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Interest on a Judgment in an Arizona Divorce Decree

Posted on : June 28, 2016, By:  Christopher Hildebrand
Interest On a Judgment in a Divorce Decree in Arizona.

Interest on a Judgment in an Arizona Divorce Decree

Mr. Skirboll (Husband) appealed a court order from his divorce trial. The order applied a ten percent interest rate to a judgment entered against him. The trial court denied his request to offset monies his wife was ordered to pay a creditor.  The trial court ordered interest to being accruing sixty days after the entry of the divorce decree. Mr. Skirboll appealed those orders to the Arizona Court of Appeals in the case of Reichert v. Skirboll (No. 1 CA-CV 140178). The Court of Appeals issued this unpublished decision in that case.

A Background of the Case: Reichert v. Skirboll

Mrs. Reichert (Wife) petitioned for dissolution of marriage in 2008. There were no minor children involved. Both parties testified at the trial. Testimony indicated Husband received $15,400 in settlement proceeds from a civil lawsuit.  He kept all of the money and did not share any of it with his wife. In addition, the parties had credit card debt to divide.

Husband did not pay the $2,000 per month temporary spousal maintenance ordered by the court. At the final trial, the judge ordered him to pay Mrs. Reichert $57,221.52. That total included $7,700 for Wife’s half of the settlement (to be paid within 60 days of the entry). It also included $20,000 in spousal maintenance arrears. Lastly, the credit card balance was split evenly with Wife ordered to pay her half directly to the creditor.

Husband filed a motion for a new trial regarding spousal maintenance. His basis for doing so was his claim that his wife had a multi-million dollar interest in a Canadian real estate company she failed to disclose. His motion was granted and Wife withdrew her claim for spousal maintenance.

Husband asked the trial judge to issue a new Decree of Dissolution of Marriage to remove the $20,000 judgment for spousal maintenance arrears. He also asked the court to dismiss Wife’s claims due to her failure to disclose information. The family court amended the decree and removed the award of spousal maintenance. The judge, however, left the remaining provisions of the couple’s original decree unchanged. Husband appealed the trial court’s refusal to make the additional requested changes to the decree.

Jennifer, thank you for being my attorney. I could not have been more pleased with the outcome of my family court hearing. Everything you have done for me throughout this case reflects in the final ruling of the judge. You helped me keep my head together and taught me a lot about myself as a person. I learned so much about my life from observing and listening to you. I will take all the advice you gave me to continue taking responsibility for my choices, continue to put the kids' needs first, and always stay truthful. Your diligence, dedication, and persistence in my case made what seemed impossible, possible. You are a wonderful person and an amazing attorney and I am stronger and more confident because of you.
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20:31 20 Sep 17
I just want to again thank the Firm for working with me all that it has. I could not have done anything without everyone's assistance. You, Chris and Stacey have been and continue to provide me with compassion and hard work towards my case. Also a very special thanks to Kip for taking my case in the beginning. Also continued support from him and his dedication to providing me with his expertise in this matter.
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21:41 07 Nov 17
After interviewing several law firms, I came across Jennifer Shick, and her firm, who I hired to represent me for my Family Court case. Jennifer has extensive knowledge of the law and is determined to bring the truth to every issue involved within the case. Throughout my case, Jennifer was prepared meticulously as well as went above and beyond all of my expectations. Even when the other party tried to differ from the truth, lie to the Judge, and turn situations around, Jennifer remained attentive and provided substantial evidence to show the judge the facts as well as the proof to support what was the best interests of my children. Additionally, Jennifer helped me endure many difficult experiences, situations and inspired me to remain positive throughout the entirety of my case. Her kindness, compassion, and professionalism helped me through very difficult times and made the process feel a thousand times lighter on my shoulders. She truly has my children and my best interest at heart and I trust her perspective as well as her honesty on each and every aspect of my case. She lessened the burden on my shoulders and even when I felt like the case was not going to go in my favor, Jennifer was open-minded and reassured me that the Judge would, in fact, see the truth, which he did and the case went in my favor. After nine months of court, everything finally came together. I cannot declare how much Jennifer has been an outstanding attorney. She addressed each and every issue with diligence, she cares about her clients and their families. Jennifer genuinely cares about her clients and her dedication to the details of the case was remarkable. Overall, I am extremely pleased with Jennifer’s services and I am truly thankful that I was so blessed to have her represent my children and me. I highly recommend Jennifer as one of the best attorneys in Arizona and if the situation ever arises, I will definitely have her represent my children and me again.
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I was a client of Attorney Kevin Park for the dissolution of a divorce in 2016. And since I had never had the need to hire an attorney before for any purpose, I was somewhat apprehensive of the process. But the very calm and professional demeanor of Mr. Park eased my fears. He adeptly answered all my questions and I clearly knew the process and what to expect. And the skilled manner he communicated with opposing counsel was perfect. When it came down to negotiating with my spouse’s counsel, I knew I had selected the best attorney for my situation. What I noticed and appreciated was that he was using just the right amount of pressure with opposing counsel as was necessary. If you find yourself in this situation, you will want a seasoned professional like Mr. Park on your side. I'm very grateful that he was my attorney and not the opposition!
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Kevin Park of Arizona Estate Planning Attorneys was just what I needed for my divorce. He was very approachable and personable. He was quick to recognize what I needed and provided it quickly and efficiently. I hope to never need a divorce lawyer again, but if I know anyone else who does, I will definitely recommend Kevin.
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I feel that Tracey Van Wickler is certainly one of the best family lawyers around. She is logical, intelligent, and truly cares. Tracey always does what is in the clients best interest, does it well, timely and with integrity. She is good at keeping her clients informed as to what is going on and clear in her communication both written and verbally. I have recommended Tracey to other people and will continue to recommend her. I recommended Tracey to someone who was having issues with their ex-wife and his response was, “I know how good she is because I went up against her and she ate me for lunch”. This same person was so impressed with her, he even recommended her to someone else, WOW, that is impressive! I am exceptionally happy with her attention to detail, her ability to explain things in ways that are easy to understand, as well as her ability to keep everyone focused on the most important things. I would recommend Tracey to anyone who may be in need of her services.
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Sam Franchimone
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22:09 12 Sep 13

Back to Court: Reichert v. Skirboll

One year later, Wife petitioned to have the decree enforced alleging that the $37,221.52 had never been paid. She also requested that interest is added to the awarded amount. She did not specify a date when interest should begin to accrue.

Dividing Contingency Fees in a Divorce in Arizona.

Dividing Contingency Fees in a Divorce in Arizona.

At the hearing, Husband argued he sent payment. He noted an uncashed check for the amount of the judgment minus an amount he offset from the judgment. That offset amount was based upon the 50% of the credit card debt he claimed his former wife did not pay as ordered. Testimony established the check was sent to Wife on condition that she accept the amount of the check in full satisfaction of the judgment. Husband argued the court could not impose a ten percent interest rate on the monies owed to Wife or, if interest were to accrue, it should accrue from the date of the amended decree.

The Trial Court Ruling

The court ordered the decree would be enforced and awarded Wife $37,221.52 plus ten percent interest (per A.R.S. Section 44-1201(B)). The interest was ordered to begin accruing on the date of the amended decree. It was also noted by the court that Husband was not entitled to an offset. The reason was that Wife was ordered by decree to pay her portion of the debt directly to the creditor. Further, Husband did not provide documentation proving he paid the debt on Wife’s behalf.

The judge ordered the husband to pay 10% interest on the $37,221.52 judgment awarded to Wife.  Interest was to begin sixty days after the original decree was entered. The court chose sixty days because the original order provided him with sixty days to pay Wife $7,700 for her share of the lawsuit settlement. The trial court, therefore, concluded the most logical result was to apply the same deadline for all interest accruals.

On Appeal: Reichert v. Skirboll

Interest on the Judgment

Husband argued the judge made an error in using a ten percent interest rate to accrue sixty days after the original decree was issued.  He also argued the judge made an error in not offsetting the amount Wife was ordered to pay, but did not, to the credit card debt. Husband cited Arizona Revised Statute Section 44-12-1(B) in support of his argument the court should have imposed a lower interest rate.

The court of appeals recognized the statute relied upon by Husband was modified from a 10% interest rate on judgments to a lower rate.  The change in the statute occurred after the parties’ divorce decree was signed by the judge. The change to the statute applies to all judgments entered on or after the date of the amendment. That change, therefore, clearly does not apply to the judgment entered in this case. The trial judge, therefore, was correct in applying a 10% interest rate to the judgment.

Date Interest Was to Begin Accruing

Husband argued the judgment could not be a final until the date of the amended decree. Therefore, he argued interest should not have been determined from the original divorce decree date. The appeals court cited the cases of Cockrill v. Cockrill and Malecky v. Malecky. It also cited Rule 78 of the Arizona Rules of Family Law Procedure. The court of appeals concluded a decree of dissolution is a final judgment and interest is permitted to begin accruing if the parties divorce decree resolved the all of their claims.

The court of appeals concluded the trial court did, however, error in ordering the interest to begin accruing sixty days after the entry of the divorce decree. The court of appeals ruled the interest should have been ordered to accrue immediately upon the entry of the original divorce decree. Interest begins to accrue when the precise amount is determined and a judgment is entered for that amount.

Off The Setting Judgment

The Arizona Court of Appeals considered Husband’s arguments for an offset for the amounts Wife did not pay to the credit card companies. However, the court of appeals did not conclude the judge abused his discretion when denying that offset.  The reason was simple.  Both the original, as well as the amended divorce decree, ordered Wife to pay her share of the debt directly to the creditor, not to Husband.

Husband requested repeatedly that Wife pay her share of the debt to him and the family court refused. Husband testified regarding the debt but provided no documentation proving he made the payments to the creditors on behalf of Wife. Husband simply could not establish from the record if he had paid those creditors or not.

Conclusion: The Court of Appeals of Arizona on Reichert v. Skirboll

The Court of Appeals of Arizona affirmed the family court’s order to impose the ten percent interest rate and the ruling that the Husband was not entitled to an offset for Wife’s share of the debt. The appellate court also modified the accrual date of the interest to the original decree’s date of entry.



 

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