Felder v. Felder

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

In re the Matter of:

KENNETH L. FELDER, Petitioner/Appellant,

v.

DEBRA S. FELDER, Respondent/Appellee.

No. 1 CA-CV 19-0685 FC
FILED 6-18-2020

Appeal from the Superior Court in Maricopa County
No. FN2005-000530
The Honorable Kerstin G. LeMaire, Judge

AFFIRMED

COUNSEL

S. Alan Cook, P.C., Phoenix
By S. Alan Cook, Sharon Ottenberg
Counsel for Petitioner/Appellant
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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.

C R U Z, Judge:

¶1 Appellant Kenneth L. Felder (“Husband”) appeals the
superior court’s order that declined to terminate his spousal maintenance
obligation to Debra S. Felder (“Wife”).1 For the following reasons, we
affirm.

FACTUAL AND PROCEDURAL HISTORY

¶2 In 2007, Husband and Wife divorced after about twenty-nine
years of marriage. Wife sought spousal maintenance. Husband owned and
operated a furniture business, the Stool & Dinette Factory (“SDF”), and the
superior court attributed a monthly salary of about $8,000 to Husband in
the decree of dissolution. The superior court found Wife’s monthly income
to be $2,400 from her disability benefit and an annuity, and so the court
ordered Husband to pay Wife $2,800 in spousal maintenance each month
until further order.

¶3 In 2013, Husband filed a petition to modify his spousal
maintenance obligation, claiming his income had been substantially
reduced. Following an evidentiary hearing, the superior court reduced
Husband’s spousal maintenance obligation to $1,500 a month plus an
additional $500 a month until an arrearage was paid. The superior court
noted there was testimony about SDF being in bankruptcy proceedings and
the bankruptcy court setting his monthly salary at $2,500. The superior
court also specifically found that SDF was paying Husband’s spousal
maintenance obligation. In 2014, the bankruptcy court approved SDF’s

1 Wife did not file an answering brief, which we may deem a
confession of reversible error. McDowell Mountain Ranch Cmty. Ass’n v.
Simons, 216 Ariz. 266, 269, ¶ 13 (App. 2007). In our discretion, we decline
to do so.

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reorganization plan. This plan allowed Husband to take a $2,600 monthly
salary.

¶4 In 2014, Husband filed another petition to modify his spousal
maintenance obligation, claiming as changed circumstance the bankruptcy
court order limiting Husband’s salary. Husband also argued Wife had
reached retirement age, so she was now able to draw from retirement funds
to help support herself. Following trial, the superior court denied
Husband’s petition to modify or terminate spousal maintenance, and
Husband appealed. This court reversed and remanded the superior court’s
order, finding there was evidence of a changed circumstance in that SDF
was no longer paying Husband’s spousal maintenance obligation. See
Felder v. Felder, 1 CA-CV 15-0831, 2016 WL 7093872, at *3, ¶ 13 (Ariz. App.
Dec. 6, 2016) (mem. decision).

¶5 On remand, the superior court found that the only change to
Husband’s income was that SDF was no longer paying his spousal support
obligation. The superior court also found that Wife had dissipated all of
the retirement assets she received in the divorce decree. In a June 2017
order, the superior court reduced Husband’s spousal maintenance
obligation to $1,000 plus $500 until his arrearage was paid. Husband did
not appeal.

¶6 Only a few months later in October 2017, Husband filed a
petition to terminate spousal maintenance. Husband alleged as changed
circumstances that he suffered from multiple physical health problems.
Husband also contended that he was unable to earn a living from his
business. Husband for the first time also claimed he had been forced to take
early distribution of his social security benefits, because he had not been
able to take a salary from SDF since 2015.

¶7 The superior court held an evidentiary hearing in June 2019,
after which it denied Husband’s petition to terminate spousal maintenance.
After an unsuccessful motion to alter/amend the order, Husband timely
appealed. We have jurisdiction under Arizona Revised Statutes (“A.R.S.”)
section 12-2101(A)(2).

DISCUSSION

¶8 Husband contends the superior court erred by failing to
terminate the spousal maintenance award to Wife. Pursuant to A.R.S. § 25-
327(A), a spousal maintenance award “may be modified or terminated only
on a showing of changed circumstances that are substantial and
continuing.” We review the superior court’s decision regarding the

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existence of changed circumstances to support modification or termination
of spousal maintenance for an abuse of discretion. Nace v. Nace, 107 Ariz.
411, 413 (1971); Kelsey v. Kelsey, 186 Ariz. 49, 53 (App. 1996). We will not set
aside the superior court’s findings unless they are clearly erroneous or
unsupported by substantial evidence. In re Marriage of Berger, 140 Ariz. 156,
161 (App. 1983); Bobrow v. Bobrow, 241 Ariz. 592, 595-97, ¶¶ 11, 20 (App.
2017). The party seeking modification bears the burden of proving a change
in circumstances. Scott v. Scott, 121 Ariz. 492, 494 (1979).

¶9 When assessing whether a substantial and continuing change
has occurred, the court considers the latest order modifying the spousal
maintenance award. McClendon v. McClendon, 243 Ariz. 399, 401-02, ¶ 10
(App. 2017). Here, Husband’s spousal maintenance obligation was
modified in a June 2017 order. Thus, in the instant proceedings the superior
court assessed whether there has been a continuing or substantial change
since June 2017.

¶10 First, Husband argues the superior court made “unwarranted
assumptions about Husband’s health, imputing fault to him for his
substantial health issues merely because he is overweight, but doing so
without taking any evidence from the physician who testified to support
the court’s findings.” However, the superior court discussed Husband’s
health—an issue raised by Husband—in the context of whether or not there
was a substantial or continuing change that justified termination of
Husband’s spousal support obligation; the superior court did not discuss
Husband’s health condition merely to “impute fault” to him.

¶11 In his opening brief, Husband contended he suffers from
eleven health conditions. However, at trial, there was testimony that
Husband’s “medical conditions were due to years of [Husband] being
overweight and that they did not occur recently.” The superior court never
found, as Husband contends, that Husband’s “inability to work is his own
fault because he is overweight.” Instead, the superior found the evidence
showed Husband likely suffered from these health problems for many
years, so the court was unable to find Husband’s health had substantially
changed since June 2017.

¶12 At trial, Husband’s physician testified Husband was
currently in remission for non-Hodgkin’s lymphoma, and the superior
court specifically noted no evidence showed this cancer had reoccurred
since 2001. A 2005 letter from one of Husband’s physicians indicated that
Husband was dealing with hypertension, peripheral vascular disease of the
lower extremities, and depression and anxiety at that time. Another letter

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from a different physician indicates that Husband had been treated for
diabetes since at least 2011. Husband underwent knee replacement in 2015.
A 2017 physician letter indicated Husband was “status post prostate
cancer,” and it indicated Husband had a kidney removed, though it is
unclear whether the kidney was removed before or after June 2017. The
record demonstrates Husband has been dealing with these conditions prior
to June 2017, and no evidence or testimony was presented as to how these
health problems may have progressed or worsened.

¶13 Although the record is unclear as to when Husband was
diagnosed with an aortic aneurysm, and whether it was before or after June
2017, the superior court did note its concern for possible future surgery
related to this condition. A 2019 letter from Husband’s physician stated
that the aortic aneurysm would be closely monitored over the next several
months for continued growth, and if it did continue to grow, Husband
would require surgery. However, the change in circumstances must exist
before a party may petition for modification; relying on future events is too
“speculative.” Chaney v. Chaney, 145 Ariz. 23, 26-27 (App. 1985). At the time
of the hearing, it was unclear when or if Husband would have surgery to
address the aortic aneurysm, and it was unclear how such a surgery would
affect Husband and his ability to work in the future.

¶14 Additionally, at trial, there was no testimony about
Husband’s current job duties at SDF. Husband’s physician did not provide
any testimony at trial about how Husband’s health conditions might
specifically affect Husband’s ability to work. Husband’s physician could
not state that working full-time was life-threatening to Husband or that it
would shorten his life in any way. The superior court did note that a
physician advised Husband to decrease his work. The superior court
further noted that Husband had in fact decreased his work to part-time.
However, the court found that according to Husband’s most recent
affidavit of financial information (“AFI”), Husband’s monthly earnings
were $3,352 per month. In the June 2017 order, Husband was attributed a
salary of $2,600 per month. The superior court found Husband’s health
conditions did not cause a substantial or continuing change in his earnings.
Husband bears the burden of proving there has been a substantial change
in circumstances since June 2017, and the superior court did not abuse its
discretion in finding that he failed to do so. See Scott, 121 Ariz. at 494.

¶15 Next, Husband argues the superior court erred when
determining his income. Husband argues it “improperly consider[ed]
Husband’s borrowing from credit cards as ‘income.’” Although Husband
claims the $1,505 listed on his AFI was borrowing on credit cards, his AFI

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specifically states $1,505 of his income is “credit cards, sales/liquidation of
assets & [repayment] of loans from SDF.” (Emphasis added.) Husband’s AFI
makes clear the $1,505 is not entirely Husband’s borrowing from credit
cards, as he now alleges on appeal. Instead, this amount includes payments
from SDF to Husband to repay significant loans Husband has made to his
company in previous years.

¶16 Further, in addition to Husband receiving social security
income, there was testimony at trial that SDF continues to pay many of
Husband’s expenses, as was the case in June 2017. Testimony also showed
SDF makes the payments for the truck Husband uses for both company and
personal use, and SDF also pays for gas and insurance for the truck.
Husband testified that SDF paid for his cell phone bill. Although Husband
used his dogs in SDF’s marketing, they were still his pets, and Husband
testified that SDF paid for veterinary bills, dog food, and other supplies.
Husband also admitted at trial to making petty cash withdrawals from SDF
for personal use, which the superior court characterized as “substantial.”
The superior court found it was not provided with any reason that SDF was
“not repaying [Husband] for loans and other expenses at a rate greater than
approximately $1,500.00 per month.”

¶17 The superior court specifically noted in its 2007 decree of
dissolution that “Husband’s income can only be described as ambiguous,”
and that statement still rings true today. Although Husband claims he has
been unable to draw a salary from SDF since 2015, he did not raise this
argument in his two prior modification proceedings. We repeat that
Husband has the burden of proving there has been a substantial and
continuing change in his income in order to justify terminating his spousal
maintenance, and looking at this record, we cannot say the superior court
erred when it found Husband failed to do so.

¶18 Husband argues the superior court failed to properly
consider Wife’s income, which he contends consists of social security
payments, public assistance, and mortgage loan forgiveness. Wife denied
receiving public assistance and loan forgiveness at trial, but in any event,
Husband fails to explain how Wife’s income has substantially and
continuously changed since June 2017. Wife has received disability benefits
since the time of the divorce in 2007. Husband contends Wife has received
the public benefits and mortgage loan forgiveness since 2014. These
circumstances existed at the time of the 2017 modification proceedings.
“[R]es judicata prevents the party ‘from obtaining a modification . . . based
on facts which could have been raised’ in the previous proceeding.”
McClendon, 243 Ariz. at 402-03, ¶ 15 (second emphasis omitted) (quoting In

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re Marriage of Rowe, 117 Ariz. 474, 475 (1978)). The superior court did not
err.

¶19 Husband also argues that Wife has unreasonably dissipated
the retirement assets she was awarded in the divorce decree, and Husband
should not be penalized for such waste. At the same time, Husband
contends “Wife has never proven at any time that she has, in fact, spent her
retirement assets.” Husband has previously raised the issue of Wife’s
retirement assets before the superior court and this court. As this court held
in Husband’s prior appeal:

Wife reached retirement age in December 2013; therefore, this
circumstance existed at the time of the earlier modification
proceeding. Wife also received the life insurance proceeds,
sales proceeds, and the lump sum annuity payment several
years before Husband filed his first petition to modify.
Evidence of these circumstances existed at the time of the
prior proceedings. Yet, Husband did not raise them in his
first petition to modify. Husband, therefore, cannot claim
these events constitute a change in circumstances since the
[most recent] order.

Felder, 1 CA-CV 15-0831, at *3, ¶ 15 (footnotes omitted).

¶20 Husband claims that the superior court has impermissibly
“forgiven” Wife’s dissipation of the retirement assets distributed to her
from the divorce decree. But in the June 2017 modification proceedings, the
superior court found that Wife “completely depleted” the retirement assets
she was awarded in an unreasonable manner, and as a result, reduced
Husband’s spousal maintenance obligation. Husband did not appeal the
June 2017 order. The superior court, therefore, already accounted for this
dissipation in the 2017 order. It is not a changed circumstance now.

¶21 Finally, Husband argues the superior court “fail[ed] to make
findings supported by the evidence with respect to the factors enumerated
in A.R.S. § 25-319(B),” particularly (4), (5), and (9). The standard for
modification or termination of a spousal maintenance obligation is whether
there has been a substantial or continuing change in circumstances. A.R.S.
§ 25-327(A). If a court finds a substantial and continuing change in
circumstances exists, then the court must determine what modification is
appropriate, in light of the changed circumstances, using the factors in
A.R.S. § 25-319(B). Ruskin v. Ruskin, 153 Ariz. 504, 506 (App. 1987); see also
Scott, 121 Ariz. at 495 n.5 (stating that courts must consider “the same . . .

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factors taken into consideration when granting an award for support and
maintenance” under A.R.S. § 25–319(B)). Here, the superior court did not
find a change of circumstances, so it was not required to make express
findings as to each factor in § 25-319(B). We find no error.

¶22 Husband requests his attorneys’ fees and costs incurred in
this appeal under A.R.S. § 25-324. He is not the prevailing party on appeal.
For this reason, and having also considered the relevant financial evidence
in the record and his positions on appeal, we decline to award fees or costs.

CONCLUSION

¶23 For the foregoing reasons, we affirm.

AMY M. WOOD • Clerk of the Court
FILED: AA

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