Schickner v. Schickner
1 CA-CV 16-0490-FC
| Ariz. Ct. App. | Oct 3, 2017Background
- Married in 1998; two minor children. Husband is an ophthalmologist with a 50% community interest in Western Medical Eye Center (WME) and 20% in Physicians Surgery Center (PSC).
- Husband filed for dissolution in 2010. Dispute centered on whether post-petition distributions from WME/PSC were Husband’s compensation (separate property) or community profits (community property).
- Family court initially treated distributions as salary/earned income, denied Wife’s request for half of post-petition distributions, valued community interests (WME and PSC), awarded Wife an equalization payment and temporary spousal maintenance and child support.
- This court’s 2015 opinion vacated the court’s characterization of distributions and WME valuation (no minority discount for a 50% interest), and remanded to determine reasonable compensation for Husband’s toil and labor and to revalue WME.
- On remand, family court found post-petition distributions were entirely Husband’s separate property (reasonable compensation supported by expert/MGMA data), valued community 50% WME interest at $650,000 (Wife awarded $325,000), denied Wife’s spousal-maintenance modification, and awarded Husband fees for defending that petition; Wife appealed. Court affirms.
Issues
| Issue | Wife's Argument | Husband's Argument | Held |
|---|---|---|---|
| Characterization of post-petition distributions | Distributions above $250,000 salary were community profits and thus divisible | Distributions reflected reasonable compensation for Husband’s toil and labor and are his separate property | Court: Distributions were Husband’s separate property; record (testimony, MGMA data, experts) supports reasonable compensation finding |
| Valuation of community’s 50% interest in WME | Wife: Expert showed inflated insider rent and excessive salaries that should reduce value; court wrongly ignored this, effectively imposing a minority discount | Husband: Pinto’s valuation (no minority discount) supported $517k–$650k; record lacks admissible proof of inflated rent or buyer’s ability to change rents | Court: No abuse of discretion in adopting Pinto’s upper-range valuation $650,000; no basis to adjust rent or apply minority discount |
| Modification of spousal maintenance | Wife: Changed circumstances (unpaid equalization amount, need to start eyewear import business) justify extension | Husband: Wife received large payments over years and has not shown substantial, continuing change or good-faith efforts toward independence | Court: Denial affirmed; Wife failed to prove substantial, continuing change or reasonable efforts toward independence |
| Attorneys’ fees for maintenance modification | Wife: Court should have awarded her fees because Husband has greater resources | Husband: Wife’s petition was unfounded; fees appropriate under §25-324(A) | Court: Award of $25,000 to Husband and $800 for new-trial response was not an abuse; denied Wife’s fee requests for remand trial; no appellate fees awarded to either party |
Key Cases Cited
- Mitchell v. Mitchell, 152 Ariz. 317 (affirming standard for reviewing family court factual findings)
- Thomas v. Thomas, 142 Ariz. 386 (App. 1984) (review standards)
- Schickner v. Schickner, 237 Ariz. 194 (App. 2015) (prior appeal vacating characterization and WME valuation and remanding)
- Bell-Kilbourn v. Bell-Kilbourn, 216 Ariz. 521 (App. 2007) (characterization of property at time of acquisition)
- In re Marriage of Fong, 121 Ariz. 298 (App. 1978) (community entitled to profits from community assets)
- Brebaugh v. Deane, 211 Ariz. 95 (App. 2005) (post-dissolution compensation may be separate property)
- Alley v. Stevens, 209 Ariz. 426 (App. 2004) (de novo review of legal conclusions)
- Gutierrez v. Gutierrez, 193 Ariz. 343 (App. 1998) (deference to family court credibility findings)