McDougall v. McDougall

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

AMY L. MCDOUGALL, Petitioner/Appellant,

v.

GREGORY A. MCDOUGALL, Respondent/Appellee.

No. 1 CA-CV 21-0752 FC
FILED 7-19-2022

Appeal from the Superior Court in Maricopa County
No. FC2020-052090
The Honorable Theodore Campagnolo, Judge

AFFIRMED

COUNSEL

High Desert Family Law Group LLP, Phoenix
By Craig Peter Cherney
Counsel for Petitioner/Appellant

Dickinson Wright PLLC, Phoenix
By Marlene A. Pontrelli, Vail Cloar, Alexandra Crandall
Counsel for Respondent/Appellee

MEMORANDUM DECISION

Judge Angela K. Paton delivered the decision of the Court, in which
Presiding Judge Maria Elena Cruz and Judge Peter B. Swann joined.

MCDOUGALL v. MCDOUGALL
Decision of the Court

P A T O N, Judge:

¶1 Amy L. McDougall (“Mother”) appeals from the Decree of
Dissolution entered ending her marriage to Gregory A. McDougall
(“Father”). We affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Before their 2008 marriage, Mother and Father (collectively
“Spouses”) entered into a prenuptial agreement (“the Agreement”)
regarding Husband’s membership in three limited liability partnerships
created by his family (“the Family Entities”). The Agreement stated that all
of Father’s interests in the Family Entities and all income received by him
from any of the Family Entities, including any efforts after marriage spent
managing or administering them, would be his sole and separate property.
The Agreement also listed several other assets belonging to each spouse as
their sole and separate property, including investment and banking
accounts, such as Father’s Scottrade account.

¶3 Mother petitioned for dissolution of the marriage in June
2020. In 2021, the superior court held a one-day trial on the outstanding
issues remaining between Spouses, including: (1) whether certain financial
accounts constituted separate property under the Agreement, (2) child
support for Spouses’ minor child, (3) potential arrearages, and (4) attorneys’
fees and costs.

¶4 Although the accounts in dispute were funded during the
marriage, Father claimed, without presenting any tracing evidence at trial,
that they were walled off from any account into which community assets
(such as earnings) were commingled. Mother disagreed and hired an
expert to determine if any of the accounts could be traced to accounts listed
in the Agreement. Father submitted a rebuttal report noting the lack of
clarity in Mother’s report as to what her expert’s conclusions actually were.
At trial, Mother’s expert clarified he could not trace any of the accounts to
pre-existing funds designated as Father’s separate property in the
Agreement.

¶5 In its October 2021 decree, the superior court entered a final
order under Arizona Rule of Family Law Procedure 78(c). The court found:
(1) the Wells Fargo, Glacier, and Sunflower Bank accounts were Father’s
sole and separate property, (2) the remaining six accounts were community
property, (3) Mother was entitled to $332.00 per month in child support,
and (4) Father was entitled to attorneys’ fees due to Mother’s unreasonable
position as to the disputed accounts.

2

MCDOUGALL v. MCDOUGALL
Decision of the Court

¶6 Mother timely appealed. We have jurisdiction pursuant to
Article 6, Section 9, of the Arizona Constitution and A.R.S. §§ 12-
120.21(A)(1) and -2101(A)(1).

DISCUSSION

I. The superior court did not err in concluding that certain
financial accounts remained Father’s separate property.

¶7 The question of whether property is separate or community
property is one we review de novo. Helland v. Helland, 236 Ariz. 197, 199,
¶ 8 (App. 2014). But we review the record in the light most favorable to
supporting the superior court’s determination. See Cooper v. Cooper, 130
Ariz. 257, 260 (1981).

¶8 Mother argues the superior court erred in finding that the
disputed financial accounts were Father’s sole and separate property, given
that Father “presented no tracing evidence.” We disagree.

¶9 Property acquired during a marriage is presumed to be
community property. A.R.S. § 25-211(A); see Cockrill v. Cockrill, 124 Ariz. 50,
52 (1979). A spouse seeking to overcome this presumption—Father here—
has the burden to demonstrate by clear and convincing evidence that the
property was separate property. In re Marriage of Cupp, 152 Ariz. 161, 164
(App. 1986). Father was required to provide evidence tracing any
commingled funds in the disputed accounts to the original separate property
noted in the Agreement. See Cooper, 130 Ariz. at 259-60.

¶10 The superior court relied on the tracing evidence presented
by Mother’s expert. The court found that “all of the non-Wells Fargo
accounts, except for the Sunflower account . . . and the Glacier account . . .
contained . . . payroll deposits or other community type funds.”
Consequently, those accounts were found to be community property. But
the court found that the Wells Fargo, Sunflower, and Glacier accounts were
funded with separate funds from the Family Entities or from gifts or loans
to Father from family. The court further found that because these funds
were not commingled they did not need to be traced. This conclusion is
supported by Mother’s own expert report, which illustrates a separate,
walled-off circuit of funds circulating among the three Wells Fargo
accounts, the Sunflower money market account, and Glacier account.

¶11 Although it was Father’s burden to provide tracing evidence
if the funds were commingled, Mother’s expert revealed that there was no
commingling of separate funds. See id. The superior court was permitted
to consider Mother’s evidence in reaching its conclusion. And we “will not

3

MCDOUGALL v. MCDOUGALL
Decision of the Court

substitute [our] judgment for that of the trial court when there is sufficient
evidence to support the trial court’s finding.” See Cupp, 152 Ariz. at 164.

¶12 Mother argues the court erred in its interpretation of the
report because the report could not trace the funds back to the separate
property on Schedule A of the Agreement. But the Agreement also
exempted income from the Family Entities as sole and separate property,
and both the Agreement and the statute governing separate property
exempt property acquired during a marriage by gift. See A.R.S. § 25-
211(A)(1). Further, Father testified that the origination of the Wells Fargo
accounts was a rollover of the listed Scottrade account in Schedule A. These
are the funding sources identified by Mother’s own expert and, consistent
with the parties’ Agreement, all remain separate property absent evidence
of commingling. We find that reasonable evidence in the record supports
the superior court’s judgment.

II. The superior court did not err in its child support award.

¶13 Mother argues the superior court erred by calculating a child
support award based on an incorrect gross income calculation and an
inequitable credit to Father for daycare. We review a child support award
for abuse of discretion and view the record in the light most favorable to
affirming the superior court’s decision. Little v. Little, 193 Ariz. 518, 520,
¶ 5 (1999).

¶14 Mother suggests that the “undisputed” testimony at trial
demonstrated that she earned $5,630.00 in monthly gross income. Mother
testified as to that monthly gross income, reported it in her affidavit of
financial information, and in the joint pretrial statement. But the evidence
was less than clear because she also testified that she earned $40.00 per hour
and later, that she earned “five or 6,000 a month” in gross income. This
required the superior court to consider conflicting evidence, and the court
accepted Mother’s testimony that she earned $40.00 per hour/$6,933.33 per
month as the basis for its child support award. We defer to the superior
court’s resolution of conflicting evidence and determinations of witness
credibility. In re Marriage of Foster, 240 Ariz. 99, 101, ¶ 5 (App. 2016) (citation
omitted). We find no error.

¶15 Mother testified that she paid $270.00 per month for childcare
expenses. In its child support calculation, the superior court found each
party responsible for $135.00 in monthly childcare expenses. Mother argues
this was error in that the court misunderstood the child support worksheet.
The court, however, had discretion to split the cost of childcare and require

4

MCDOUGALL v. MCDOUGALL
Decision of the Court

both parties to pay half. See A.R.S. § 25-320 app. § 13 (2018). The court did
not err in crediting each parent with half of the childcare expenses.

III. The superior court did not err in its award of attorneys’ fees.

¶16 Mother argues that because Father can better afford to pay his
fees, he should not be given an attorneys’ fees award. We review an award
of attorneys’ fees for an abuse of discretion. Medlin v. Medlin, 194 Ariz. 306,
309, ¶ 17 (App. 1999). A court may award attorneys’ fees pursuant to A.R.S.
§ 25-324(A) after considering the reasonableness of a party’s positions and
the financial resources of both parties. But a court may award fees to a party
who adopts unreasonable positions, even if they are the party least able to
pay. MacMillan v. Schwartz, 226 Ariz. 584, 592, ¶ 37 (App. 2011).

¶17 Here, the superior court found that Mother was unreasonable
in continuing to claim Father’s Wells Fargo, Glacier, and Sunflower
accounts were community property after the date her own expert reported
that funds in those accounts were not commingled. Because the court
found that the “great bulk” of evidence, testimony, and exhibits pertained
to the dispute over these accounts, the court awarded Father his fees for the
period after Mother received her expert report. The court did not abuse its
discretion.

ATTORNEYS’ FEES AND COSTS

¶18 Both parties request an award of costs and attorneys’ fees
pursuant to A.R.S. § 25-324(A) and Arizona Rule of Civil Appellate
Procedure (“ARCAP”) 21. In our discretion, we award Father attorneys’
fees and costs upon compliance with ARCAP 21.

CONCLUSION

¶19 We affirm.

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

5