## Facts

- A 2005 consent decree dissolved the parties’ marriage and incorporated, but did not merge, a property settlement agreement (PSA).
- The PSA required husband to pay spousal maintenance of $6,666.67 per month for eight years beginning April 1, 2005.
- The PSA included a modification provision tied to wife’s “earnings from employment” or “active business endeavors,” stating earnings under $50,000 per year would not be a change of circumstances, while earnings of $50,000 or more could be grounds for modification.
- After the dissolution, wife obtained full-time employment at Company Nurse with a salary around $48,000 per year and also received employer-funded deferred compensation (monthly deposits and bonus) as part of her compensation package.
- Husband petitioned to reduce spousal maintenance, alleging wife’s earnings exceeded $50,000 and triggered the PSA clause; wife counter-petitioned to increase and extend maintenance.
- Following an evidentiary hearing, the trial court treated wife’s deferred compensation as current employment earnings, found wife’s expenses and income streams (salary, deferred compensation, and investment income), and reduced maintenance to $4,250 per month.
- The trial court also entered a protective order concerning certain business documents and awarded husband a portion of attorneys’ fees.
- Wife appealed the modification order, discovery ruling, and fee award.

## Issues

1. Whether wife’s deferred compensation should be treated as “earnings from employment” that counted toward the PSA’s $50,000 modification threshold.
2. How the PSA’s modification clause should be interpreted and applied when incorporated but not merged into the dissolution decree, in light of A.R.S. § 25-327’s “substantial and continuing change” requirement.
3. Whether the trial court abused its discretion in reducing maintenance to $4,250 per month based on its findings regarding wife’s income and needs.
4. Whether the trial court abused its discretion in issuing the protective order and awarding husband attorneys’ fees.

## Decision

- The court of appeals affirmed the trial court’s orders.
- Wife’s salary plus deferred compensation exceeded $50,000 per year, satisfying the PSA’s contractual condition allowing consideration of modification.
- The deferred compensation plan was properly treated as employment earnings for both triggering modification and determining the modified amount.
- The reduced maintenance award of $4,250 per month was supported by the record and was not an abuse of discretion.
- The protective order and partial fee award to husband were affirmed under abuse-of-discretion review.

## Legal Principles

- A spousal-maintenance provision in a PSA that is incorporated but not merged into a decree remains enforceable as a contract and is interpreted under general contract principles.
- Parties may contractually define conditions relevant to modification (such as income thresholds), but statutory modification under A.R.S. § 25-327 still requires a substantial and continuing change in circumstances.
- “Earnings from employment” may include employer-provided deferred compensation when it is part of an employee’s compensation package and increases present economic resources.
- Appellate review of spousal-maintenance modification amounts, discovery management, and attorneys’ fees awards is for abuse of discretion; findings supported by the record will be upheld.

## Conclusion

The court affirmed a reduction in spousal maintenance after concluding that wife’s employer-funded deferred compensation constituted employment earnings that pushed her annual compensation above the PSA’s $50,000 threshold, permitting modification under A.R.S. § 25-327 and the parties’ contractual framework, and it found no abuse of discretion in the modified amount, discovery rulings, or fee award.


MacMillan v. Schwartz, 250 P.3d 1213 (Ariz. Ct. App. 2011)