                      NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE


                                In re the Matter of:

              DAMON V. HOVANNISIAN, Petitioner/Appellee,

                                         v.

            CONNIE E. HOVANNISIAN, Respondent/Appellant.

                            No. 1 CA-CV 19-0385 FC
                                 FILED 8-11-2020


            Appeal from the Superior Court in Maricopa County
                           No. FC2017-053905
                The Honorable Roy C. Whitehead, Judge

    AFFIRMED IN PART; VACATED AND REMANDED IN PART;
            REVERSED AND REMANDED IN PART


                                    COUNSEL

The Cavanagh Law Firm PA, Phoenix
By Christina S. Hamilton
Counsel for Petitioner/Appellee

Berkshire Law Office PLLC, Tempe
By Keith Berkshire, Erica L. Gadberry
Counsel for Respondent/Appellant
                  HOVANNISIAN v. HOVANNISIAN
                      Decision of the Court



                      MEMORANDUM DECISION

Chief Judge Peter B. Swann delivered the decision of the court, in which
Presiding Judge Samuel A. Thumma and Judge Randall M. Howe joined.


S W A N N, Chief Judge:

¶1            Connie E. Hovannisian (“Wife”) appeals from several rulings
in the decree dissolving her marriage to Damon V. Hovannisian
(“Husband”). For the reasons set forth below, we vacate the order
characterizing Wife’s 2019 bonus as community property and we remand
for the entry of an order identifying the bonus as Wife’s separate property.
We reverse and remand for reconsideration of the legal-decision-making
award, the child-support award, and the award of attorney’s fees. We
affirm the decree in all other respects.

                FACTS AND PROCEDURAL HISTORY

¶2            Husband and Wife married in 2005. They have two minor
children. Husband served Wife with the petition for dissolution on
September 18, 2017. Wife worked as a corporate executive throughout the
marriage, and Husband worked as a restaurant manager until he was laid
off in March 2018.

¶3            In 2017, the Securities and Exchange Commission (“SEC”)
sued Husband, two of his relatives, and a friend for trading on inside
information regarding Wife’s employer. Wife had worked on a confidential
project involving the acquisition of her company by another corporation in
2014. When the acquisition was made public, the value of stock in Wife’s
company increased substantially. According to the SEC complaint,
Husband improperly obtained nonpublic information about the pending
acquisition from Wife, traded on this inside information, and tipped off
three other people who also traded on the information.

¶4            Without telling Wife, Husband entered a settlement with the
SEC, which required him to pay a civil penalty of more than $155,000. To
pay the civil penalty, Husband borrowed the money from his father and
signed a promissory note for the debt, again without informing Wife. Wife
was investigated by the SEC and her employer, but she was never charged
with any wrongdoing. Wife spent $16,388 on attorney’s fees defending



                                     2
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

herself in the SEC investigation, and Husband incurred an additional $4,308
in fees.

¶5            While the parties were still living in the same house, Wife
discovered that Husband had hidden a recording device in her bedroom—
which he later admitted he had used since 2016 to record her private
conversations. Wife obtained an order of protection and the parties ceased
cohabiting. The parties went to trial in the subsequent dissolution action in
January 2019.

¶6            The superior court awarded the parties joint legal decision-
making authority regarding their children, concluding that the order of
protection did not preclude an award of joint legal decision-making
authority because Husband had not committed “substantial” domestic
violence when he surreptitiously recorded Wife’s conversations. The court
attributed an income of $94,000 to Husband for child support, rejecting
Wife’s argument that he could earn more based on his work history. In
dividing property, the court rejected Wife’s claim for waste relating to the
SEC debt and legal fees, equally divided Wife’s 2019 retention bonus,
adopted Husband’s valuation of the real property, and equally divided a
Fidelity account. The court also allocated personal property and awarded
Husband $30,000 in attorney’s fees based on findings that Wife had greater
financial resources and took unreasonable positions. Wife appeals from the
final decree.

                              DISCUSSION

I.    THE SUPERIOR COURT FAILED TO APPLY AND MAKE
      FINDINGS  UNDER    A.R.S.  § 25-403.03.01(E) WHEN
      DETERMINING LEGAL DECISION-MAKING AUTHORITY.

¶7            We must reverse a legal decision making order if the superior
court abused its discretion. See Engstrom v. McCarthy, 243 Ariz. 469, 471,
¶ 4 (App. 2018). The court abuses its discretion when the record does not
support its decision or when it commits an error of law in reaching a
discretionary conclusion. Id. We defer to the court’s factual findings unless
clearly erroneous, but we review de novo its conclusions of law and
interpretation of statutes. Id.

¶8            A.R.S. § 25-403 provides that in a contested case, the court
must determine legal decision making authority consistent with the
children’s best interests. In determining the children’s best interests, the
court must consider “[w]hether there has been domestic violence . . .
pursuant to § 25-403.03.” A.R.S. § 25-403(A)(8). Section 25-403.03(A)


                                     3
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

precludes an award of joint legal-decision-making authority “if the court
makes a finding of significant domestic violence pursuant to § 13-3601 or if
the court finds by a preponderance of the evidence that there has been a
significant history of domestic violence.” However, even if the court finds
no “significant” domestic violence under § 25-403.03(A), “[t]he court shall
consider evidence of domestic violence as being contrary to the best
interests of the child[ren].” A.R.S. § 25-403.01(B); see also DeLuna v. Petitto,
247 Ariz. 420, 423, ¶ 11 (App. 2019). In fact, under § 25-403.01(D), “[i]f the
court determines that a person who is seeking sole or joint legal-decision
making has committed an act of domestic violence against the other parent
[and the victim has not also committed an act of domestic violence], there
is a rebuttable presumption that an award of sole or joint legal decision
making authority to the parent who committed the act of domestic violence
is contrary to the child’s best interests.” A person commits an act of
domestic violence for purposes of § 25-403.01(D) if he or she “[e]ngages in
a pattern of behavior for which a court may issue an ex parte order to
protect the other person who is seeking child custody.” A.R.S. § 25-
403.01(D)(3). “Before awarding sole or joint legal decision-making
authority to the offending parent, the court must make specific findings on
the record that there is sufficient evidence to rebut the presumption,”
considering multiple factors set forth in § 25-403.03(E). DeLuna, 247 Ariz.
at 423, ¶ 12.

¶9             Here, the superior court found that the order of protection did
not establish “substantial” domestic violence. Though one reasonably
could disagree with the superior court’s finding on this record, we must
defer to it. The finding pertained to the analysis under § 25-403.01(A) only.
The court did not cite to § 25-403.01(E) or make any findings under its
rubric. Though the court addressed some of the § 25-403.01(E) factors as
part of its other analyses, it did not make findings regarding all of the
factors and it did not consider any findings within the context of the
question presented by § 25-403.01(E). Further, we will not, as Father urged
at oral argument on appeal, speculate that any § 25-403.01(E) factors for
which the court made no coincidental findings did not apply on this record.
See DeLuna, 247 Ariz. at 424, ¶ 16 (“We cannot infer that the court
considered [the § 25-403.03(E)] factors when making its decision.”). The
court’s failure to consider and make findings under § 25-403.01(E)
constituted an abuse of discretion. We reverse the award of joint legal
decision making authority, and we remand for reconsideration in
accordance with all applicable provisions of § 25-403.03.




                                       4
                    HOVANNISIAN v. HOVANNISIAN
                        Decision of the Court

II.    THE SUPERIOR COURT DID NOT ABUSE ITS DISCRETION BY
       CONCLUDING THAT THE DEBTS RELATED TO THE SEC
       INVESTIGATION DID NOT CONSTITUTE WASTE.

¶10           Wife contends that the superior court erred by not finding
waste with respect to the promissory note by which Husband assumed debt
to pay for his settlement with the SEC, and also with respect to her and
Husband’s legal fees incurred in connection with the SEC investigation and
suit.

¶11           We review the superior court’s allocation of community
property for an abuse of discretion. Gutierrez v. Gutierrez, 193 Ariz. 343, 346,
¶ 5 (App. 1998). “A debt incurred by a spouse during marriage is presumed
to be a community obligation; a party contesting the community nature of
a debt bears the burden of overcoming that presumption by clear and
convincing evidence.” Hrudka v. Hrudka, 186 Ariz. 84, 91–92 (App. 1995).
In determining whether the presumption has been rebutted, the court may
consider a spouse’s “excessive or abnormal expenditures, destruction,
concealment or fraudulent disposition of community . . . property.” A.R.S.
§ 25-318(C). The spouse alleging abnormal or excessive expenditures has
the burden to make a prima facie showing of waste, after which the other
spouse must present evidence to rebut the showing. Gutierrez, 193 Ariz. at
346–47, ¶ 7.

¶12           The superior court concluded that the promissory note was
presumptively a community debt because it was incurred during the
marriage. The court found that Wife failed to rebut that presumption
because the insider information “came from [Wife]” and Husband’s
settlement allowed Wife to keep her job; the court also noted that Wife has
a pending civil action against Husband seeking damages for her share of
this debt. Similarly, the court rejected Wife’s claim that the legal fees related
to the SEC investigation constituted waste because the fees were not
excessive or abnormal, the fees were necessary for Wife to keep her job, and
Wife asserted a claim for the fees in the civil action.

¶13           Wife contends that the promissory note and the legal fees
constitute waste because, consistent with her employer’s and the SEC’s
findings, she was not involved in Husband’s insider trading. The superior
court’s findings suggest that it concluded Wife was somehow aware of or
complicit in Husband’s insider trading. Viewing the facts in the light most
favorable to sustaining the court’s findings and deferring to the court’s
credibility determinations and the weight to give conflicting evidence, see
Gutierrez, 193 Ariz. at 346, 347, ¶¶ 5, 13, Husband’s testimony supports the


                                       5
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

court’s conclusion that Wife was not without responsibility for these debts
and expenses.1 Husband testified that he found out about the sale of Wife’s
company “from a wink and a nod from . . . [Wife] when I asked her about
it” and that she learned of his stock purchase before the SEC investigation
began. Husband also testified that he exercised his right against self-
incrimination during the investigation and agreed to the settlement “to save
[Wife]’s position and career.” We affirm the superior court’s conclusion
that Wife did not establish community waste.2

III.   THE SUPERIOR COURT ERRONEOUSLY CHARACTERIZED
       WIFE’S POST-SERVICE RETENTION BONUS AS COMMUNITY
       PROPERTY.

¶14           The decree allocated two of Wife’s retention bonuses. The
allocation of the first bonus, which Wife received in 2017 for services
rendered in 2017 (“the 2017 bonus”), is not at issue. At issue is the allocation
of the second bonus, which Wife’s employer offered her on September 19,
2017, just one day after the petition for dissolution was served, payable on
and contingent on her remaining employed through September 30, 2019
(“the 2019 bonus”). The court found that the entire 2019 bonus was
community property because it was earned during the marriage but
payment was delayed due to the SEC investigation. Wife contends that the
classification of the bonus as community property was error. The
characterization of property as community or separate is a question of law
that we review de novo. Schickner v. Schickner, 237 Ariz. 194, 199, ¶ 22 (App.
2015).

¶15          The parties do not dispute that the 2019 bonus was offered
after the community terminated. Therefore, it is presumptively Wife’s
separate property. A.R.S. §§ 25-211(A)(2), -213(B). As the party challenging


1      We note that Helland v. Helland, cited by the superior court, did not
hold that a spouse’s criminal activity can never constitute waste—it merely
held that the wife in that case failed to establish any causal relationship
between the husband’s criminal activity and the lower value of the
community medical practice. 236 Ariz. 197, 201, ¶¶ 20–21 (App. 2014).

2      We disagree with Wife that the superior court denied her waste
claim based on an erroneous application of issue preclusion. The court did
not find that Wife’s civil suit precluded a finding of waste; rather, it
concluded that Wife failed to rebut the presumption that the debts were
community obligations.



                                       6
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

the presumption, Husband had the burden of proving the community
nature of the 2019 bonus by clear and convincing evidence. Cf. Hrudka, 186
Ariz. at 91–92. Husband had to show that the 2019 bonus was intended to
compensate Wife for services rendered during the marriage. See Brebaugh
v. Deane, 211 Ariz. 95, 99–101, ¶¶ 19–21, 25 (App. 2005).

¶16           The evidence did not show that the 2019 bonus was intended
to retroactively compensate Wife for the time she was under investigation.
To the contrary, the offer expressly stated that it was made “[i]n recognition
of the importance of [Wife’s] engagement and commitment to the future of
[the company.]” To earn the bonus, Wife had to remain employed through
September 30, 2019.

¶17           The only evidence suggesting that the 2019 bonus was earned
during the marriage was Husband’s testimony that in the civil suit Wife
filed against him, she claimed that her employer delayed offering her a
bonus from July 2016 to October 2017 when the SEC completed its
investigation. Wife confirmed that she was not eligible to receive a
retention bonus until the SEC investigation was complete. But she did not
specify whether the delay related to the 2017 or 2019 bonus—and even if it
was the 2019 bonus that was delayed, no evidence suggested what, if any,
portion of the 2019 bonus Wife earned before the dissolution petition was
served. Husband’s evidence was insufficient to rebut the separate-property
presumption. See id. at 99, ¶ 15 (holding that language indicating stock
option was intended to encourage employee to remain with company
sufficiently rebutted the presumption of community property). We
therefore vacate the superior court’s order characterizing the 2019 bonus as
community. On remand, the court shall award the 2019 bonus to Wife as
her separate property.

IV.    THE SUPERIOR COURT DID NOT ABUSE ITS DISCRETION IN
       ALLOCATING THE REAL PROPERTY.

¶18           The parties owned seven rental properties. The superior
court allocated those properties based on its finding that the parties agreed
regarding the properties’ value and equity. The court awarded the rental
properties to Husband at the agreed-upon value and awarded Wife an
equalization payment.

¶19          Wife contends that the superior court erred when it found
that she agreed with Husband’s valuation, which was not based on an
independent appraisal and which she testified would require verification.
But “an owner of property is always competent to testify as to the value of



                                      7
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

his property.” Town of Paradise Valley v. Laughlin, 174 Ariz. 484, 486 (App.
1992) (citation omitted). If Wife disagreed with Husband’s valuation, it was
incumbent on her to provide evidence of different values. She did not do
so.

¶20           Wife argues that under Leathers v. Leathers, 216 Ariz. 374, 378,
¶ 19 (App. 2007), Husband should be bound by his pretrial statement,
which stated that if Wife disagreed with his valuation, the rental properties
should be sold. Wife’s pretrial statement used Husband’s valuation, noting
that it was based on online appraisals giving “approximate” and
“estimated” values, and asking for independent appraisals if Husband
wanted to purchase the rental properties. As noted above, it was Wife’s
obligation to provide her own appraisals if she disagreed with those used
by Husband. She cannot now claim that the court abused its discretion
when she failed to provide an alternative valuation. See Reyes v. Town of
Gilbert, 247 Ariz. 151, 159–60, ¶ 35 (App. 2019) (“Of course, the joint pretrial
statement is subject to modification or limitation by previous disclosures
and the superior court.”).

¶21           Wife also argues that the superior court abused its discretion
because it treated the rental properties differently than the marital
residence, for which the court accepted Husband’s valuation and ordered
that Wife could either buy out Husband’s interest or the parties could sell
the residence and split the proceeds equally. The court did not treat the
properties differently—in both cases the court provided for an equitable
division. And in the case of the marital residence, Wife wanted to buy out
Husband’s interest and the court explained that Husband’s appraisal was
more reliable than Wife’s because it was more recent and well-supported.
We affirm the allocation of the real property.

V.     THE SUPERIOR COURT FAILED TO CONSIDER ALL RELEVANT
       FACTORS BEFORE ATTRIBUTING HUSBAND’S INCOME FOR
       CHILD SUPPORT PURPOSES.

¶22           At the time of trial, Husband had been unemployed for
approximately nine months since being laid off. He previously worked as
a restaurant manager, earning a maximum annual salary of $94,000.
Husband also receives $5,361 per month in passive income from a separate
family business. The superior court imputed to Husband an annual income
of $94,000—so only $2,472.33 per month more than his passive income—for
purposes of child support. Wife contends that the court erred by not
attributing a higher income to Husband based on his earning capacity.




                                       8
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

¶23           We review child support awards for an abuse of discretion,
and we accept the superior court’s findings of fact unless they are clearly
erroneous. Engel v. Landman, 221 Ariz. 504, 510, ¶ 21 (App. 2009). Whether
the court can attribute a higher income than the party is earning is a
question of law that we review de novo. Pullen v. Pullen, 223 Ariz. 293, 295,
¶ 9 (App. 2009).

¶24             The Child Support Guidelines allow the superior court to
attribute income up to earning capacity when a parent is unemployed or
working below his or her full earning capacity, “[i]f earnings are reduced
as a matter of choice and not for reasonable cause.” A.R.S. § 25-320 app.
§ 5(E). The court should consider the reasons for the parent’s reduced
income and should balance all relevant factors. Id.; Little v. Little, 193 Ariz.
518, 522–23, ¶¶ 13–15 (1999). The court must consider, among other things,
“whether the parent’s current educational level and physical capacity
provide him or her with the ability to find suitable work in the
marketplace,” whether “the additional training is likely to increase the
parent’s earning potential,” whether “length of the parent’s proposed
educational program” is such that the parents will benefit from the future
income, whether “the parent is able to finance his or her child support
obligation while in school through other resources such as loans or part-
time employment,” and “whether the parent’s decision is made in good
faith.” Little, 193 Ariz. at 522–23, ¶¶ 13–15.

¶25           Husband testified that he was changing careers to be available
for the children. Husband testified that historically he had worked nights
and weekends as a restaurant manager, and that Wife had threatened that
such a work schedule would not permit equal parenting time. He stated
that his goal was to work in real estate. He had not, however, applied for
any jobs or taken any steps to obtain a real estate license during his ten
months’ unemployment.

¶26           The superior court considered Wife’s threat and Husband’s
stated intention to change careers, but the court made no mention of the
myriad other factors required to be considered under Little. On this record,
we reverse the child support award and remand for reconsideration
consistent with Little.3



3      The parties agree that the child support order incorrectly attributed
two additional children to Husband. On January 22, 2020, the parties
stipulated that this was an error and agreed to a corrected amount and to
adjust for the resulting overpayment after the appellate mandate.


                                       9
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

VI.    THE SUPERIOR COURT DID NOT ABUSE ITS DISCRETION BY
       EQUALLY DIVIDING THE PARTIES’ COMMUNITY CASH
       ACCOUNT.

¶27          The parties had a community cash account at Fidelity. The
superior court ordered the account divided equally. Wife contends that this
was contrary to an agreement the parties reached at the trial.

¶28           The parties agreed at trial to divide the Fidelity account
equally. Wife’s attorney then added that there was “small pre and post . . .
appreciation to the Fidelity account, which I believe [Husband’s attorney]
is aware of. But . . . that should be determined by the division
(indiscernible).” Husband’s attorney responded, “That’s fine.” The judge
then said, “Okay. Thank you.”

¶29            Even if the foregoing exchange constituted an agreement that
the Fidelity account needed to be divided in an unequal manner, the
agreement was not binding on the court because it was not “submitted and
approved by the court as provided by law.” ARFLP 69(b). If the parties
wished to make a property-division agreement binding on the court, they
had to place the terms clearly on the record and ask the court to approve
the stipulation. ARFLP 69(a), (b). They did not do so, so we find no abuse
of discretion in the court’s equal division of the account.

VII.   THE EVIDENCE SUPPORTS THE SUPERIOR COURT’S
       ALLOCATION OF THE PARTIES’ PERSONAL PROPERTY.

¶30            The superior court allocated the parties’ personal property by
granting Wife the option of dividing the property pursuant to Husband’s
list in Exhibit 39 or allowing Husband to purchase 100% of the property
from Wife at the values stated in her Exhibit 98. The court went on to award
Husband the watches in his possession and to award Wife the jewelry,
handbags, and memorabilia in her possession. The court found that the
watches were worth $25,900 and that the jewelry, handbags, and
memorabilia were “of comparable [ ] value.”

¶31           The decree exempted the jewelry, handbags, and
memorabilia in Wife’s possession from the property that Wife had the
option of dividing or allowing Husband to purchase. However, because
Exhibits 39 and 98 were not admitted in evidence, the record does not show
whether there was, as Wife contends on appeal, memorabilia listed on those
exhibits. We presume that any jewelry, handbags, and memorabilia listed
in Exhibits 39 or 98 that were not in Wife’s possession are subject to the
division Wife selects.


                                     10
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

¶32           Wife also contends that the superior court erred by including
her engagement and wedding rings as part of the property equalization
because they were separate property gifts whereas Husband’s watches
were community property. According to Wife, this resulted in an
inequitable allocation of personal property.

¶33           In allocating the personal property, the superior court
referred to several exhibits that were not admitted in evidence. Exhibit 17,
which is in the record, shows that the watches were worth $25,900. The
women’s jewelry listed in Exhibit 99 (also in the record), excluding Wife’s
engagement and wedding rings, was valued at $16,400. Husband testified
that the jewelry, handbags, and memorabilia in Wife’s possession were
purchased with community gambling winnings during the marriage and
had a value equal to or greater than the watches in his possession. This
evidence supports the court’s determination that these items were
community property and that the jewelry, handbags, and memorabilia
awarded to Wife were equal in value to the watches awarded to Husband.
We affirm the allocation of the personal property.

VIII.   THE SUPERIOR COURT MUST RECONSIDER THE GROUNDS
        FOR AWARDING ATTORNEY’S FEES ON REMAND.

¶34           The superior court may award attorney’s fees “after
considering the financial resources of both parties and the reasonableness
of the positions each party has taken throughout the proceedings.” A.R.S.
§ 25-324(A). We review an award of attorney’s fees for an abuse of
discretion. Mangan v. Mangan, 227 Ariz. 346, 352, ¶ 26 (App. 2011).

¶35           The superior court awarded Husband $30,000 in attorney’s
fees, finding that Wife had greater financial resources and had taken
unreasonable positions. Among the positions the court found unreasonable
were Wife’s (1) claim for waste of community funds (unrelated to the SEC
investigation), (2) denial of regular parenting time to Husband until the eve
of the temporary orders hearing in September 2018, (3) request for sole legal
decision making authority, (4) refusal of Husband’s settlement offer, (5)
dispute of Husband’s entitlement to share in her bonuses, (6) claim for an
equalization payment for her car, and (7) ending mediation after half a day.

¶36          Wife contends that the conduct cited by the superior court
was not unreasonable. Because we have vacated the allocation of Wife’s
2019 bonus, we cannot say that Wife’s position on that issue was objectively
unreasonable. See In re Marriage of Williams, 219 Ariz. 546, 549, ¶ 11 (App.
2008) (holding that the reasonableness of a party’s position is evaluated by



                                     11
                   HOVANNISIAN v. HOVANNISIAN
                       Decision of the Court

an objective standard). Though Wife’s position on the allocation of the
bonus was only one of the many positions that the superior court found
unreasonable, we cannot determine how much weight the court placed on
each particular finding. Accordingly, we reverse the award of attorney’s
fees and remand for reconsideration.

                             CONCLUSION

¶37          We vacate the order allocating Wife’s 2019 bonus. On
remand, the court shall award the 2019 bonus to Wife as her separate
property. We reverse and remand for reconsideration the legal-decision-
making award, the child-support award, and the award of attorney’s fees.
We affirm the decree in all other respects.

¶38           Both parties request an award of attorney’s fees on appeal
under A.R.S. § 25-324. In the exercise of our discretion, we order that each
party shall pay his or her own attorney’s fees on appeal. As the prevailing
party, Wife is awarded her taxable costs on appeal, contingent upon her
compliance with ARCAP 21.




                         AMY M. WOOD • Clerk of the Court
                         FILED: AA




                                       12
