In re Cotter
In re Cotter
Opinion of the Court
¶ 1 Judith Cotter appeals the trial court's determination that she is ineligible for spousal maintenance, arguing its determination was not supported by the evidence. Cotter also complains the court erred by failing to credit her for half the value of a television and denying her request for attorney fees. For the reasons that follow, we affirm in part, reverse in part, and remand for further proceedings.
Factual and Procedural History
¶ 2 On appeal, "[w]e view the evidence in the light most favorable to the [trial] court's order." Boyle v. Boyle ,
¶ 3 In June 2016, Cotter petitioned for dissolution of the marriage, seeking spousal maintenance and attorney fees. While the dissolution was pending, Podhorez suffered an acute mental health problem, such that he did not work during the four months before trial and began collecting short-term-disability benefits himself. Indeed, at the time of trial, he had not received a prognosis for when he might be able to resume working.
¶ 4 In August 2017, the trial court dissolved the marriage and distributed all property, but denied Cotter's requests for spousal maintenance and attorney fees. Concerning maintenance, the court found Cotter "ha[d] not established a statutory basis for entitlement to an award." With respect to fees, the court found there was "no substantial disparity of financial resources," the parties did not "act unreasonably," and no other circumstances warranted such relief. This appeal followed.
Jurisdiction
¶ 5 Although the parties do not raise the issue, we have an independent duty to examine our own jurisdiction. See Baker v. Bradley ,
Spousal Maintenance
¶ 6 Cotter first asserts the trial court erred by determining that she was ineligible for spousal maintenance.
¶ 7 Before granting a maintenance order, the trial court must, as a threshold matter, determine whether the requesting spouse is eligible for an award. See A.R.S. § 25-319(A). In making an eligibility determination, the court considers only the circumstances of the requesting spouse. See
¶ 8 Pursuant to § 25-319(A), the court may grant an award "if it finds that the spouse seeking maintenance ... [l]acks sufficient property ... to provide for [his or her] reasonable needs." The legislature has not defined "sufficient property." This court, interpreting a previous version of the statute, determined "sufficient property" meant property "capable of providing for the reasonable needs of the spouse seeking maintenance," whether by actively producing income to provide for the spouse's reasonable needs or by being converted into a suitable form so that it would so provide. Deatherage v. Deatherage ,
¶ 9 Further, our cases do not specify the period during which such property must be able to provide for a requesting spouse's needs in order to render him or her ineligible for a maintenance award. See Wineinger v. Wineinger ,
¶ 10 To the extent there is any ambiguity in the meaning of "sufficient property," the history of § 25-319(A)(1) likewise supports the interpretation that sufficient property means property that, standing alone, can provide for a spouse's reasonable needs during his or her lifetime. See Premier Physicians Group, PLLC v. Navarro ,
¶ 11 Podhorez contends that "sufficient" is a "low threshold," meaning "[a]dequate ... [or] necessary for a given purpose."
*263See Sufficient , Black's Law Dictionary (10th ed. 2014). He further argues that Cotter received "over $36,000 in cash and marital assets," which he asserts is "far more liquid assets than the average American [possesses]." But as we have explained above, adequate or necessary for the purposes of § 25-319(A)(1) means capable of independently providing for a spouse's reasonable needs during his or her life. Further, even assuming arguendo that, at the dissolution of their marriage, Cotter possessed "far more liquid assets than the average American," this fact has no bearing on whether those assets are sufficient to render her ineligible for a maintenance award.
¶ 12 Here, the trial court recited § 25-319(A)(1)-(4) and determined that Cotter "ha[d] not established a statutory basis for entitlement to an award of spousal maintenance." The court, however, did not make specific findings about the value of Cotter's property, the cost of her reasonable needs, or the term for which that property could be expected to provide for those needs before she exhausted it. Recognizing the court was not required to make such specific findings, see Higgins v. Higgins ,
¶ 13 In so holding, we take no position on the secondary question of whether the trial court should award spousal maintenance to Cotter. Rather, we instruct the court to evaluate her property as set forth in this opinion and determine whether she is eligible for an award. See § 25-319(A). If the court determines she is eligible for an award, it must then consider the relevant factors, balance the equities between the parties, and exercise its discretion as it deems just. See § 25-319(B) ; Gutierrez v. Gutierrez ,
Equalization Credit
¶ 14 Cotter also complains the court erred when it calculated her property-equalization payment because it "overlooked the 75 inch television retained by [Podhorez] ... worth approximately $2,300.00." "[A]ll marital joint property should be divided substantially equally unless sound reason exists to divide the property otherwise." In re Marriage of Flower ,
¶ 15 Here, the trial court specifically awarded to each party "all ... household furniture, furnishings and appliances, and other personal property currently in his [or her] possession." Further, Podhorez listed the television among the property he had removed from the marital residence. Accordingly, we presume the court considered the television and its value when it distributed the property and calculated the value of the equalization payment. See Able Distrib. Co. v. James Lampe, Gen. Contractor ,
Attorney Fees
¶ 16 Cotter insists the trial court erred by refusing to award her attorney fees. See A.R.S. § 25-324(A). Section 25-324(A) provides that "after considering the financial resources of both parties and the reasonableness of [their] positions," a trial court may order one party to pay a "reasonable amount to the other party for the costs and expenses of maintaining ... any [dissolution] proceeding." We review a trial court's order concerning attorney fees under § 25-324 for an *264abuse of discretion. See Mangan v. Mangan ,
¶ 17 Here, the trial court denied both parties' requests for attorney fees, finding "there [was] no substantial disparity of financial resources between the parties" and that neither "act[ed] unreasonably in the litigation." Cotter asserts that Podhorez's net income "significantly exceeded" her gross income and that his "unreasonable position" regarding maintenance "dramatically increased the time, complexity, and costs of the litigation." Cotter's assertion about Podhorez's income, however, is based upon figures existing before he suffered a mental health problem several months before trial-a circumstance that caused him to leave work and collect short-term-disability benefits himself. As the court specifically found, "[b]oth parties were on disability at the time of the trial, and had been on disability for some period of time prior to the trial." Further, the court determined that although both argued "the other party [was] capable of earning more ... the possibility of additional income [was] speculative at best." Based on these findings and the record before us, we cannot say the trial court abused its discretion. See
¶ 18 Finally, Cotter requests attorney fees on appeal pursuant to § 25-324(A). However, she has not demonstrated the parties' respective financial resources warrant such an award nor that Podhorez has taken an unreasonable position in defending the case on appeal. See § 25-324(A).
Disposition
¶ 19 For the foregoing reasons, we affirm the trial court's rulings with respect to its accounting for the television in the equalization payment and to attorney fees. However, we reverse the court's determination that Cotter was ineligible for spousal maintenance and remand for further proceedings consistent with this opinion.
Cotter also challenges the trial court's determinations that she was ineligible for an award under A.R.S. § 25-319(2) and (4). However, we need not address these arguments because we determine the court erred by finding her ineligible for spousal maintenance with respect to subsection (1).
Our dissenting colleague argues that Deatherage expressly disclaimed the principle that courts could not expect spouses to "use up" their property. Infra ¶24. But the court there did not disclaim the principle generally; instead, it rejected the suggestion that the trial court had done so in that particular case. Deatherage ,
The dissent characterizes this formulation as inviting speculation and urges that the proper test is to directly compare the income-producing potential of the requesting spouse's property against his or her reasonable needs at the time of trial. Infra ¶¶29-32. This test is certainly suitable in most cases. However, it would not account for property that does not produce income adequate to sustainably meet reasonable needs but could do so if its principal was invaded as well.
The dissent interprets Wineinger to set forth a bright-line rule that "a spouse should not be expected to live off and dissipate the principal of his or her assets for any period of time." Infra ¶26. But this interpretation overlooks that the court framed its reasoning by looking to the time when the principal would be dissipated: when the spouse "no longer had any earning capacity."
The enumerated circumstances required a finding that the spouse either was "unable to support himself or herself through appropriate employment or [had] custod[y] of a child whose age or condition [was] such that the custodian should not be required to seek employment outside the home or lack[ed] earning ability ... adequate to support himself or herself." 1976 Ariz. Sess. Laws, ch. 171, § 5.
Our dissenting colleague conflates § 25-319(A)(1) and (2) by considering income Cotter might obtain through work alongside her other property interests. Infra ¶34. Moreover, the dissent suggests we have "simply overlook[ed] the practical import" of considering whether a spouse possesses sufficient property or is capable of supporting herself through appropriate employment. Infra n.8. But whether these factors should be considered separately or together reflects a policy concern for the legislature to resolve. Cf. Winsor v. Glasswerks PHX, L.L.C. ,
But, regardless of whether Cotter's disability income of $1,593.06 per month is categorized as property under subsection (1) or as employment income under subsection (2), her property would nevertheless be insufficient to provide for her reasonable needs of $2,251.16 per month. And even assuming arguendo that her disability income could be categorized under subsection (2), this would only devalue her property, further establishing her eligibility under § 25-319(A)(1).
We also deny Cotter's request for attorney fees pursuant to § 25-324(B) because she develops no argument based on that subsection and, in any event, we determine it does not apply because Podhorez did not file a petition, much less under the circumstances enumerated therein.
Concurring in Part
¶ 20 I concur in the opinion as to the issue of equalization credit and in its denial of appellee's request for attorney fees. I respectfully dissent from the opinion as to spousal maintenance and would affirm the lower court decree as a whole.
Sufficient Property
¶ 21 The majority primarily concludes that the trial court failed to make a finding under A.R.S. § 25-319(A)(1) that Cotter had sufficient property to provide for her reasonable needs "during ... her lifetime." The majority concludes that "[p]ursuant to 25-319(A), the court may grant an award 'if it finds that the spouse seeking maintenance ... [l]acks sufficient property ... to provide for [his or her] reasonable needs.' " The majority then goes on to describe what "sufficient property" means, and then to explain over what period the court must find the property to be sufficient. The majority concludes that a spouse seeking maintenance is eligible for maintenance if she does not have property "of such value that it could provide for her reasonable needs without supplement," and "of such value that the spouse would be unlikely to exhaust it in his or her lifetime." This is incorrect and arises from the majority's misreading of the effect of two cited cases- Deatherage and Wineinger .
¶ 22 In Deatherage v. Deatherage , the wife requesting maintenance received in the decree cash and bank deposits totaling approximately $54,000, stock worth approximately *265$13,700, a receivable worth approximately $9,000, five acres of undeveloped real property having an equity value of approximately $77,000, and had reconfirmed to her as her separate property a five-acre parcel of undeveloped real property valued at $95,000.
¶ 23 The Deatherage court held, however, that "by considering non-income producing property in determining eligibility to receive maintenance, the spouse may be indirectly influenced to either borrow against the equity in the property or convert the property into a form which yields income.... [T]his is the result which inevitably flows from the statutory language in issue." Id ."Wife is not being required to 'use up' her property. The trial court is merely required to consider the income potential of the property as a factor in determining (a) whether a spouse is entitled to spousal maintenance; and if so (b), what amount." Id . at 321,
¶ 24 The Deatherage court then held that maintenance was appropriate but only for a reasonable period during which the wife could convert her non-income-producing property into income-producing property to meet her reasonable needs. Id . at 320,
¶ 25 In Wineinger v. Wineinger , the wife was awarded certain property in the decree and she was also awarded spousal maintenance because the court determined that the awarded property was insufficient to meet her reasonable needs.
What the [trial] court was really saying in its "nest egg" theory was that she did not have sufficient property apportioned to her to provide for her reasonable needs. She would have to live off both the principal and interest from the money, dissipating it to an extent that when she no longer had any earning capacity, there would be nothing left upon which she could draw.
¶ 26 The Wineinger court then, because using the principal of her accumulated assets to meet her reasonable needs would "dissipate" them over time, affirmed the wife's eligibility for maintenance under § 25-319(A)(1).
¶ 27 The majority then goes on to read these cases together to mean that, for the purposes of § 25-319(A)(1), "sufficient property means property that, standing alone, can provide for a spouse's reasonable needs during his or her lifetime." This conclusion is faulty, or, at least, so unclear as to risk misapplication.
¶ 28 Deatherage stands for nothing more than the proposition that a party's assets must be considered for their current income-producing potential even if they are not currently producing income . The Deatherage court looked at the requesting spouse's assets and determined that, within two years, she could reasonably begin earning income on her property. Deatherage ,
¶ 29 The majority sows further confusion by compelling courts, in the eligibility determination, to determine at what point "during his or her lifetime" the spouse's assets might be exhausted. That is, the opinion's reasoning will require courts, in examining the sufficiency of a requesting spouse's assets, to look down the road and predict, based on the spouse's reasonable needs, when the money will run out. Both a spouse's "reasonable needs" and his or her ability to provide for them should be determined as of the day of trial. Unless a statute clearly states to the contrary, we read statutes as referring to the present tense. See, e.g. , State v. Hinden ,
¶ 30 In Neal v. Neal , the trial court awarded the requesting spouse one dollar in spousal maintenance as a way of "holding open the courtroom door for possible changes of circumstances."
¶ 31 Sherman v. Sherman ,
¶ 32 The majority's reasoning leads to the conclusion that a trial court is to look down the road in analyzing how long and at what point "during his lifetime" a requesting spouse's assets will run out. The danger is that courts will read this to mean that a spouse should be expected to spend down his principal assets so long as they last a sufficient length of time. This danger is avoided if the court looks only to the income currently produced by, or the current income potential of, a requesting spouse's principal assets, and, in light of that (and other income sources), whether such meet his reasonable needs at the time of trial. This is what the statute and our case law tells courts to do. The trial court here was only required to determine whether Cotter had sufficient income, or present income potential, from her property or an income source otherwise to meet her reasonable needs at the time of trial.
Remand for Further Findings
¶ 33 The trial court determined that Cotter was not eligible for spousal maintenance under A.R.S. § 25-319, but did not make a specific finding as to why she was ineligible. The majority concedes that § 25-319 does not require that a court make an express finding as to the reason for ineligibility. Wineinger ,
¶ 34 Cotter received her share of marital property, she had an income from a private disability insurance policy and received Social Security disability benefits, and there was no evidence that she could not work at least part time for wages. Because Cotter has an income, and because she did not present any evidence that she is presently unable to work to earn additional income, and because, together, these would serve to meet the reasonable needs she identified, the record supports the trial court's determination that she is ineligible for spousal maintenance.
¶ 35 Because the majority, at best, confuses what is needed by § 25-319, I cannot fully join in its opinion, and, because the record supports the trial court's finding of ineligibility, I would affirm the decree in its entirety.
The majority also mistakenly states that a requesting party could be self-sufficient through appropriate employment, yet still be eligible for maintenance if he does not have property sufficient to provide for his reasonable needs. That cannot be true because, regardless of the source of the means by which one's reasonable needs are met, if they are being met, one is ineligible for maintenance under either § 25-319(A)(1) or (2). The majority claims this dissent "conflates" these concepts; the majority however simply overlooks the practical import of the concepts altogether.
Even while conceding this point, the majority faults the court for not making specific findings about the value of Cotter's property, the cost of her reasonable needs, or the "term for which that property could be expected to provide for those needs before she exhausted it."
The record also supports a finding of ineligibility under all other grounds under § 25-319.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.