Arizona Court of Appeals
Alvares v. Munguia
Alvares v. Munguia was an unpublished memorandum decision where the Arizona Court of Appeals affirmed family court orders requiring the sale of two properties and imposing a $1,000 sanction against a litigant for violations of the divorce decree.
The parties married in 1987 and divorced in 2013. The divorce decree ordered the parties to obtain an appraisal of a residence awarded to Munguia and split any equity equally. It also ordered proceeds from the sale of another parcel of real estate to be used first to pay off a motorcycle loan. Any remaining proceeds were ordered to be shared equally.
Five years after entry of the decree, the parties still had not appraised the residence nor sold the real estate parcel, though at some point Alvares used separate funds to settle the outstanding motorcycle loan.
In September 2018, Alvares filed a petition to enforce the divorce decree where she requested reimbursement of half of the $4,000 she paid toward the motorcycle loan and an order for Munguia to pay her attorney’s fees related to the enforcement. Munguia asked the family court to deny the petition.
At the evidentiary hearing, the court found that neither party filed an affidavit of financial information and Munguia also failed to file a pretrial statement and failed to disclose documents requested by Alvares’ attorney. The court afforded Munguia an opportunity to explain his noncompliance but ultimately decided to proceed by default. After Alvares testified, the court appointed a real estate commissioner to sell both properties and divide the proceeds equally between the parties. The court also ordered Munguia to reimbursement Alvares for half of the motorcycle loan. The court denied Alvares’ request for attorney’s fees, though it did impose a sanction of $1,000 against Munguia for his failure to follow court orders.
Modification of Decree
Munguia appealed and first argued that the family court improperly modified the divorce decree and should have used the property’s value as of the date of the original decree when dividing its equity.
The Court of Appeals disagreed and explained that family courts retain jurisdiction to enforce divorce decrees, either by granting relief provided by the decree or entering new orders when the original decree no longer fully serves the interests of the aggrieved party.
Here, the family court’s new orders never really modified the decree. The decree conditionally awarded the property to Munguia upon payment to Alvares of one half of the property’s equity. Essentially this ordered the property to be sold and the proceeds divided equally.
The Court of Appeals found this to award the property to both parties as tenants in common pursuant to A.R.S. § 25-318(D), which states the property “held in common for which no provision is made in the decree shall be from the date of the decree held by the parties as tenants in common, each possessed of an undivided one half interest.”
This also disposed of Munguia’s secondary argument — that by using the current value of the property, which was greater than the value of the property at dissolution, it resulted in a windfall for Alvares.
Because Alvares’ interest was an undivided one half interest, it was equally subject to appreciation and market fluctuation as Munguia’s identical one half interest.
Munguia also argued that Alvares’ claim should be barred because she “unreasonably delay[ed]” enforcement for five years following the decree. Because this defense, sometimes called laches, was improperly raised for the first time on appeal, the Court of Appeals deemed it waived.
Though it was not considered in this case, laches is an equitable defense available in family court when an individual waits an “unreasonable” amount of time before bringing a claim and the delay prejudices the opposing party.
Sanctions and Attorney’s Fees
Munguia argued that the family court erred when it proceeded by default without first holding an evidentiary hearing and when it ordered him to pay sanctions.
Pursuant to Rule 76.2, family courts can impose sanctions when a party fails to follow pretrial orders, including orders to prepare and submit a pretrial statement. Here, Munguia not only failed to file a pretrial statement but he also violated the court’s order to file an affidavit of financial information.
Munguia’s appeal characterized the $1,000 sanction as “attorney’s fees” and argued that the court could not award attorney’s fees because Alvares also failed to file an affidavit of financial information.
It is true that A.R.S. § 25-324 requires family courts to consider the financial resources of the parties before awarding attorney’s fees under that statute. Usually the affidavit of financial information is essential to this mandate. But in this case the family court denied Alvares’ claim for attorney’s fees and ordered Munguia to pay $1,000 as a sanction for violating the court orders.