Modifying Non-Modifiable Spousal Maintenance

  • If both parties agree to make spousal maintenance non-modifiable and the obligor subsequently becomes disabled or unable to pay, can the court modify non-modifiable spousal maintenance?

A.R.S. § 25-317(G) provides that the court loses jurisdiction to modify non-modifiable spousal maintenance upon the entry of the decree:

[E]ntry of a decree that sets forth or incorporates by reference a separation agreement that provides that its maintenance terms shall not be modified prevents the court from exercising jurisdiction to modify the decree and the separation agreement regarding maintenance, including a decree entered before July 20, 1996.

In re Marriage of Waldren (2007)

In the case In re Marriage of Waldren, the supreme court held that § 25-317(G) prohibits the obligor from filing any post-decree motions to modify spousal maintenance, even in extreme circumstances. 217 Ariz. 173, 171 P.3d 1214 (2007). The decree in Waldren incorporated the parties’ agreement that the husband would pay non-modifiable spousal maintenance for 60 months. Less than two years later, the husband became disabled and his income was limited. He moved to terminate under Ariz. R. Civ. P. 60(c)(5) which provides relief from a “final judgment, order or proceeding [if] it is no longer equitable that the judgment should have prospective application.”

The court concluded that procedural “rules must yield to statutory provisions on substantive matters such as the court’s subject matter jurisdiction.” Because § 25-317(G) eliminated the superior court’s jurisdiction to modify decrees regarding non-modifiable spousal maintenance, “[a]llowing Husband relief under Rule 60(c)(5) would permit the court’s procedural rule to govern the substantive statute that limits the court’s jurisdiction in such matters.”

Coburn v. Rhodig (2017)

In Coburn v. Rhodig, the court of appeals addressed a similar issue. 243 Ariz. 24, 400 P.3d 448 (App. 2017). In this case, the parties also agreed to non-modifiable spousal maintenance. The parties later agreed to modify and shorten the spousal maintenance term. After the husband paid the agreed-upon amount, the wife filed for enforcement of the full amount set forth in the parties’ consent decree.

The court of appeals found this case distinguishable from Waldren. The husband in Coburn did not ask to modify or terminate his spousal maintenance obligation. Rather, he was defending a petition for enforcement filed by his ex-wife. Although the court did not have jurisdiction to modify or terminate the decree, the husband may still establish an equitable defense to enforcement. If he succeeds, the court need only deny the wife’s petition to enforce.

The court analogized Coburn to similar cases involving child support, where the obligor established an equitable defense even though child support orders cannot be retroactively modified. See Ray v. Mangum, 163 Ariz. 329, 788 P.2d 62 (1989); Cordova v. Lucero, 129 Ariz. 184, 629 P.2d 1020 (App. 1981).

In most cases, non-modifiable spousal maintenance is truly non-modifiable. However, there may be other avenues in defending a request for arrearages. If the other party delayed in filing for enforcement or agreed to accept a lesser amount, they may be barred from enforcing the award.

Smith v. Smith (mem.)

Smith v. Smith, No. 1 CA-CV 21-0300 FC, 2022 WL 320569 (Ariz. App. Feb. 3, 2022).

Facts and Procedural History

Heath and Tricia Smith were married in 2009 but lived together for about 10 years prior to that. Tricia, 40, is disabled due to a genetic disorder affecting her joints and is unable to work. Heath earns a modest income of about $72,000 per year as an electrician. Tricia’s only income comes from adoption subsidies of $1,931 per month. The parties have four children, three of whom are minors and two of whom were adopted.

Following a trial, the court ordered Heath to pay spousal maintenance of $1,500 per month for 20 years—twice the length of the parties’ actual marriage. Notably, the court made a finding that the parties were “legally married for approximately ten year[s] but ha[d] lived as a married community since the birth of their first [c]hild more than 20 years ago.”

After paying spousal maintenance and child support ($849/month), Heath’s income was $3,611 per month and Tricia’s income was $4,280 per month.

Heath appealed, arguing that the court improperly considered their premarital cohabitation in determining the “duration of the marriage” under A.R.S. § 25-319(B).

Ruling

The court of appeals found no abuse of discretion in ordering Heath to pay spousal maintenance for 20 years. A court must consider “all relevant factors” under § 25-319(B), and an award longer than the actual marriage is not automatically an abuse of discretion if other findings support the award. The court of appeals also noted that nothing in the trial court’s ruling indicated that the court gave much weight to the premarital cohabitation.

Likewise, the court of appeals found no abuse of discretion in ordering $1,500 per month in spousal maintenance because it was “approximately 25% of [Heath]’s income, which is not unusual.”

Thomas-Morgan v. Bodine (mem.)

Thomas-Morgan v. Bodine, No. 1 CA-CV 21-0243 FC, 2022 WL 405843 (Ariz. App. Feb. 10, 2022) (mem.).

Facts and Procedural History

The parties were divorced in 2008. As part of the decree, the court awarded spousal maintenance to Wife for 10 years. As part of the division of property within the decree, the court ordered Husband to transfer two life insurance policies to Wife. Husband was also ordered to “maintain payment of all necessary premiums and all other associated costs in connection with said policies so long as duties of child support and spousal maintenance [were] owed to [Wife].”

Husband allowed the first two policies to lapse and was held in contempt. Husband was ordered to replace the lapsed policies with a new, third policy. Years later, the third policy also lapsed and Husband filed a Rule 85 motion seeking various alternatives—obtaining a smaller policy or an equivalent policy with a different payment structure. The court denied the Rule 85 motion and Husband appealed.

Ruling

The court of appeals held that Husband was prohibited from allowing the third policy to lapse because it was Wife’s separate property under the decree. Provisions in a decree “as to property disposition may not be revoked or modified, unless the court finds the existence of conditions that justify the reopening of a judgment under the laws of this state.” A.R.S. § 25-327(A).

Husband also appealed the contempt finding, but contempt rulings are not appealable and the court of appeals declined to accept special action jurisdiction.

Although this is a memorandum decision, this case affirms the court’s authority to require one spouse to make premium payments on a life insurance as part of its division of property.

Mitchell v. Mitchell

Mitchell v. Mitchell, 152 Ariz. 312, 732 P.2d 203 (App. 1985), vacated in part, 152 Ariz. 317, 732 P.2d 208 (1987).

Issue: Does a court have the authority to transfer a life insurance policy to the other spouse in order to secure a spousal maintenance obligation?

Facts and Procedural History

The trial court awarded Carole Mitchell the ownership of life insurance policies covering her husband’s life. The court also ordered her husband to pay spousal maintenance. The husband appealed, arguing that the community interest in his life insurance policies was limited to their cash value, and that the court could not change the ownership of the policies.

The husband appealed various issues in the decree; this post will only address the life insurance issue. The supreme court later vacated the COA opinion on other grounds but did not address the life insurance issue. See Mitchell v. Mitchell, 152 Ariz. 317, 732 P.2d 208 (1987).

Ruling

The court of appeals held that “[t]he trial court has the authority to assign, encumber or restrict the ownership of a life insurance policy in order to secure the performance of other provisions of the decree.” The trial court did not specifically state its reason for transferring ownership but the court of appeals assumed it was done for a proper purpose—to secure the husband’s spousal maintenance obligation.

The opinion does not cite to a particular statute, but presumably the ruling was based on A.R.S. § 25-318(E), which states:

The court may impress a lien on the separate property of either party or the marital property awarded to either party in order to secure the payment of:

….

An allowance for child support or spousal maintenance, or both.

A.R.S. § 25-318(E)

The court of appeals directed the trial court to consider on remand whether the life insurance policies should revert to the husband after the spousal maintenance obligation terminated.