author: HOWE, Judge:

text:
    Susan LAGERMAN, Plaintiff/Appellant, v. ARIZONA STATE RETIREMENT SYSTEM, Defendant/Appellee.
    No. 1 CA-CV 18-0014
    Court of Appeals of Arizona, Division 1.
    FILED March 7, 2019
    Robaina & Kresin PLLC, Phoenix, By Thomas T. Griffin, Counsel for Plaintiff/Appellant
    Arizona State Retirement System, Phoenix, By Jothi Beljan, Counsel for Defendant/Appellee
    Judge Randall M. Howe delivered the opinion of the Court, in which Presiding Judge Diane M. Johnsen and Judge Maria Elena Cruz joined.
   HOWE, Judge:

¶1 Susan Lagerman appeals the superior court's order affirming a decision by the Arizona State Retirement System ("ASRS") that she (1) could not elect to begin receiving retroactive retirement benefits payable before the date she submitted her retirement application and (2) did not warrant a retroactive retirement date. She also argues that ASRS violated its fiduciary duty in denying her request for a retroactive retirement date. She further argues that ASRS breached statutory and constitutional provisions protecting her retirement benefits against forfeiture, diminution, or impairment.

¶2 We affirm. The plain language of A.R.S. § 38-764(A) prohibits an ASRS member from electing a retirement date before the date that ASRS receives the member's retirement application. Also, Lagerman's request for a retroactive retirement date was properly denied because she was unable to show that she could not have submitted a retirement application before the retroactive date that she had sought. Further, ASRS did not violate its fiduciary duty to Lagerman, and it did not cause her to forfeit her benefits or cause her benefits to diminish or become impaired.

FACTS AND PROCEDURAL HISTORY

¶3 In 1978, Lagerman became an ASRS member when she was hired as a securities examiner with the Arizona Corporation Commission, and her membership continued when she later worked as an attorney with the Arizona Attorney General's Office ("AGO") from 1981 to February 2003. An active member is a state employee who works at least 20 weeks in each fiscal year, works at least 20 hours each week, and makes member contributions to ASRS. A.R.S. § 38-711(1). As an ASRS member, Lagerman received annual member statements. After Lagerman left the AGO in February 2003, ASRS mailed her an annual member statement for the time period of July 1, 2003 through June 30, 2004. The member statement included Lagerman's early retirement date (the earliest date she could retire under the law) and her normal retirement date for all three statutory definitions of normal retirement. For ASRS members who joined before July 1, 2011, "normal retirement date" means the earliest of the following: (1) a member's 65th birthday, (2) a member's 62nd birthday and completion of at least ten years of service, or (3) the first day that the sum of a member's age and years of service equals 80. A.R.S. § 38-711(27)(a). Lagerman's earliest normal retirement date was December 23, 2007, under the 80-points definition.

¶4 Although Lagerman was not an active member in 2005, ASRS allowed her to complete a service purchase that she had submitted in 2003 because it had not timely processed her request. An active member of ASRS may purchase credited service for prior public employment by paying a certain amount into ASRS. A.R.S. § 38-743. The service purchase accelerated Lagerman's 80-points normal retirement date to July 23, 2005, which was reflected in her member statement for the time period of July 1, 2004 through June 30, 2005.

¶5 In summer 2006, Lagerman was diagnosed with cancer and underwent chemotherapy. During and following chemotherapy, Lagerman's mental and physical abilities deteriorated; she had difficulty concentrating and holding conversations. During this time, ASRS continued to mail her annual member statements from the fiscal year beginning July 1, 2005, through the fiscal year beginning July 1, 2010. Each member statement that she received moved the stated normal retirement date to the end of the applicable period. The member statements also stated that "[r]etirees receiving a monthly benefit are permitted under certain circumstances to return to work and still receive their benefit. For details on the return to work options, visit the ASRS website."

¶6 ASRS stopped mailing the member statements to its members, including Lagerman, June 30, 2011. ASRS gave notice to its members that they must access their retirement information on their ASRS online accounts. Lagerman had already created an online ASRS account in 2007. She had also contacted ASRS in 2008 for assistance in resetting her account password.

¶7 On April 6, 2016, ASRS received Lagerman's completed ASRS retirement application and processed her retirement effective as of that date. Lagerman appealed to the ASRS Assistant Director and requested a retirement date of August 2006. In her appeal letter, she noted that she had attended a benefits exposition at the AGO at which the ASRS representative stated that employees could not work more than 20 hours per week after retirement. She also noted that in 2003 the AGO informed her that she could not work more than 20 hours per week after retiring. She further noted that when she left the AGO, she "did not retire because [she] wanted to continue [her] professional career with full time work." The ASRS Assistant Director denied her appeal.

¶8 Lagerman appealed to the ASRS Director, who denied the appeal. She then appealed that decision, and an administrative law judge ("ALJ") held a hearing in January 2017. During the hearing, Lagerman's counsel asked ASRS employee Jenna Orozco whether the lump sum amount ASRS would have to pay Lagerman if it granted her request for a retroactive retirement under A.R.S. § 38-715(D)(4) was a factor in denying the request. Orozco denied that ASRS considered the amount of money that it would have to pay Lagerman when it rejected her request. Another ASRS employee, Ryan Falls, testified that he had no knowledge about the facts in Lagerman's case and was called to testify only about the actuarial concepts of the retirement system. During closing argument, counsel for ASRS also explained that Falls's testimony was offered simply to show that actuarial reasons to limit retroactive retirements under A.R.S. § 38-715(D)(4) exist.

¶9 The ALJ recommended affirming the ASRS Director's determination, which the ASRS Appeals Committee accepted. Lagerman then appealed to the superior court, which affirmed the ASRS Appeals Committee's decision. Lagerman timely appealed to this Court.

DISCUSSION

1. Statutory Interpretation of A.R.S. § 38-764(A)

¶10 Lagerman argues that the superior court erred in concluding that A.R.S. § 38-764(A) does not allow her to elect a retirement date that occurred before the date she submitted her retirement application. This Court reviews the superior court's decision de novo and determines "whether the administrative action was not supported by substantial evidence or was illegal, arbitrary and capricious, or involved an abuse of discretion." Pendergast v. Ariz. State Ret. Sys. , 234 Ariz. 535, 538 ¶ 10, 323 P.3d 1186, 1189 (App. 2014) (quoting Carlson v. Ariz. State Pers. Bd. , 214 Ariz. 426, 430 ¶ 13, 153 P.3d 1055, 1059 (App. 2007) ). "Although we view the evidence in the light most favorable to upholding the agency's decision, we are not bound by the agency's or the superior court's legal conclusions or statutory interpretations." Parsons v. Ariz. Dep't of Health Servs. , 242 Ariz. 320, 322-23 ¶ 10, 395 P.3d 709, 711-12 (App. 2017).

¶11 This Court's primary goal in interpreting a statute is to give effect to the legislature's intent. Id. at 323 ¶ 11, 395 P.3d at 712. "In doing so, we look to the statute's plain language as the best indicator of that intent[ ]" and "must construe the statute in context with other related provisions and its place in the statutory scheme." Id. This Court also attempts to "give meaning to 'each word, phrase, clause and sentence ... so that no part of the legislation will be void, inert, redundant, or trivial.' " See Ariz. State Univ. Bd. of Regents v. Ariz. State Ret. Sys. , 242 Ariz. 387, 389 ¶ 7, 396 P.3d 623, 625 (App. 2017) (quoting In re Estate of Zaritsky , 198 Ariz. 599, 603 ¶ 11, 12 P.3d 1203, 1207 (App. 2000) ).

¶12 Arizona Revised Statutes section 38-764(A) states:

Retirement is deemed to commence on a date elected by the member. That date shall not be earlier than the day following the date of termination of employment, the date ASRS receives the member's completed retirement application or the date specified by the member pursuant to subsection I of this section.

Lagerman contends that because the statute uses the word "or," it should be read in the disjunctive, meaning that she could elect a retirement date that satisfied only the first clause, i.e., a date that occurred after she had terminated her employment. As such, she argues that she could wait until many years after she terminated work to retroactively elect to have her retirement begin just after she was eligible for full retirement. She is incorrect.

¶13 The statute states that a member's retirement date "shall not be earlier" than (1) the day following the date of termination, (2) the date ASRS receives the member's completed retirement application, or (3) the date specified by the member under A.R.S. § 38-764(I). As such, the statute's plain language prohibits a member's retirement from beginning before all of the aforementioned dates. See Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 119 (2012) (explaining that when the disjunctive "or" is used after a negative, the effect is each item listed is negated and prohibited); see also Schane v. Int'l Bhd. of Teamsters Union Local No. 710 Pension Fund Pension Plan , 760 F.3d 585, 589-90 (7th Cir. 2014) (concluding that "the rule of inference that not (X or Y) is equivalent to not X and not Y ").

¶14 We cannot disregard, however, that A.R.S. § 38-764(I) creates an exception to the termination-of-employment requirement in the first clause of subpart (A): "A member who attains a normal retirement date may retire at any time without terminating employment if the member is employed for less than the hours required for active membership pursuant to section 38-711, paragraph 23, subdivision (b)." Subpart (I) thereby allows a member who is eligible for normal retirement to retire without terminating employment if the member works less than 20 weeks in the fiscal year and less than 20 hours per week, which are the active membership hours defined in A.R.S. § 38-711(23)(b). By allowing a member to retire without terminating employment, A.R.S. § 38-764(I) is inconsistent with the plain language of A.R.S. § 38-764(A), under which a member may not retire and continue work. To address this inconsistency, we apply the rules of statutory construction and consider the statute's history, context, and purpose. See Stein v. Sonus USA, Inc. , 214 Ariz. 200, 202 ¶ 8, 150 P.3d 773, 775 (App. 2007).

¶15 The history of A.R.S. § 38-764 shows that the legislature did not intend by adding subpart (I) to eliminate the requirement in subpart (A) that a member's retirement cannot begin before the member submits a completed retirement application. The legislature added what is now subpart (I), allowing a retired member to continue to work on a limited basis, in 1999 with Senate Bill 1083. Before that amendment, A.R.S. § 38-764(A) provided that the commencement of a member's retirement "shall not be earlier than the day following the date of termination of employment or the date ASRS receives the member's completed retirement application." The legislature added the third clause to subpart (A) ("the date specified by the member") in 1999, at the same time it amended the statute to add what is now subpart (I). 1999 Ariz. Sess. Laws, ch. 327, § 15 (1st Reg. Sess.).

¶16 The plain language of the statute before the amendment provided that a member could not elect to begin receiving retirement benefits before the date of the member's termination of employment or the date that ASRS received the member's completed retirement application. The purpose of the amendment was merely to allow retired members to work on a limited basis:

2. Redefines the term "member" and "compensation" to assist employers who hire part-time employees who meet the work-time requirements for ASRS.
...
12. Clarifies that a member who has attained a normal retirement date but continues to work less than the hours required for active ASRS membership may do so without losing that member's retirement pension.

Senate Fact Sheet, S.B. 1083, 44th Leg., 1st Reg. Sess. (Ariz. Feb. 1, 1999); see A.R.S. § 38-764(I). Nothing in the legislative history indicates that when the legislature amended subpart (A) to accommodate the new provision in what is now subpart (I), it intended to eliminate the requirement that a member must submit a completed retirement application before beginning retirement, or that it intended to allow an employee to retroactively elect a retirement date many years in the past.

¶17 Related statutes support this interpretation. Arizona Revised Statutes section 38-757(A) states, "After application on a form prescribed by the director , a member may retire on reaching the member's normal retirement date." (Emphasis added.) Also, A.R.S. § 38-766(A) states that a retired member who works at least 20 weeks in a fiscal year and at least 20 hours per week resumes active membership in ASRS. In such event, the statute states that the member's retirement benefits will be suspended until the member either (1) terminates employment and completes an application for re-retirement or (2) attains a normal retirement date, no longer meets the active membership criteria, and completes an application for re-retirement . A.R.S. § 38-766(A). Therefore, the ASRS statutory scheme requires that a member's retirement may not commence before the member submits a retirement application.

¶18 Lagerman contends that any ambiguity in A.R.S. § 38-764(A) must be construed in her favor. "[I]f the meaning of a ... provision remains uncertain after consideration of the parties' intentions, as reflected by their language in view of surrounding circumstances, a secondary rule of construction requires the provision to be construed against the drafter." Pendergast , 234 Ariz. at 541 ¶ 19, 323 P.3d at 1192 (quoting MT Builders, L.L.C. v. Fisher Roofing, Inc. , 219 Ariz. 297, 302 ¶ 10, 197 P.3d 758, 762 (App. 2008) ). Here, the plain language in the statute is unambiguous because the language can be interpreted only one way grammatically. And an inconsistency created by the 1999 amendment has been resolved by looking at the legislative history and statutory scheme, which show that the legislature intended that a member cannot receive retirement benefits before the member submits a retirement application. Because the intent of the legislature is clear, we need not construe the statute against ASRS.

2. ASRS's Fiduciary Duty to Lagerman

¶19 Under A.R.S. § 38-715(D)(4), the ASRS Director may "[m]ake retirement under this article effective retroactively to on or after the day following the date employment is terminated if the member was unable to apply before the retroactive effective date through no fault of the member." Lagerman challenges the decision by ASRS rejecting her request for retroactive retirement under this statute. She claims that ASRS breached its fiduciary duty by (a) taking financial and actuarial consequences into account when denying her request for a retroactive retirement date under A.R.S. § 38-715(D)(4) and (b) failing to raise her retirement options during her previous conversations with ASRS representatives.

¶20 ASRS owes a fiduciary duty to its members, including Lagerman. See Ariz. State Univ. ex rel. Ariz. Bd. of Regents v. Ariz. State Ret. Sys. , 237 Ariz. 246, 252-53 ¶ 28, 349 P.3d 220, 226-27 (App. 2015). Whether a party breached a duty is a question of fact. Keg Rests. Ariz., Inc. v. Jones , 240 Ariz. 64, 77 ¶ 45, 375 P.3d 1173, 1186 (App. 2016). "We review the evidence in the light most favorable to upholding [an agency]'s decision and will not substitute our judgment for that of the agency regarding factual questions and agency expertise." Wassef v. Ariz. State Bd. of Dental Exam'rs through Hugunin , 242 Ariz. 90, 93 ¶ 11, 393 P.3d 151, 154 (App. 2017). Here, nothing in the record shows that Lagerman was unable to apply before the retroactive effective date through no fault of her own. Therefore, ASRS did not breach its fiduciary duty by declining to grant her a retroactive retirement date.

¶21 Lagerman cites other instances in which ASRS granted retroactive retirement dates, and she contends that her cancer history warranted a retroactive date. But ASRS granted retroactive retirement dates in those cases because the members were not at fault, including instances of administrative errors and instances when the member clearly expressed an intent to retire. Although Lagerman experienced mental and physical difficulties after receiving chemotherapy, her cancer diagnosis could not serve as a basis for allowing a retroactive retirement date because she was not diagnosed with cancer until summer 2006, a year after she became eligible for retirement in July 2005. Furthermore, she did not clearly show her intent to retire until 2016. Following the language of A.R.S. § 38-715(D)(4), this evidence supports the ALJ and Director's decision that her cancer did not prevent her from applying for retirement when she became eligible in 2005. Although she claims that she did not retire in 2005 because an ASRS representative had previously advised her that she would not be able to return to work full-time for the State if she collected retirement benefits at any time, she provides no evidence for this other than her own testimony. See Royal Globe Ins. Co. v. Indus. Comm'n , 20 Ariz. App. 432, 434, 513 P.2d 970, 972 (App. 1973) (this Court defers to the ALJ's credibility determinations).

¶22 Lagerman also argues that Falls and Orozco's testimony showed that ASRS considered the potential financial and actuarial consequences of granting her request for retroactive retirement in denying her request. Assuming without deciding that ASRS might breach a fiduciary duty by considering the financial consequences of a waiver, the record shows that ASRS provided Falls's testimony to simply demonstrate that the limiting of retroactive retirements under A.R.S. § 38-715(D)(4) has an actuarial purpose. Falls testified that he had no knowledge of the facts in Lagerman's case and was called to testify only about the actuarial concepts for the retirement system. Moreover, Orozco testified that financial consequences were not a factor in determining whether to grant Lagerman's request for a retroactive retirement date. Therefore, this argument is not persuasive.

¶23 Next, Lagerman notes that she had various contacts with ASRS between 2003 and 2016, and she argues that ASRS breached its fiduciary duty by failing to inform her of her retirement options before 2016. Under A.R.S. § 38-755(A), ASRS "shall make information concerning a member's account accessible to the member in written or electronic form. This information shall include the member's current account balance, contact information, beneficiary election, estimated retirement date and estimated benefit amount." The record shows that ASRS complied with A.R.S. § 38-755(A) by mailing Lagerman retirement statements and by later posting the information online for Lagerman to review. The record also shows that each time Lagerman contacted ASRS, the contact's purpose was logged-and none of the contacts before 2016 concerned how or when she could receive her retirement benefits. Instead, the contacts focused on other subjects, such as resetting her password or addressing service purchase issues. The last contact logged was in March 2016, when Lagerman called to update her beneficiary designation and to schedule an appointment in April 2016 to start her retirement. Lagerman does not cite any authority for the proposition that ASRS representatives must explain a member's retirement options every time they hear from a member, and we know of no authority. As such, this argument fails.

¶24 Lagerman also excuses her delayed application by claiming that she was confused because of the multiple normal retirement dates and because ASRS began including return-to-work information on the member statements after she began her battle with cancer. If Lagerman was confused about the member statements and the normal retirement dates, she could have contacted ASRS for clarification, but she did not do so. Likewise, if she had questions about returning to work, she could have searched for the information on the ASRS website or contacted an ASRS representative, but again, she did not do so. As such, this argument is not persuasive.

3. Remaining Arguments

¶25 Lagerman argues that ASRS's refusal to allow her to elect a retirement date that was before the date she had submitted her retirement application caused her to forfeit about $220,000 in retirement benefits, thereby violating A.R.S. § 38-757(A). That subsection states that a member's right to retirement benefits is nonforfeitable upon attainment of the member's normal retirement date. A.R.S. § 38-757(A). Although the statute affirms that a member's right to retirement benefits is vested after reaching the member's normal retirement date, the vesting does not extinguish the member's need to satisfy other statutory requirements before making a retirement effective, such as filing a retirement application. See Hall v. Elected Officials' Ret. Plan , 241 Ariz. 33, 44 ¶ 33, 383 P.3d 1107, 1118 (2016). Thus, this argument fails.

¶26 She also argues that ASRS's actions diminished or impaired her retirement benefits. The Arizona Constitution, Article 29, Section 1 (C)-(D) provides, "Membership in a public retirement system is a contractual relationship that is subject to article II, section 25[,]" and "[p]ublic retirement system benefits shall not be diminished or impaired[.]" The ASRS contractual relationship is described in the ASRS statutes, which require a member to file a retirement application before the member can receive retirement benefits. A.R.S. §§ 38-757(A), -764(A), -766(A). After submitting her application in April 2016, which the contractual relationship requires, Lagerman has been receiving monthly payments from ASRS. And because Lagerman elected a joint and survivor annuity option naming her husband as the beneficiary, ASRS will pay any remaining monthly benefits to her husband after her passing. Thus, her retirement benefits have not been diminished or impaired.

¶27 Lagerman requests attorneys' fees under Arizona Rule of Civil Appellate Procedure 21 and A.R.S. §§ 12-341.01 and -348. As the unsuccessful party on appeal, she is not entitled to attorneys' fees.

CONCLUSION

¶28 For the foregoing reasons, we affirm.


source: Caselaw Access Project

license: Public Domain

text:
    In re the Matter of: Tiffany Lee LEHN, Petitioner/Appellee, v. Ahmad A. AL-THANAYYAN, Respondent/Appellant.
    No. 1 CA-CV 17-0756 FC
    Court of Appeals of Arizona, Division 1.
    FILED March 7, 2019
    Hallier & Lawrence, PLC, Phoenix, By Angela K. Hallier, Brandon L. Leibsohn, Co-Counsel for Petitioner/Appellee
    Jones, Skelton & Hochuli PLC, Phoenix, By Eileen Dennis GilBride, Sean M. Moore, Co-Counsel for Petitioner/Appellee
    Owens & Perkins PC, Scottsdale, By Max Nicholas Hanson, Counsel for Respondent/Appellant
    Judge Randall M. Howe delivered the opinion of the Court, in which Presiding Judge Diane M. Johnsen and Judge Maria Elena Cruz joined.
   HOWE, Judge:

¶1 Ahmad A. Al-Thanayyan ("Father") appeals from the property allocation, parenting time restrictions, and award of attorneys' fees in the decree dissolving his marriage to Tiffany Lee Lehn ("Mother"). Father claims that the family court inequitably allocated community property and debt in Mother's favor. He also argues that the court had no authority to require him to post a cash bond of $ 2.5 million for each child to secure their safe return from Kuwait and that the record does not support the need for a bond in that amount. He further claims that the court abused its discretion by awarding Mother her attorneys' fees.

¶2 We affirm the decree. The family court did not abuse its discretion in allocating the community property and debt in Mother's favor because the allocation was equitable given Father's attempt to hide the community's interest in his Kuwaiti businesses and the income from those businesses. The court also had discretion to impose the cash bond under its authority to determine parenting time in the children's best interests, and the amount was not an abuse of discretion given the degree of risk that Father might relocate the children to Kuwait and fail to return them to Mother. Further, the court properly awarded Mother attorneys' fees because it found that a substantial financial disparity existed between the parties.

FACTS AND PROCEDURAL HISTORY

¶3 Father is a Kuwaiti citizen who has United States lawful permanent resident status, and Mother is a United States citizen. The parties were married in Arizona in 2006. Shortly thereafter, the parties moved to Kuwait and lived there for five years. Their older child was born in Kuwait in 2008. While the parties lived in Kuwait, Mother and the older child would travel to the United States. When Mother became pregnant with the parties' second child in 2011, Father gave the consent required by Kuwaiti law for her to return permanently to the United States. The children are dual citizens of Kuwait and the United States. When Mother returned to the United States, the parties purchased a home in Arizona. Father traveled to Arizona several times a year, and Mother brought the children to Kuwait each summer for a month-long visit.

¶4 During the marriage, Father worked for the Kuwait Municipal Ministry and a Kuwaiti business called Uptown Trading Company ("Uptown"). In the dissolution proceedings, Mother claimed Father also owned other Kuwaiti businesses, including Al-Thanayyan International Company ("AIC"), Smart Tech, Smart Zone, and Free Zone, and sought disclosure from Father of financial documents concerning those entities. Father did not provide the requested discovery, claiming that he could not obtain the business records because AIC was a family business in which he had no ownership interest and the other companies were merely AIC's subsidiaries.

¶5 At trial, Mother provided evidence that Father was previously listed on the AIC website as an authorized partner, co-founder, and owner and identified himself as its chief executive officer on business cards and social media. Both parties presented evidence that in Kuwait, to bear the name "Al-Thanayyan International Company," the company would need to be owned by a person with that surname. Father claimed his father started AIC.

¶6 The evidence showed that the Kuwait Chamber of Commerce registry had listed Father as an authorized partner of AIC and Smart Zone, but that he was no longer listed as such at the time of trial. Mother's expert, Mary Ann Sharp, testified that the Chamber of Commerce would not have listed Father as an owner unless it received documentary evidence of an ownership interest. Sharp agreed, however, that the Kuwait Ministry of Commerce, not the Chamber of Commerce, maintains the official registry of business ownership in Kuwait, and Father was not listed as an owner of any business on the Kuwait Ministry's registry.

¶7 As further evidence that Father had an ownership interest in or earned additional income from these businesses, Mother testified that during the marriage Father's income was higher than he claimed. Mother's evidence established that Father deposited an average of $ 12,000 per month in a United States bank account, paid the mortgage and the two children's private school tuition, and gave Mother $ 8,000 per month for her expenses even though he claimed that he only earned $ 12,337 per month from the Kuwait Ministry and Uptown.

¶8 The family court found that Father likely had an ownership interest in these Kuwaiti businesses and had received income for the benefit of the community "at some point in time." The court also found that he had provided insufficient disclosure of those interests or had otherwise hidden assets. For that reason, the court could not determine the value of these business interests. To compensate Mother for her share of the community's interest in these businesses, the court ordered Father to pay the entire balance of a $ 241,000 community debt and awarded Mother 85 percent of the community Metro Health Savings Federal Credit Union account, which contained $ 21,132.

¶9 Both parties called experts in international law to address Mother's request that Father's parenting time occur only in Arizona because she feared that if he were permitted to take the children to Kuwait, he would not return them to the United States. Mother also requested that Father be ordered to surrender his passport and United States permanent resident card to his attorney before exercising parenting time in the United States. Mother was concerned because Kuwait is not a signatory to the Hague Convention on the Civil Aspects of International Child Abduction ("Hague Convention"), which "seeks 'to secure the prompt return of children wrongfully removed to or retained in any Contracting State,' and 'to ensure that rights of custody and of access under the law of one Contracting State are effectively respected in the other Contracting States.' " Abbott v. Abbott, 560 U.S. 1, 8, 130 S.Ct. 1983, 176 L.Ed.2d 789 (2010) (quoting Hague Convention, Art. 1, Treaty Doc., at 7).

¶10 The experts agreed that Mother would need Father's permission to leave Kuwait with the children but offered conflicting opinions about Mother's legal recourse in Kuwait if Father failed to return the children. Father's expert testified that the parties could enter into a written agreement requiring Father to return the children to Mother in Arizona, but he conceded that such an agreement would be revocable, and he could not cite any case previously implementing such an agreement.

¶11 Mother's expert, attorney Jeremy Morley, testified that he "concentrate[s] exclusively on international family law matters, particularly, including international child custody matters, and international child abduction prevention [and] recovery." He admitted that his opinions about Father were based on facts obtained from Mother and Father's expert, and he acknowledged that to the extent those facts may be incorrect, his opinions would lack foundation. Morley relied on official statements and information about Kuwaiti law from the United States Department of State, the United Kingdom, and non-governmental organizations that provide information relating to international child abductions. Morley testified that he had done extensive research into international child custody disputes, written several articles and two treatises on the subject, and provided expert testimony in courts across the United States and internationally. Father stipulated that Morley was an expert. Morley testified about some of the factors listed by section 7 of the Uniform Child Abduction Prevention Act ("UCAPA") and further testified that other United States courts have applied similar risk assessment factors. On cross-examination, Father questioned the level of Morley's experience with Kuwaiti cases and the bases for his opinions but did agree with some of Morley's testimony on Kuwait family law.

¶12 Evidence showed that Father had told one child to lie to Mother about having a cell phone and had also told that same child he was old enough to visit Kuwait on his own and "more than that." According to Mother, Father refused to explain to her what he meant by the latter comment. Additionally, Father petitioned for divorce in Kuwait and falsely alleged that Mother left Kuwait without legal justification and submitted a power of attorney stating that he is the children's natural guardian.

¶13 The family court ordered Father to exercise parenting time in Arizona unless Mother agreed in writing and was given the children's passports. Additionally, the court ordered that Father could exercise parenting time in Kuwait, but only if he first posted a $ 2.5 million cash bond per child to secure their safe return. The family court based these parenting time orders on the following findings:

• Kuwait is not a signatory of the Hague Convention and has no extradition treaty with the United States;
• The potential legal structures in Kuwait, if any, for Mother to utilize in order to ensure the return of her Children are insufficient and/or illusory;
• Father has insufficient ties to the United States and/or Arizona, given his lack of employment, family ties and property (especially in light of the recent sale of his home);
• Father has significant ties to Kuwait, to include employment, family and property;
• Father is a risk for not returning the Children if they visit him in Kuwait.
...
• It is in the Children's best interests to have parenting time with Father;
• A security bond is the only appropriate and available legal structure to allow Father to exercise parenting time in Kuwait; and
• It is in the Children's best interests to impose a security bond that is substantial enough to provide a monetary incentive and/or act as a deterrent to abducting the Children.

The family court then awarded Mother a portion of her attorneys' fees after finding a substantial disparity of financial resources between the parties, and Father timely appealed.

DISCUSSION

1. Property Allocation

¶14 Father contends the property allocation was inequitable and an abuse of discretion. The family court has broad discretion to allocate community property, "and we will not disturb its allocation absent an abuse of discretion." Boncoskey v. Boncoskey, 216 Ariz. 448, 451 ¶ 13, 167 P.3d 705, 708 (App. 2007). On appeal, we view the evidence in the light most favorable to affirming the family court's ruling and will affirm if the evidence reasonably supports it. Id.

¶15 Under A.R.S. § 25-318, community property is to be divided "equitably" absent a sound reason otherwise appearing in the record. See Toth v. Toth, 190 Ariz. 218, 221, 946 P.2d 900, 903 (1997) ; see also A.R.S. § 25-318(C) (family court may consider excessive or abnormal expenditures, destruction, concealment or fraudulent disposition of community property when dividing such property at dissolution). "Equitable" "is a concept of fairness dependent upon the facts of particular cases." Toth, 190 Ariz. at 221, 946 P.2d at 903. In this case, the unequal allocation of the community debt and bank account was within the court's discretion based on the evidence, which supported the court's finding that Father attempted to hide the community's interest in or income from the Kuwaiti businesses. See A.R.S. § 25-318(C).

¶16 In ordering Father to pay the entire $ 241,000 community debt, the court referred to its "findings regarding his business interests." Although the court did not specifically refer to these findings in allocating the community bank account, the court's allocation of that asset is similarly supported by its rejection of Father's claim that he did not have an ownership interest in the Kuwaiti businesses. Thus, the court did not abuse its discretion in equitably allocating other community assets or obligations to compensate Mother for her share of the community interest in the businesses. See Martin v. Martin , 156 Ariz. 452, 457, 752 P.2d 1038, 1043 (1988) (holding A.R.S. § 25-318"authorize[s] the court to make an award of money instead of merely dividing property.").

¶17 Father contends that the court had no basis for this unequal allocation because the court (1) did not find that he had an ownership interest in the businesses at the time Mother petitioned for dissolution and (2) did not make a valuation of these business interests. Neither contention has merit. First, the court's finding that Father had received income from his business interests "for the benefit of the community" necessarily implies that Father's business interests existed during the marriage.

¶18 Second, Father cannot complain about the lack of a valuation of his business interests because his attempts to hide these interests and recalcitrance in disclosing information about them made a valuation impossible. Where a party's own "obstructionist behavior" prevents an accurate determination of the community's interest in an asset, the court may award one party a greater share of community assets. See Hrudka v. Hrudka, 186 Ariz. 84, 93-94, 919 P.2d 179, 188-85 (App. 1995), superseded by statute on other grounds as stated in Myrick v. Maloney, 235 Ariz. 491, 494 ¶ 8, 333 P.3d 818, 821 (App. 2014) ; see also Thomas v. Thomas , 142 Ariz. 386, 392, 690 P.2d 105, 111 (App. 1984) (a party's concealment of income or assets may be considered when dividing community property). The valuation cases Father cites do not involve a party concealing assets or withholding financial records.

¶19 Father complains that the court abused its discretion in allocating all of a $ 241,000 community debt to him and 85 percent of a community credit union account containing $ 21,132 to Mother. Considering that Mother presented evidence that Father had business interests with $ 3.8 million in capital and Father did not provide any evidence of the value of his interests, we cannot say that the court's allocations were an abuse of discretion. See Hrudka, 186 Ariz. at 93-94, 919 P.2d at 188-85.

2. Parenting Time Restrictions

¶20 Father argues that the imposed parenting time restrictions were without legal authority or support in the record. On appeal, we do not reweigh the evidence but defer to the family court's determinations of witness credibility and the weight given to conflicting evidence. Gutierrez v. Gutierrez , 193 Ariz. 343, 347 ¶ 13, 972 P.2d 676, 680 (App. 1998). The family court based its parenting time orders on findings that are consistent with several factors listed in the UCAPA § 7 for determining whether a parent poses a risk of abducting the child. As Mother's expert testified, other United States courts have applied these and similar risk assessment factors. See, e.g. , Moore v. Moore, 349 P.3d 1076, 1081-83 (Alaska 2015) ; MacKinnon v. MacKinnon , 191 N.J. 240, 922 A.2d 1252, 1259 (2007) ; Katare v. Katare, 175 Wash.2d 23, 283 P.3d 546, 554-55 (2012) ; In re Sigmar, 270 S.W.3d 289, 300-01 (Tex. App. 2008) (applying UCAPA § 7 factors in addition to risk factors listed in state statute). Although Arizona has not adopted the UCAPA, the court nevertheless had the discretion to rely on these factors in the absence of a specific statute to the contrary as long as it also considered the children's best interests. See A.R.S. § 25-403.01(B) (court shall adopt a parenting plan that is consistent with the children's best interests); see also Hays v. Gama, 205 Ariz. 99, 102 ¶ 18, 67 P.3d 695, 698 (2003) (children's best interests are paramount in custody determinations).

¶21 The evidence supports the court's findings that Father has legitimate reasons to travel to Kuwait, has significant financial and familial ties to Kuwait, and lacks any significant ties to Arizona, particularly since he sold his house and has no job in Arizona. The finding that Father might not return the children to Mother in the United States is supported by evidence that Father had told one child to lie to Mother about having a cell phone and had told the child he was old enough to visit Kuwait on his own and "more than that." Father refused to explain what he meant by "more than that." Moreover, Father petitioned for divorce in Kuwait by falsely alleging that Mother had left Kuwait without legal justification and submitted a power of attorney stating that he was the children's natural guardian. These filings could be viewed as an attempt to establish rights under Kuwaiti law.

¶22 The finding that Mother would have no significant legal recourse is supported by evidence that Kuwait has not adopted the Hague Convention or entered into a bilateral agreement with the United States regarding the return of internationally abducted children. Thus, no procedure for the return of the children exists other than those available under Kuwaiti law. Testimony showed that Mother would need Father's permission to leave Kuwait with the children and any written agreement that required Father to return the children could be revoked. Thus, the evidence supports the conclusion that Mother would have little recourse available to challenge Father's rights.

¶23 Father contends the family court abused its discretion by relying on Morley's testimony because he relied on information from Mother, unidentified international law experts, and governmental informational sources. We will affirm the family court's admission of evidence absent an abuse of discretion and resulting prejudice or a mistake of law. Montgomery v. Miller, 234 Ariz. 289, 297 ¶ 15, 321 P.3d 454, 462 (App. 2014).

¶24 Morley testified that he worked exclusively on international family law matters, including international child custody matters, international child abduction prevention, and recovery of internationally abducted children. He explained that his opinions about Father were based on facts provided by Mother and Father's expert, and he acknowledged that his opinions may lack foundation if those facts were incorrect. The factual statement Mother provided to Morley, however, was substantially consistent with her trial testimony. Therefore, viewing that evidence in the light most favorable to affirming the decree, see Boncoskey, 216 Ariz. at 451 ¶ 13, 167 P.3d at 708, Morley's opinions did not lack foundation.

¶25 Moreover, Morley's opinions in this case were based on his extensive experience and research. He relied on official statements and information about Kuwaiti law from the United States Department of State, the United Kingdom, and non-governmental organizations that provide information relating to international child abductions. Morley testified that he had gained significant knowledge about international child custody disputes, written several articles and two treatises on the subject, and provided expert testimony in the United States and internationally. Father also stipulated that Morley was an expert and that his own expert agreed with some of Morley's testimony regarding Kuwait family law. The family court acknowledged the strengths and weaknesses in both experts' positions and was in the best position to judge their credibility. See Gutierrez, 193 Ariz. at 347 ¶ 13, 972 P.2d at 680. Thus, the court did not abuse its discretion by accepting Morley's testimony and report.

¶26 Father also contends the $ 2.5 million cash bond violates his fundamental right to custody of his children and is not supported by any legal authority. But a parent's right to custody and control of his or her children is not absolute. See In re Appeal in Maricopa Cty. Juv. Action No. JD-6123, 191 Ariz. 384, 392, 956 P.2d 511, 519 (App. 1997). Additionally, the court may regulate international travel within the bounds of due process. See, e.g. , Califano v. Aznavorian, 439 U.S. 170, 176, 99 S.Ct. 471, 58 L.Ed.2d 435 (1978) ; Eunique v. Powell, 302 F.3d 971, 974 (9th Cir. 2002) ; Sahibzada v. Sahibzada , 294 Ga. 783, 757 S.E.2d 51, 52-54 (2014) (holding trial court had discretion to bar father from taking children outside United States without mother's permission); Katare, 283 P.3d at 555 ¶ 34. Given the court's findings about Father's business interests, the bond requirement that the court imposed does not preclude Father from traveling with the children altogether; it merely conditions his ability to take the children to Kuwait.

¶27 The family court has authority under A.R.S. § 25-403.02(D) to create a parenting plan with such conditions as are "necessary to promote and protect the emotional and physical health of the child." The bond deters violations of the court's parenting time orders and protects the children from the emotional harm that would be caused by an abduction. Therefore, the court had authority to impose the bond pursuant to § 25-403.02(D). Without referring to this statute, this Court upheld the imposition of a bond to assure that a father returned his children and complied with a parenting time order in Badertscher v. Badertscher, 10 Ariz. App. 501, 506, 460 P.2d 37 (1969), superseded by statute on other grounds as stated in Bryan v. Bryan, 132 Ariz. 353, 357 n.4, 645 P.2d 1267, 1271 (App. 1982). Other jurisdictions have approved use of a bond to deter parental abduction of a child. See, e.g., Moon v. Moon, 277 Ga. 375, 589 S.E.2d 76, 79-80 (2003) (holding court has discretion to impose bond to assure return of children); Charpie v. Charpie, 300 A.D.2d 143, 752 N.Y.S.2d 291, 293 (2002) (same); Stonham v. Widiastuti , 79 P.3d 1188, 1197-98 (Wy. 2003) (same). Pursuant to UCAPA § 8(d)(2), an abduction prevention order may include a bond or other security "in an amount sufficient to serve as a financial deterrent to abduction...." Having found the evidence supports the court's finding that the children were at risk of not being returned to Arizona if Father were allowed to take them to Kuwait, we affirm the imposition of a security bond.

¶28 Father further argues that the amount of the bond was not related to the anticipated costs Mother might incur in litigating the forced return of the children from Kuwait and was excessive given his assets and income. The purpose of the bond, however, was not to compensate Mother for the costs she might incur, but to deter Father from abducting the children. Thus, the cases Father cites concerning supersedeas or other bonds are not persuasive. The family court found that Father had undisclosed ownership interests in and income from Kuwaiti businesses. Because Father had failed to disclose relevant financial records, Mother had no precise evidence of Father's income and ownership interests in the Kuwaiti businesses. She did provide evidence, however, that at least one of Father's businesses in Kuwait may be worth $ 3 million. Therefore, Father cannot now complain that the amount the court found would act as a deterrent was excessive. Furthermore, given the court's authority to prohibit international travel altogether, see Katare, 283 P.3d at 555 ¶ 34, we cannot conclude that the amount of the bond, although significant, is an abuse of discretion. We affirm the parenting time orders and the bond provisions.

3. Award of Attorneys' Fees to Mother

¶29 Father argues the family court abused its discretion in denying his request for an award of attorneys' fees and by awarding fees to Mother under A.R.S. § 25-324(A), which authorizes an award of attorneys' fees after considering both parties' financial resources and the reasonableness of their positions throughout the proceedings. We review the award of attorneys' fees under this statute for an abuse of discretion. Myrick, 235 Ariz. at 494 ¶ 6, 333 P.3d at 821.

¶30 According to Father, the family court failed to properly consider the parties' relative financial resources, Mother's ability to pay her own fees, and Father's ability to pay his own and Mother's fees. However, Mother's ability to pay is not dispositive. "[ Section] 25-324 does not require 'a showing of actual inability to pay as a predicate' for an award; 'all a party need show is that a relative financial disparity in income and/or assets exists between the parties.' " Id. at ¶ 9 (quoting Magee v. Magee, 206 Ariz. 589, 589 ¶ 1, 81 P.3d 1048, 1048 (App. 2004) (alteration in Myrick )).

¶31 Father disputes any significant disparity in the parties' monthly incomes based on the child support order and the net property allocation in the decree. Although the family court was unable to attribute a specific amount of income to Father from the Kuwaiti businesses, Mother's evidence suggested that Father's income was much higher than reported on the child support order or income tax returns. On appeal, we do not reweigh this evidence and will defer to the family court's resolution of this factual dispute. See Gutierrez, 193 Ariz. at 347 ¶ 13, 972 P.2d at 680. The record supports the finding of a substantial disparity in assets.

¶32 Father contends that, contrary to Mother's assertion, the family court did not find that he took an unreasonable position in the litigation. In awarding attorneys' fees, the court found "it has previously taken into consideration Father's insufficient disclosure and hiding of assets." Thus, Father's argument fails.

CONCLUSION

¶33 For the foregoing reasons, we affirm. Both parties request an award of attorneys' fees and costs under A.R.S. § 25-324, and Father also requests fees under A.R.S. § 12-341.01. This matter does not arise out of contract; therefore, fees are not warranted under A.R.S. § 12-341.01. After considering the parties' financial resources and the reasonableness of the parties' positions, we award Mother her attorneys' fees and costs upon her compliance with Arizona Rule of Civil Appellate Procedure 21.

      Kuwait has not signed the Hague Convention. See https://www.hcch.net/en/instruments/conventions/status-table/?cid=24 (listing contracting countries) (last viewed February 4, 2019).

      Mother also cites A.R.S. § 25-411(J) as authority for imposing the bond. Because we rely on § 25-403.02(D), we need not decide whether § 25-411(J) would apply here. For the same reason, we also do not address the application of § 25-403.03(F)(7), which authorizes imposition of a bond to ensure the safe return of a child where the court finds a parent has committed an act of domestic violence.

      For the first time in his reply brief, Father suggests the bond was the result of judicial bias but fails to include any citations or authority. Thus, this issue is not properly before us on appeal. See Marco C. v. Sean C., 218 Ariz. 216, 218-19 ¶ 6, 181 P.3d 1137, 1139-40 (App. 2008).


author: SWANN, Judge:

text:
    JOHNSON UTILITIES L.L.C., an Arizona limited liability company, Petitioner, v. ARIZONA CORPORATION COMMISSION; Tom Forese, Bob Burns, Andy Tobin, Boyd W. Dunn, and Justin Olson, in their official capacities as members of the Arizona Corporation Commission, Respondents.
    No. 1 CA-SA 18-0197
    Court of Appeals of Arizona, Division 1.
    FILED March 7, 2019
    Fredenberg Beams, LLC, Phoenix, By Daniel E. Fredenberg, Christian CM Beams, Crockett Law Group, PLLC, Phoenix, By Jeffrey W. Crocket, Co-Counsel for Petitioner
    Arizona Corporation Commission, Phoenix, By Andrew M. Kvesic, Maureen A. Scott, P. Robyn Poole, Counsel for Respondents
    Judge Peter B. Swann delivered the opinion of the court, in which Presiding Judge Kenton D. Jones and Judge David D. Weinzweig joined.
   SWANN, Judge:

¶1 Johnson Utilities L.L.C. seeks special action relief from the Arizona Corporation Commission's order appointing a third-party interim manager to conduct Johnson Utilities' operations. It argues that the Commission lacks authority to interfere with the internal management of a public service corporation, and therefore that the Commission lacked jurisdiction to issue the interim management order.

¶2 We accept jurisdiction but deny relief. Both the Commission's broad ratemaking power under Ariz. Const. art. 15, § 3, and its statutorily delegated power to determine a "just" remedy for "inadequate" public-utility equipment, facilities, or services under A.R.S. § 40-321(A), provide the Commission with sufficient authority to impose an interim manager under appropriate circumstances. It is for the superior court, however, to decide whether the circumstances in this case supported the Commission's authority to issue the interim management order.

FACTS AND PROCEDURAL HISTORY

¶3 Johnson Utilities is a public service corporation that provides water and wastewater services in Pinal and Maricopa Counties. In March 2018, the Commission held a 14-day hearing regarding the adequacy of Johnson Utilities' operations and issued a decision finding several significant concerns with its billing practices and financial management, as well as with the condition of its equipment and facilities. Finding it "just and reasonable and in the public interest," the Commission appointed EPCOR Water Arizona (another water utility provider in the area) to "conduct the business and affairs" of Johnson Utilities as an interim manager. The Commission further ordered that Johnson Utilities may apply for termination of the interim management appointment with EPCOR "upon a showing that [Johnson Utilities'] services ... are in all respects just, reasonable, safe, proper, adequate, and sufficient and that terminating the [appointment] would not present an unreasonable risk of service."

¶4 Johnson Utilities filed several actions protesting the Commission's order, including three unsuccessful requests to enjoin its enforcement. Johnson Utilities also filed a "Statutory Special Action" with the Arizona Supreme Court, and that court issued an order declining jurisdiction "without prejudice to refile in the court of appeals." Johnson Utilities now petitions this court for special action review.

¶5 We issued a brief order accepting jurisdiction and denying relief on September 21, 2018, noting that an opinion would follow. This is that opinion.

JURISDICTION

¶6 We accepted special action jurisdiction because Johnson Utilities' petition presents a purely legal issue of immediate statewide importance. See Ariz. Corp. Comm'n v. State ex rel. Woods , 171 Ariz. 286, 287-88, 830 P.2d 807, 808-09 (1992).

DISCUSSION

¶7 Johnson Utilities contends that only the superior court, and not the Commission, has authority to order that a third-party interim manager operate a public service corporation. The ultimate question of whether the Commission's order was justified on the merits must be decided on a case-by-case basis. We will not engage in such a fact-intensive inquiry here. Instead, we address only the narrow legal issue presented by this special action-whether an order for an interim manager falls within the jurisdiction of the Commission.

¶8 "The Arizona Corporation Commission, unlike such bodies in most states, is not a creature of the legislature, but is a constitutional body which owes its existence to provisions in the organic law of this state." Miller v. Ariz. Corp. Comm'n , 227 Ariz. 21, 24, ¶ 12, 251 P.3d 400, 403 (App. 2011) (citation omitted); see also State v. Tucson Gas, Elec. Light & Power Co. , 15 Ariz. 294, 302, 306, 138 P. 781 (1914) (referring to the Commission as a fourth branch of state government). The Commission derives its power to govern public service corporations from two sources: Article 15 of the Arizona Constitution and Title 40 of the Arizona Revised Statutes. See Phelps Dodge Corp. v. Ariz. Elec. Power Coop. , 207 Ariz. 95, 111, ¶ 54, 83 P.3d 573, 579 (App. 2004). The Arizona Constitution grants the Commission authority to set "just and reasonable" rates subject to the requirements of Ariz. Const. art. 15, § 12, and to enact any rules, regulations, or orders that are "reasonably necessary steps in ratemaking." Ariz. Const. art. 15, § 3 ; Woods , 171 Ariz. at 294, 830 P.2d at 815. All other powers are left to the Legislature, which may delegate its own power to the Commission by statute, thus enlarging the Commission's powers and duties. Ariz. Const. art. 15, § 6 ; Phelps Dodge , 207 Ariz. at 111, ¶ 54, 83 P.3d at 579. The Commission is required to exercise its power, constitutional or statutory, in the public's interest. Woods , 171 Ariz. at 291-92, 830 P.2d at 812-13.

I. THE ARIZONA CONSTITUTION PROVIDES THE COMMISSION AUTHORITY TO IMPOSE AN INTERIM MANAGER.

¶9 Article 15, Section 3 of the Arizona Constitution includes, in pertinent part, the following four clauses:

The corporation commission shall have full power to, and shall , prescribe just and reasonable classifications to be used and just and reasonable rates and charges to be made and collected, by public service corporations within the state for service rendered therein, and
make reasonable rules, regulations, and orders, by which such corporations shall be governed in the transaction of business within the state, and
may prescribe the forms of contracts and the systems of keeping accounts to be used by such corporations in transacting such business, and
make and enforce reasonable rules, regulations, and orders for the convenience, comfort, and safety, and the preservation of the health, of the employees and patrons of such corporations....

(Line-breaks and emphasis added.)

¶10 The supreme court originally interpreted Section 3 to establish a broad grant of power to the Commission. See Tucson Gas , 15 Ariz. at 302, 138 P. 781 ("It was clearly the policy of the framers of the Constitution, and the people in adopting it, to take the powers of supervision, regulation, and control of public utilities from the legislative branch and vest them in the Corporation Commission ...."). The court then changed course and interpreted the provision narrowly-concluding that only the first clause contained an express grant of power-and held the Commission's constitutional power was therefore limited to setting reasonable classifications, rates, and charges. See Corp. Comm'n v. Pac. Greyhound Lines , 54 Ariz. 159, 172-73, 94 P.2d 443 (1939) (noting that reading Section 3 too expansively would result in other constitutional provisions becoming "so much Dead Sea fruit turning to ashes upon the lips" (quoting Ariz. E. R.R. v. State , 19 Ariz. 409, 411-12, 171 P. 906 (1918) )). Years later, the court interpreted Article 15 and Pacific Greyhound to give the Commission the constitutional authority to enact "rules, regulations, and orders concerning such classifications, rates, and charges." Ethington v. Wright , 66 Ariz. 382, 391-92, 189 P.2d 209 (1948).

¶11 More recent decisions afford deference to the Commission's determination of whether a rule, regulation, or order is "reasonably necessary for effective ratemaking," interpreting "necessity in light of the framers' intent of the Commission's function ... to protect consumers from abuse and overreaching by public service corporations." Woods , 171 Ariz. at 294-95, 830 P.2d at 815 ; see Miller , 227 Ariz. at 28-29, ¶¶ 27, 31, 251 P.3d at 407-08 (deferring to the Commission's determination of whether a "sufficient nexus" exists between a rule and the Commission's ratemaking authority). On the other hand, to "protect regulated corporations from over-reaching and micro-management of their internal affairs by the Commission," Miller , 227 Ariz. at 27, ¶ 23, 251 P.3d at 406, courts also must consider whether a proposed rule, regulation, or order "so interfere[s] with management functions that [it] constitute[s] an attempt to control the corporation rather than an attempt to control rates," Woods , 171 Ariz. at 297, 830 P.2d at 818.

¶12 Although no Arizona court has explicitly reviewed the legality of imposing a third-party interim manager to run a public service corporation, courts have reviewed other measures that interfered with management.

We look to these decisions-including particularly Woods , Phelps Dodge , and Miller -and to the text of the constitution for guidance.

¶13 In Woods , the supreme court held that it was within the Commission's ratemaking power to require Commission approval for "all transactions between a public service corporation and its affiliates that may significantly affect economic stability and thus impact the rates charged by a public service corporation." 171 Ariz. at 295, 830 P.2d at 816. The court addressed arguments that the proposed rules would impermissibly interfere with a corporation's management, but held that monitoring transactions between public service corporations and their affiliates had become necessary to ensure the economic viability of the utility companies. Id. at 295-97, 830 P.2d at 816-18. The court reasoned that a utility company's economic viability would impact its rates. Id. at 297, 830 P.2d at 818. Woods minced no words in its characterization of the Commission's power: "The Commission was not designed to protect public service corporations and their management but, rather, was established to protect our citizens from the results of speculation, mismanagement, and abuse of power," id. at 296, 830 P.2d at 817, and "[t]o put it simply, the Commission was given the power to lock the barn door before the horse escapes," id. at 297, 830 P.2d at 818.

¶14 In Phelps Dodge , we reviewed several policy-driven rules, which the Commission maintained were necessary to effect its ratemaking power. 207 Ariz. at 101-02, 112-15, ¶¶ 4-9, 57-76, 83 P.3d at 579-80. One of the rules required that utility companies sell off "competitive generation assets and competitive services," and that, if companies opted to sell those assets to an affiliate, they had to do so at a fair price as determined by the Commission. Id. at 113, ¶ 62, 83 P.3d at 591. We held that under its ratemaking power, the Commission could control the price of an asset in a sale between a utility company and its affiliate to avoid unfair cross-subsidization, but that it could not require utility companies to sell off competitive assets when it could simply have required the companies to not use the assets competitively. Id. at 113-14, ¶¶ 64-66, 83 P.3d at 591-92. Acknowledging that the point at which managerial interference becomes impermissible can be difficult to discern, we noted that "our supreme court [in Woods ] has suggested that the line is drawn between rules that attempt to control rates, which are permissible, and rules that attempt to control the corporation, which are impermissible." Id. at 113, ¶ 64, 83 P.3d at 591. We held that the portion of the rule requiring the sale of assets (as opposed to the portion controlling the sale price to affiliates) was an attempt to control the corporation because there was a less intrusive means to reach the same end, and there was no apparent justification related to ratemaking for taking the more intrusive route. See id. at 114, ¶ 66, 83 P.3d at 592. We also reviewed a rule requiring utility companies planning to offer competitive service through affiliates to file codes of conduct with the Commission for approval. Id. at ¶ 70. We held that because the rule required the codes of conduct to include procedures for preventing cross-subsidization between affiliates, which would adversely impact rates, the rule was sufficiently aimed at controlling rates despite interfering with management. Id. at ¶¶ 70 -71.

¶15 In Miller , we held that a sufficient nexus existed between rules requiring public utilities to diversify their energy sources and the Commission's ratemaking power. 227 Ariz. at 29, ¶ 31, 251 P.3d at 408. We reasoned that "[p]rophylactic measures designed to prevent adverse effects on ratepayers due to a failure to diversify electrical energy sources fall within the Commission's power 'to lock the barn door before the horse escapes.' " Id. (quoting Woods , 171 Ariz. at 297, 830 P.2d at 818 ). We noted that, in exercising its ratemaking authority, "[t]he Commission may take a 'broader view' and consider, for example, risks associated with contemplated action or inaction." Id. at 28, ¶ 30, 251 P.3d at 407. We discussed past applications of the so-called managerial interference doctrine, but because the appellants were utility customers, we found they lacked standing to argue interference, and therefore did not apply the doctrine to restrict the Commission's power. Id. at 26-27, ¶¶ 19-23, 251 P.3d at 405-06.

¶16 The common thread weaving through Woods , Phelps Dodge , and Miller is that while the managerial interference doctrine requires courts to look with disfavor on interference with a public service corporation's management, the doctrine does not create a bright-line rule that places such interference outside the Commission's jurisdiction. Instead, courts have reviewed the merits of each case to determine whether a failure to interfere could have a deleterious effect on rates or the public welfare. See also, e.g. , S. Pac. Co. v. Ariz. Corp. Comm'n , 98 Ariz. 339, 343, 404 P.2d 692 (1965) ("[A] public utility may, ... in the exercise of its managerial functions, determine the type and extent of service to the public within the limits of adequacy and reasonableness ." (emphasis added)); Miller , 227 Ariz. at 27, ¶ 23, 251 P.3d at 406 ("The managerial interference doctrine is a judicial construct designed to protect regulated corporations from over -reaching and micro-management of their internal affairs by the Commission." (emphasis added)); Metro. Edison Co. v. Penn. Pub. Util. Comm'n , 62 Pa.Cmwlth. 460, 437 A.2d 76, 80 (1981) ("An obvious corollary of the [managerial interference doctrine] is that if there has been an abuse of managerial discretion, and the public interest has been adversely affected thereby, then the Commission is empowered to intervene."). The distinction between rules that "attempt to control rates" and rules that "attempt to control the corporation," Woods , 171 Ariz. at 297, 830 P.2d at 818, focuses on what the Commission intends to achieve, and courts have likewise framed their analysis in terms of the Commission's attempted goal or "aim," see Phelps Dodge , 207 Ariz. at 113-14, ¶ 65, 83 P.3d at 591-92 (holding that a rule aimed at controlling rates was permissible despite its interference with management). Reviewing the development of the doctrine, we hold that neither our precedent nor the broad language of Article 15, Section 3 prohibits control of management incidental to the Commission's attempt to control rates.

¶17 In Woods and Phelps Dodge , the court only addressed proactive measures that were permanent in nature, not temporary remedial orders. See Ariz. Corp. Comm'n v. Palm Springs Util. Co. , 24 Ariz. App. 124, 128, 536 P.2d 245 (App. 1975) (recognizing the Commission's ability to accomplish some goals by specific order pertaining to particular companies rather than by rules and regulations of general applicability). In more urgent situations (as well as in situations like those in Woods and Phelps Dodge ), controlling the utility company may be a necessary means to accomplishing the permissible ends of controlling rates, i.e., in situations in which costly financial or structural harm to the corporation is imminent but avoidable. We therefore conclude that the Commission's constitutional ratemaking authority permits, albeit in limited circumstances, the appointment of an interim manager to run a public service corporation.

II. THE COMMISSION'S STATUTORY POWERS PROVIDE IT AUTHORITY TO IMPOSE AN INTERIM MANAGER.

¶18 When the Commission's imposition of an interim manager is not sufficiently related to its ratemaking power, it may nevertheless find authority to issue such an order through its statutory powers. The Legislature has delegated significant authority over public service corporations to the Commission. See Ariz. Const. art. 15, § 6 ; see generally A.R.S. tit. 40, ch. 2 (constellation of statutes delegating powers and duties to the Commission). The Commission cites A.R.S. § 40-321(A), among other statutes, as a source of its statutory power to impose an interim manager. Section 40-321(A) provides:

When the commission finds that the equipment, appliances, facilities or service of any public service corporation, or the methods of manufacture, distribution, transmission, storage or supply employed by it, are unjust, unreasonable, unsafe, improper, inadequate or insufficient, the commission shall determine what is just, reasonable, safe, proper, adequate or sufficient, and shall enforce its determination by order or regulation.

¶19 "[T]he language of a statute is the best and most reliable index of its meaning," Ariz. Sec. Ctr., Inc. v. State , 142 Ariz. 242, 244, 689 P.2d 185, 187 (App. 1984), and when possible, we will give the statute its plain and obvious meaning, Bilke v. State , 206 Ariz. 462, 464, ¶ 11, 80 P.3d 269, 271 (2003). Further, we must avoid interpretations that render statutory provisions superfluous or void. Id.

¶20 While the Legislature may delegate authority to interfere with the management of public service corporations to the extent that public interest demands, we will not infer any such authority beyond that provided by the "clear letter of a statute." S. Pac. Co. , 98 Ariz. at 343, 404 P.2d 692 ; Burlington N. & Santa Fe Ry. v. Ariz. Corp. Comm'n , 198 Ariz. 604, 606, ¶ 11, 12 P.3d 1208, 1210 (App. 2000) ("We will not imply any power beyond that expressly bestowed by the statute."). In other words, the language of such statutes will not be "broadened by implication." Chesapeake & Potomac Tel. Co. v. Manning , 186 U.S. 238, 248, 22 S.Ct. 881, 46 L.Ed. 1144 (1902) (cited by S. Pac. Co. , 98 Ariz. at 343, 404 P.2d 692 ). "[T]he standards laid down by the Legislature may be broad and in general terms [and do] not have to supply administrative officials with a specific formula to guide them when flexibility and adaptability are necessary." Ethridge v. Ariz. St. Bd. of Nursing , 165 Ariz. 97, 104-05, 796 P.2d 899, 906 (App. 1989) ; see Phelps Dodge , 207 Ariz. at 112-13, ¶ 59, 83 P.3d at 590-91 (stating that, although the court must read empowering statutes narrowly, a statutory grant of authority may be found "if such authority 'may be reasonably implied from the statutory scheme so as to carry out the purpose and intent of the legislative mandate' " (quoting Ethridge , 165 Ariz. at 105, 796 P.2d at 907 )).

¶21 Section 40-321(A) is broadly worded; it gives the Commission broad authority to remedy certain problems within a public service corporation. The Legislature did not restrict the specific means by which the Commission could enforce "just, reasonable, safe, proper, adequate or sufficient" remedies, except that it do so by "order or regulation." We therefore need not look beyond the express language of this statute to find authority allowing the Commission to impose an interim manager. See S. Pac. Co. , 98 Ariz. at 343, 404 P.2d 692 ; Burlington N. & Santa Fe Ry. , 198 Ariz. at 606, ¶ 11, 12 P.3d at 1210.

¶22 A reading of § 40-321(A) that permits imposition of an interim manager is consistent with other Arizona statutes. For instance, Title 40, Chapter 2 contemplates broad power for the Commission. See, e.g. , A.R.S. § 40-202(A) ("The commission may supervise and regulate every public service corporation in the state and do all things, whether specifically designated in this title or in addition thereto, necessary and convenient in the exercise of that power and jurisdiction."); A.R.S. § 40-361(B) (requiring utility companies to maintain adequate facilities and services for safety of patrons); A.R.S. § 40-331(A) (granting power to make orders requiring public utilities to improve facilities to promote the security and convenience of the public). And two Arizona provisions outside Title 40 contemplate the existence of an interim manager of a public service corporation. See A.R.S. § 49-355(B) (permitting monetary grants to "interim operators, interim managers or owners" of small drinking water utility companies to ensure compliance with Title 40, Chapter 2); Ariz. R. Sup. Ct. 31(d)(28) ("In matters before the Arizona Corporation Commission, a public service corporation, an interim operator appointed by the Commission, or a non-profit organization may be represented by a corporate officer, employee, or a member who is not an active member of the state bar....").

III. A.R.S. § 40-422 DOES NOT PROHIBIT THE COMMISSION FROM ISSUING AN ORDER IMPOSING AN INTERIM MANAGER.

¶23 Johnson Utilities argues that under A.R.S. § 40-422(A), the Commission could secure the appointment of an interim manager of a public service corporation only from the superior court. Section 40-422(A) requires the Commission to commence a proceeding in the superior court "to have ... violations or threatened violations [of an order of the Commission] prevented, either by mandamus or injunction." This statute provides the Commission a means to enforce its original order, but does not limit the scope of the original order or affect whether the Commission has constitutional or statutory authority to issue the order in the first instance.

CONCLUSION

¶24 We accept jurisdiction but deny relief. Subject to the substantive limitations of the managerial interference doctrine, both Ariz. Const. art. 15, § 3, and A.R.S. § 40-321(A) provide the Commission jurisdiction to impose an interim manager for a public service corporation.

      Both parties present novel arguments regarding jurisdiction. The Commission argues that under A.R.S. § 40-254(F), special action jurisdiction in this matter lies solely with the supreme court, and therefore this court does not have jurisdiction to review the petition. Johnson Utilities argues that § 40-254(F) creates a "statutory special action" under Ariz. R.P. Spec. Act. 1(b), which mandates that the petitioned court accept review. But because the supreme court explicitly permitted Johnson Utilities to refile its petition with this court, and because we accept jurisdiction based on the discretionary factors under Ariz. R.P. Spec. Act. 1(a), we need not address either argument here.

      Notably, throughout the century of jurisprudence on Ariz. Const. art. 15, § 3, comparatively little focus has been placed on the force of the fourth clause, which gives the Commission broad authority to make and enforce orders affecting public welfare. See Pac. Greyhound , 54 Ariz. at 168, 176-77, 94 P.2d 443 (discussing only the first two clauses); Woods , 171 Ariz. at 294-96, 830 P.2d at 815-17 (same); but see Ariz. E. R.R. , 19 Ariz. at 414-16, 171 P. 906 (discussing in dicta whether the fourth clause's permissive language, when read together with the other clauses, gives the Legislature and the Commission concurrent jurisdiction in non-ratemaking areas); Ariz. Corp. Comm'n v. Palm Springs Util. Co. , 24 Ariz. App. 124, 127-28, 536 P.2d 245 (App. 1975) (referring to the Commission's authority to make orders respecting "convenience, comfort, and safety").

      This is not the first time the Commission has ordered the appointment of an interim manager for a public service corporation. The Commission points to several instances in which it issued interim management orders for a troubled public utility, including Acme Water Company, LLC in 2017 (Comm'n Dec. No. 75871, http://docket.images.azcc.gov/0000176137.pdf), Citrus Park Water Company in 2014 (Comm'n Dec. No. 74832, http://docket.images.azcc.gov/0000159298.pdf), and American Realty and Mortgage Company, doing business as Hacienda Acres Water System, in 2008 (Comm'n Dec. No. 70609, http://docket.images.azcc.gov/0000090590.pdf).


author: CAMPBELL, Judge:

text:
    Lonny BRITTNER, Plaintiff/Appellant, v. Mary Ann LANZILOTTA, Defendant/Appellee.
    No. 1 CA-CV 18-0088
    Court of Appeals of Arizona, Division 1.
    FILED March 12, 2019
    Lonny Brittner, Chandler Plaintiff/Appellant
    Renaud Cook Drury Mesaros PA, Phoenix, By Michael D. Wolver, Karl J. Gruse, Steven G. Mesaros, Counsel for Defendant/Appellee
    Judge Jennifer B. Campbell delivered the opinion of the Court, in which Presiding Judge Paul J. McMurdie and Judge Randall M. Howe joined.
   CAMPBELL, Judge:

¶1 Lonny Brittner appeals the superior court's dismissal of his amended complaint. Because Dr. Mary Ann Lanzilotta is entitled to judicial immunity as the court-appointed therapeutic interventionist ("TI") in Brittner's family court matter, we affirm.

BACKGROUND

¶2 Brittner filed a civil action against Lanzilotta for intentional infliction of emotional distress, abuse of power, breach of fiduciary duty, and breach of contract after she resigned from her role as a court-appointed TI in his dissolution matter. In that proceeding, Brittner sought joint legal decision-making and equal parenting time of his children. The family court appointed Dr. Daniel Christiano as a custody evaluator. Christiano recommended the family see a TI. The parties provided the family court with a stipulated agreement to appoint Lanzilotta, and the court appointed her. Pursuant to the order, Lanzilotta was appointed to rehabilitate relationships between Brittner and the minor children, establish "rules for [the] exchange of [the] children in order to enhance safety and health in the family," make referrals for therapy as necessary, and facilitate conflict resolution. In his amended complaint, Brittner acknowledged that Lanzilotta was appointed by court order and that the court relied on Lanzilotta's recommendations in issuing its final decree.

¶3 Lanzilotta moved to dismiss the complaint under Arizona Rule of Civil Procedure 12(b)(6), arguing she was entitled to judicial immunity as a court-appointed TI. The court dismissed the complaint with prejudice. Brittner timely appealed from the resulting final judgment. See Ariz. R. Civ. P. 54(c).

DISCUSSION

¶4 We review the dismissal of a claim under Rule 12(b)(6) de novo. Coleman v. City of Mesa , 230 Ariz. 352, 355, ¶ 7, 284 P.3d 863, 866 (2012). "When adjudicating a Rule 12(b)(6) motion to dismiss, Arizona courts look only to the pleading itself and consider the well-pled factual allegations contained therein." Cullen v. Auto-Owners Ins. Co. , 218 Ariz. 417, 419, ¶ 7, 189 P.3d 344, 346 (2008). We also "assume the truth of the well-pled factual allegations and indulge all reasonable inferences therefrom." Id. We will affirm the dismissal if, as a matter of law, the plaintiff is not "entitled to relief under any interpretation of the facts susceptible of proof." Fid. Sec. Life Ins. Co. v. State Dep't of Ins. , 191 Ariz. 222, 224, ¶ 4, 954 P.2d 580, 582 (1998).

¶5 Brittner argues Lanzilotta is not entitled to judicial immunity because she was hired to provide therapeutic services to the parties, and not as an expert to assist the court, relying in part on Paul E. v. Courtney F. , 244 Ariz. 46, 56-57, ¶ 32, 418 P.3d 413, 423-24 (App. 2018) (review granted in part Nov. 20, 2018). Brittner, however, admits that Lanzilotta was appointed by the court. He also acknowledges the court relied on Lanzilotta's recommendations when making the final custody determination.

¶6 Judicial immunity protects judges from civil liability for judicial acts performed in the exercise of their judicial functions. In re Alexander , 232 Ariz. 1, 11, ¶ 41, 300 P.3d 536, 546 (2013). "Judicial immunity protects a nonjudicial officer performing a function pursuant to a court directive related to the judicial process." Lavit v. Superior Court , 173 Ariz. 96, 99, 839 P.2d 1141, 1144 (App. 1992) (citing Acevedo ex rel Acevedo v. Pima Cty. Adult Prob. Dep't , 142 Ariz. 319, 321, 690 P.2d 38, 40 (1984) ). Absolute judicial immunity has been extended to "certain other court officials who perform functions integral to the judicial process," including court-appointed psychologists and psychiatrists who assist the court. Id. (citing Acevedo , 142 Ariz. at 321, 690 P.2d at 40 ). The existence of judicial immunity is a question of law we review de novo. Widoff v. Wiens , 202 Ariz. 383, 385-86, ¶ 8, 45 P.3d 1232, 1234-35 (App. 2002). Whether absolute immunity protects a nonjudicial officer hinges on "the nature of the function performed, not on the identity of the actor." Lavit , 173 Ariz. at 99, 839 P.2d at 1144.

¶7 Here, the court appointed Lanzilotta to provide therapeutic services and to give recommendations to the family court regarding "rules for [the] exchange of [the] children in order to enhance safety and health in the family" and referrals for therapy, which the court ultimately relied on in issuing its final order. Therapeutic services in this matter are incidental to the court's purpose-Lanzilotta was appointed to provide the court information and make recommendations to assist in a custody determination. To formulate her expert opinion, therapeutic sessions were necessary to gather and evaluate the family dynamics and challenges to various proposed custody arrangements. Thus, Lanzilotta is a court-appointed therapist who performed functions integral to the judicial process.

¶8 Brittner's reliance on Paul E. is misplaced because the court-appointed therapist there was not ordered to report to the court. 244 Ariz. at 56, ¶ 31, 418 P.3d at 423. The therapist's role was not to provide the court with information to resolve disputes, id. at 51, ¶ 13, 418 P.3d at 418 ; rather, the court appointed the therapist to aid the family in a treating capacity, id. at 56, ¶ 31, 418 P.3d at 423. See Ariz. Rev. Stat. § 25-405(B) (allowing the court to "seek the advice of a professional ... whether or not employed by the court on a regular basis").

¶9 While the trial court couched the therapist's appointment in terms of § 25-405(B) language, we noted that the therapist's appointment was essentially an order for therapy, and "[a] treating therapist ... performs a nonjudicial function that does not justify immunity." Id. at 57, ¶¶ 31-32, 418 P.3d at 424. This court ultimately concluded that the therapist in Paul E. was not entitled to judicial immunity because the trial court expressly ordered that she continue in the role of a privately retained therapist, rather than an advisor to the court. Id. at 56, ¶ 31, 418 P.3d at 423. Necessarily, the expert must be formulating an opinion about an issue currently pending before the court to advise the court. To invoke § 25-405(B) and appoint an expert to advise the court, there must be a pending motion, scheduled review hearing, or some other unresolved proceeding before the court. See id. at 57, ¶ 33, 418 P.3d at 424 (applying same principle to the court's appointment of a gender expert).

¶10 Brittner argues that not all of the services provided by Dr. Lanzilotta should be cloaked in immunity. Brittner cites Lavit for the proposition that judicial immunity is not afforded to a nonjudicial officer who works exclusively for one party or who performs ministerial activities that are not part of the clinical and reporting function. See Lavit , 173 Ariz. at 101, 839 P.2d at 1146. But we do not parcel out therapeutic service from evaluation and reporting to the court nor do we limit immunity only for services related to the judicial process. To do so is neither practical nor possible. Here, therapy sessions were not separate from the evaluation leading to an expert opinion; the sessions are the observation and information gathering that enable the expert to formulate her opinion.

¶11 Looking solely at the facts alleged in the amended complaint, Lanzilotta was appointed to provide therapeutic services and make recommendations to the court. Brittner did not allege that Lanzilotta worked exclusively for one party or that his causes of action against her were based on "ministerial activities" unrelated to the formulation of her expert opinion. Rather, he alleged that Lanzilotta's work "in the Family Action" was deficient: she caused harm to his family, she "has a Duty of Care to both [him] and [his] minor children in the Family Action," she owes him and "each one of his children in the Family Action" a standard of care, and he and his children "in the Family Action relied on that Standard of Care." The facts and causes of action alleged in the complaint are all derived from Lanzilotta's work as a court-appointed TI. Judicial immunity for a court-appointed therapist is appropriate. The therapist cannot serve two masters-her obligation is ultimately to the court.

¶12 Lanzilotta acted as a nonjudicial officer when she performed a court ordered function by aiding the court in making its final custody order. Judicial immunity applies.

CONCLUSION

¶13 For the foregoing reasons, we affirm the superior court's grant of the motion to dismiss.

      Brittner did not include the entire family court order in his amended complaint; on appeal, Lanzilotta asks this court to take judicial notice of the remainder of the order. See State v. McGuire , 124 Ariz. 64, 66, 601 P.2d 1348, 1350 (App. 1978) ("An appellate court can take judicial notice of any matter of which the trial court may take judicial notice, even if the trial court was never asked to do so."). In our discretion and because we resolve this issue based on the record before us, we deny Lanzilotta's request.

      For example, Brittner averred that the custody orders contained "therapeutic supervised dinner visits with the minor children as recommended by the therapeutic interventionist." (Emphasis added.)