Valasekova v. Fedor

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

JANETTE VALASEKOVA, Petitioner/Appellee,

v.

BRANISLAV FEDOR, Respondent/Appellant.

No. 1 CA-CV 23-0274 FC
FILED 5-7-2024

Appeal from the Superior Court in Maricopa County
No. FN2022-002529
The Honorable Monica Edelstein, Judge

VACATED IN PART AND REMANDED

COUNSEL

Janette Valasekova, Waddell
Petitioner/Appellee

Berkshire Law Office PLLC, Tempe
By Alexandra Sandlin, Keith Berkshire
Counsel for Respondent/Appellant

VALASEKOVA v. FEDOR
Decision of the Court

MEMORANDUM DECISION

Judge Michael S. Catlett delivered the decision of the Court, in which
Presiding Judge Angela K. Paton and Judge James B. Morse Jr. joined.

C A T L E T T, Judge:

¶1 Branislav Fedor (“Husband”) appeals the superior court’s
Decree of Dissolution (“Decree”) ending his marriage to Janette Valasekova
(“Wife”), arguing the court erred in awarding Wife $2,500 per month in
spousal maintenance for 5 years in lieu of valuing and dividing a
community business. We vacate the Decree in part and remand for further
proceedings.

FACTS AND PROCEDURAL HISTORY

¶2 Husband and Wife married in 2008 and have no children.
Husband worked as an independent contractor until 2018, when he began
buying, re-modeling, and re-selling houses. Wife worked as a corrections
officer until 2018, when she left that job to assist Husband’s business. In
2020, Husband formed B&J Home Renovations LLC (“B&J”), which
conducts commercial and residential repairs and remodeling. That same
year, Wife began a new job working for a different state agency.

¶3 In 2022, Wife petitioned for divorce. The parties agreed on all
matters except the division of B&J and the amount and duration of spousal
maintenance for Wife. Wife sought spousal maintenance of $2,500 per
month for 8 years; Husband argued Wife should receive $400 per month for
5 years.

¶4 Wife did not object to the court awarding B&J to Husband,
but she requested payment for one-half of B&J’s value, which she claimed
was approximately $217,500. She based that value on two things: (1)
Husband provided her with a list of other businesses for sale and she took
the average price of those businesses, and (2) B&J’s gross profit was
$278,805 in 2022. Husband claimed B&J had no market value because it
derived its income exclusively from his work. Husband also asserted that,
at most, B&J was worth $4,000, based on Husband’s estimated value of
B&J’s tools and equipment. Neither party retained an expert to value the
business.

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¶5 At trial, Husband and Wife testified regarding B&J’s value.
Wife explained that she tried to obtain an appraisal but did not have the
necessary funds. Husband testified that he did not obtain an appraisal
because the court did not require one, and he believed an appraisal would
be based only B&J’s profit and loss statement, which Husband provided to
the court. He explained that he also compared B&J with other businesses
currently for sale, but he concluded doing so would result in an inaccurate
value because B&J had no physical location or guaranteed contracts.

¶6 The court entered the Decree, finding B&J was a community
asset subject to division. The court concluded that it was “unable to
accurately value [B&J] or determine the appropriate offset.” The court
declined “to ‘audit’ the Parties’ tax returns submitted to determine the
value of [B&J]” and concluded “the submitted records do little to assist the
court.” The court, therefore, awarded B&J to Husband.

¶7 Because the court could not “determine value for purposes of
equalization of the community lien,” it elected “to account for the award in
conjunction with Wife’[s] Spousal Maintenance Claim.” The court found
that each of the spousal maintenance factors in A.R.S. § 25-319(A) entitled
Wife to spousal maintenance. The court also found that “Wife has
insufficient property” because the court was “unable to equitably divide
the Parties assets-namely the business[.]” The court awarded Wife $2,500
per month in spousal maintenance for 5 years.

¶8 Husband timely appealed. We have jurisdiction. See A.R.S.
§ 12-2101(A)(1).

DISCUSSION

¶9 Husband argues the superior court erred in awarding Wife
spousal maintenance of $2,500 per month in lieu of valuing and equitably
dividing the business. We review an award of spousal maintenance and
the distribution of community property for an abuse of discretion. Cullum
v. Cullum, 215 Ariz. 352, 354 ¶ 9 (App. 2007); Lehn v. Al-Thanayyan, 246 Ariz.
277, 283 ¶ 14 (App. 2019). “An error of law constitutes an abuse of
discretion,” State v. Bernstein, 237 Ariz. 226, 228 ¶ 9 (2015), as does an order
unsupported by the record, Boyle v. Boyle, 231 Ariz. 63, 65 ¶ 8 (App. 2012).

¶10 Community property should “be divided ‘equitably’ absent a
sound reason otherwise appearing in the record.” Lehn, 246 Ariz. at 283
¶ 15; A.R.S. § 25-318(A). This “approach simply reflects the principle that
community property implies equal ownership.” Toth v. Toth, 190 Ariz. 218,
221 (1997). “Thus, in most cases, dividing jointly held property equally will

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be the most equitable.” In re Marriage of Flower, 223 Ariz. 531, 535 ¶ 13 (App.
2010). The superior court “has broad discretion in the specific allocation of
individual assets and liabilities.” Id. ¶ 14.

¶11 Husband does not challenge the court’s conclusion that Wife
was entitled to some spousal maintenance. Husband, instead, challenges
the amount of spousal maintenance awarded, claiming the superior court
could not increase spousal maintenance solely because it was “unable to
accurately value the business or determine the appropriate offset[.]”
Husband argues the superior court is not statutorily permitted to award
Wife a higher amount of spousal maintenance in lieu of her interest in
community property because “[s]pousal maintenance is intended to be
based on a spouse’s reasonable needs[.]” And because Husband contends
that B&J was worth at most $4,000, the superior court should have awarded
Wife maintenance of $400 per month for 60 months—the highest amount
Husband claims he can pay.

¶12 Husband relies on Buttram v. Buttram, 122 Ariz. 581 (App.
1979) and In re Marriage of Foster, 125 Ariz. 208 (App. 1980). In Buttram, the
superior court awarded the husband the family residence and the wife
spousal maintenance to offset the “unequal division of community
property.” 125 Ariz. at 581–82. This court vacated the award, holding that
spousal maintenance is justified only if it is “necessary for the spouse’s
support and maintenance . . . . not [as] a justification for failing to properly
divide the community property.” Id. at 582.

¶13 Foster was the mirror image of Buttram. There, the superior
court awarded one spouse a greater share of the community property in
lieu of awarding spousal maintenance. See 125 Ariz. at 210. This court also
vacated that award, reasoning that “an award of a substantially greater
share of the community assets” is not “appropriate as a substitute for an
award of spousal maintenance.” Id. Based on Buttram and Foster, Husband
argues the superior court could not award Wife a greater amount of spousal
maintenance in lieu of equitably dividing B&J.

¶14 Husband’s reliance on Foster is misplaced. Here, unlike in
Foster, the superior court did not award Wife a greater share of community
property in lieu of spousal maintenance. To the contrary, the court
awarded Wife a lesser share of community property in exchange for a
greater amount of spousal maintenance. Foster is inapposite.

¶15 Turning to Buttram, a subsequently enacted statute has
superseded the limitation discussed therein on the superior court’s

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authority to award more spousal maintenance in lieu of an equal division
of community property. See Young v. Young, 1 CA-CV 17-0302 FC, 2018 WL
2248256, *2, ¶ 10 (Ariz. App. May 17, 2018) (mem. decision) (“Buttram was
superseded by [A.R.S.] § 25-318(R)[.]”).

¶16 Enacted in 2008, A.R.S. § 25-318(R) states the following: “If
any part of the court’s division of joint, common or community property is
in the nature of child support or spousal maintenance, the court shall make
specific findings of fact and supporting conclusions of law in its decree.”
See 2008 Ariz. Legis. Serv. ch. 124 § 2. Under § 25-318(R), the superior court
is authorized to divide community property through an award of spousal
maintenance, where A.R.S. § 25-319(A) otherwise supports such an award.
See Parsons v. Ariz. Dep’t of Health Servs., 242 Ariz. 320, 323 ¶ 11 (App. 2017).
But Buttram remains good law in at least one respect—if the superior court
does not satisfy the requirements of § 25-318(R), it may not use spousal
maintenance as “a justification for failing to properly divide the community
property.” See Buttram, 122 Ariz. at 582.

¶17 Here, it is unclear whether the superior court relied on § 25-
318(R) as authority—the Decree does not mention that subsection. But
nothing in § 25-318(R) suggests that the superior court must expressly
reference that subsection for it to apply. Moreover, we assume the superior
court knows the law, and we can affirm on any basis supported by the
record. Leflet v. Redwood Fire & Cas. Ins. Co., 226 Ariz. 297, 300 ¶ 12 (App.
2011). We therefore analyze whether the Decree satisfies § 25-318(R).

¶18 Husband argues that even if § 25-318(R) permitted the
superior court to award Wife her interest in B&J in the form of additional
spousal maintenance, the “court’s award . . . fails to meet the statutory
requirement that specific findings of fact and conclusions of law must be
made[.]” On this narrower point, Husband is correct. Section 25-318(R)
requires the superior court to “make specific findings of fact and supporting
conclusions of law in its decree.” The Decree does not contain the factual
findings required to divide B&J by awarding Wife additional spousal
maintenance. See Young, 2018 WL 2248256 at *2 ¶ 10.

¶19 The superior court did not make an express finding as to
B&J’s value. The court instead concluded that B&J’s value was
indeterminable. The record does not adequately support that conclusion.
True, neither party submitted an expert valuation, making accurate
valuation much more difficult for the court. But to properly proceed under
§ 25-318(R), the court needed to determine B&J’s value as of the date Wife
served Husband with the petition for dissolution.

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¶20 The court has broad discretion to utilize the parties’
conflicting valuation evidence. See Gutierrez v. Gutierrez, 193 Ariz. 343, 347
¶ 13 (App. 1998). Both parties testified as to B&J’s value. The parties also
submitted B&J’s profit and loss statement, which showed a gross income of
$278,805 in 2022. Wife testified that B&J is worth approximately $200,000
based on the value of other businesses and B&J’s own profit and loss
statement, and Husband expressed his belief that B&J is worth at most
$4,000. See United Cal. Bank v. Prudential Ins. Co. of Am., 140 Ariz. 238, 304
(App. 1983) (“[T]he valuation process is not solely the province of expert
witnesses. An owner of property has, by definition, knowledge of the
components of value that are useful in ascertaining value, and an owner,
no less than an ‘expert’, can base his opinion of value on that knowledge.”).
The court also has discretion to rely on various other valuation methods.
See Kelsey v. Kelsey, 186 Ariz. 49, 51 (App. 1996); see also Ariz. R. Fam. Law
P. 72 (permitting the appointment of a special master to prepare a
valuation).

¶21 Because the court did not include a finding regarding B&J’s
value, it is unclear what portion of the spousal maintenance award was
intended to meet Wife’s needs under § 25-319 and what portion was
intended to compensate Wife for her share of B&J under § 25-318(R). It is
apparent from the Decree that the court did not adopt Husband’s $4,000
valuation, but the court also did not explicitly adopt Wife’s $200,000
valuation. Without knowing what value the court used for B&J, if any, or
what portion of the maintenance award was intended to compensate Wife
for her share of that community asset, we cannot assess whether the
maintenance award was appropriate. Similarly, we cannot assess whether
the superior court properly divided the community’s assets under § 25-
318(A).

¶22 Because the Decree does not contain the findings required to
award spousal maintenance in lieu of community property, we vacate the
Decree in part. On remand, the court should equitably divide the
community’s interest in B&J and reassess Wife’s spousal maintenance
award consistent with § 25-319 and, if it so chooses, § 25-318(R). If the court
again concludes that Wife should be awarded additional spousal
maintenance in lieu of receiving payment for her community interest in
B&J, the court should make “specific findings of fact and supporting
conclusions of law in its decree.” A.R.S. § 25-318(R).

¶23 Finally, Husband argues the superior court did not fully
consider his ability to meet his needs when it awarded Wife $2,500 per
month in maintenance. Because we vacate the superior court’s order as to

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the maintenance award and remand for the court to equitably divide the
community’s interest in B&J and then determine an appropriate spousal
maintenance award, we need not address Husband’s argument. Husband
may raise his concern anew with the superior court.

ATTORNEY FEES

¶24 Both Husband and Wife request attorney fees on appeal
under A.R.S. § 25-324. Because Wife is neither the prevailing party nor
represented by counsel, we deny her request. In the exercise of our
discretion, we also deny Husband’s request. As the prevailing party,
Husband is entitled to his costs on appeal upon compliance with Arizona
Rule of Civil Appellate Procedure 21.

CONCLUSION

¶25 We vacate the Decree in part and remand for further
proceedings consistent with this decision.

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

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