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Hearing to Contest Rule 69 Agreement in AZ | Hildebrand Law, PC

Mon 29th Jan, 2018 Arizona Divorce Laws

Rule 69 of the Arizona Rules of Family Law Procedure allow parties in a family law case to reach binding agreements regarding the division of their assets and debts, agreements pertaining to custody of their children, agreements regarding child support, and agreements regarding spousal maintenance among other issues.

Despite the seemingly binding nature of a Rule 69 agreement, the judge assigned to your case has an independent duty to ensure the agreement is fair and equitable. If the judge concludes the agreement is not fair and equitable, the court must reject the agreement and may not enforce the agreement.

So, what happens when someone enters into a binding rule 69 agreement only to later suffer buyer’s remorse because he or she believes the agreement was unfair? Is a judge required to hold a trial to present evidence for the judge to determine whether the Rule 69 agreement is fair and equitable?

Well, the answer to whether you are entitled to a trial to present evidence on the fairness of a Rule 69 agreement or whether a judge can simply make that determination without a trial depends upon whether there is already sufficient information in your court record that enables a judge to determine if your Rule 69 agreement is fair and equitable and should be ordered by the court or is not fair and equitable and should be rejected by the court.

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A Hearing is Required if the Court Record is Insufficient for a Judge to Determine if a Rule 69 Agreement is Fair and Equitable

The Arizona Court of Appeals, in the unpublished case of Jones vs. Jones, addressed when a judge is required to hold a hearing and allow the parties to present evidence before a judge will be able to determine if the terms of a Rule 69 agreement are fair and equitable and should be enforced by the court or must be rejected by the judge because the agreement is not fair and equitable.

In the Jones case, Husband and Wife entered into a Rule 69 agreement. Husband subsequently claimed the agreement was not fair and equitable because it involved dividing assets that were his separate premarital property and unfairly divided the remaining community property.

The trial judge, over Husband’s objection, made a finding the agreement was fair and equitable and enforced the terms of their Rule 69 agreement. The trial judge made those findings without conducting a trial or allowing the parties to present evidence to prove what items were sole and separate property, what property was community property,  and how much those community property items were worth.

On appeal, Husband claimed the trial judge did not have enough evidence in the record to be able to independently determine whether the Rule 69 agreement he signed was fair and equitable and, therefore, the trial judge should have held a hearing to allow him to present evidence to prove the unfairness of the agreement.

Hearing to Content a Rule 69 Agreement in Arizona

The Court of Appeals started its analysis of the issue by citing Arizona Revised Statute Section 25-317(A) which provides that to promote the amicable settlement of disputes, parties to a dissolution of marriage may enter into a written separation agreement containing provisions for the disposition of any property owned by either of them.

The Court of Appeals concluded Arizona Revised Statute Section 25-317(B) provides that the terms of a Rule 69 settlement agreement are “binding on the court unless it finds, after considering the economic circumstances of the parties and any other relevant evidence produced by the parties, that the agreement is unfair.”

The Court of Appeals also cited to the prior Court of Appeals decision in the case of Wick vs. Wick where it held a court is duty-bound to distribute the parties’ property in a fair manner, even if doing so is contrary to the terms of their Rule 69 agreement.

The Court of Appeals ruled that Rule 69 agreements are presumed to be valid. The person challenging such an agreement has the burden to prove otherwise.

When such an objection is made to a settlement agreement, the trial court is required to determine what property items are community property and whether the person objecting to the settlement agreement had full knowledge of that community property. The court is also required to consider whether the person objecting to the agreement had full knowledge of what items of property constitutes the separate property of a spouse.

If there is sufficient information in the court record, such as in the Hutki vs. Hutki case discussed below, for the court to determine the fairness of the agreement, the court is not required to conduct a trial. In such a case, the judge can simply rule that the agreement is fair and equitable and enforce the agreement or can find the agreement is not fair and equitable and refuse to enforce the agreement.

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However, if there is not sufficient information in the court record for the court determine whether a Rule 69 agreement is fair and equitable, the court must provide the parties with a hearing to present evidence for the court to determine whether the agreement is fair and equitable.

The Court of Appeals then indicated it would uphold a trial court’s order dividing the property and debts of the parties absent the trial judge’s abuse of his or her discretion. A judge abuses his or her discretion when the court record upon which he or she relied to enforce a Rule 69 agreement is devoid of competent evidence to support its decision.

In response to Husband’s claim the trial judge did not consider the substantive fairness of the settlement agreement before the judge enforced the agreement, the Arizona Court of Appeals indicated Husband had extensive sole and separate property he owned prior to marriage.

The Court of Appeals also noted the parties’ agreement required Husband to pay Wife a property equalization payment of $500,000.00. The Court of Appeals ruled that provision of the settlement agreement does not provide sufficient evidence for the trial judge to evaluate the fairness of that equalization payment or the agreement itself.

Wife argued the trial court could have looked at the information about their assets included in their Resolution Management Conference statements. The Arizona Court of Appeals rejected Wife’s argument because the information in those documents does not contain values of the assets or the amount Wife was claiming as a community lien against Husband’s sole and separate property.

Ultimately, the Court of Appeals concluded the trial court lacked sufficient evidence about which assets were the separate property of each spouse, which assets were community property, or the value of the community property assets.

The Court of Appeals, therefore, vacated the trial judge’s enforcement of the parties Rule 69 agreement and remanded the case back to the trial judge to conduct an evidentiary hearing after which the judge can determine if the agreement is fair and equitable and should be enforced or not fair and equitable in which case the trial court should reject the agreement.

A Hearing is Not Required if the Court Record is Sufficient for a Judge to Determine if a Rule 69 Agreement is Fair and Equitable

Whether a Hearing is Required Before a Judge Enforces a Rule 69 Agreement in Arizona

We have written a separate article on the Arizona Court of Appeals case of Hutki vs. Hutki. In that case, Husband and Wife entered into a Rule 69 agreement dividing their assets and debts among other agreements. Wife later objected to the Rule 69 agreement claiming the agreement was not fair and equitable.

Wife requested a trial to present evidence as the value of their property and the extent of their debts. The trial court denied Wife’ s request for a trial on her objections to the fairness of the Rule 69 agreement and issued orders enforcing their agreement as the court’s orders for the division of their assets and debts.

On appeal, the court of appeals concluded there was sufficient information in the record that enabled the trial judge to find the agreement was fair and equitable without conducting a trial.

If you have questions about a hearing to contest rule 69 agreement in an Arizona divorce case, you should seriously consider contacting the attorneys at Hildebrand Law, PC. Our Arizona divorce and family law attorneys have decades of combined experience successfully representing clients in divorce and family law cases.

Our family law firm has earned numerous awards such as US News and World Reports Best Arizona Family Law Firm, US News and World Report Best Divorce Attorneys, “Best of the Valley” by Arizona Foothills readers, and “Best Arizona Divorce Law Firms” by North Scottsdale Magazine.

Call us today at (480)305-8300 or reach out to us through our appointment scheduling form to schedule your personalized consultation and turn your Arizona divorce or family law case around today.

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