Svansdottir v. Johnsesn

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

BERGLIND SVANSDOTTIR, Petitioner/Appellant,

v.

BALDUR JOHNSEN, Respondent/Appellee.

No. 1 CA-CV 20-0269 FC
FILED 5-13-2021

Appeal from the Superior Court in Maricopa County
No. FN2018-091785
The Honorable Suzanne S. Marwil, Judge

AFFIRMED IN PART; REMANDED IN PART

COUNSEL

Dickinson Wright PLLC, Phoenix
By Marlene A. Pontrelli, Denise H. Troy
Counsel for Petitioner/Appellant

Scott L. Patterson LLC, Tempe
By Scott L. Patterson

Steven N. Cole LLC, Tempe
By Steven N. Cole
Co-Counsel for Respondent/Appellee

SVANSDOTTIR v. JOHNSEN
Decision of the Court

MEMORANDUM DECISION

Chief Judge Peter B. Swann delivered the decision of the court, in which
Presiding Judge Kent E. Cattani and Judge Samuel A. Thumma joined.

S W A N N, Chief Judge:

¶1 Berglind Svansdottir (“Wife”) appeals several provisions of
the decree dissolving her marriage to Baldur Johnsen (“Husband”).
Finding no abuse of discretion, we affirm the judgment but remand for
amendments to the decree as directed by this decision.

FACTS AND PROCEDURAL HISTORY

¶2 Husband and Wife are both Icelandic citizens. They married
in Nevada in 2001 and resided in Arizona. Wife filed for dissolution of
marriage in 2018. By that time, Husband and Wife had debts and assets in
both Iceland and the United States, including a condo in Iceland. The
parties agreed to a pretrial sale of the condo. They placed the proceeds of
the sale—approximately $80,000 USD, or “the Condo Holdback”—in
escrow pending the superior court’s division of assets and debts. Before
closing the sale of the condo, however, Husband used $36,969 of the
proceeds to pay off an overdraft loan secured by a lien.

¶3 The community’s major assets were the equity in their United
States residence and the couple’s retirement accounts, valued cumulatively
at approximately $380,000. The community also had significant consumer
debt and Wife’s student loan debt. Both parties testified at trial. Husband
reported his annual income to be approximately $225,000. Wife, although
previously an orthopedic nurse in Iceland, did not work for most of the
marriage. Additionally, a financial expert testified as to Wife’s reasonable
expenses.

¶4 Wife asserted that Husband engaged in marital waste by
spending money on other women and in investing nearly $105,000 in a “get
rich quick scheme.” Before the end of the marriage, Husband invested
$104,595.83 in the Warburg-Stuart Management Company (which the
parties call the “Warburg Investment”). However, the court valued the
Warburg Investment at zero at the time of trial.

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SVANSDOTTIR v. JOHNSEN
Decision of the Court

¶5 The superior court equally divided the retirement accounts
and gave Wife credit for her share of the home equity. The court awarded
Wife an equalization payment of $50,000; $3,000 per month in spousal
maintenance for two years; and $25,000 in attorney’s fees. Wife moved to
amend or alter the decree citing several alleged errors, including the court’s
failure to specifically state its findings related to their Icelandic pensions.
The court denied the motion and instead held that the parties’ full
agreement concerning the distribution of the Icelandic pension was “put on
record and not stated word for word in the Decree,” and directed the parties
to consult the record if they “require the precise verbiage.” Wife appeals.

DISCUSSION

¶6 Wife asserts the superior court abused its discretion in
determining the amount of spousal maintenance and attorney’s fees, and in
its division of community property and debt.

I. THE COURT DID NOT ABUSE ITS DISCRETION IN ITS AWARD
OF SPOUSAL MAINTENANCE.

¶7 Wife first argues that the superior court erred by “limiting
[her] award of spousal maintenance.” Wife requested a spousal
maintenance award of $5,000 per month for five years. Husband did not
dispute Wife’s entitlement to spousal maintenance under A.R.S. § 25-
319(A), but disagreed with her requested amount. After a review of the
statutory factors, the superior court awarded Wife $3,000 per month for a
period of two years.

¶8 The amount and duration of spousal maintenance is
determined pursuant to A.R.S. § 25-319(B). The court must consider
thirteen factors, including the standard of living during the marriage, each
spouse’s age, employment history and ability to work, and the financial
abilities and resources of each spouse. Id. at (1)–(13). On review, we
examine an award of spousal maintenance for abuse of discretion. Cullum
v. Cullum, 215 Ariz. 325, 354, ¶ 9 (App. 2007). We will affirm the superior
court’s spousal maintenance award if there is any supporting evidence.
Helland v. Helland, 236 Ariz. 197, 202, ¶ 22 (App. 2014).

¶9 The record does not support Wife’s contentions that the court
failed to consider her monthly expenses, age, work experience, and income
potential. Wife also argues that the court did not consider the comparative
financial resources of the spouses because the $3,000 maintenance award
leaves her with a monthly shortfall while Husband has a high paying job
and could afford a greater amount.

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SVANSDOTTIR v. JOHNSEN
Decision of the Court

¶10 The superior court is in the best position to determine
credibility and the weight to give conflicting evidence. See Gutierrez v.
Gutierrez, 193 Ariz. 343, 347, ¶ 13 (App. 1998). We will not reweigh the
evidence or substitute our opinions for the superior court’s findings. Id.
Here, Wife’s testimony supported the $3,000 maintenance award the court
granted. Wife did not prove any current limitations on her ability to work;
in fact, Wife testified that she expected to work in the public health field as
an epidemiologist or a nurse and to earn $30,000 per year in addition to full
medical benefits. The superior court, as the ultimate factfinder, was free to
adopt or reject Wife’s testimony and the testimony of her expert. Id.
Moreover, the superior court’s comparative analysis of the parties’ relative
financial positions was not an abuse of discretion. The court may consider
the ability to earn, rather than actual earnings, in determining spousal
maintenance. Williams v. Williams, 166 Ariz. 260, 266 (App. 1990).

¶11 In its consideration of the A.R.S. § 25-319(B) factors, the court
noted Wife’s prior nursing experience and that she was just a few credits
short of her master’s degree in public health. The court found that spousal
maintenance would give her time to secure her Arizona nursing license or
arrange for any training necessary to obtain appropriate employment.
Spousal maintenance is meant to be a bridge to Wife’s own financial
independence. See Schroeder v. Schroeder, 161 Ariz. 316, 321 (1989). As the
minute entry evidences the court’s consideration of each of the statutory
factors and the record supports those findings, the court did not abuse its
discretion in determining the spousal maintenance award.

II. THE COURT ERRED IN ITS DIVISION OF THE WARBURG
INVESTMENT AND THE ICELANDIC PENSION, BUT WE
DETECT NO OTHER ERROR.

¶12 Wife next asserts that the court’s division of the Condo
Holdback, the Warburg Investment, and her student loans were “against
the weight of the evidence.” In a dissolution, the court must divide the
community property and obligations equitably. See A.R.S. § 25-318; Flower
v. Flower, 223 Ariz. 531, 534–35, ¶ 12 (App. 2010). Property characterization
is a question of law we review de novo. Helland, 236 Ariz. at 199, ¶ 8. We
view the facts in the light most favorable to upholding the decree. See Bell-
Kilbourn v. Bell-Kilbourn, 216 Ariz. 521, 522, ¶ 2 n.1 (App. 2007).

Overdraft Debt and the Condo Holdback

¶13 Wife claims that she is due an additional $18,484.50 from the
Condo Holdback, which is half of the $36,969 of the condo sale proceeds

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that Husband used to pay off an overdraft debt secured by a lien on the
condo. Wife argues that the overdraft debt arose after the date of separation
from an initial overdraft debt of $14,053 while the parties were married.

¶14 Debts incurred during a marriage are presumed to be
community debts. Schlaefer v. Fin. Mgmt. Servs., Inc., 196 Ariz. 336, 341, ¶
18 (App. 2000). And the spouse seeking to avoid debt liability bears the
burden of rebutting that presumption by a standard of clear and convincing
evidence. Id. Moreover, a spouse who voluntarily pays off community debt
to maintain community assets, even after the filing of a petition for
dissolution, is entitled to reimbursement. Bobrow v. Bobrow, 241 Ariz. 592,
596, ¶¶ 19–20 (App. 2017).

¶15 Here, the record does not clearly show that the court erred in
determining that the debt was community debt. The court specifically
found that Husband used the proceeds to “pay a community obligation and
that should not be offset from his portion of the escrow proceeds.” While
it is true, as Wife argues, that the community is deemed to end when the
petition for dissolution is served, see A.R.S. § 25-211(A)(2), debt is still
community debt if it is incurred during the marriage. Schlaefer, 196 Ariz. at
341, ¶ 18. Husband testified that the September overdraft was the result of
Wife stopping the refinancing deal of the Icelandic condo. Wife argues on
appeal that Husband “did not present a single shred of documentary
evidence or other proof to the trial court regarding how this loan was
spent.” But Wife likewise testified that she “stop[ped] the refinance” of the
condo which resulted in a lien attached to the condo, in an amount “like
seven million, Icelandic Krona.” The superior court is in the best position
to assess and resolve conflicting evidence and we accept its factual findings
absent clear error. Kelsey v. Kelsey, 186 Ariz. 49, 51 (App. 1996). Here, we
detect no clear error, so the court’s reimbursement of Husband’s payment
and the division of the Condo Holdback is affirmed.

The Warburg Investment

¶16 Wife next contends the court erred when it allocated the
Warburg Investment—valued at zero—solely to Husband. Before the end
of the marriage, Husband invested $104,595.83 in the Warburg-Stuart
Management Company. Wife argued at trial that the Warburg Investment
was marital waste. On appeal, she asserts that she should receive $52,298
as reimbursement of her half of the expended community funds, or, in the
alternative, half of the benefit from the investment.

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SVANSDOTTIR v. JOHNSEN
Decision of the Court

¶17 Under A.R.S. § 25-318(C), an equitable division of property
requires the court to consider any “excessive or abnormal expenditures,
destruction, concealment or fraudulent disposition of community”
property. Spouses have equal management and disposition rights over
community property and have equal power to bind the community,
including in investments. A.R.S. § 25-214(B).

¶18 Wife, as the party alleging marital waste, had “the burden of
making a prima facie showing of waste.” Gutierrez, 193 Ariz. at 346, ¶ 7
(App. 1998). That showing requires more than one party’s disapproval of
an investment; marital waste occurs when “one spouse has wasted or
dissipated marital assets.” Helland, 236 Ariz. at 201, ¶ 17. We review a
determination of whether there was marital waste for abuse of discretion.
See Kline v. Kline, 221 Ariz. 564, 573, ¶ 35 (App. 2009).

¶19 Husband was authorized to make the Warburg Investment.
See A.R.S. § 25-214(B). Both parties testified at trial that the Warburg
Investment was worthless. The superior court then held:

the value of the Warburg investment is $0.00 . . . Just as Wife
would be entitled to any gains from this investment, she must
share in its losses. It would be inequitable to have Husband
reimburse Wife half the amount originally invested
($104,595.83).

¶20 Wife’s initial claim that she should be reimbursed for half of
the value of the Warburg Investment fails. Wife does not dispute that the
investment was made with community funds, and so the failure of the
investment made with those community funds is a community failure. See
A.R.S. § 25-211(A). But, if the Warburg Investment ever were to become
profitable, equity requires that benefit be shared. Accordingly, we direct
the superior court to hear testimony on the division of the Warburg
Investment.

Wife’s Student Loans

¶21 The court assigned to Wife her two student loans as her
separate debt, including a loan of nearly $9,000 and an $80,000 balance on
a loan from her pre-marital education in Iceland. Wife asserts the pre-
marital loan grew substantially during the marriage because Husband
refused to use community funds to make payments. On appeal, she argues
that the community should be responsible for that increase. Husband is not
liable for Wife’s pre-marital debt absent an agreement to the contrary. See
A.R.S. § 25-215(A); Hines v. Hines, 146 Ariz. 565, 567 (App. 1985). Wife cites

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no legal authority to support her argument, nor are we aware of any. The
court’s assignment of the debt is affirmed.

Icelandic Pensions

¶22 The court denied Wife’s request to alter the decree to include
the language she asserts is necessary for an Icelandic court to facilitate the
division of those accounts as agreed to by the parties. To the extent that she
can demonstrate legal need, we direct the superior court to enter such
orders.

Currency Issues

¶23 Wife argues the decree also should be amended to account for
fluctuations in the Icelandic Krona relative to the U.S. Dollar. As indicated
in the decree, the superior court made the property division with the
valuation information it had at the time. We review valuation dates for
abuse of discretion and we will affirm the court’s selection of a valuation
date if the result is fair. Sample v. Sample, 152 Ariz. 239, 242–43 (App. 1986).
There was no abuse of discretion by the superior court and no unfairness in
the result. And Wife waived this issue by failing to raise it with the superior
court. See Premier Fin. Servs. v. Citibank (Arizona), 185 Ariz. 80, 86 (App.
1995).

III. THE SUPERIOR COURT’S ATTORNEY’S FEES AWARD WAS
SUPPORTED BY SUFFICIENT EVIDENCE.

¶24 Finally, Wife challenges her award of $25,000 in attorney’s
fees after trial because the court did not grant her an award of all of her
incurred fees. We review a fee award for an abuse of discretion. MacMillan
v. Schwartz, 226 Ariz. 584, 592, ¶ 36 (App. 2011).

¶25 A.R.S. § 25-324(A) requires the superior court to examine both
the financial resources and the reasonableness of each party’s positions.
Here, the record shows that the superior court found Husband had greater
financial resources and sufficient resources available to contribute toward
Wife’s attorney’s fees and costs. The court held that both parties acted
unreasonably during the litigation, but awarded Wife’s attorney’s fees to
Husband. Given the party’s positions, we find that the court’s award of
$25,000 of Wife’s attorney’s fees was not an abuse of discretion.

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SVANSDOTTIR v. JOHNSEN
Decision of the Court

ATTORNEY’S FEES ON APPEAL

¶26 Both Husband and Wife request attorney’s fees pursuant to
A.R.S. § 25-324(A). Having considered the statutory factors, including the
parties’ relative financial resources, we award Wife her reasonable
attorney’s fees on appeal in an amount to be determined after compliance
with ARCAP 21.

CONCLUSION

¶27 For the above-stated reasons, we affirm the judgment and
remand for amendments to the decree as directed by this decision.

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

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