Lindsey v. Lindsey – No. 20150720-CA – 2017 UT App 38

Lindsey v. Lindsey – No. 20150720-CA – 2017 UT App 38

On March 2, 2017, the Utah Court of Appeals issued its decision in the case of Lindsey v. Lindsey. Here is the link to the court’s full decision, and we have also included the link the description section of this video report.

Three circumstances have been identified under Utah law as supporting an award of separate property at the time of divorce. These exceptions are when separate property has been commingled; when the other spouse has augmented, maintained, or protected the separate property; and in extraordinary situations when equity so demands. The latter two exceptions are at issue here. The undisputed evidence before the trial court was that Ms. Lindsey was not involved in the creation, organization, or ongoing affairs of Mr. Lindsey’s business. While Ms. Lindsey helped Mr. Lindsey strengthen relationships with his clientele, and on several occasions hosted and entertained his clients, she did not identify any concrete benefit that accrued to Mr. Lindsey’s business interests due to her efforts nor did she point to any other involvement with or services she allegedly provided to Prime Holdings, and it is undisputed that she never acted as its employee. Moreover, Ms. Lindsey did not contend that Mr. Lindsey elected to forgo salary or other compensation that would have benefited the marriage so that those funds could be reinvested in his business, and it was undisputed that Mr. Lindsey received significant compensation as well as dividends during the marriage, which were treated as marital income and thus benefited both parties. It was undisputed that Ms. Lindsey enjoyed the benefit of payouts from Mr. Lindsey’s business interests during the marriage; over $2 million in dividends were paid to Mr. Lindsey due to his ownership of Prime Holdings stock and, in Ms. Lindsey’s words, those dividends were used in the marriage as marital income. The court of appeals was unaware of any Utah appellate decision characterizing a spouse’s assumption of substantial household and childcare duties, coupled with the sort of limited involvement and well-established premarital business present here, as an extraordinary circumstance. The trial court correctly granted summary judgment awarding Mr. Lindsey’s business interests to him as separate property. No undisputed facts prevented the trial court from making that determination at the summary judgment stage. Ms. Lindsey’s efforts were insufficient to satisfy the contribution exception, and there were no extraordinary circumstances warranting an award of Mr. Lindsey’s business interests to Ms. Lindsey. Accordingly, the judgment of the trial court was affirmed.

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