Coburn v. Rhodig

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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:

LAURIN COBURN, Petitioner/Appellee,

v.

MICHAEL RHODIG, Respondent/Appellant.

No. 1 CA-CV 18-0194 FC
FILED 4-9-2019

Appeal from the Superior Court in Maricopa County
No. FN2009-052965
The Honorable Richard F. Albrecht, Judge Pro Tempore

AFFIRMED

COUNSEL

Schmillen Law Firm, PLLC, Scottsdale
By James R. Schmillen
Counsel for Petitioner/Appellee

Dickinson Wright, PLLC, Phoenix
By Marlene A. Pontrelli, Michael R. Scheurich
Counsel for Respondent/Appellant
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Decision of the Court

MEMORANDUM DECISION

Presiding Judge James B. Morse Jr. delivered the decision of the Court, in
which Judge Jon W. Thompson and Vice Chief Judge Peter B. Swann joined.

M O R S E, Judge:

¶1 Michael Rhodig ("Husband") appeals from the spousal
maintenance arrearage order in favor of Laurin Coburn ("Wife"). For the
reasons stated below, we affirm the order.

FACTUAL AND PROCEDURAL HISTORY

¶2 The parties divorced in 2010. The consent decree required
Husband to pay non-modifiable spousal maintenance of $3000 per month
for 60 months starting December 2009. Husband stopped paying Wife in
August 2010. After exchanging several emails in late 2010 in which
Husband threatened to leave the state or commit suicide if Wife enforced
the decree in court, the parties agreed that Husband would pay Wife a
$5000 lump sum payment plus $1000 per month for twelve months, with
the "final payment" due December 15, 2011. Wife agreed to "waive any
other unpaid support owed her by [Husband]."

¶3 Husband made all payments due under the agreement. In
December 2014, Wife filed a petition to enforce the spousal maintenance
arrearages she claimed were due under the consent decree. According to
Wife, she signed the agreement under duress. Husband argued the
agreement was enforceable and supported the equitable defenses of wavier,
estoppel, and laches.

¶4 The superior court concluded it lacked jurisdiction to modify
the support order in the consent decree based on Husband's equitable
defenses and granted Wife's petition to enforce. Husband appealed the
judgment, and this Court reversed, holding the superior court had
jurisdiction to consider Husband's equitable defenses and remanded for an
evidentiary hearing. Coburn v. Rhodig, 243 Ariz. 24, 26-27, ¶¶ 10, 15 (App.
2017).

¶5 Following the hearing, the superior court found the
agreement invalid because Wife signed it under duress. The court also
rejected Husband's equitable defenses and reinstated the prior judgment

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against Husband for $136,000 in spousal maintenance arrearages plus
$37,259.39 in interest. Husband filed a timely notice of appeal from the
judgment and subsequent order denying the motion for new trial. We have
jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-
2101(A)(2), (A)(5).

DISCUSSION

¶6 Husband argues the 2010 agreement is enforceable pursuant
to Arizona Rule of Family Law Procedure ("Rule") 69(A) (2018),1 which
provides that an agreement between the parties is valid and binding if it is
in writing. Wife has the burden of proving the signed, written agreement
was invalid. See Ariz. R. Fam. Law P. 69(B). The superior court concluded
that Husband's failure to pay support to Wife pursuant to the consent
decree, his assertion that he will not be forced to pay support, and his
threats to commit suicide constituted duress and induced Wife to sign the
agreement. The validity and enforceability of a contract is a mixed question
of law and fact that we review de novo. See Armiros v. Rohr, 243 Ariz. 600,
605, ¶ 16 (App. 2018).

¶7 To constitute duress, an act or threat must be wrongful and
preclude a party from exercising his or her free will and judgment. See
Dunbar v. Dunbar, 102 Ariz. 352, 355-56 (1967); USLife Title Co. of Ariz. v.
Gutkin, 152 Ariz. 349, 357 (App. 1986). This definition is based on the
Restatement of Contracts § 492 (1932). Dunbar, 102 Ariz. at 355-56; Inter-Tel,
Inc. v. Bank of Am., Ariz., 195 Ariz. 111, 117, ¶ 35 (1999); Republic Nat'l Life
Ins. Co. v. Rudine, 137 Ariz. 62, 65 (App. 1983). The Restatement (Second) of
Contracts § 175 (1981) updated this definition due to its "vagueness and
impracticability," providing that a contract is voidable if a party's "assent is
induced by an improper threat by the other party that leaves the victim no
reasonable alternative." See Restatement (Second) of Contracts § 175 cmt. b
and § 175(1). The Restatement (Second) of Contracts § 176 details what
constitutes an improper threat.

¶8 Husband contends Wife did not cite the Restatement (Second)
of Contracts §§ 175 and 176 in the superior court and, therefore, has waived
her arguments that these Restatement sections support a finding of duress.
Wife did not specifically cite the Restatement (Second) of Contracts §§ 175

1 We cite to the version of the Rule in effect at the time of the 2018
hearing. Rule 69 has changed multiple times since 2010 (the time of
agreement) and 2014 (when Wife filed the petition to enforce) but has
always stated that an agreement is valid and binding if it is in writing.

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and 176 in arguing duress in the superior court. Generally, arguments not
raised below are deemed waived. Evenstad v. State, 178 Ariz. 578, 582 (App.
1993). Waiver, however is a procedural and not jurisdictional rule. Id. "If
application of a legal principle, even if not raised below, would dispose of
an action on appeal and correctly explain the law, it is appropriate for us to
consider the issue." Id.; see also State v. Boteo-Flores, 230 Ariz. 551, 553, ¶ 7
(App. 2012).

¶9 Under either definition of duress, the evidence supports the
conclusion that Wife entered into the agreement under duress. The
superior court found economic duress because Husband's failure to make
the support payments created Wife's financial distress. The court relied on
Inter-Tel, 195 Ariz. at 117-18, ¶¶ 37-40, which held that "duress does not
exist merely because one party takes advantage of the financial difficulty of
the other," but the court may find duress where one party contributed to or
caused the financial difficulty of the other. The conduct that caused Wife's
financial distress must have been improper or unfair. See USLife Title Co.,
152 Ariz. at 357 ("Unless wrongful, unlawful or unconscionable pressure is
applied there is no business compulsion amounting to duress . . . .")
(quoting Frank Culver Elec., Inc. v. Jorgenson, 136 Ariz. 76, 78 (App. 1983)).
This is consistent with Restatement (Second) of Contracts § 176(2)(b), which
provides, "A threat is improper if the resulting exchange is not on fair terms,
and . . . the effectiveness of the threat in inducing the manifestations of
assent is significantly increased by prior unfair dealing by the party making
the threat." This section addresses "cases in which the party making the
threat has by unfair dealing achieved an advantage over the recipient that
makes his threat unusually effective." See Restatement (Second) of
Contracts § 176 cmt. f (emphasis added).

¶10 Wife acknowledged that Husband was unable to pay the
amounts owed under the consent decree. Thus, the evidence does not
support the conclusion that Husband improperly or unfairly caused Wife's
financial distress. Husband's failure to pay support was due to his own
financial difficulties, not an improper motive. As such, it does not
constitute a wrongful or improper threat.

¶11 In contrast, Husband's threats to leave the state or commit
suicide if Wife enforced the decree in court were wrongful and improper.
A threat to commit suicide, while not a crime, is a wrongful threat of

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physical violence.2 See Restatement (Second) of Contracts § 176(1)(a) and
cmt. b (stating threat of physical violence need not be directed at the
recipient of the threat or his relative "if the threat in fact induces the
recipient to manifest his assent"). Additionally, Husband's threat to ensure
Wife would not receive any support payments if she went to court was
improper because it violated his court-ordered obligation to pay support.
See Restatement (Second) of Contracts § 176(1)(a) and cmt. b; see also A.R.S.
§ 12-864 (defining contempt of court as the failure to obey court order or
judgment). Such threats constitute highly "manipulative conduct during
the bargaining stage" and are, therefore, improper. See Restatement
(Second) of Contracts § 176 cmt. f.

¶12 The record also supports the conclusion that Husband's
threats induced Wife to forego the substantial amount of spousal
maintenance to which she was otherwise entitled, resulting in an unfair
exchange. See Restatement (Second) of Contracts § 176(2)(b) and cmt. f.
Wife signed the agreement because she feared Husband would harm
himself based on his threats. Although Husband claimed his suicide threats
were not serious, Wife believed him. Wife also signed the agreement
because Husband told her he was not going to pay her anything unless she
signed. In fact, Husband did not pay Wife anything until after she agreed
to the modification.

2 We found two cases in which one party claimed duress resulting
from the other party's suicide threat. In Country Cove Dev., Inc. v. May, 150
P.3d 288, 292-93 (Idaho 2006), the court found that, although "[s]uicide is a
wrongful act," the threat did not induce the plaintiff to sign the contract
because (1) one year passed between the threat and the contract and (2)
plaintiff negotiated through attorneys. This case is factually
distinguishable. We note that, like Arizona, suicide is not a crime in Idaho;
yet the court found suicide was wrongful. See A.R.S. § 13-1103(A)(3)
(criminalizing assisted suicide); Idaho Code Ann. § 18-4017 (criminalizing
assisting in a suicide). In Pelfrey v. Pelfrey, 487 S.E. 2d 281, 285 (Va. Ct. App.
1997), the court concluded the husband did not sign the agreement in
response to the wife's suicide threats, but for other reasons. This case is also
factually distinguishable. But compare Wackwitz v. Roy, 418 S.E. 2d 861, 864
(Va. 1992) (holding suicide remains a common law crime in Virginia).

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¶13 Husband contends that Wife's assent was not a result of his
threats because two months passed between his threats in October and the
date Wife signed the agreement in December. We disagree. Less than three
weeks passed between when Husband last threatened to leave the state "or
worse" and when Wife signed the agreement. Wife's response to the threats
was to try and reach an agreement, thus supporting her claim that she took
his threats seriously.

¶14 In addition to an improper threat, duress requires the absence
of a reasonable alternative. See Inter-Tel, 195 Ariz. at 118-19, ¶ 42
(concluding no reasonable alternative available where plaintiff could not
find another lender due to defendant bank's conduct); Sharp v. Sharp, 179
Ariz. 205, 209 (App. 1994) (rejecting claim that wife signed agreement under
duress because she could have called her attorney a second time or mailed
a letter when her attorney did not accept her collect call), superseded by rule
on other grounds as recognized in Hutki v. Hutki, 244 Ariz. 39, 43, ¶ 18 (App.
2018); Pleasants v. Home Fed. Sav. & Loan Ass'n, 116 Ariz. 319, 321 (App. 1977)
(finding no duress where reasonable alternative was available to plaintiffs);
see also Restatement (Second) of Contracts § 175.

¶15 Wife contends that she had no reasonable alternative in light
of Husband's threats to leave the state or commit suicide. The superior
court did not expressly state that Wife had no reasonable alternative, but
by finding duress, we presume the court made this finding. See Rinegar v.
Rinegar, 231 Ariz. 85, 90, ¶ 20 (App. 2012) (presuming superior court found
every fact necessary to support its ruling because parties did not request
written findings of fact or conclusions of law).

¶16 Husband argues that Wife could have sought relief in the
courts, as she did in 2014. Wife contends this was not a reasonable
alternative because Husband threatened to leave the state or commit
suicide if she took him to court. Asserting one's rights in court is generally
a reasonable alternative. See generally, Republic Nat'l Life Ins. Co., 137 Ariz.
at 65. "This alternative may not, however, be reasonable if the threat
involves, for instance . . . the use of oppressive tactics, or the possibility of
emotional consequences." Restatement (Second) of Contracts § 175 cmt. b.
"The standard is a practical one under which account must be taken of the
exigencies in which victim finds himself . . . ." Id.

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¶17 Husband's threats constitute "oppressive tactics" with
"emotional consequences" to Wife if he followed through. Wife believed
Husband's threats were serious: she contacted Husband's son after
receiving Husband's threats; both she and Husband's son attempted to
contact Husband for several days after the threat was made; and, after Wife
contacted security services, security services performed a wellness check at
Husband's home. Although Husband claimed he was not serious, nothing
in the record suggests that Wife's belief and response were unreasonable.
Husband cannot make improper threats, then claim he was not serious after
Wife acceded to his threats. See generally Ray v. Mangum, 163 Ariz. 329, 333
(1989) (holding that where conflicting testimony exists, one party's
unspoken assumptions and beliefs are not clear evidence that other party
agreed). In light of these facts, we cannot find the court erred by finding
the agreement was a result of duress and, therefore, not enforceable under
Rule 69.3

¶18 Husband also argued the agreement established the equitable
defenses of waiver, estoppel, and laches. Husband must present clear and
convincing evidence of these equitable defenses. See State ex rel. Dep't of
Econ. Sec. v. Dodd, 181 Ariz. 183, 186-87 (App. 1994). We defer to the
superior court's factual findings absent clear error even if substantial
conflicting evidence exists. John C. Lincoln Hosp. & Health Corp. v. Maricopa
County, 208 Ariz. 532, 535, ¶ 10 (App. 2004).

¶19 To constitute a waiver of support arrearages, "the facts must
demonstrate by 'clear and compelling evidence' the voluntary and intentional
abandonment of a known right." Ray, 163 Ariz. at 332 (quoting Cordova v.
Lucero, 129 Ariz. 184, 187 (App. 1981)). As stated above, Wife signed the
agreement under duress. Therefore, Wife did not voluntarily waive her
rights to the spousal maintenance due under the decree.

¶20 Husband also argues that by signing the agreement and
accepting reduced payments, Wife is estopped from collecting any
arrearages. To establish equitable estoppel, Husband must show "(1)
conduct by which one induces another to believe in certain material facts;
and (2) the inducement results in acts in justifiable reliance thereon; and (3)
the resulting acts cause injury." Ray, 163 Ariz. at 333. The superior court
found any reliance on Husband's part was a result of his own wrongful acts

3 Because the agreement was unenforceable, Husband cannot
establish an accord and satisfaction. See Frank Culver Elec., 136 Ariz. at 77
(holding essential contract elements must exist for accord and satisfaction).

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and found no injury because Husband would only be required to pay what
the decree originally required. We review the court's decision not to find
estoppel for an abuse of discretion. Flying Diamond Airpark, LLC v.
Meienberg, 215 Ariz. 44, 50, ¶ 27 (App. 2007).

¶21 Husband could not justifiably rely on an agreement Wife
signed under duress. Furthermore, Wife testified that Husband ignored her
attempts to communicate after December 2011, and she was subsequently
unable to locate him. Husband's reliance on Wife's failure to demand
additional support payments was not justifiable because his conduct was,
at least in part, the reason Wife did not demand payment sooner.
Furthermore, Husband cannot show prejudice based solely on the
increased financial burden caused by interest accruing on the arrearages.
See In re Marriage of Yuro, 192 Ariz. 568, 574, ¶ 17 (App. 1998) (holding
prejudice not shown by the increased financial burden resulting from
compound interest on arrearages and because obligor did not change his
financial position in reliance on the agreement).

¶22 The equitable defense of laches required Husband to show
Wife unreasonably delayed bringing a claim and prejudice from the delay.
See Dodd, 181 Ariz. at 188. As stated above, Wife was unable to enforce the
decree earlier because Husband avoided her attempts to communicate and
she was later unable to determine his whereabouts until she hired a private
investigator. Thus, the delay was not unreasonable. Additionally,
Husband failed to establish any prejudice from the delay. The increased
financial burden alone does not constitute prejudice for purposes of laches.
See Yuro, 192 Ariz. at 574, ¶ 17. Husband did not establish any equitable
defenses to Wife's enforcement action.

ATTORNEYS' FEES AND COSTS ON APPEAL

¶23 Both parties claim the other was unreasonable on appeal and
request an award of attorneys' fees pursuant to A.R.S. § 25-324. We find
neither party took unreasonable positions on appeal, and we lack any
evidence regarding the parties' comparable financial resources.
Accordingly, we decline to award attorneys' fees to either party. As the
successful party, Wife is entitled to an award of costs on appeal. See A.R.S.
§ 12-342.

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CONCLUSION

¶24 We affirm the arrearage judgment. Wife is awarded her costs
on appeal upon compliance with Arizona Rule of Civil Appellate Procedure
21.

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

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