Stone v. Stone
1 CA-CV 16-0178-FC
| Ariz. Ct. App. | Sep 28, 2017Background
- Wife and Husband married in 2013, divorced in 2016; they operated a bar together during the marriage. The bar’s liquor permit was later cancelled and the bar closed.
- At private mediation the parties signed a written Rule 69 settlement agreement giving Wife the bar (assets and liabilities) and requiring her to pay Husband $85,000 as an equalization payment "in lieu of spousal maintenance."
- Four days after the mediation Wife moved to set aside the agreement alleging duress and other defects; Husband moved to adopt the agreement. The court held a status conference to address those motions.
- At the status conference the court refused Wife’s documentary evidence, allowed unsworn assertions from Husband, and relied on counsel’s avowals rather than sworn testimony or admitted exhibits.
- The superior court denied Wife’s motion, adopted the Rule 69 agreement into the decree, and awarded Husband $2,050 in attorney’s fees. Wife appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the superior court properly determined the Rule 69 settlement was fair and equitable before incorporating it | Wife: court failed to independently determine fairness and lacked competent evidence; must consider parties’ economic circumstances | Husband: agreement should be enforced and incorporated; court relied on undisputed facts/avowals | Court: vacated portions of decree and remanded — record lacks competent evidence to support finding the agreement fair and equitable; court must consider relevant evidence before adopting agreement |
| Whether the court erred by denying Wife an opportunity to introduce evidence (and by relying on counsel’s avowals and unsworn statements) | Wife: was prevented from admitting exhibits and presenting sworn testimony; burden to prove defect requires opportunity to present evidence | Husband: relied on asserted undisputed facts and counsel avowals at hearing | Court: reversed — when credibility or disputed facts are at issue, court must allow sworn testimony and cannot rely solely on counsel avowals (citing Volk) |
| Whether the attorney-fee award to Husband was appropriate | Wife: fee award improper because court erred in rejecting her challenge without an evidentiary hearing | Husband: Wife acted unreasonably in bringing meritless motions; fees were warranted | Court: vacated the $2,050 fee award and remanded for reconsideration after evidentiary hearing; Wife entitled to costs on appeal |
| Whether an evidentiary hearing is always required before adopting a settlement | Wife: a hearing was required here because disputed facts existed and the record lacked evidence | Husband: an evidentiary hearing not necessary if facts are undisputed or record sufficient | Court: clarified hearing not always required but here record had no competent evidence; remand for evidentiary hearing to assess fairness |
Key Cases Cited
- Sharp v. Sharp, 179 Ariz. 205 (App.) (a court must have evidentiary basis to find a settlement fair before incorporating it)
- Little v. Little, 193 Ariz. 518 (App.) (no competent evidence in record supports an award is an abuse of discretion)
- Volk v. Brame, 235 Ariz. 462 (App.) (when credibility matters court must allow sworn oral testimony and may not rely solely on counsel avowals)
- Keller v. Keller, 137 Ariz. 447 (App.) (separation agreements bind parties absent fraud or undue influence)
- Fuentes v. Fuentes, 209 Ariz. 51 (App.) (abuse of discretion includes errors of law in exercising discretion)
- In re Marriage of Foster, 125 Ariz. 208 (App.) (court abused discretion by reallocating community property in lieu of spousal maintenance)