from the Superior Court in Maricopa County No. FN2015-050064
The Honorable Joseph C. Kreamer, Judge
M. Huey PLC, Scottsdale By Joseph M. Huey Counsel for
Davison Law Firm PLLC, Phoenix By Jennifer D. Hill Counsel
Presiding Judge Jon W. Thompson delivered the Opinion of the
Court, in which Judge Peter B. Swann and Judge James P. Beene
THOMPSON, PRESIDING JUDGE:
Letti Hutki (Wife) appeals from the trial court's order
denying her motion concerning the fairness of a property
settlement agreement (PSA) she entered with Dennis Hutki
(Husband), at a private mediation, where both parties were
represented by counsel. She also appeals from the decree that
incorporates the terms of the PSA, which the trial court
approved and signed on July 5, 2017, and entered the
following day. For the following reasons, we affirm the trial
court's decisions. Contrary to Wife's position on
appeal, we hold that neither Arizona Revised Statutes
(A.R.S.) section 25-317(B) (2018) nor Sharp v. Sharp,
179 Ariz. 205 (App. 1994) requires a "fairness
determination" hearing in all cases.
AND PROCEDURAL HISTORY
After approximately 41 years of marriage, Wife and
Husband's marital union was dissolved on August 23, 2016.
During the marriage, Wife had been a teacher. After she
retired, Wife took on bookkeeping duties for Husband's
family business, Hoenshied Family Limited Partnership
(HFLP). Husband is a self-employed real-estate
Before dissolution of the marriage, Husband and Wife
participated in mediation, on May 26, 2016, wherein they
addressed the division of their property, including business
entities, a trust account, other financial accounts, and
debts. The businesses were Blue Ink, LLC; D&L Consulting,
Inc.; and HFLP.
Wife had consulted Kotzin Valuation Services (Kotzin) to
assess the separate and marital community interest in these
assets. Kotzin provided its valuation reports on May 17,
2016, prior to the mediation. A note contained in one of the
Kotzin reports stated:
Despite repeated requests, Mr. Hutki never provided a clear
listing of which business interests he believed to be
community property and which he was claiming were sole and
separate. As such, we performed our own procedures regarding
the four identified business entities and came to the following
conclusions. These conclusions could materially change if Mr.
Hutki were to produce further documentation for how the
interests were obtained.
a March 15, 2016 email from Kotzin informed Husband "it
looks like you have sent all of the items we have requested
so far." During Kotzin's valuation, Husband also
followed up with Kotzin to determine if additional
information was needed. A valuation had also been done of
"a 1 percent limited partnership interest in
[HFLP]" in 2013.
Particularly as to HFLP, and relying on a 2015 partnership
ledger of unit ownership, the Kotzin valuation concluded that
66.5 percent of the entities' shares, held by Husband and
Wife, were rendered community property due to co-mingling of
separate assets with community assets. The partnership had 99
limited partnership units. The Kotzin valuation noted Husband
owned 62 limited partnership units, and 1 general partner
unit, and Wife owned 3.5 limited partnership units. The
shares were originally obtained as gifts to each party
respectively. Husband, at various times, also had gifted away
certain amounts of his limited partnership units.
At mediation, the parties reached full agreement regarding
all but one issue-the division of three pieces of jewelry
that were later awarded to Husband after a trial on the
issue. The agreement specifically stated that "[a]ny
dispute the parties [had] with each other over the sole or
separate or community nature of their interest in [HFLP] is
compromised by the agreements herein." The agreement was
reduced to writing pursuant to Arizona Rules of Family Law
Procedure (ARFLP) 69. Both Husband and Wife acknowledged
entering the PSA knowingly, voluntarily, intelligently, and
with the advice of counsel. In her separate pre-trial
statement relating to the jewelry, Wife also specifically
acknowledged that, excepting the jewelry, the PSA
"equalized the parties' assets and
About six months after the parties' agreement, Wife filed
a "Motion for Determination as to the Fairness of the
Parties Property Division Agreement[, ]" (the Motion).
In the Motion, Wife stated certain reasons she believed the
PSA was unfair, and requested that the trial court "make
an independent determination of the fairness of the [PSA,
]" pursuant to A.R.S. § 25-317(B), and Sharp.
Sharp is the seminal case interpreting § 25-317(B).
Husband filed a "Notice of Lodging Decree of Dissolution
of Marriage"pursuant to ARFLP 81. He requested that the
court "sign and enter the same . . . or, alternatively,
enter the parties' [PSA] as a final Decree in this
case." Wife filed an objection to the lodged decree.
Husband then filed a "Notice of Lodging of Amended
Decree (Amended Decree), which also reserved his right to
file a response to the Motion. Husband subsequently filed his
response to the Motion. Wife did not file a reply.
In an unsigned minute entry filed January 5, 2017, the trial
court denied the Motion after finding the PSA was
"fair" and "equitable[.]" The court also
indicated it would sign the Amended Decree given its
conclusion regarding the PSA. The court signed Husband's
Amended Decree. Wife timely appealed to this court from the
signed decree. The trial court later issued another signed
order, including the denial of the Motion and again stating
it would sign Husband's Amended Decree. Wife then amended
her appeal to challenge both the court's denial of the
Motion and signing of the Amended Decree.
The signed Amended Decree contained language
"reserv[ing] jurisdiction on the issue relating to the
award of [the three pieces of jewelry.]" After receiving
Wife's appeal, this court requested the parties file
memoranda addressing whether all issues had been resolved by
the Amended Decree. Wife did not submit a memorandum. Husband
submitted a memorandum asserting that all claims had been
resolved and averred the decree erroneously indicated the
jewelry issue remained outstanding. This court then stayed
the appeal, and revested jurisdiction in the trial court to
permit the trial court to consider a motion for an amended
decree that did not include the reserving language.
The parties subsequently stipulated to permit further
amendment of the Amended Decree to exclude the statement
reserving jurisdiction. A further amended decree, excluding
the erroneous language (the Final Decree), ...