In divorce actions, be sure to distinguish between the different tax treatment of Roth and traditional IRAs. Investopedia.com stated it clearly and concisely: “The traditional IRA allows you to contribute a portion of pre-tax dollars. That reduces your taxable income for the year while setting aside the money for retirement. The taxes will be due as you withdraw the money. The Roth IRA allows you to contribute post-tax dollars. There are no immediate tax savings, but once you retire, the amount you paid in and the money it earns are tax-free.”
This means that a dollar in a traditional IRA is not worth the same as a dollar in a Roth IRA. Bear the tax consequences of funds in traditional IRAs and in Roth IRAs when you divide marital assets.
Generally: It appears that the law in Utah is that the trial court is not required to consider hypothetical and/or future tax consequences of the disposition of the marital estate. SeeHowell v. Howell, 806 P.2d 1209, 1214 (Utah Ct.App. 1991).
There is no abuse of discretion if a court refuses to speculate about hypothetical future tax consequences of a property division made pursuant to a divorce (Alexander v. Alexander, 737 P.2d 221, 224 (Utah 1987)). Tax consequences in this case were speculative as to whether they could be avoided or delayed, and as to amount. The court heard testimony and evidence regarding possible tax implications, but did not err in refusing to adjust property distribution because of those theoretical consequences.
And see Rothwell v. Rothwell, ¶53, 531 P.3d 225 (Utah Ct.App. 2023), 2023 UT App 50:
[T]he district court’s decision not to tax-effect the businesses is consistent with Utah law. “We do not generally expect courts to speculate about hypothetical future tax consequences.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 97, 507 P.3d 385 (quotation simplified) (rejecting the argument that a wife’s property award should be decreased based on possible transaction costs the husband would incur if he liquidated the business), cert. denied, 525 P.3d 1259 (Utah 2022); see also Morgan v. Morgan, 795 P.2d 684, 690 (Utah Ct. App. 1990) (explaining that courts are under “no obligation to speculate about hypothetical future tax consequences” (quotation simplified)), cert. denied, 860 P.2d 943 (Utah 1993). The sale of a business has tax consequences only if the business is actually sold, which may be long in the future when tax laws have changed or may not happen at all. Cf. Howell v. Howell, 806 P.2d 1209, 1213–14 (Utah Ct. App. 1991) (rejecting an argument that the tax associated with selling real property should have been deducted from the value of the property because such taxes were speculative), cert. denied, 817 P.2d 327 (Utah 1991).
Yet there is this distinction from the case of Labon v. Labon (517 P.3d 407, 413 (Utah Ct.App. 2022) 2022 UT App 103, ¶27):
[A] court should consider the “tax consequences” associated with the division of marital property if one of the parties “will be required to liquidate assets to pay marital debts.” Morgan v. Morgan, 795 P.2d 684, 690 (Utah Ct. App. 1990)
Even so, if the tax implications of the division and disposition of the marital are important, they should be made specific trial issues, and the parties should expressly ask that the court consider and should minimize adverse tax consequences incidental to the disposition of the marital estate. Many treatises and practice guides recommend that every argument at the motion and trial level address the tax implications of the argument in detail, backed by not only the documentary evidence but the expert explanations, analyses, and opinions of an accountant.
When the value of a business that is a marital asset is divided in divorce, the question of the “goodwill value” of the business will usually arise.
Goodwill is defined by Black’s Law Dictionary as “a business’s reputation, patronage, and other intangible assets that are considered when appraising the business, esp. for purchase; the ability to earn income in excess of the income that would be expected from the business viewed as a mere collection of assets.” (Black’s Law Dictionary (11th ed. 2019))
The Utah appellate case of Marroquin v. Marroquin defined institutional or enterprise goodwill as “based on the intangible, but generally marketable, existence in a business of established relations with employees, customers and suppliers, and may include factors such as a business location, its name recognition and its business reputation” (¶15, 440 P.3d 757 (Utah App. 2019)). In contrast, “Personal goodwill is based on an individual’s “reputation for competency” and is not subject to distribution upon divorce.” (Id.) This is why, in Marroquin v. Marroquin, where the court determined the only goodwill associated with the husband’s business was that of personal goodwill, the value of such goodwill was not subject to distribution upon divorce of the parties. Consequently, requiring the husband to pay the spouse part of the value ascribed to the personal goodwill would have been inequitable.
In the Utah appellate case of Stonehocker v. Stonehocker (2008 UT App 11, 176 P.3d 476 (Utah Ct. App. 2008)), the value of the husband’s business would be determined independent of any goodwill component where the business was the product of the husband’s reputation, goodwill, and sole efforts, and there could be no good will in a business that was dependent for its existence upon the husband who conducted the enterprise and would vanish were the husband to die, retire or quit work (Id. at ¶ 44).
Most small businesses do not have business or commercial goodwill, but that does not stop many spouses from claiming that business/commercial goodwill exists, that it exists in prodigious quantities, and that the spouse making the claims is entitled to a big ‘ole cash award equal to half of the alleged business/commercial goodwill.
Karra J. Porter and Kristen C. Kiburtz, Attorneys for Appellant
Julie J. Nelson, Attorney for Appellee
JUDGE AMY J. OLIVER authored this Opinion, in which JUDGES
MICHELE M. CHRISTIANSEN FORSTER and RYAN D. TENNEY
concurred.
OLIVER, Judge:
¶1 Richard Lee Clark appeals from the district court’s decision following a two-day divorce trial. Clark challenges several aspects of the court’s ruling, including a discovery sanction for his failure to timely disclose his trial exhibits under rule 26 of the Utah Rules of Civil Procedure; findings relating to his claim that his ex-wife, Susan Jeanne Clark, dissipated the marital estate; and the court’s division of the marital property. We affirm the district court’s ruling with the exception of one aspect of the district court’s marital property determination, which we vacate and remand for additional findings.
BACKGROUND
¶2 Richard and Susan[1] married in 2002, when Richard was in his sixties and Susan was in her fifties. Richard was retired from military service and from employment as an attorney with the Department of Justice. Susan owned a wallpaper business when she met Richard but quit working shortly after they married. For the next six years, Richard and Susan lived off Richard’s retirement income from both the Army and the Department of Justice.
¶3 In 2008, Richard came out of retirement to work for a government contractor in Afghanistan, where he lived for thirty-eight months. During that time, Richard’s retirement and employment income of $814,627 was deposited into a joint account that Susan controlled. Richard returned home to find “probably about $100,000 . . . had been saved” in the joint bank account—much less than he expected—yet he said nothing to Susan at that time.
¶4 Three years after his return, Richard moved into the basement of the marital home. The following year, in 2016, Susan transferred approximately $78,000 from their joint account into her personal account, prompting Richard to confront her about what he viewed as missing money from his time in Afghanistan. Two years later, in 2018, Susan filed for divorce. Shortly afterward, Richard purchased a Harley-Davidson motorcycle with financing, which he paid off in 2020.
¶5 At the time of their divorce, Richard and Susan owned two real properties—a condo in Norfolk, Virginia (Mooring Drive), and a home in Kamas, Utah (Ross Creek). Richard had purchased Mooring Drive before the marriage for approximately $205,000. In 2003, Richard added Susan to the title of Mooring Drive, which allowed her to vote at the condominium association’s meetings and to join the board. The following year, Richard and Susan used equity loans on Mooring Drive to finance the purchase and construction of Ross Creek. From 2009—when Susan moved to Utah and Richard was in Afghanistan—until June 2019, Richard rented Mooring Drive out to others and the revenues were deposited into his separate account that was designated to pay for the property’s expenses.
¶6 During their marriage, the parties took out an equity loan on Ross Creek that matured, along with one of the equity loans from Mooring Drive, in 2019. With the divorce still pending, Susan agreed to refinance Ross Creek’s mortgage to pay off the two equity loans that were due, but only if Richard would stipulate that Mooring Drive and Ross Creek were marital property and were subject to equitable division in their pending divorce. Richard agreed, and the parties stipulated that “the Ross Creek and Mooring Drive properties shall remain marital property and shall be subject to equitable division in the parties’ divorce notwithstanding that the Ross Creek home and Mooring Drive property will no longer be jointly titled.”
¶7 In April 2019, the Mooring Drive tenants’ lease expired. Richard decided he could only offer the tenants a month-to-month lease until his divorce was over. When the tenants declined to renew and moved out in June, Richard withdrew $30,000 from the joint bank account, claiming that he needed the funds to cover Mooring Drive’s expenses. After a hearing, the court entered temporary orders in December 2019, permitting Richard to access equity in Ross Creek to pay off debt on Mooring Drive but denying his “request for financial relief based on the loss of rental income because [Richard] ha[d] not made any attempt to secure new renters.”
¶8 Trial was originally scheduled for June 2020, but when the COVID-19 pandemic hit and courts were required to hold bench trials virtually, Richard declined to proceed with a virtual trial, and it was continued without a date. In February 2021, the court held a pretrial scheduling conference and rescheduled the trial for May 2021. The court’s pretrial order stated the parties must produce pretrial disclosures on or before April 26, 2021, pursuant to rule 26(a)(5)(B) of the Utah Rules of Civil Procedure.
¶9 Richard missed the deadline. A week after it passed, he requested a continuance to hire trial counsel. Richard had been representing himself as a pro se litigant despite being eighty-four years old and not having practiced law since 1988. According to Richard, health issues arose that made him “no longer physically and mentally capable of representing” himself. The court granted the motion, rescheduling the trial for June. The new deadline for pretrial disclosures became May 24, but Richard did not submit his pretrial disclosures until June 10—eleven days before trial.
¶10 The two-day trial began with Susan’s objection to Richard’s untimely pretrial disclosures. Susan contended that Richard had “ample opportunity” to produce his pretrial disclosures given the multiple continuances of the trial. In response, Richard claimed his failure to meet the disclosure deadline was harmless because he had previously produced as discovery responses the 339 pages of financial documents—including check registers, paystubs from 2008 to 2009, and bank account information from 2011 to 2012— that he sought to admit as exhibits 2 through 8. Yet Richard did not file certificates of service for those responses, and neither party’s counsel could confirm whether Richard had previously sent the documents in exhibits 2 through 8 to Susan, leaving the district court with only Richard’s testimony to support the claim that he had previously disclosed the exhibits. The district court sustained Susan’s objection as to exhibits 2 through 8, excluding them from trial.
¶11 Both Susan and Richard testified at trial. Susan testified Richard had transferred $30,000 from their joint account to his personal account in June 2019 and contended she was entitled to half of that amount. Susan also testified about her exhibits that provided recent balances in her bank and retirement accounts.
¶12 On cross-examination, Susan admitted she had not looked for work and was unemployed despite the court’s urging in 2020 for her to seek employment. Richard then peppered Susan about numerous expenditures during his time in Afghanistan, to which Susan replied that it “was a number of years ago” and she “ha[d] no recollection at all” of the transactions. Susan did state, however, that when Richard left for Afghanistan, she recalled they “had very large credit card balances” that Richard instructed her “to start paying off” while he was away.
¶13 First testifying as Susan’s witness, Richard answered questions about some of the marital property. He testified about a recent appraisal of Mooring Drive that valued it at $390,000, his three life insurance policies that all list Susan as the beneficiary, and his purchase of the Harley-Davidson in May 2019. Susan then introduced a pleading Richard had filed with the court in November 2019 that stated, in relevant part, he had “owned three motorcycles, selling the last one when [he] moved to Norfolk,” but he has “never ridden a Harley-Davidson.” Richard replied that he had “misstated the fact,” both in that pleading and at a hearing the same month when he told the court he did not own a Harley-Davidson. Richard testified he should receive three-fourths of the equity in Mooring Drive because he purchased it before the marriage. Unable to provide a figure for what the property was worth when he married Susan, Richard claimed that “the[] prices have gone up and gone down a great deal” since their marriage, but his best guess was that Mooring Drive appreciated from $205,000 to $350,000 between 2000 and 2002. Richard continued to do some impromptu math on the stand to clarify how much equity he felt he was owed, asserting that since Mooring Drive was recently appraised at $390,000 and had been worth $350,000 in 2002—by his best guess—there is $40,000 of equity for them to divide, but then he admitted such valuation “is something I’m just not knowledgeable about.”
¶14 As his own witness, Richard testified about Susan’s alleged dissipation during his time in Afghanistan. Richard’s excluded exhibits went to the issue of dissipation, so without the financial documents from that period, Richard sought to prove Susan “dissipated money while [he] was in Afghanistan” through his testimony about his earnings and typical expenses during that time frame. Using the excluded exhibits to refresh his recollection, Richard estimated their monthly expenses before he left were approximately $10,000 to $11,000. Richard also challenged Susan’s testimony about credit card balances, claiming that “there weren’t any large credit card balances before [he] left.”
¶15 At the conclusion of trial, the district court asked both parties to submit proposed findings of fact and conclusions of law in lieu of closing arguments. After issuing an oral ruling, the district court memorialized its decision in written findings of fact and conclusions of law. The court found that Richard’s “testimony was insufficient to establish his [dissipation] claim” and that Richard had “failed to meet his burden of demonstrating dissipation.” The court also found “problems with the credibility of both parties,” specifically finding that Susan’s “credibility was lacking with regards to the dissipation issue” and Richard’s “credibility was lacking with regards to his motorcycle purchase.” Susan was awarded Ross Creek’s equity, and Richard was awarded Mooring Drive’s. The court awarded Susan $2,500 per month in alimony and an offset of $43,474 (from Richard’s purchase of the Harley-Davidson and his $30,000 withdrawal from the joint account) “to achieve an equitable division of the estate.” The court found Richard “withdrew $30,000 from the joint account without [Susan’s] knowledge or consent and deposited it into his own personal account,” but it made no findings as to how Richard spent the $30,000.
ISSUES AND STANDARDS OF REVIEW
¶16 Richard raises three main issues for our review. First, Richard challenges the district court’s exclusion of his exhibits for his failure to comply with rule 26(a)(5) of the Utah Rules of Civil Procedure. A district court “has broad discretion regarding the imposition of discovery sanctions,” and when we apply “the abuse of discretion standard to the district court’s imposition of a particular sanction, we give the district court a great deal of latitude.” Bodell Constr. Co. v. Robbins, 2009 UT 52, ¶ 35, 215 P.3d 933 (cleaned up).
¶17 Second, Richard contends the district court erred in its application of the burden of proof on Richard’s dissipation claim. A district court’s “allocation of the burden of proof is . . . a question of law that we review for correctness.” Salt Lake City Corp. v. Jordan River Restoration Network, 2018 UT 62, ¶ 20, 435 P.3d 179.
¶18 Finally, Richard challenges the district court’s division of the property, including the court’s finding that the marital estate included Mooring Drive and the Harley-Davidson, and its decision to deduct from the marital estate the $30,000 Richard withdrew from the parties’ joint account. A district court “has considerable discretion considering property division in a divorce proceeding, thus its actions enjoy a presumption of validity,” and “we will disturb the district court’s division only if there is a misunderstanding or misapplication of the law indicating an abuse of discretion.” Beckham v. Beckham, 2022 UT App 65, ¶ 6, 511 P.3d 1253 (cleaned up).
ANALYSIS
I. Pretrial Disclosures
¶19 Richard asserts the district court abused its discretion in excluding his exhibits 2 through 8 for failure to comply with rule 26(a)(5) of the Utah Rules of Civil Procedure because he “produced the documents that comprised the exhibits” during discovery and any “technical non-compliance with that rule” was “harmless.” We disagree.
¶20 Rule 26 governs “disclosure and discovery” in civil matters and requires parties to provide “a copy of each exhibit, including charts, summaries, and demonstrative exhibits, unless solely for impeachment, separately identifying those which the party will offer and those which the party may offer . . . . at least 28 days before trial.” Utah R. Civ. P. 26(a)(5). A party who fails to timely disclose exhibits “may not use the undisclosed witness, document, or material at . . . trial unless the failure is harmless or the party shows good cause for the failure.” Id. R. 26(d)(4). A district court “has broad discretion in selecting and imposing sanctions for discovery violations under rule 26,” and “appellate courts may not interfere with such discretion unless there is either an erroneous conclusion of law or no evidentiary basis for the district court’s ruling.” Wallace v. Niels Fugal Sons Co., 2022 UT App 111, ¶ 26, 518 P.3d 184 (cleaned up), cert. denied, 525 P.3d 1267 (Utah 2023).
¶21 Richard does not dispute that he failed to timely disclose exhibits 2 through 8. Instead, Richard argues he produced the documents in those exhibits to Susan in earlier discovery responses, so his failure to timely file pretrial disclosures was harmless, and he further argues that it was Susan’s burden to prove she had not received them. In response, Susan asserts it was Richard’s burden, not hers, to prove that he produced the documents earlier in discovery, and the failure to file his pretrial disclosures pursuant to rule 26(a)(5) was not harmless. We agree with Susan on both fronts.
¶22 First, “the burden to demonstrate harmlessness or good cause is clearly on the party seeking relief from disclosure requirements.” Dierl v. Birkin, 2023 UT App 6, ¶ 32, 525 P.3d 127 (cleaned up), cert. denied, 527 P.3d 1107 (Utah 2023). Second, Richard failed to carry his burden of demonstrating harmlessness. Although Richard “assured [his counsel] that he [had] produced records related to this 2008-to-2012 timeframe,” he did not file the required certificates of service. See Utah R. Civ. P. 26(f) (requiring a party to file “the certificate of service stating that the disclosure, request for discovery, or response has been served on the other parties and the date of service”). Thus, Richard failed to prove that the documents had previously been produced.
¶23 But even if he had proved prior production, excusing pretrial disclosures if the documents were produced earlier in discovery would “eviscerate[] the rule that explicitly requires parties to” serve a copy of the documents they intend to use “in their case-in-chief at trial.” Johansen v. Johansen, 2021 UT App 130, ¶¶ 19, 26, 504 P.3d 152 (rejecting argument to follow the spirit of rule 26 rather than “the plain language of rule 26” regarding pretrial disclosures); see also Utah R. Civ. P. 26(a)(5)(A)(iv) (requiring pretrial disclosure of “each exhibit” the party will or may offer at trial). And expecting a party to sort through hundreds, if not thousands, of pages of documents that were produced earlier by the other side during discovery and then expecting the party to predict which ones the opposing party might seek to admit at trial would be harmful and would violate the intent of rule 26.
¶24 Ultimately, “a court’s determination with respect to harmlessness . . . . is a discretionary call,” and our review of it “is necessarily deferential.” Johansen, 2021 UT App 130, ¶ 11 (cleaned up). Thus, the district court was well within its “broad discretion” to exclude Richard’s exhibits 2 through 8 under these circumstances. See Wallace, 2022 UT App 111, ¶ 26 (cleaned up).
II. Dissipation
¶25 Richard claims the district court erred in finding that he failed to meet the burden of proof on his dissipation claim. We disagree.
¶26 “The marital estate is generally valued at the time of the divorce decree or trial.” Goggin v. Goggin, 2013 UT 16, ¶ 49, 299 P.3d 1079 (cleaned up). “But where one party has dissipated an asset,” the “trial court may, in the exercise of its equitable powers,” “hold one party accountable to the other for the dissipation.” Id. (cleaned up). A court’s inquiry into a dissipation claim may consider “a number of factors,” such as “(1) how the money was spent, including whether funds were used to pay legitimate marital expenses or individual expenses; (2) the parties’ historical practices; (3) the magnitude of any depletion; (4) the timing of the challenged actions in relation to the separation and divorce; and (5) any obstructive efforts that hinder the valuation of the assets.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 69, 507 P.3d 385 (cleaned up), cert. denied, 525 P.3d 1259 (Utah 2022).
¶27 The burden of proof for dissipation initially falls on the party alleging it. See Parker v. Parker, 2000 UT App 30, ¶ 15, 996 P.2d 565 (stating that a party seeking to assert dissipation must make an “initial showing of apparent dissipation”). The district court correctly concluded that Richard bore the “burden of demonstrating dissipation.” To meet the “initial showing of apparent dissipation,” the party alleging dissipation must first show evidence of dissipation. Id. ¶¶ 13, 15. Only after “present[ing] the trial court with evidence tending to show that [Susan] had dissipated marital assets” does the burden shift to Susan “to show that the funds were not dissipated, but were used for some legitimate marital purpose.” Id. ¶ 13.
¶28 Richard’s documentary evidence on this issue had been excluded by the court, so the only evidence he presented was his testimony in 2021 that his income while in Afghanistan from 2008 to 2012 exceeded the estimated historical marital expenses from before 2008, some thirteen years earlier. Richard asserts that his testimony alone should suffice for an initial showing of dissipation. In Parker v. Parker, 2000 UT App 30, ¶ 15, 996 P.2d 565, the husband “presented the trial court with evidence” that detailed how the wife had dissipated marital assets—exact beginning and ending balances for eight bank accounts, the marital expenses during the time in question, and specific checks the wife wrote to herself—thus shifting the burden to the wife. Id. ¶ 13. But Richard, like the wife in Parker, only “testified in conclusory and cryptic terms,” and thus “wholly failed to meet [his] burden.” Id. ¶ 14.
¶29 Therefore, the district court was well within its discretion to decide that Richard’s uncorroborated testimony about Susan’s spending that occurred many years before either party contemplated divorce[2] was insufficient evidence to meet his initial burden of proving dissipation. Accordingly, the district court did not err in its finding that Richard failed to meet his burden of proof on the dissipation claim.
III. Marital Property
¶30 Richard presents three challenges to the district court’s division of the marital property. First, Richard asserts he is entitled to his premarital contribution to Mooring Drive. Second, he alleges the Harley-Davidson he purchased during the pendency of the divorce is his separate property. Third, Richard claims the court should not have deducted from the marital estate the $30,000 that he withdrew from the joint account in June 2019.
We affirm the district court’s decision on Richard’s first two challenges and vacate the decision on the third, remanding the matter for additional findings.
A. Mooring Drive
¶31 Although the district court awarded Richard the equity in Mooring Drive when it divided the marital estate, it did not also award Richard any premarital equity in the property for three reasons. First, it found that Richard “formally stipulated that Ross Creek and Mooring Drive were marital property subject to division in this divorce action.” Second, it found that “through a series of refinances, [Richard] transferred equity from Ross Creek to Mooring Drive, and paid expenses associated with both properties with marital funds.” Third, it found that Richard “formally conveyed the property to himself and [Susan] in 2003” when he added Susan’s name to the title. Because we affirm the district court’s decision not to award Richard any premarital equity on the basis of the parties’ stipulation, we do not address the other two reasons the district court relied upon.
¶32 Richard and Susan stipulated that “the Ross Creek and Mooring Drive properties shall remain marital property and shall be subject to equitable division in the parties’ divorce, notwithstanding that the Ross Creek home and Mooring Drive property will no longer be jointly titled.” Richard now claims that despite the language of the stipulation, he “never agreed that he should not be compensated for his premarital and separate contributions to Mooring Drive before the property became marital.” Furthermore, Richard argues, “nowhere in the stipulation did he agree that he was waiving his premarital equity in that property.”
¶33 Richard’s argument is flawed. “Parties to a divorce are bound by the terms of their stipulated agreement.” McQuarrie v. McQuarrie, 2021 UT 22, ¶ 18, 496 P.3d 44. And according to the “ordinary contract principles” that govern “contracts between spouses,” see Ashby v. Ashby, 2010 UT 7, ¶ 21, 227 P.3d 246 (cleaned up), “if the language within the four corners of the contract is unambiguous, the parties’ intentions are determined from the plain meaning of the contractual language,” Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 17, 84 P.3d 1134 (cleaned up). See also Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 2016 UT 6, ¶ 24, 367 P.3d 994 (holding that “the best indication of the parties’ intent is the ordinary meaning of the contract’s terms”); Ocean 18 LLC v. Overage Refund Specialists LLC (In re Excess Proceeds from the Foreclosure of 1107 Snowberry St.), 2020 UT App 54, ¶ 22, 474 P.3d 481 (holding that where the “contract is facially unambiguous, the parties’ intentions are determined from the plain meaning of the contractual language . . . without resort to parol evidence” (cleaned up)).
¶34 Richard essentially argues that the district court erred when it refused to go beyond the stipulation’s language and infer his intention from what he omitted. But the district court was correct when it interpreted the parties’ intentions by what the plain language of the stipulation does say and not by what it does not. Therefore, the district court did not abuse its discretion when it abided by the parties’ stipulation and included Mooring Drive as marital property, “subject to equitable division.”
B. The Harley-Davidson
¶35 “Prior to the entry of a divorce decree, all property acquired by parties to a marriage is marital property, owned equally by each party.” Dahl v. Dahl, 2015 UT 79, ¶ 126, 456 P.3d 276. Thus, the presumption is that property acquired during the pendency of a divorce is marital, not separate. Richard failed to rebut this presumption regarding the Harley-Davidson motorcycle he purchased because he failed to present evidence that he used separate funds.
¶36 Richard argued that he purchased the Harley-Davidson from separate, rather than marital, funds in his proposed findings of fact and conclusions of law.[3] To be clear, Richard does not assert that the Harley-Davidson is separate property because he purchased it after the parties separated or after Susan filed for divorce. Instead, he argues the only funds available to him to purchase the motorcycle came from his “separate premarital retirement income.” Richard’s argument fails for two reasons. First, Richard did not present evidence to support his argument that the funds he used to purchase the motorcycle came from separate, not marital, funds. Instead, Richard essentially places his burden on the district court by asserting, on appeal, that “[t]here was no marital account identified by the district court from which [Richard] could have made that purchase.” But Richard, not the court, bears the burden of identifying where the funds came from that he used to purchase the motorcycle.
¶37 Second, the district court found credibility problems with Richard’s testimony about the Harley-Davidson, concluding that Richard’s “credibility was lacking with regards to his motorcycle purchase.”[4] A district court “is in the best position to judge the credibility of witnesses and is free to disbelieve their testimony” or “disregard such testimony if it finds the evidence self-serving and not credible.” Ouk v. Ouk, 2015 UT App 104, ¶ 14, 348 P.3d 751 (cleaned up).
¶38 In sum, as “property acquired during [the] marriage,” the Harley-Davidson is presumptively “marital property subject to equitable distribution.” Dahl, 2015 UT 79, ¶ 26. Richard bore the burden of proof to rebut the presumption that the funds he used to purchase the Harley-Davidson were not marital, and he presented no credible evidence to the district court to support that position. Thus, the district court did not abuse its discretion by including the motorcycle in the marital estate.
C. $30,000 Offset
¶39 Finally, Richard challenges the district court’s decision to include in the marital estate the $30,000 he withdrew from the joint account. The district court agreed with Susan that because Richard had made a unilateral withdrawal from the joint account during the pendency of the divorce, he should be held accountable for that withdrawal. Richard, on the other hand, claims he used the money for marital expenses, paying costs associated with Mooring Drive. Susan argues the money could also have been spent on personal items including travel and motorcycle payments and accessories. “How the money was spent, including whether [the] funds were used to pay legitimate marital expenses or individual expenses,” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 69, 507 P.3d 385 (cleaned up), cert. denied, 525 P.3d 1259 (Utah 2022), is a critical question that needs to be resolved.
¶40 Divorce cases often require district courts to make numerous findings of fact. And generally speaking, “for findings of fact to be adequate, they must show that the court’s judgment or decree follows logically from, and is supported by, the evidence” and such findings “should be sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate conclusion on each factual issue was reached.” Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 28, 70 P.3d 35 (cleaned up). Moreover, when it comes to the “unequal division of marital property,” a district court must “memorialize[] in . . . detailed findings the exceptional circumstances supporting the distribution.” Bradford v. Bradford, 1999 UT App 373, ¶ 27, 993 P.2d 887 (cleaned up). “Without adequate findings detailing why [one spouse] should be entitled to such an unequal split of the marital estate, we cannot affirm the court’s award.” Fischer v. Fischer, 2021 UT App 145, ¶ 29, 505 P.3d 56; see, e.g., Rothwell v. Rothwell, 2023 UT App 50, ¶ 57, 531 P.3d 225 (concluding that “we simply do not have enough information” to rule on whether the funds were marital or separate, “let alone to conclude that the district court
. . . erred”).
¶41 We face the same dilemma here. The district court made no findings as to how Richard spent the $30,000. The written ruling merely states, “In June 2019, [Richard] withdrew $30,000 from the joint account without [Susan’s] knowledge or consent and deposited it into his own personal account.” “We will not imply any missing finding where there is a matrix of possible factual findings and we cannot ascertain the trial court’s actual findings.” Hall v. Hall, 858 P.2d 1018, 1025–26 (Utah Ct. App. 1993). Without “adequate findings” on whether Richard used the funds for marital expenses or not, “we cannot affirm,” nor properly review, the court’s decision to offset the $30,000 against Richard in its division of the marital estate. See Fischer, 2021 UT App 145, ¶ 29. Therefore, we vacate this portion of the decision and remand the matter to the district court for it to enter findings on how the funds were spent.
CONCLUSION
¶42 The district court did not abuse its discretion when it excluded Richard’s exhibits for failure to comply with rule 26(a)(5) of the Utah Rules of Civil Procedure. The district court also did not err in its conclusion that Richard failed to meet the burden of proof for his dissipation claim nor did it abuse its discretion in how it divided the marital estate with respect to Mooring Drive and the Harley-Davidson. We vacate the district court’s decision to offset the $30,000 against Richard when it divided the marital estate and remand the matter for the district court to enter additional findings and to alter its conclusion as may be necessary.
[1] Because the parties share the same surname, we refer to them by their first names, with no disrespect intended by the apparent informality.
[2] Susan invites us to join some other states in drawing a bright-line rule concerning the timing of a dissipation claim and limit pre-separation dissipation claims to those occurring (1) in contemplation of divorce or separation or (2) when the marriage is in serious jeopardy or undergoing an irretrievable breakdown. Under our caselaw, the district court is empowered to consider the “timing of the challenged actions in relation to the separation and divorce” as one of several factors when determining “whether a party should be held accountable for the dissipation of marital assets.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 33, 440 P.3d 757 (cleaned up). We see no need to alter this approach. Assessing timing as one factor among many provides the greatest flexibility to the district court to consider all the circumstances in a particular case, and we believe the district court is in the best position to evaluate the importance of such evidence on a case-by-case basis.
[3] Because the district court directed the parties to submit proposed findings of fact and conclusions of law in lieu of closing arguments, Richard’s argument was preserved for our review.
[4] Indeed, in its oral ruling, the court stated that Richard “lied to the Court about the purchase of the motorcycle.”
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES JOHN D. LUTHY and AMY J. OLIVER concurred.
HARRIS, Judge:
¶1 This case arises from a protracted and multi-faceted dispute among siblings and stepsiblings regarding the use and distribution of the assets in a trust created by Dean Harding. After four years of litigation and a six-day bench trial, the trial court determined that Rickie Taylor, acting as trustee of his deceased stepfather’s trust, engaged in numerous acts of self-dealing and other breaches of fiduciary duties resulting in more than $5 million in damages. After trial, the court also determined—sua sponte—that Margene Harding (Taylor’s mother and the lifetime beneficiary of the trust) had been vicariously liable for Taylor’s actions, and therefore held Margene’s estate (the Estate) jointly and severally responsible for the damages Taylor caused. The court then entered judgment against Taylor and the Estate jointly and severally, and in favor of petitioner Robert Harding, in amounts approximating $5 million. Taylor and the Estate now each separately appeal.
¶2 In his appeal, Taylor raises several challenges. First, he takes issue with the court’s order denying his motion to amend his answer to add certain additional affirmative defenses. Second, he challenges the court’s summary judgment order in which the court determined, as a matter of law, that Taylor made unlawful distributions from the trust. Next, Taylor appeals the court’s orders excluding his expert witnesses. Finally, Taylor makes several complaints about the court’s judgment against him, including the amount of damages ordered. As discussed below, we reject most of Taylor’s complaints, although we find merit in one aspect of his challenge to the court’s damages award.
¶3 In its appeal, the Estate also raises several issues for our consideration. First, it challenges the court’s sua sponte determination that it should be jointly and severally liable for the damages caused by Taylor’s wrongdoing. Second, the Estate appeals the court’s decision regarding the appropriate interest rate to be applied to a debt two of Dean’s children owed the trust. Third, it raises several issues with the form of the judgment. Finally, it takes issue with the court’s decision not to award it attorney fees. We find merit in many of the issues the Estate raises.
¶4 For the reasons discussed herein, we affirm some of the court’s rulings, but detect error in others, and therefore vacate the court’s judgment and remand for further proceedings.
BACKGROUND
The Trust and Dean’s Death
¶5 During his lifetime, Dean Harding was a successful businessman who owned and operated a commercial heating, ventilation, and air conditioning company. With his first wife, Dean[1] had three children: Robert G. Harding, Jill H. Kendall, and Jeana Vuksinick. In the mid-1980s, after Dean’s first wife had passed away, Dean married Margene Harding. Margene had several children from previous marriages, including Taylor. After Dean married Margene, Taylor became Dean’s stepson and the stepsibling of Robert, Jill, and Jeana.
¶6 In 1994, in an effort to manage his assets and plan his estate, Dean created the A. Dean Harding Marital and Family Trust (Trust). The beneficiaries of the Trust were Dean’s “surviving spouse”—Margene—and Dean’s three children. Under the terms of the Trust, upon Dean’s death, and if Dean’s “spouse survives” him, “all property subject to [the Trust] shall be divided into two parts known as the marital share and the family share.” Dean’s surviving spouse was to have the use of certain Trust assets during her lifetime, and then after her death the Trust assets were to be distributed to Dean’s three children “in equal shares.” Margene’s own children—including Taylor—were not direct beneficiaries of the Trust.
¶7 Any income earned by any part of the Trust was to be paid to Dean’s spouse, and any excess “undistributed” income from the marital share was, upon the spouse’s death, to pass to the “spouse’s estate.” But aside from such income, “all other properties of” the Trust, including all unused principal, were to pass to Dean’s three children upon the spouse’s death.
¶8 With regard to Trust principal, the Trust documents did not authorize any distribution of principal out of the marital share; those documents state that only the surviving spouse was empowered to receive—but not empowered “to appoint”—“any part of” the marital share’s property, but that even she was empowered to receive “income only.” With regard to the principal assets of the family share, however, the situation was different: to the extent that the Trust’s income was not sufficient to meet the surviving spouse’s ongoing “support and maintenance” needs, as viewed through the lens of “her accustomed manner of living,” the trustee was authorized, in his “discretion,” to use the family share’s principal to meet those needs. In making the determination about whether to dip into family share principal to meet the spouse’s needs, the trustee was to consider any “income or other resources” that the spouse had at her disposal, and was to “be mindful of the fact that [Dean’s] primary concern in establishing the [T]rust is [Dean’s] spouse’s welfare and that the interests of others in the [T]rust are to be subordinate to [Dean’s] spouse.”
¶9 The Trust also allowed for “the primary residence owned by” Dean at the time of his death to be “allocated to” the marital share. In that event, Dean’s surviving spouse would be allowed to “reside personally upon the said premises” during her lifetime but would be responsible for paying property taxes, maintaining “adequate insurance,” and “perform[ing] such repairs and maintenance as may be required to maintain the property in the condition it was maintained prior to [Dean’s] death.”
¶10 Dean’s will—created contemporaneously with the Trust— contained a “spendthrift clause” that all parties now agree was incorporated into the Trust. This provision mandated, in relevant part, that no “interest of any beneficiary” in the Trust “be liable . . . for the debts, contracts, liabilities, engagements, obligations or torts of such beneficiary.”
¶11 Dean passed away in January 2004. When he created the Trust, Dean had named himself as trustee, and had named an accountant (Accountant) as successor trustee. Upon Dean’s death, Accountant became the trustee of the Trust, and he estimated that the Trust contained a total of about $5.8 million in assets. Accountant further allocated some $1.5 million to the family share and about $4.3 million to the marital share. Accountant also allowed Margene to continue to reside in Dean’s residence.
¶12 When Dean died, he was the owner of individual retirement accounts (IRAs) that were valued at approximately $1.5 million. These IRAs were among the assets that Accountant allocated to the marital share of the Trust. Shortly after Dean’s death, Accountant signed certain forms clarifying that the Trust was the primary beneficiary of the IRAs. No such forms executed before Dean’s death are part of the record in this case. But even before Dean’s death, the account statements from the IRAs clearly referenced the Trust as the primary beneficiary.
The Settlement Agreement and the Note
¶13 Soon after Dean’s death, various disputes arose involving the Trust’s beneficiaries, and in June 2004, due to “growing contention,” Accountant resigned as trustee. Margene then appointed her son—Taylor—as the new trustee of the Trust. Later, Margene also gave Taylor power of attorney over her own personal finances, which power Taylor utilized to, among other things, write checks (or otherwise authorize withdrawals) from her personal bank accounts.
¶14 Robert, Jill, and Jeana questioned Taylor’s status as successor trustee, and Taylor took issue with an undocumented $1 million loan (the Loan) that two companies controlled by Robert and Jill had taken from the Trust prior to Dean’s death. Both sides filed competing petitions in court raising these and other disputes, and eventually agreed to resolve their differences in a settlement agreement (the Settlement Agreement). Among other things, the Settlement Agreement provided that Taylor would be allowed to continue as trustee of the Trust, but he would be required to “provide a full accounting . . . of the Trust assets and affairs at least annually,” provide “quarterly trust brokerage statements,” and “communicate with” Robert, Jill, and Jeana through their designated liaison—Jeana—“at least twice per month.” Ultimately, in the ensuing years, Jeana met with Taylor about four times per year to obtain information about the Trust, and neither Jeana nor her siblings, prior to 2015, ever asked for additional information from Taylor.
¶15 With regard to the Loan, Robert—both personally and on behalf of the companies—and Jill agreed to “execute a promissory note memorializing the undocumented Loan,” and agreed to pay “[a]ccrued interest” at a “variable” rate equivalent to “the margin loan rate assessed by S[a]lomon Smith Barney on Brokerage Account No. 298-02528-13 303 . . . as may fluctuate from time to time until paid in full.” The promissory note they later signed (the Note) also stated that interest payments were to be made quarterly, and that if the Note were to be in “default” that “interest shall accrue at one percent (1%) above” the variable rate specified. Interest paid on the Note was to be considered income from the marital share of the Trust and—under the terms of the Trust—paid to Margene or, if undistributed at her death, to the Estate. Robert and Jill signed the Note as personal guarantors, but each did so “only for one-half (1/2) of the remaining balance plus interest, and only to the extent of [their] inheritance.”
¶16 The Settlement Agreement also had an attorney fees clause, which provided that if any party to the agreement were “required to retain counsel to enforce any of the provisions of this Agreement,” the party “determined to be in substantial default in any subsequent action shall pay the prevailing [party] its costs and reasonable attorney fees.” The Note had such a clause too, pursuant to which Robert and Jill “promise[d] to pay all reasonable costs and expenses of collection of any amount due under this Note including reasonable attorney’s fees.”
A Decade of Taylor’s Trust Administration
¶17 Following execution of the Settlement Agreement, Taylor served as trustee of the Trust for the next thirteen years (until he was removed by court order in January 2018). During that time, he took numerous actions that were later questioned by one or more of Dean’s children.
¶18 Upon assuming the role of trustee, Taylor made little effort to familiarize himself with much of what his duties entailed.[2] An attorney hired by the Trust provided Taylor with a document setting forth some of his duties as trustee, but he read only the pages the attorney said were important, and he was later unable to recollect any of the content of the document. Taylor also later stated that he was unaware of what fiduciary duties are. At one point, when asked whether he had read the Trust documents before beginning to authorize distributions of Trust assets, Taylor stated that he “left that . . . to the attorneys and the accountants.”
¶19 Throughout his tenure as trustee, Taylor was largely unaware whether the distributions he authorized came from the marital or family share of the Trust. He later testified that he was unaware of any written guidelines indicating when it was appropriate to distribute money from the family share. As noted above, the Trust allowed Taylor to distribute family share principal only when the trust income and Margene’s other assets were insufficient to meet Margene’s accustomed needs, but Taylor never analyzed Margene’s needs to determine whether principal distributions were appropriate. Throughout the thirteen years he served as trustee, Taylor never tracked the distributions of principal. In addition, with regard to some of the distributions Taylor made from the Trust—including several five-figure payments—Taylor was later unable to explain the destination or purpose of the payments.
¶20 Taylor was also unaware of whether the required minimum distributions (RMDs) he made from the IRAs were considered income and therefore payable to Margene, or were considered principal and therefore subject to the Trust’s restrictions on distributions of principal. During his time as trustee, Taylor simply paid 100% of the RMDs from the IRAs to Margene, as if they were entirely composed of income. He later learned, however, that pursuant to the provisions of Utah’s Uniform Principal and Income Act (UPIA), only a small portion of the RMDs could properly be classified as income. See Utah Code § 22-3-409.[3]
¶21 During his years as trustee, Taylor used his power of attorney over Margene’s personal finances to make transfers of money from Margene’s accounts (which were largely funded by Trust assets) to accounts controlled by Taylor, and Taylor was unable to explain the reason for many of these transfers. Examples of these transactions include payment for third-row Utah Jazz season tickets in the amount of $74,945; a $123,470.59 payment to a business Taylor owned; purchase of an Arabian horse; a $93,600 payment to Taylor’s sister; and $62,700 in “[f]unds directed to Taylor personally.” Some of these transfers he characterized as “gifts” from Margene to him or his siblings.
¶22 Taylor also failed to properly maintain vehicles owned by the Trust. A motorhome owned by the Trust was used by Taylor’s siblings until, while being used by Taylor’s nephew, it was stolen. A truck and “another car,” also owned by the Trust, were gifted by Margene to Taylor’s sister. And another Trust vehicle was totaled by Taylor’s son.
¶23 While Taylor was acting as trustee, Robert’s ex-wife served a writ of garnishment on the Trust regarding money Robert allegedly owed her in their divorce case. Robert claims to have first become aware of his ex-wife’s actions when a Trust attorney informed him that his ex-wife had served the writ on the Trust. After receiving notice, Robert claims that he hired an expert “to analyze the propriety of the amount of [her] claim” and that he obtained legal counsel to potentially dispute or negotiate the money owed. However, under the threat of the writ of garnishment, Taylor authorized payment from the Trust of some $250,000 to Robert’s ex-wife. Moreover, Robert’s ex-wife had previously obtained approximately $35,000 from the proceeds of a short sale of Robert’s home. Robert took issue with Taylor’s authorization of the payment out of the Trust to his ex-wife, believing that the payment resulted in his ex-wife receiving at least $35,000 more than she was entitled to and that it “undercut any negotiation he had with [her] regarding the [total] amount owed.” However, Robert’s ex-wife did not make any further claims against Robert for the money owed, and Robert later testified that the Trust’s “distributions of funds to [his ex-wife] did extinguish his debt to her.”
¶24 In the years after the Loan was memorialized in the Note as part of the Settlement Agreement, Robert and Jill (and their companies) made only two payments on the $1 million Note. Those payments totaled about $58,000 and appeared to include interest calculated at a 2% rate. But no other payments were made, and the two companies involved eventually went out of business. No party gave the Trust any notice of the companies’ dissolution, so the Trust, perhaps understandably, never made a claim on any of the companies’ assets. A Trust attorney did send a notice of default in 2006. But the Trust never took any other steps to collect on the Note from the companies (prior to dissolution) or from Robert and Jill (as guarantors), and the Note (both principal and interest) remained unpaid until after Margene’s death.
Margene’s Death and the Ensuing Distributions
¶25 Margene passed away in February 2015, and Taylor was appointed personal representative of her estate. The terms of the Settlement Agreement required Taylor to make final distributions of Trust assets within sixty days of Margene’s death, but he did not do so within that time period. About six months after Margene’s death, Taylor made a partial distribution of $775,000 (before deductions) to each of the three beneficiaries. Robert didn’t actually receive any money, though, because Taylor deducted $524,279.25 from both Robert’s and Jill’s distributions to account for the unpaid principal (but not the unpaid interest) on the Loan, and deducted an additional $250,720.75 from Robert’s tally because of the payment made by the Trust, on Robert’s behalf, to Robert’s ex-wife. Jill received a payment of $250,720.75, and Jeana received the full $775,000. Later, in 2016, Taylor was ordered to transfer nearly all the remaining Trust assets to Dean’s three children, and he did so by making a distribution to each of them in the approximate amount of $608,000.
The Lawsuit and the Two Competing Petitions
¶26 In September 2015, Robert filed a petition seeking “full distribution” from the Trust, a “full accounting” of Trust expenditures, and “damages resulting from breach of trust.” The petition named the Trust, Taylor, the Estate, Jill, Jeana, and Robert’s ex-wife as respondents. As to Taylor, Robert alleged that Taylor had unlawfully distributed principal from the Trust, and that at least some of these unlawful distributions had been made “on Margene’s behalf.” As to his ex-wife, Robert alleged that the payment made to her from the Trust violated the spendthrift provision and “interfered with and frustrated [his] settlement negotiations with” her.[4] And as to the Estate, Robert’s only allegation concerned the marital home; he alleged that “Margene failed to repair and maintain the [home] in the condition it was maintained prior to Dean’s death.” He made no other substantive allegations against the Estate, and did not assert that Margene or the Estate was or should be liable for Taylor’s actions.
¶27 In his prayer for relief at the end of his petition, Robert requested a full accounting, and asked that the court order Taylor to make distributions to him and his two siblings as required by that accounting. He also asked the court to order Taylor to “take immediate action to recover the funds distributed to” Robert’s ex-wife. He requested damages against “the Trust and/or Trustee” resulting from any unlawful distributions Taylor had made from the Trust. Against the Estate, he sought only damages “for the loss in value of” the marital home, as well as “a return of principal wrongfully distributed from the Trust.” Although Jill and Jeana were listed as respondents, the petition did not set forth any claims against or requests for relief from them; indeed, as noted, the petition asked the court to order distributions to all three of Dean’s children.
¶28 The Estate filed a counter-petition against the Trust, Robert, and Jill. The petition sought an order compelling Robert and Jill to pay the interest owed on the Loan to the Estate, pointing out that interest is classified as income from the marital share of the Trust and is, under the terms of the Trust, payable to the Estate (whose heirs include Taylor) upon Margene’s death. The Estate’s petition suggested that the total amount of interest owed, at the time the petition was filed, was more than $630,000. With regard to the Trust, the Estate simply asked that “any amounts still owing” to the Estate from the Trust be paid. And in this filing, the Estate included an “objection to” Robert’s petition, arguing that Robert’s prayer for relief addressing the Estate should be stricken “when no such allegations are made in the petition itself.”
¶29 Taylor filed an “objection and response” to Robert’s petition, in which he admitted certain of Robert’s allegations and denied the rest. He set forth no affirmative defenses of his own, although he did “join[]” in the defenses set forth in the response filed by Robert’s ex-wife. In her response, Robert’s ex-wife set forth nine separate affirmative defenses, including the allegation that Robert’s “claims are barred by the statute of limitations for objecting to and/or opposing the” writ of garnishment, “and by the doctrine of laches.”
Pretrial Motions
¶30 Following the filing of the two competing petitions and the responses, the litigation entered the discovery phase. The trial court issued scheduling orders setting certain deadlines, and the parties exchanged written discovery, took several depositions, and attempted mediation.
¶31 About nine weeks prior to the end of the fact discovery period, Taylor filed a motion asking for leave to amend his response to add several specific affirmative defenses, including a claim that he “had a good faith basis for his actions” and a claim that Robert’s petition was “barred by applicable statutes of limitation, including, but not limited to” Utah Code sections 78B2-305 and -307. In the memoranda supporting his motion, Taylor never asserted that probate petitions aren’t pleadings subject to the usual rules of amendment. Robert opposed Taylor’s motion, arguing that Taylor provided no justification for the delay, that waiting to amend was a “dilatory move” made at least in part to “evade [Robert’s] discovery requests,” and that Robert would be prejudiced because of the little time left in the fact discovery period. After full briefing, the court held a hearing to consider Taylor’s motion, and at the conclusion of the arguments denied the motion from the bench. The court’s minute entry recites that the motion was denied “[f]or reasons as stated” on the record. But the record submitted to us does not include a transcript of this hearing. After the hearing, the court signed an order memorializing the ruling, therein briefly stating that it had denied Taylor’s motion because “adequate justification has not been provided” and because it considered Taylor’s delay “unreasonable.” Taylor had attempted to justify the amendment, at least in part, by asserting that he had intended his incorporation of Robert’s ex-wife’s affirmative defenses to include “all applicable statutes of limitations and laches defenses.” The court rejected this justification as “faulty,” determining that Robert’s ex-wife’s defense was “limited in scope to one specific issue,”
namely, the writ of garnishment, and that Taylor’s incorporation of that defense did not serve to indicate to Robert that Taylor was asserting any different time-based defense.
¶32 Later, Robert moved for partial summary judgment on the narrow question of whether Taylor had violated the “terms of the Trust . . . by invading the principal of the” Trust’s marital share, and had thereby breached his fiduciary duties. In particular, Robert asserted that Taylor had made more than $2.2 million worth of “improper distributions” of principal out of the Trust’s marital share—some $1 million of which involved distributions from the IRAs, and some $1.2 million of which involved distributions from other sources—all of which were contrary to the Trust documents’ command that no such distributions were authorized, and that these actions constituted breach of fiduciary duty. Robert included specific details of the alleged distributions and supported his allegations with bank statements.
¶33 In response, Taylor did not deny making distributions of principal from the marital share, and he in fact admitted to making “over distributions” of principal that “may have been improper,” but argued that the distributions were nevertheless “valid” for various reasons. For instance, he argued that the distributions were valid, at least to some extent, because he was authorized to distribute principal from the family share at his discretion. And with regard to the IRA distributions, Taylor asserted that he relied on the advice of legal and accounting professionals, and that his actions were therefore reasonable, and he asserted that it was unclear whether the Trust was even the proper owner of the IRAs. Taylor also disputed the amount of the distributions he had made from principal. In reply, Robert pointed out, among other things, that Taylor had not included an “advice-of-counsel” affirmative defense in his responsive pleading, and that the court had already rejected his attempt to add additional affirmative defenses, including specifically a defense that he “had a good faith basis for his actions.” Robert thus asserted that Taylor had waived his opportunity to plead an advice-of-counsel defense.
¶34 After full briefing on the motion, the court held oral argument, and in an oral ruling at the conclusion of the hearing granted Robert’s motion, at least in part. The record submitted to us does not include a transcript of this hearing, so the details and scope of the oral ruling are unknown to us. In an order entered about a month later that was intended to memorialize the oral ruling, the court first noted that the Trust authorized Margene to receive “income only” from the marital share, and then concluded that, “[b]ased on . . . Taylor’s admissions and the evidence before the court, . . . Taylor made unlawful distributions of principal from the [marital share] to Margene.” But that was as far as the court went; it recognized that genuine issues of material fact remained regarding, among other things, the amount and calculation of the unlawful distributions, as well as whether Robert and Jill owed money to the Trust or to the Estate related to the Note. The court reserved all of those issues for trial. And at least in its written ruling, the court made no mention of Taylor’s claimed advice-of-counsel defense.
¶35 The court’s order also implicitly rejected Taylor’s argument that the Trust was not the owner of the IRAs, stating that the marital share of the Trust “included several [IRAs]” and that “[t]he required minimum distributions of the IRAs were paid to” the marital share and transferred to Margene. The court shed additional light on this matter in another order issued the same day resolving a separate motion that Robert had filed; in that other order, the court determined that the Estate “is not the owner or beneficiary of the IRAs.” This decision was driven by the court’s determination that the Estate had “fail[ed] to provide any admissible evidence to create a genuine issue of fact” with regard to Robert’s assertion—amply supported by the record—“that the IRAs were properly transferred to and owned by the . . . Trust after Dean’s death.”
¶36 Around the same time, Robert also moved for summary judgment regarding the payment Taylor had authorized to Robert’s ex-wife. After briefing and argument, the court held that the payment violated the spendthrift provision as a matter of law, but that “[t]here are disputed facts regarding,” among other things, “the amount of damages, if any,” and concluded that those issues were reserved for trial. The court, however, noted that “equity prevents” giving Robert a “windfall of $250,000,” and that factual questions remained regarding whether Robert “suffered any interest losses that he . . . may have been entitled to if . . . the money had been kept longer or there had been a [lower amount that his ex-wife] would’ve accepted.”
¶37 There were also pretrial skirmishes regarding expert witnesses. When the time came for Taylor to designate experts, he designated three: a legal expert and two accounting experts. Robert elected to receive written reports from the accounting experts, but opted to take the deposition of Taylor’s proffered legal expert. Taylor did not ever submit expert reports from his two proffered accounting experts. On Robert’s motion, and because Taylor failed to submit reports as required, the court later excluded Taylor’s accounting experts from testifying in Taylor’s case-in-chief, although the court did allow one of them to testify at trial as a rebuttal witness.
¶38 Robert also asked the court to exclude the proffered testimony of Taylor’s legal expert, arguing that the court “should not allow a local attorney to tell [it] how to interpret” the Trust documents. The court granted this motion in an oral ruling made at a hearing; it later memorialized that ruling in a brief written order stating simply that, “[a]fter argument by counsel and review of the briefings filed by the parties, the Court grants [Robert’s] Motion in Limine excluding all legal expert testimony at trial.” The record submitted to us does not contain a transcript of the hearing at which the court rendered its oral ruling, nor does it contain any additional elucidation of the court’s reasoning in granting Robert’s motion to exclude Taylor’s legal expert.
¶39 While Jill and Jeana each hired counsel and participated in the litigation, neither Jill nor Jeana filed their own petitions or made any claims of their own against Taylor; indeed, as noted, they were included as respondents in Robert’s initial petition. But as the litigation went on, Jill and Jeana began to align themselves more and more with Robert; in its post-trial findings, the court observed that, by the time of trial, Jill’s and Jeana’s “interests were eventually aligned with Robert’s.” About two years into the litigation, and recognizing some uncertainty about whether Jill and Jeana were stating claims, Taylor filed a motion attempting to clarify matters and limit Robert’s damages “to his one-third beneficial interest or share of the Trust.” Robert, Jill, and Jeana all separately opposed this motion. In his opposition, Robert stated that, even though he was the only one of Dean’s children who had filed a petition, he was seeking damages “for the benefit of all beneficiaries—[Robert], Jill and Jeana.” After full briefing, the court held argument to consider Taylor’s motion, and denied it in an oral ruling at the conclusion of the hearing. The record submitted to us does not include a transcript of this hearing. A few weeks later, the court memorialized its oral ruling in a written order, concluding that Robert “has standing to assert claims on behalf of all of the Trust beneficiaries” and that “[a]ny damages that are ultimately found against Taylor are not limited to [Robert’s] one-third beneficial interest.”
¶40 As the time for trial grew near, Robert filed a motion to bifurcate, asking the court to separate the trial of the Estate’s claims—chiefly, for interest on the Loan—from the trial of Robert’s claims for damages relating to improper distributions of Trust principal. In this motion, Robert suggested that the claims stated in his petition against the Estate—regarding the marital home—were “likely resolved” in light of a recent ruling the court had apparently made regarding the costs to repair the home.[5] Thus, Robert argued, “the only issue remaining” with regard to his petition “is the amount of damages to be awarded against Taylor as the Trustee of the Trust,” and therefore in Robert’s view the Estate “should not be involved in” the trial of the claims set forth in his petition. The court denied the motion, noting that the case was scheduled to be tried to the bench and stating that “the court is capable of keeping separate the testimony of the various witnesses” regarding the Estate’s petition and Robert’s petition.
¶41 Also prior to trial, on Robert’s motion, the court issued an order removing Taylor as trustee of the Trust. In that same order, the court replaced Taylor with two co-trustees: Robert and Jill.
The Trial
¶42 The issues remaining in the case were tried to the bench in March and April 2019. During the course of the trial, the court heard fact testimony from Robert, Jill, Jeana, and Robert’s current wife, as well as from Taylor. The court also heard testimony from financial experts, one retained by Robert and one by the Estate, as well as rebuttal testimony from one retained by Taylor. In addition, the court heard testimony from an accountant and an attorney who had provided advice to the Trust during Taylor’s tenure as trustee. After the completion of the parties’ four-day evidentiary presentation, the court scheduled time for the parties to present extensive closing arguments, which took place over another two days the following week. At one point during closing arguments, Jeana’s attorney made an oral motion “to conform the pleadings to the evidence that [Jeana] is a one-third beneficiary of the [T]rust, who essentially has been acting as a Petitioner in this case.” Over the Estate’s objection, the court ruled that Jeana “is a Petitioner,” even though the court was not allowing her to “assert any affirmative claims,” and that Jeana had “a third interest, as a beneficiary,” in the case. After closing arguments, the court then took the matter under advisement, and asked the parties to submit proposed findings of fact and conclusions of law that were stipulated “on as many points as possible.”
Post-Trial Developments
¶43 Perhaps predictably, the parties were unable to reach agreement on any matter in the findings and conclusions, and by mid-May they had each submitted individual proposed findings instead. In Robert’s set of suggested findings, he did not propose any finding or conclusion that the Estate was (or should be) vicariously liable for Taylor’s actions, although Robert did propose that the court “impose[] a constructive trust on the assets of the Estate” and order that “all remaining [Estate] assets payable or distributable to Taylor be used to pay the outstanding judgments in this case.” The court reviewed the parties’ respective findings and began work on its own written ruling.
¶44 For the next six months, the court held periodic status hearings approximately every sixty days—in July, September, and November—sometimes asking for “clarification” or additional information on issues, and on one occasion stating simply that it had called the hearing to let the parties know that it “need[ed] a little additional time to finish” the ruling and offering its view that “this hearing will technically give [the court] another 60 days.” In the November 2019 status hearing, the court indicated that it was nearly finished with its written ruling, and actually announced portions of that ruling during the hearing. In the course of making those announcements, the court declared— sua sponte—that it would be “finding that the [E]state is liable,” along with Taylor, for Taylor’s actions; the court explained that Taylor “controlled the expenditures of Margene” and “had power of attorney” and “represented both” the Estate and the Trust, and that the Estate “benefited from [Taylor’s] misuse of” Trust funds.
The court indicated that it was “struggling a little bit on what the proper law is to divide up the liability between” the Estate and Taylor, and it asked the parties for supplemental briefing on that question and certain other issues.
The Court’s Initial Written Ruling
¶45 A couple of weeks later, while the supplemental briefing was still in process, the court issued a lengthy written ruling containing both findings of fact and conclusions of law. In that ruling, the court found, among other things, that Taylor did not trouble himself to “read the Trust document prior to making distributions,” that he “was ignorant and at times willfully blind of the duties he assumed as a fiduciary under Utah law,” “that he did not make reasonable efforts to inform himself of those duties,” and that he had, in various ways, breached those duties as trustee of the Trust. In particular, the court determined that Taylor had breached several different fiduciary duties, including his duty to administer the Trust in good faith and as a prudent person would, his duty of loyalty, and his duty to enforce and defend claims against the Trust. The court also found that Taylor had breached a duty to maintain the marital home, explaining that, even though the Trust documents placed that duty on Margene and not on the trustee, “Taylor as trustee can be imputed a duty to maintain the marital home for the welfare of Margene.” And the court offered its view that, at least in some respects, Taylor’s “testimony lacked any indicia of credibility.”
¶46 With regard to Taylor’s trust administration, the court found that Taylor’s conduct not only “fell short of the required standard” but “crossed over into ‘reckless indifference’ towards Trust assets, or to acts of bad faith.” In the court’s view, Taylor “acted as trustee in a dilatory, haphazard, uncaring and slipshod fashion,” at times “making use of the Trust as if it were his own personal piggy-bank.” The court found that Taylor “showed a blatant lack of care about tracking monies coming out of the Trust,” and that “Taylor frequently invaded Trust corpus principal . . . with no consideration of the limiting terms of the [T]rust agreement.” The court found “that Taylor did not make an analysis of his mother’s needs when expending trust funds,” specifically noting that “Margene had significant assets of her own . . . that [Taylor] should have . . . considered as sources to provide for her care and maintenance prior to expenditure of Trust corpus principal,” including two other properties and some $2 million in “Zions stock.”
¶47 With regard to Taylor’s duty of loyalty, the court found that Taylor had engaged in frequent acts of self-dealing, for himself, his wife, and his siblings, and that he “used his position as trustee to engage in acts of extensive, repeated, and prolonged self-dealing” by “repeatedly authoriz[ing] transactions that directly benefited himself.” The court specifically listed the Jazz tickets, the Arabian horse, and direct payments to Taylor’s family members as examples of Taylor’s self-dealing. The court also mentioned Taylor’s “fail[ure] to control [the] vehicles titled in the name of the Trust,” stating that it appeared to the court as though Taylor was unaware that the Trust even owned any vehicles. The court found that “Taylor’s treatment of the vehicles . . . is typical of his reckless treatment of other Trust assets and his ignorance of his fiduciary duties as Trustee.”
¶48 On the question of damages caused by Taylor’s mismanagement of the Trust, the court adopted the calculations offered by Robert’s damages expert, explaining that her “methods provide a reasonably certain calculation of damages” that “accounts for both excess distributions and losses incurred due to present value of money.” Based on the methods used by Robert’s expert, the court calculated that the Trust had sustained damages, as the result of Taylor’s actions, in the amount of $5,229,095.
¶49 The court also made findings about the marital home, determining that it “was in excellent repair and condition” at the time of Dean’s death, but that Margene did not continue to properly maintain the property afterwards. As noted, however, the court held Taylor responsible for this conduct, imputing Margene’s duty onto Taylor. The court determined that the total damages regarding the home were $33,500, and that this amount was “owed to Jeana,” because Jeana had purchased the home for full value and then made the repairs to the home herself.[6] The court took the $33,500 amount from estimates provided by Jeana, even though, during a separate legal proceeding, Jeana had claimed she was owed only $29,439 for the repairs.
¶50 The court also determined that Taylor “violated his duty to enforce and defend claims against the Trust” when he authorized the $250,000 payment to Robert’s ex-wife. The court found that Taylor “failed to adequately communicate with Robert . . . regarding any merits or defenses to [Robert’s ex-wife]’s writ of garnishment . . . , or even to ascertain whether the amounts claimed were proper.” The court ruled that Taylor was “liable for the consequences of” this breach, but in its initial post-trial ruling the court made no effort to quantify that amount or identify who the damaged party was. During closing argument and his post-trial proposed findings, Robert had asked the court to award $35,000 plus interest on this issue. Nevertheless, the court later determined, after additional post-trial briefing, that Taylor was liable for the entire payment of $250,720.25.
¶51 In its initial written ruling, the court also made findings regarding the Estate’s petition. As noted, the Estate’s main issue concerned the unpaid interest on the Loan the Trust had made to Robert and Jill and their companies and, specifically, what the appropriate interest rate was. While the Note memorializing the Loan called for an interest rate tied to a particular brokerage account at Salomon Smith Barney, there were several lengthy “gap period[s],” ranging from several months to several years, during which “an interest rate was not published on the account.” The Estate’s expert used the published rate for the months it was available, but for the gap periods he employed two different methods (more fully explained below, in Part II.B) to estimate what the brokerage account interest rate would have been. Using these methods, the expert calculated the unpaid interest on the Note as $922,219.77.
¶52 The court, despite finding that the Estate’s expert’s averaging “method to cover short gap periods [was] reasonable,” declined to apply the expert’s interest rates for any of the gap periods. Instead, the court chose to apply a statutory default interest rate—one that turned out to be much lower than the rates suggested by the expert—to all the gap periods. See Utah Code § 70A-3-112 (“If an instrument provides for interest, but the amount of interest payable cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the instrument and at the time interest first accrues.”). In its initial post-trial ruling, the court asked the parties to provide supplemental calculations of the amount of interest owing, using the methods laid out in the ruling. After supplemental briefing, the court later determined that the total amount of unpaid interest owing on the Note was $565,314.97.
¶53 Finally, the court briefly considered the question of attorney fees, which had been requested by the Estate, Robert, and Taylor. The court determined that Taylor was “not entitled to any attorneys’ fees he incurred,” but that Robert was entitled to both (a) reimbursement of $187,595.71 from the Trust for fees incurred in defending the administration of the Trust, and (b) additional attorney fees from Taylor, pursuant to Utah’s bad faith statute, as the “prevailing party” in the litigation. See id. § 78B-5-825. The court specifically found that “Taylor’s defenses against the claims raised” in Robert’s petition “were brought in bad faith,” and asked Robert to submit an affidavit of fees and costs.
Joint and Several Liability of the Estate
¶54 After receiving the court’s lengthy written ruling, the parties continued working on their supplemental briefing, not only about the interest calculation but also about the joint-and-several-liability issue raised by the court, sua sponte, in the November 2019 hearing. After full briefing, the court heard argument on that issue, and at the conclusion of the hearing took the matter under advisement. A few weeks later, the court issued a written ruling, making two significant determinations. First, the court determined that the issue of Margene’s (and therefore, by extension, the Estate’s) vicarious liability for Taylor’s actions— despite not having been raised in the pleadings—had been tried by the consent of the parties. Second, the court officially found the Estate jointly and severally liable for Taylor’s actions. It specifically did not employ a constructive trust theory to render the Estate’s assets available for collection; instead, it noted that “Taylor had power of attorney over his mother’s financial affairs while exercising authority and powers as the trustee of” the Trust, and concluded that Taylor had the “intent to unlawfully pilfer the . . . Trust and preserve his mother’s estate for his own benefit and the benefit of his siblings.” The court offered its view that it “need not retreat to any equitable theory”—such as constructive trust— where there was “an express contract covering the subject matter of the litigation,” which contract was, in the court’s view, the Trust document. The court later clarified that it had not rejected Robert’s constructive trust theory, stating that the fact that it “didn’t rule on that theory . . . doesn’t mean that [the court] didn’t accept it,” and explaining that it had simply made a ruling “on an alternative ground.” Indeed, the court went so far as to say that, if a constructive trust theory was “what the parties believe is a more proper finding,” the court may be willing to “find that I’m ordering a constructive trust.”
Attorney Fees
¶55 After the trial, the court also made additional rulings regarding attorney fees. The court had already determined, in its lengthy written ruling, that Robert was entitled to recover reasonable attorney fees from Taylor. Later, Robert submitted an affidavit claiming $441,546.50 of attorney fees and $137,148.38 in costs, which the court determined were reasonable.
¶56 The Estate also requested attorney fees from Robert on the Loan/Note issue, invoking the Note’s attorney fees provision and asserting that it had been the prevailing party on the question of unpaid interest on the Loan. The Estate submitted detailed declarations—from two different attorneys—setting forth the fees incurred in that endeavor. In the motion accompanying the declarations, the Estate was careful to point out that “the fee declarations allocate between time spent on issues pertaining to the claim for interest on the Note and time spent on other matters,” directing the court’s attention to line items in the declarations that had been excluded from the request. The Estate asserted that the items remaining in its request were either directly related to its claim for unpaid interest or, alternatively, were inextricably intertwined with that claim such that they could not meaningfully be separated.
¶57 However, the court denied the Estate’s fee request in its entirety, concluding that the Estate had “fail[ed] to properly allocate claimed fees for claims upon which it prevailed.” The court acknowledged that the Estate had “made some effort to adhere to the Court’s admonition” to properly allocate attorney fees, but ultimately concluded that the Estate’s attempts in that regard were inadequate because, in the court’s view, the Estate’s fee request included fees for “legal work that sought to advance theories and arguments which the Court did not adopt and upon which the [E]state did not prevail.”[7]
The Form of the Judgment
¶58 During this same post-trial time period, the court also addressed questions regarding the form of the judgment, including who should be ordered to pay whom and how much. Robert submitted a proposed form of judgment, listing himself as the only judgment creditor, and indicating that Taylor owed him some $5.8 million and that the Estate, through joint and several liability and after an offset for unpaid interest, owed him some $5.2 million. This proposed judgment drew initial objections from the Estate and Taylor. In response to these initial objections, the court clarified that Taylor was solely liable for the payment to Robert’s ex-wife, but that the Estate was jointly and severally liable for the marital home damages and fee payments. And it ruled that Robert and Jill were each liable for “one half of the unpaid interest,” but it did not add Jill as a judgment debtor, reasoning that “[t]he amount of interest is to mitigate damages owed by the Estate” and should be accounted for as “an offset against amounts owed.”
¶59 Just days after the court’s ruling on the initial objections to the form of the judgment, the Estate lodged another objection, pointing out that—even though the court had previously held that Robert was not limited to pursuing damages only for his one-third share, had noted that Robert has standing to bring a claim on behalf of his siblings, and had even stated in its written ruling that the damages to the marital home were “owed to Jeana”—the only judgment creditor listed in the judgment was “Robert G. Harding,” apparently in his personal capacity. The Estate argued that the proper judgment creditors should be Robert and Jill “as trustees” of the Trust, because the claims presented at trial were largely “related to claims by the Trust, not claims by Robert G. Harding personally.” Robert opposed this objection, asserting that the language of the proposed judgment “is consistent with the procedural history” of the case and with the court’s written rulings. The court made no express ruling on this final objection and instead went ahead and signed its judgment without further comment, thus implicitly overruling the objection.
¶60 The signed judgment lists “Robert G. Harding” as the only judgment creditor, and Taylor and the Estate as the only judgment debtors. The document recites that Robert is “awarded Judgment against” Taylor in the amount of $5,815,599.71, and that Robert is “awarded Judgment against” the Estate in the amount of $4,999,564.49.[8] The difference between the two figures—the amount owed by Taylor as compared to the amount owed by the Estate—is $816,035.22, which is the sum of the offset for the unpaid interest on the Note ($565,314.97) and the amount paid to Robert’s ex-wife ($250,720.25).
¶61 Following entry of the judgment, the Estate filed a motion to amend the court’s rulings, findings, and judgment. In this motion, the Estate argued, among other things,[9] that the court had erred by accounting for the Estate’s recovery against Robert and Jill for unpaid interest through a setoff mechanism, instead of entering a separate judgment in favor of the Estate and against Robert and Jill. The Estate pointed out that this was especially problematic with regard to Jill, who was not a judgment creditor and therefore had no positive judgment against which her interest obligation could be set off. After full briefing and argument, the court denied the Estate’s motion.
ISSUES AND STANDARDS OF REVIEW
¶62 Taylor and the Estate each separately appeal. In his appeal, Taylor raises four issues for our review. First, he contends that the court erred in denying his motion to amend to add additional affirmative defenses. When reviewing a trial court’s decision on a motion to amend, “we give considerable deference to the [trial] court, as it is best positioned to evaluate the motion to amend in the context of the scope and duration of the lawsuit” and we “defer to the trial court’s determination.” Daniels v. Gamma West Brachytherapy, LLC, 2009 UT 66, ¶ 60, 221 P.3d 256 (quotation simplified). Thus, “[w]e overturn a trial court’s denial of a motion to amend . . . only when we find an abuse of discretion.” Kelly v. Hard Money Funding, Inc., 2004 UT App 44, ¶ 14, 87 P.3d 734.
¶63 Second, Taylor argues that the court erred in determining, on summary judgment, that he had breached his fiduciary duties by making distributions from marital share principal. Summary judgment is appropriate “if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law.” Utah R. Civ. P. 56(a). “We review the summary judgment decision de novo.” Salo v. Tyler, 2018 UT 7, ¶ 19, 417 P.3d 581 (quotation simplified).
¶64 Third, Taylor takes issue with the court’s exclusion of his three disclosed expert witnesses. There are “[t]wo different standards of review [that] apply to claims regarding the admissibility of evidence.” Smith v. Volkswagen SouthTowne, Inc., 2022 UT 29, ¶ 41, 513 P.3d 729. “The first standard of review, correctness, applies to the legal questions underlying the admissibility of evidence.” Id. (quotation simplified). “The second standard of review, abuse of discretion, applies to the [trial] court’s decision to admit or exclude evidence and to determinations regarding the admissibility of expert testimony.” Id. (quotation simplified).
¶65 Fourth, Taylor challenges the court’s ultimate determination of damages. “A trial court’s findings of fact will not be set aside unless clearly erroneous.” Traco Steel Erectors, Inc. v. Comtrol, Inc., 2009 UT 81, ¶ 17, 222 P.3d 1164 (quotation simplified). “The award of damages is a factual determination that we review for clear error.” Saleh v. Farmers Ins. Exch., 2006 UT 20, ¶ 29, 133 P.3d 428.
¶66 In connection with its appeal, the Estate raises four issues for our consideration. First, the Estate challenges the court’s determination to hold it jointly and severally liable for Taylor’s actions, and its challenge takes two forms. As an initial matter, the Estate takes issue with the court’s conclusion that the vicarious liability issues—which were not present in Robert’s pleadings— were tried by the consent of the parties, and that Robert’s pleadings could therefore be amended post-trial pursuant to rule 15(b) of the Utah Rules of Civil Procedure. “We review the [trial] court’s application of rule 15(b) for correctness. However, because the trial court’s determination of whether the issues were tried with all parties’ implied consent is highly fact intensive, we grant the trial court a fairly broad measure of discretion in making that determination under a given set of facts.” Hill v. Estate of Allred, 2009 UT 28, ¶ 44, 216 P.3d 929 (quotation simplified). And more substantively, the Estate challenges the merits of the court’s conclusion that it is vicariously liable for Taylor’s actions. In some contexts, a vicarious liability ruling involves issues of fact. See, e.g., Newman v. White Water Whirlpool, 2008 UT 79, ¶ 10, 197 P.3d 654 (stating that “[w]hether an employee is in the course and scope of his employment” for purposes of vicarious liability “presents a question of fact for the fact-finder”). In other contexts, though, such a ruling is inherently legal. See, e.g., Wardley Better Homes & Gardens v. Cannon, 2002 UT 99, ¶ 19, 61 P.3d 1009 (stating that “[w]hether a principal is vicariously liable for an agent’s acts” presents a “legal question[]”). While—as discussed below—the precise legal basis for the trial court’s ruling is somewhat unclear, Robert defends the ruling by pointing to principles of agency law. We agree that, under the circumstances, the trial court’s vicarious liability ruling was a legal one, not a factual one, and we therefore review it for correctness.
¶67 Second, the Estate argues that the court erred in determining the rate for the unpaid interest due on the Note. Both sides agree that, at least under the circumstances of this case, we should review this issue for correctness. See USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 32, 372 P.3d 629 (stating that ascertaining “the appropriate interest rate” is “a question of law that we review for correctness”).
¶68 Third, the Estate raises several issues with the form of the court’s judgment. In particular, it wonders who the proper judgment creditors are, and contends that the court erred in setting off the Estate’s award of interest against the amounts the court determined it owed to Robert and Jill for vicarious liability. Challenges to offset determinations often involve mixed questions of fact and law and are “reviewed under a clearly erroneous standard for questions of fact and a correctness standard for questions of law.” Hale v. Big H Constr., Inc., 2012 UT App 283, ¶ 11, 288 P.3d 1046 (quotation simplified), cert. denied, 298 P.3d 69 (Utah 2013). The issue we address here regarding offset—namely, whether offset was appropriate when one of the parties did not receive a judgment—presents a legal question reviewed for correctness. See Fisher v. Fisher, 2009 UT App 305, ¶ 7, 221 P.3d 845 (noting that whether “an offset is allowed under [a] cause of action” is a question “of law, which we review for correctness”), cert. denied, 230 P.3d 127 (Utah 2010). And in addition, the Estate challenges the court’s award of damages for repairs to the marital home. “The award of damages is a factual determination that we review for clear error.” Saleh, 2006 UT 20, ¶ 29. However, “[w]e review the court’s legal conclusions for correction of error.” Hale, 2012 UT App 283, ¶ 13.
¶69 Finally, the Estate takes issue with the court’s rejection of its claim for attorney fees incurred in furtherance of its successful claim for unpaid interest on the Note. “The award of attorney fees is a matter of law, which we review for correctness. However, a trial court has broad discretion in determining what constitutes a reasonable fee, and we will consider that determination against an abuse-of-discretion standard.” Jensen v. Sawyers, 2005 UT 81, ¶ 127, 130 P.3d 325 (quotation simplified).
ANALYSIS
I. Taylor’s Appeal
¶70 As noted, Taylor asks us to consider four issues in connection with his appeal. First, he challenges the court’s denial of his motion to amend to add additional affirmative defenses. Second, he takes issue with the trial court’s ruling, made on summary judgment, that Taylor had breached his fiduciary duties by making unlawful distributions from the Trust’s marital share principal. Third, he challenges the trial court’s decision to exclude his expert witnesses. Finally, he raises certain challenges to the court’s damages determinations. We address each of Taylor’s arguments in turn.
A. Taylor’s Motion to Amend
¶71 First, Taylor asks us to examine the court’s ruling denying his motion to amend his responsive pleading to add several additional affirmative defenses, including a more specific statute of limitations defense and a defense that he “had a good faith basis for his actions.” The court denied Taylor’s request on the basis that Taylor had engaged in “unreasonable delay” and had “failed to provide adequate justification [as to] why he did not [seek to] amend his pleading earlier.” We discern no abuse of discretion in the trial court’s decision.
¶72 In deciding a motion to amend, courts are instructed to consider several factors, including whether the movant “was aware of the facts underlying the proposed amendment long before its filing, the timeliness of the motion, the justification for the delay, and any resulting prejudice to the responding party.” Jones v. Salt Lake City Corp., 2003 UT App 355, ¶ 16, 78 P.3d 988 (quotation simplified) (affirming the denial of a motion to amend where it was filed about a year after the deadline for amending pleadings and where the movant provided no justification for the delay), cert. denied, 90 P.3d 1041 (Utah 2004). In this case, the court denied Taylor’s motion in an oral ruling from the bench, and the record submitted to us does not include a transcript of that oral ruling. But in a subsequent written order memorializing its ruling, the court focused on two of these factors: timeliness and justification. The court was of the view that Taylor had waited too long to seek amendment of his responsive pleading, despite apparent awareness of the relevant issues, and that his delay was not justified by any good reason. The court rejected as “faulty” Taylor’s excuse that he had been under the impression that his original answer—which incorporated by reference the statute of limitations defense pleaded by Robert’s ex-wife—included “all statute of limitations” defenses. The court’s written ruling made no specific mention of Taylor’s desired “good faith” defense.
¶73 In his appellate brief, Taylor does not engage with the trial court’s reasoning, and provides no specific response to the court’s conclusion that his motion was untimely and his delay was unjustified. Instead, he makes two arguments in support of his appellate challenge. First, he asserts that his unpleaded statute of limitations defense was meritorious. But this is beside the point here; if the trial court was within its discretion to deny Taylor’s motion to amend on delay and justification grounds, then the merits of Taylor’s unpleaded defenses are not directly relevant.
¶74 Second, Taylor suggests that, because this case was a probate action initiated by a “petition” rather than a “complaint,” the rules of civil procedure regarding timeliness of pleadings do not apply. But this argument is unpreserved; Taylor did not make it at the trial court level—at least not in his written filings; as noted, the record includes no transcript of the hearing—and thus did not give the trial court an opportunity to rule on it. See Gowe v. Intermountain Healthcare, Inc., 2015 UT App 105, ¶ 7, 356 P.3d 683 (stating that, “to preserve an argument for appellate review, the appellant must first present the argument to the [trial] court in such a way that the court has an opportunity to rule on it,” and observing that “we generally do not address unpreserved arguments raised for the first time on appeal” (quotation simplified)), cert. denied, 364 P.3d 48 (Utah 2015). Therefore, we decline to consider this argument for the first time on appeal.
¶75 Under these circumstances—where Taylor does not provide us with a transcript of the trial court’s oral ruling, does not directly engage with the court’s reasoning, and offers an argument that is apparently unpreserved—Taylor has not carried his burden, on appeal, of demonstrating that the court abused its discretion by denying his motion to amend his responsive pleading to add additional affirmative defenses. We therefore affirm the court’s denial of that motion.
B. The Summary Judgment Ruling
¶76 Next, Taylor challenges the trial court’s determination, made on summary judgment, that he made unlawful distributions from the Trust’s marital share principal and thereby breached his fiduciary duties. In particular, he asserts that this ruling was inappropriate because genuine issues of material fact remained to be decided in connection with these issues. But Taylor has not borne his burden, here on appeal, of demonstrating error in the court’s summary judgment ruling.
¶77 As a threshold matter, it is important to recognize that the ruling in question was brief and quite narrow. In that ruling, the court noted that, under the terms of the Trust, Taylor was not allowed to distribute principal from the marital share, and it noted that Taylor had admitted to making distributions of principal from the marital share. The court therefore determined, as a matter of law and under the plain terms of the Trust documents, that these distributions were “unlawful.” It reserved all other issues for trial, including “the amount of damages that resulted from” any such unlawful distributions.
¶78 Taylor does not challenge the court’s determination that, under the terms of the Trust documents, he was forbidden from distributing principal out of the marital share. And he does not take issue with the court’s observation that, in discovery, Taylor admitted that he had indeed made distributions of principal out of, among other sources, the IRAs that Accountant had placed in the marital share. Thus, his challenge to the court’s summary judgment ruling is limited: he takes issue only with the court’s conclusion that those admitted distributions were unlawful as a matter of law. In this regard, Taylor makes three arguments, which we consider in turn.
1
¶79 First, Taylor asserts that his actions were not unlawful—at least not as a matter of law—because he had merely been following advice given to him by professionals (namely accountants and attorneys) retained to advise him in his role as trustee, and that questions of fact therefore remained regarding the reasonableness of his conduct. But on the record before us, this argument cannot carry the day for Taylor.
¶80 Under Utah law, a trustee who violates a duty owed to a beneficiary has breached fiduciary duties. See Utah Code § 75-71001 (“A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.”); see also id. § 75-7-801 (stating that trustees must “administer the trust expeditiously and in good faith, in accordance with its terms and purposes”). And it does not matter that the trustee’s actions were merely negligent (rather than knowing or intentional). See Restatement (Third) of Trusts § 93 cmt. b (Am. L. Inst. 2012) (“A breach of trust occurs if the trustee, intentionally or negligently, fails to do what the fiduciary duties of the particular trusteeship require or does what those duties forbid . . . . [A] trustee may commit a breach of trust by conduct (action or inaction) that results from a mistake . . . , typically [one] regarding the nature or extent of a trustee’s duties or powers.”).
¶81 In this case, the plain language of the Trust documents clearly forbade Taylor from making any distributions from the principal assets of the Trust’s marital share. He therefore had a clear obligation not to authorize distributions of principal from the marital share. He violated that obligation by repeatedly authorizing such distributions, and this is true even if one assumes, for purposes of the argument, that Taylor made the distributions negligently rather than intentionally or knowingly. Unless otherwise excused, that action constitutes a breach of the fiduciary duties that Taylor, in his capacity as trustee, owed the beneficiaries of the Trust.
¶82 However, under the Restatement’s approach, in certain circumstances, a court has the authority, where equity demands it, to excuse a trustee from having to pay a liability resulting from a breach of duty. See id. § 95 cmt. d (stating that, where a court concludes that “it would be unfair or unduly harsh to require the trustee to pay . . . the liability that would normally result from a breach of trust, the court has equitable authority to excuse the trustee . . . from having to pay that liability”); see also Restatement (Second) of Trusts § 205 cmt. g (Am. L. Inst. 1959) (“In the absence of a statute it would seem that a court of equity may have power to excuse the trustee in whole or in part from liability where he has acted honestly and reasonably and ought fairly to be excused.”). For instance, where case law upon which a trustee relied is later overruled, courts might conclude that a trustee should be equitably relieved from the consequences of a breach of duty. See Restatement (Third) of Trusts § 95 cmt. d (Am. L. Inst. 2012). And as relevant here, courts may reach a similar conclusion where “a trustee has selected an adviser prudently and in good faith, has provided the adviser with relevant information, and has relied on plausible advice on a matter within the adviser’s competence.” See id. § 93 cmt. c.
¶83 In the trial court, Taylor opposed Robert’s summary judgment motion by arguing, among other things, that his actions were reasonable because he relied on professional advice; in so doing, however, Taylor did not cite the Restatement or ask the trial court to apply its approach. Robert replied by asserting that “advice of counsel” was an affirmative defense that Taylor had waived by not pleading it and by failing to obtain leave to add that defense in an amended pleading. We do not know if Taylor’s advice-of-counsel defense (or Robert’s waiver argument made in response to it) was discussed during the oral argument on Robert’s summary judgment motion, because the record submitted to us does not include a transcript of that hearing. And the court’s rather brief written order memorializing its summary judgment ruling makes no mention of the issue.
¶84 There are several plausible ways the trial court could have handled Taylor’s advice-of-counsel defense at the summary judgment stage. First, the court could have determined that Utah law does not allow an advice-of-counsel defense under the circumstances presented here. We are unaware of any Utah authority adopting the Restatement’s approach, so it is unclear whether that approach is consonant with Utah law; certainly, Taylor makes no effort to so persuade us in his appellate brief.[10] Second, the court may have adopted Robert’s argument that Taylor waived this defense by failing to plead it in his answer and by failing to persuade the court to allow amendment of that answer. As already noted, several months before the summary judgment hearing the trial court did deny Taylor leave to amend his responsive pleading to add a “good faith” defense, ruling that any such amendment was too late and unjustified. On appeal, Taylor does not refute Robert’s assertion that he waived the defense, and he makes no effort to show that advice of counsel is not the sort of affirmative defense that must, upon penalty of waiver, be pleaded in an answer.[11] Third, the court may have determined that resolution of Taylor’s advice-of-counsel defense was not necessary at the summary judgment stage. In fact, the written summary judgment ruling is not necessarily at odds with that defense: even if the distributions from the marital share are considered unlawful, the court could, during the damages phase of the proceedings, potentially equitably relieve Taylor from the consequences of those unlawful distributions. And here on appeal, Taylor makes no argument that he was prevented, at trial, from presenting evidence relating to his advice-of-counsel defense. Fourth, the court could have determined, at the summary judgment hearing, that the undisputed evidence regarding Taylor’s advice-of-counsel defense was insufficient to present a genuine dispute of material fact that would prevent summary judgment. Or fifth, the court could have completely ignored the issue, and simply made no ruling on it at all.
¶85 We do not know what the court did with Taylor’s advice-of-counsel argument at the summary judgment phase, because its written ruling is silent on the matter and its oral ruling is not included in the appellate record. It is certainly not obvious, from the record before us, that the trial court erred in the way it handled Taylor’s asserted advice-of-counsel defense in connection with Robert’s summary judgment motion. It is an appellant’s responsibility “to include in the record a transcript of all evidence relevant to a finding or conclusion that is being challenged on appeal.” Gines v. Edwards, 2017 UT App 47, ¶ 21, 397 P.3d 612 (quotation simplified), cert. denied, 398 P.3d 52 (Utah 2017). “When an appellant fails to provide an adequate record on appeal, we presume the regularity of the proceedings below,” and “when crucial matters are not included in the record, the missing portions are presumed to support the action of the trial court.” State v. Pritchett, 2003 UT 24, ¶ 13, 69 P.3d 1278 (quotation simplified); see also Bank of Am. v. Adamson, 2017 UT 2, ¶ 11, 391 P.3d 196 (stating that an appellant’s brief must “contain the contentions and reasons of the appellant with respect to the issues presented . . . with citations to the authorities, statutes, and parts of the record relied on” (quotation simplified)).
¶86 In situations like this one, where “crucial matters are not included in the record, the missing portions are presumed to support the action of the trial court.” Pritchett, 2003 UT 24, ¶ 13 (quotation simplified). While it is perhaps not always necessary for an appellant challenging an adverse summary judgment ruling to include in the appellate record a transcript of the oral argument on the summary judgment motion, cf. Gines, 2017 UT App 47, ¶ 21 (noting that “an appellant is not required to provide the transcript from every proceeding that occurred in the case”), in our view this is necessary in cases where the court issued an oral ruling at the conclusion of the hearing and where the court’s eventual written order is silent with regard to the matter being challenged. In such cases, a transcript of the hearing is necessary for us to effectively review the challenged issue. Without the transcript, we do not know what evidence or argument the court relied on in rendering any decision. Indeed, in this case we do not know if the court even made a decision on the point Taylor challenges. Under these circumstances, Taylor “has not provided this court with the tools necessary to determine whether the [trial] court” erred, and therefore his “claim of error,” in this regard, “is merely an unsupported, unilateral allegation which we cannot resolve.” R4 Constructors LLC v. InBalance Yoga Corp., 2020 UT App 169, ¶ 12, 480 P.3d 1075 (holding that the appellant did not show an abuse of discretion where he failed to include a necessary transcript in the appellate record). Accordingly, Taylor has not carried his burden of persuasion on appeal, and the trial court’s summary judgment ruling is not now assailable on the basis that questions of fact remained to be decided regarding whether Taylor reasonably followed professional advice.
2
¶87 Second, Taylor asserts that the IRAs from which many of the allegedly unlawful distributions of principal were made were not part of the Trust at all, and therefore the distributions could not have been unlawful. But the trial court did not err in determining that no genuine issue of material fact existed on this point. As noted above, the court issued a separate ruling, signed on the same day and arising out of the same summary judgment hearing, determining that Robert had conclusively demonstrated that “the IRAs were properly transferred to and owned by the [Trust] after Dean’s death.” And in the summary judgment ruling at issue here, signed by the court just minutes later, the court simply noted that the marital share of the Trust “included” the IRAs. Taylor asserts that there existed questions of fact about the ownership of the IRAs, because the parties were never able to locate a “signed beneficiary designation” executed prior to Dean’s death. But Robert submitted quite a bit of evidence, including account statements from the IRAs dated prior to Dean’s death, indicating that the IRAs were in fact part of the Trust.[12] And Accountant—the first successor trustee of the Trust—certainly saw it that way. Taylor did not meaningfully rebut this evidence; the mere absence of a signed beneficiary designation is not, under these circumstances, enough to create a genuine issue of material fact regarding ownership of the IRAs.
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¶88 Finally, Taylor asserts that his distributions of principal from the marital share, including distributions from the IRAs, can be considered lawful if they are offset against distributions of principal he could have hypothetically lawfully made from the family share. As noted above, Taylor had conceptual authority to make distributions of principal from the family share for Margene’s “support and maintenance” if the Trust income and Margene’s other assets were not sufficient to address her needs. In other words, Taylor asserts that the beneficiaries would not be entitled to any damages resulting from his otherwise unlawful distributions of marital share principal if Taylor can show that those distributions could, in his discretion, have been made from the family share instead. But even if this is true, this argument serves only to reduce the damages sustained by the beneficiaries as the result of Taylor’s breaches of duty; this argument does not somehow transform Taylor’s unlawful distributions into lawful ones. As noted, the court reserved for trial, among other things, all questions regarding “[t]he total amount of damages that resulted from Taylor’s unlawful distributions of principal from the” marital share. And in addition, there is no evidence that Taylor actually engaged in the analysis required prior to making lawful distributions from the family share principal—assessing whether Margene’s reasonable needs could be met from her own assets and the income from the Trust.
¶89 In the end, we perceive no error, on this record, in the trial
court’s narrow ruling, made on summary judgment, that Taylor had made unlawful distributions of principal from the Trust’s marital share, and that he had thereby breached the fiduciary duties he owed to the beneficiaries.
C. Taylor’s Expert Witnesses
¶90 Taylor next challenges the court’s orders prohibiting his disclosed expert witnesses from testifying in his case-in-chief at trial. The court excluded two of these experts—Taylor’s financial experts—because Taylor failed to serve the required report from the experts.[13] And the court excluded the third expert—Taylor’s legal expert—for reasons we cannot, on this record, ascertain. Under the circumstances presented here, Taylor has not persuaded us that the court’s orders regarding his expert witnesses are subject to reversal.
¶91 The court had good reason to exclude Taylor’s two financial experts. Following Taylor’s disclosure of these two experts, Robert opted to require the experts to produce a written report. See Utah R. Civ. P. 26(a)(4)(C)(i), (ii) (stating that “the party opposing the expert may serve notice electing either a deposition of the expert . . . or a written report” from the expert). Taylor failed to timely provide those reports. The court’s order excluding those experts on that basis is therefore sound. See id. R. 26(d)(4) (“If a party fails to disclose or to supplement timely a disclosure or response to discovery, that party may not use the undisclosed witness, document, or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.”); see also Clifford P.D. Redekop Family LLC v. Utah County Real Estate LLC, 2016 UT App 121, ¶¶ 15–16, 378 P.3d 109 (upholding a trial court’s exclusion of an expert witness when the party did not timely provide a written report by the deadline or provide “good cause” for failing to do so). And on appeal, Taylor does not attempt to argue that his failure to provide reports was harmless or spurred by good cause. Instead, Taylor merely informs us of what the witnesses would have testified about and asserts that the witnesses’ testimony “would have been of great benefit to the court.” This is insufficient to establish that the court abused its discretion. See R.O.A. Gen., Inc. v. Chung Ji Dai, 2014 UT App 124, ¶ 11, 327 P.3d 1233 (“We have held that the sanction of exclusion is automatic and mandatory unless the sanctioned party can show that the violation of rule 26 . . . was either justified or harmless.” (quotation simplified)), cert. denied, 337 P.3d 295 (Utah 2014).
¶92 Taylor’s third witness, the legal expert, was dismissed after a hearing. In his motion asking the court to exclude Taylor’s legal expert, Robert argued that the court “should not allow a local attorney to tell [it] how to interpret” the Trust documents. The court granted this motion in an oral ruling made at the conclusion of the hearing; the court’s minute entry contains very little information about the basis for the ruling. A few weeks after the hearing, the court signed a written order, prepared by counsel, that was intended to memorialize the oral ruling; that order stated simply that, “[a]fter argument by counsel and review of the briefings filed by the parties, the Court grants [Robert’s] Motion in Limine excluding all legal expert testimony at trial.” And as noted, the record submitted to us does not contain a transcript of the hearing at which the court rendered its oral ruling, nor does it contain any additional elucidation of the court’s reasoning in granting Robert’s motion to exclude Taylor’s legal expert.
¶93 Under circumstances like these, an appellant fails to carry its burden of persuasion on appeal. As already noted, it is an appellant’s responsibility “to include in the record a transcript of all evidence relevant to a finding or conclusion that is being challenged on appeal.” Gines, 2017 UT App 47, ¶ 21 (quotation simplified) (affirming a trial court’s decision on a motion in limine because the appellant did not provide a transcript of the hearing); see also Pritchett, 2003 UT 24, ¶ 13 (stating that, in the absence of an adequate record, “we presume the regularity of the proceedings below,” and that “when crucial matters are not included in the record, the missing portions are presumed to support the action of the trial court” (quotation simplified)).
¶94 In this non-legal-malpractice case, we can easily envision good reason for the court to have excluded Taylor’s proffered legal expert. See Steffensen v. Smith’s Mgmt. Corp., 862 P.2d 1342, 1347 (Utah 1993) (“Even though experts can testify as to ultimate issues, their testimony must still assist the trier of fact under rule 702. Opinion testimony is not helpful to the fact finder when it is couched as a legal conclusion.” (quotation simplified)). And where, as here, material gaps in the appellate record exist, we must presume the regularity of the proceedings, and presume that the court had good reason to take the action it took. Under these circumstances, Taylor has simply not persuaded us that the court abused its discretion in excluding his legal expert witness.
¶95 Accordingly, we reject Taylor’s assertions that the trial court abused its discretion in ordering the exclusion of all three of Taylor’s disclosed expert witnesses.
D. The Court’s Damages Award
¶96 Finally, Taylor raises two challenges to the court’s damages determinations. He first makes a general challenge to the court’s damages award, asserting that the court should not have used the damages calculation offered by Robert’s damages expert because that expert “made too many mistakes and relied on assumptions that are too speculative.” He next asserts that Robert did not suffer $250,000 in damages from the distribution to Robert’s ex-wife because Robert “received full credit against the judgment for the money distributed.” We reject Taylor’s first challenge, but find merit, at least to some extent, in the second.
¶97 Taylor’s general attack on Robert’s damages expert—and, by extension, on the court’s damages computation—is not well-taken. As examples of the “faulty assumptions” Robert’s expert made, Taylor points to the expert’s assumptions—held at least prior to trial, if not afterward—that three specific transactions (or sets of transactions) constituted “distributions” of Trust assets: (1) a $200,000 transfer between Trust accounts, (2) several five-figure checks of unknown purpose, and (3) a separate sale of an investment in the Trust portfolio. But as Robert points out, the expert herself—after receiving additional information at trial— backed away from the first assumption, and ended up not including the $200,000 transfer in her ultimate recommendation to the court. And most importantly, it does not appear that the trial court actually included any of the identified transactions in its damages award—at least, Robert asserts that it didn’t, and Taylor does not take issue with that assertion. So, to the extent that these identified transactions constitute “mistakes” on the part of Robert’s expert, the court appears to have accounted for those mistakes in its damages award.
¶98 As noted above, we review the court’s damages calculations for clear error. See Saleh v. Farmers Ins. Exch., 2006 UT 20, ¶ 29, 133 P.3d 428 (“The award of damages is a factual determination that we review for clear error.”). And we perceive no clear error in the court’s general adoption—with apparent adjustments—of Robert’s expert’s damages calculation. In its post-trial ruling, the court described Robert’s expert as “an experienced professional in the field of accounting and a licensed financial analyst,” and found that her methodologies “provide[d] a reasonably certain calculation of damages” that “account[ed] for both excess distributions and losses incurred due to [the] present value of money.” And as noted, the court in making its award apparently made adjustments, based on the evidence presented, to the expert’s computations. Under these circumstances, Taylor simply hasn’t carried his burden of demonstrating any clear error in the court’s general adoption of Robert’s expert’s damages methodologies, as adjusted.[14] See id.
¶99 However, we do see clear error in the court’s award of $250,000 in damages to Robert for Taylor’s payment of Trust assets to Robert’s ex-wife. The court found that this payment was made in violation of the Trust’s spendthrift provision and was therefore unlawful. But the court also found that the payment “did extinguish [Robert]’s debt to [his ex-wife],” which debt was a non-zero amount. The court, in a previous order, correctly noted that Robert’s damages on this point should be limited to “any interest losses that he . . . may have been entitled to” and money he would have saved if he could prove that his ex-wife would have accepted a lower amount. And of course, his damages calculation would need to account for any excess amounts paid to his ex-wife from other sources, such as his allegation that she received an extra $35,000 from the sale of one of his properties; it is notable that Robert, in his proposed post-trial findings, asked the court to award him only $35,000 plus interest on this point. But the court did not engage in a comprehensive analysis here, nor did it make specific findings on these recoverable damages; instead, it simply awarded Robert the entire $250,000 amount.
¶100 The court erred by awarding Robert damages for the full $250,000, at least without making specific findings as to why that amount was appropriate. As the court itself was aware, the $250,000 distribution to Robert’s ex-wife had at least some value to Robert—the extinguishing of his debt to his ex-wife—that should have been valued and offset against the $250,000 amount. And the court should have explained why it chose to award Robert the full $250,000 instead of the $35,000 (plus interest) that he asked for in his proposed findings.
¶101 Therefore, while we reject Taylor’s general complaint about the court’s adoption of Robert’s expert’s methodologies, we find merit in Taylor’s specific complaint about the court’s calculation of Robert’s damages related to the payment to Robert’s ex-wife. We therefore vacate—and remand for reassessment—that specific portion of the damages award.[15]
¶102 In sum, then, we reject all of Taylor’s claims on appeal, except for the second of his two damages-related assertions.[16]
II. The Estate’s Appeal
¶103 We now turn to the Estate’s appeal. As noted, the Estate asks us to consider four issues. First, the Estate asks us to reverse the court’s determination to hold it vicariously liable for the actions Taylor took as trustee. Second, the Estate challenges the court’s conclusion regarding the appropriate rate to be applied in calculating the interest that Robert and Jill owe on the Note. Third, the Estate raises various issues with the form of the judgment. And finally, the Estate asks us to review the court’s rejection of its claim for attorney fees incurred in furtherance of its successful claim for interest on the Note. We address each of these arguments in turn.
A. Vicarious Liability
¶104 The Estate’s main challenge on appeal—the one on which it spends the bulk of its energies—concerns the court’s ruling that the Estate should be held vicariously liable for the unlawful actions Taylor took as trustee. The Estate criticizes this ruling on two specific grounds, one procedural and one substantive. The procedural challenge has to do with whether the issue was properly before the court for decision in the first place. And the substantive challenge has to do with whether the court’s decision was correct. We find merit in both of the Estate’s challenges to the court’s vicarious liability ruling.
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¶105 The Estate begins its argument by pointing out, correctly, that Robert did not plead or seek vicarious liability in his petition or in any other place in his voluminous pretrial filings in this case. In his petition, Robert sought specific relief against the Estate for damages related to the marital home. Aside from that particular request, the petition sought only one other thing from the Estate: “a return of principal wrongfully distributed from the Trust.” In the petition, Robert never asked the court to hold Margene or the Estate vicariously liable for Taylor’s conduct.
¶106 Not only did Robert fail to plead a claim for vicarious liability, but as the litigation proceeded, he implicitly disavowed making any such claim. Prior to trial, Robert filed a motion to bifurcate, asking the court to separate the trial of the Estate’s claims—most notably, for interest on the Loan—from the trial of Robert’s claims relating to Taylor’s alleged breaches of fiduciary duty. In this motion, Robert suggested that the claims stated in his petition against the Estate—chiefly, regarding the marital home— had already been “likely resolved” in a recent ruling. In particular, Robert asserted that “the only issue remaining” with regard to his petition “is the amount of damages to be awarded against Taylor,” and he argued that the Estate “should not be involved in” the trial of his claims against Taylor. Had Robert been seeking a vicarious liability ruling against the Estate, he would never have taken that position.
¶107 To its credit, the trial court recognized these realities and, in announcing its ruling that the Estate should be held vicariously liable, did not attempt to assert that the issue had ever been raised prior to trial. Instead, the court held that the issue of the Estate’s vicarious liability had been tried by consent during the multi-day bench trial. See Utah R. Civ. P. 15(b)(1) (“When an issue not raised in the pleadings is tried by the parties’ express or implied consent, it must be treated in all respects as if raised in the pleadings.”). Here on appeal, the Estate asserts that the trial court incorrectly concluded that this issue was tried by consent. We agree.
¶108 Under rule 15(b) of the Utah Rules of Civil Procedure, “implied consent to try an [unpleaded] issue may be found where one party raises an issue material to the other party’s case or where evidence is introduced without objection, where it appears that the parties understood the evidence is to be aimed at the unpleaded issue.” Hill v. Estate of Allred, 2009 UT 28, ¶ 48, 216 P.3d 929 (quotation simplified). In such instances, the pleadings are deemed amended after the fact, in order “to conform them to the evidence” presented at trial. See Utah R. Civ. P. 15(b)(1). “The test for determining whether pleadings should be deemed amended under Utah R. Civ. P. 15(b) is whether the opposing party had a fair opportunity to defend and whether it could offer additional evidence if the case were retried on a different theory.” Hill, 2009 UT 28, ¶ 48 (quotation simplified). “When evidence is introduced that is relevant to a pleaded issue and the party against whom the amendment is urged has no reason to believe a new issue is being injected into the case, that party cannot be said to have impliedly consented to trial of that issue.” Id. (quotation simplified); see also Archuleta v. Hughes, 969 P.2d 409, 412 (Utah 1998) (“Implied consent of the parties must be evident from the record.” (quotation simplified)).
¶109 Robert asserts that “the Estate showed awareness of its potential liability” several times during the lawsuit. For instance, it lodged an objection to the portion of the prayer for relief in Robert’s petition that requested the return of wrongfully distributed principal from the Estate, and it informed the court, at trial and in certain post-trial hearings, that one of the Estate’s goals in the litigation “was to assure that liability for Taylor’s wrongful acts did not ‘slop over’ to the Estate.” But awareness of an unpleaded issue does not necessarily constitute consent that the issue be tried, especially here where the Estate demonstrated its awareness of the issue by objecting (rather than consenting) to the issue’s presence in the case. More is required. There must be some indication that the Estate expressly or impliedly consented to the litigation of the merits of the unpleaded issue at trial. See Archuleta, 969 P.2d at 412 (“There must, of course, be either express or implied consent of the parties for the trial of issues not raised in the pleadings.”). And here, the record does not support the proposition that the Estate expressly or impliedly consented to try the issue of its vicarious liability for Taylor’s conduct.
¶110 Certainly, there is no indication that the Estate ever expressly consented to amendment of Robert’s pleadings to add the issue of its vicarious liability. Neither Robert nor the trial court directs our attention to any such evidence.
¶111 And in our view, the record cannot support the conclusion that the Estate ever impliedly consented to trial of that specific unpleaded issue. As noted, awareness of the issue is not enough. Neither Robert nor the trial court points us to evidence “introduced without objection, where it appears that the parties understood the evidence is to be aimed at the unpleaded issue.” Hill, 2009 UT 28, ¶ 48 (quotation simplified). In the court’s ruling on this point, it recited evidence that Taylor had conflicts of interest, was acting in several different capacities, and used his authority in those capacities to benefit his mother; the court concluded therefrom that “[t]hese circumstances are sufficient grounds to find that the issue of liability as to the Estate was tried by consent.” This is incorrect. All of this evidence—regarding Taylor’s conflicts of interest, breaches of duty, and actions taken to benefit Margene—is relevant to Robert’s overarching claims against Taylor. Its presence in the case would not have signaled to the Estate that the unpleaded issue of its vicarious liability for all those actions was somehow being litigated.[17] See id. (“When evidence is introduced that is relevant to a pleaded issue and the party against whom the amendment is urged has no reason to believe a new issue is being injected into the case, that party cannot be said to have impliedly consented to trial of that issue.” (quotation simplified)). We are aware of no evidence presented at trial that clearly and exclusively went to the issue of whether the Estate should be held vicariously liable for Taylor’s actions.
¶112 But perhaps the most telling sign that the vicarious liability issue was not tried by implied consent of the parties is that even Robert didn’t appear to believe, after the trial, that the issue had been tried. In the set of proposed findings and conclusions he submitted about a month after the trial ended, Robert included no findings or conclusions regarding the Estate’s vicarious liability, and he did not ask the court to so rule. The closest he came to the issue was asking for a finding that imposed “a constructive trust on the assets of the Estate” and an order that “all remaining [Estate] assets payable or distributable to Taylor be used to pay the outstanding judgments in this case.”
¶113 Thus, the issue of the Estate’s vicarious liability was never pleaded or sought by Robert and was never tried by consent of the parties. The trial court came up with the theory all on its own, many months after the trial had concluded. This was procedurally inappropriate. We therefore reverse the court’s ruling that this unpleaded issue was tried by the consent of the parties.
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¶114 Because the issue of the Estate’s vicarious liability was neither pleaded nor tried by the consent of the parties, the trial court’s ruling holding the Estate vicariously liable for Taylor’s actions is infirm and subject to reversal for that reason alone. But the court’s vicarious liability ruling was also wrong on its merits, and we opt to explain why, in order to provide certain guidance that may be useful on remand.
¶115 There appear to be three different theories, floated by the parties (or the court) at various times in the case, as to how Robert and his siblings might access the assets of the Estate to compensate them for the unlawful acts Taylor took as trustee of the Trust.[18] First, there is the court’s own vicarious liability theory, which we refer to as the “conflict of interest” theory. As the court explained it, Taylor wore several somewhat-conflicting hats at various times throughout the case: he was trustee of the Trust, he had power of attorney over Margene’s personal finances, he was (after Margene’s death) personal representative of the Estate, and he (along with Margene’s other children) is one of the beneficiaries of the Estate. In the court’s view, Taylor was motivated to benefit himself and the Estate where he could, and he used his authority in these various roles—most notably as trustee of the Trust—to do just that. Essentially, the court ruled that, because many of the unlawful actions Taylor took as trustee of the Trust benefited Margene and the Estate, the Estate should be vicariously liable for Taylor’s actions, and should therefore answer to Robert (and his siblings) for Taylor’s conduct.
¶116 Second, there is the agency law theory upon which Robert largely relies here on appeal: that Taylor was an “agent” of Margene (and, by extension, the Estate) in carrying out his unlawful acts, and that the Estate—as principal—should be vicariously liable for its agent’s activities.
¶117 Finally, there is a constructive trust theory—expressly sought in Robert’s proposed post-trial findings—under which the Estate is not necessarily vicariously liable for Taylor’s actions as a general matter but, instead, the assets of the Estate may be used to satisfy Robert’s judgment against Taylor, at least to the extent that those assets stem from the Estate’s receipt of unlawful distributions from the Trust. Specifically, Robert’s proposed post-trial findings asked for the imposition of “a constructive trust on the assets of the Estate” and an order that “all remaining [Estate] assets payable or distributable to Taylor be used to pay the outstanding judgments in this case.”
¶118 The first two of these theories do not work. Even accepting the court’s central proposition—that Taylor had conflicting responsibilities—we cannot see how that fact leads to a legal conclusion that the Estate is generally liable for unlawful actions Taylor took in his capacity as trustee of the Trust. Under the Trust documents, only Taylor (as trustee) had any authority to make distributions. Margene (as “surviving spouse”) had no such authority, with the Trust documents stating that “[t]he surviving spouse shall have no power to appoint” Trust property to any other person. Taylor’s unlawful distributions were undertaken in his capacity as trustee of the Trust, and Margene had no authority to make any distributions of Trust assets; because she had no such authority, she couldn’t have delegated any of it to Taylor, via the power of attorney or otherwise. In other words, Taylor’s authority to take actions as trustee didn’t come from Margene, it came directly from the Trust documents themselves. We acknowledge that it certainly appears that the Estate may have benefited from Taylor’s unlawful actions. But we are aware of no authority— neither Robert nor the trial court cited any—indicating that an entity that benefits from someone else’s bad acts is thereby vicariously liable for those bad acts.
¶119 And the second theory—that Taylor was acting as Margene’s (or the Estate’s) agent when he committed the unlawful acts—fails for similar reasons. As an initial matter, there is no evidence that Taylor was acting as Margene’s agent at all when, acting as trustee of the Trust, he made distributions from the Trust to Margene. That is, there is no evidence that Margene instructed him to make any distributions, or that he was acting on Margene’s behalf when he did so. The mere fact that Margene benefited from Taylor’s actions does not mean that Taylor was acting as Margene’s agent; this is especially true where, as here, the alleged principal (Margene) possessed no authority to make the distributions in question.
¶120 But more substantively, even if we assume that Taylor was acting as Margene’s agent, a principal is liable for an agent’s actions only under certain circumstances. See Stein Eriksen Lodge Owners Ass’n Inc. v. MX Techs. Inc., 2022 UT App 30, ¶ 25, 508 P.3d 138 (“Under agency law, an agent cannot make its principal responsible for the agent’s actions unless the agent is acting pursuant to either actual or apparent authority.” (quotation simplified)). “Actual authority may either be express or implied.” Hussein v. UBS Bank USA, 2019 UT App 100, ¶ 32, 446 P.3d 96, cert. denied, 455 P.3d 1062 (Utah 2019). “Express [actual] authority exists whenever the principal directly states that its agent has the authority to perform a particular act on the principal’s behalf.” Drew v. Pacific Life Ins. Co., 2021 UT 55, ¶ 54, 496 P.3d 201 (quotation simplified). “Implied [actual] authority includes acts which are incidental to, or are necessary, usual, and proper to accomplish or perform, the main authority expressly delegated to the agent.” Id. (quotation simplified). And apparent authority exists “when a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.” Id. ¶ 55 (quotation simplified). Robert makes no effort to persuade us that Taylor was acting pursuant to either actual or apparent authority from Margene when he committed the unlawful acts.
¶121 Robert does observe—correctly—that Margene gave Taylor power of attorney over her personal finances. But he does not explain how this narrow grant of authority led to the unlawful acts Taylor committed as trustee, or constituted the type of authority by which the Estate can be held vicariously liable for Taylor’s malfeasance. The scope of this grant of authority extended only to Margene’s own personal finances; Margene had no authority to disburse Trust funds, and therefore could not have granted, by her power of attorney, any such authority to Taylor, either expressly or impliedly. And as a practical matter, nothing Taylor did with Margene’s personal finances could have, by itself, impacted the Trust; after all, by the time Taylor took actions pursuant to his power of attorney—e.g., moving money from Margene’s personal accounts to, say, his own—he would by definition have already committed the unlawful acts in question— distributing Trust principal into Margene’s accounts in the first place. That is, the specific bad acts at issue here weren’t undertaken pursuant to any authority Margene gave Taylor; they were committed pursuant to authority Taylor already possessed, as trustee, under the Trust documents. Under these circumstances, Robert has not borne his burden of persuading us that vicarious liability exists here under principles of agency law.
¶122 Moreover, as noted, the trial court did not rely on this theory; if we were to rely on it here, we would be affirming on a different ground, something we may do only if that ground is “apparent on the record.” See Croft v. Morgan County, 2021 UT 46, ¶ 43, 496 P.3d 83 (quotation simplified). It is certainly not apparent from this record that Taylor had authority from Margene to act on her behalf in making unlawful distributions of Trust principal.
¶123 Thus, on the record before us, we see no basis in law for the Estate to be held vicariously liable, as a general matter, for acts Taylor committed as trustee of the Trust. We therefore reverse the trial court’s ruling to that effect.
¶124 Before concluding our analysis, however, we discuss the third theory by which assets of the Estate might conceivably be used to satisfy a judgment entered against Taylor in connection with his malfeasance as trustee: Robert’s apparent request that the court impose a constructive trust on the assets of the Estate, at least to the extent that those assets are derived from unlawfully distributed Trust assets. As noted, this theory is more limited than a vicarious liability theory—imposition of a constructive trust would not connote that Margene or the Estate did anything wrong and would not result in the Estate being generally liable for Taylor’s unlawful actions. But imposition of a constructive trust would enable Robert (and his siblings) to reach at least certain assets of the Estate to compensate them for Taylor’s malfeasance. See Lodges at Bear Hollow Condo. Homeowners Ass’n, Inc. v. Bear Hollow Restoration, LLC, 2015 UT App 6, ¶ 31, 344 P.3d 145 (“Constructive trusts are usually imposed where injustice would result if a party were able to keep money or property that rightfully belonged to another.” (quotation simplified)).
¶125 It is unclear to us whether Robert properly pleaded and pursued this theory or, if not, whether it was tried by consent of the parties. Robert certainly asked for this relief in his proposed post-trial findings, at least regarding Taylor’s share of the Estate’s assets. But the trial court specifically eschewed this theory during post-trial proceedings, offering its view that it “need not retreat to any equitable theory”—for instance, constructive trust—to support its determination regarding vicarious liability. However, the court expressly stopped short of rejecting a constructive trust theory, stating in a later ruling that it had not ruled on the theory, but instead had merely “ruled on an alternative ground,” and further clarifying that the fact that it “didn’t rule on that theory . . . doesn’t mean that [the court] didn’t accept it.” Indeed, the court went so far as to say that, if a constructive trust theory was “what the parties believe is a more proper finding,” the court may be willing to impose such a trust.
¶126 On remand, the court should consider whether Robert properly pleaded a claim for constructive trust and, if not, whether that claim was tried by consent of the parties. If the court determines that the claim is properly before the court, it should then consider the merits of the claim, and evaluate whether and to what extent a constructive trust should be imposed on the assets of the Estate in favor of Robert and his siblings. The merits of these questions have not been briefed in connection with this appeal, and we express no opinion on them, nor do we express any opinion regarding whether, on remand, these questions can or should be decided on the existing evidentiary record or whether additional proceedings would be appropriate.
B. Interest Rate
¶127 Second, the Estate asks us to examine the trial court’s ruling regarding the rate to be applied in calculating the amount of interest that Robert and Jill owe on the Note associated with the Loan. Despite the fact that the only expert—the Estate’s expert— to offer an interest calculation at trial calculated that interest to be $922,219.77, the court concluded that the total amount of unpaid interest owing on the Note was $565,314.97.
¶128 Under the terms of the Note, Robert and Jill agreed to pay “variable interest . . . at the margin loan rate assessed by S[a]lomon Smith Barney on Brokerage Account No. 298-02528-13 303 . . . as may fluctuate from time to time until paid in full.” But the calculation is not as straightforward as it may sound, because Robert and Jill failed to repay the Note for eleven years, and there were “some months” during that time span “where an interest rate was not published on the account” referenced in the Note.
¶129 For the months in which an interest rate on the specific account was published, the Estate’s expert used the published rate, which varied by month and ranged from 4.125% to 11%. For most of the “gap periods”—those months for which no interest rate was published on the account—the expert looked at the rate published for the month before the gap and the rate published for the month after the gap, averaged the two rates, and applied that average rate for each month during the gap period. Some of these gap periods were short, involving a gap of just a month or two, but other gap periods were quite long, involving periods up to three years without a published interest rate. But for the last gap period—a long one stretching from September 2011 through February 2015—the expert did not use an “average rate” methodology, because he could find no rate for the end month. Instead, he “made some calls and talked to a Smith Barney representative” who gave him “a range of rates”—from 4.75% to 5.5%—used “during that period of time” on various brokerage accounts. The expert then attempted to “corroborate that” range by comparing those rates to “rates published in the Wall Street Journal” and by discussing the issue “with [his] colleagues,” and eventually determined that a “reasonable rate” to use for the last gap period was 4.75%, a rate the expert considered to be “a very conservative rate . . . on the low end of the range.” The expert noted that this choice was only “an increase of 1.5% over the prime rate,” which he considered to be another sign that his chosen rate was “conservative and reasonable.” Applying this methodology, the expert calculated the total amount of interest owing, over the entire eleven-year period, as $922,219.77.
¶130 The trial court found the expert’s methodology to be “reasonable,” at least for “short gap periods,” but nevertheless did not accept the Estate’s expert’s methodology. It determined that the “Note’s repayment of interest term was ambiguous” with regard to the gap periods because the Note did not specify “what should occur if” no monthly interest rate was published for the account in question. It also found that “the intent of the parties” with regard to this ambiguity was “ascertainable sufficient to enforce it.” But even though it professed to be considering “extrinsic evidence to clarify the intent of the parties,” the court did not actually utilize any such evidence. Instead, it observed that the Note was a “negotiable instrument,” and it turned to a statute, located in Utah’s Uniform Commercial Code (UCC), for guidance. See Utah Code § 70A-3-112. That statute states, in relevant part, that if a negotiable “instrument provides for interest, but the amount of interest payable cannot be ascertained from the description, interest is payable at the judgment rate in effect at the place of payment of the instrument and at the time interest first accrues.” Id. § 70A-3-112(2). The court concluded that this statute “provides an adequate remedy at law to execute the intent of the parties as represented in the Note.” And it decided to apply this statutory default rate—which turned out to be 3.28%—to all gap periods, regardless of their length, noting that the statutory rate “provides a reliable method at law that relieves the Court from adopting” the expert’s methodologies for the gap periods. Notably, the court did not ever find that the Estate’s expert’s methodology was unreasonable; as noted, it found the methodology reasonable as to short gap periods and, even with regard to the longer gap periods, the court stated that it “appreciate[d]” the expert’s “efforts to determine reasonableness of his proposed rates by comparing them with the contemporaneous prime rate.” Later, using the published rate for the months in which one existed and the UCC rate for all other months, the court calculated the unpaid interest as $565,314.97.
¶131 The Estate ascribes error to the court’s approach, asserting that, after making its ambiguity determination, the court should not have jumped directly to the UCC rate but, instead, should have “determine[d] the parties’ intent from extrinsic evidence,” including the expert’s testimony. The Estate points out that the Note is far from silent on the interest-rate question, and indicates the parties’ intent to apply a rate equivalent to the brokerage rate for a particular account. And they assert that the UCC rate “applies only where the instrument is silent on how to calculate interest,” and not where the parties’ instructions in that regard are simply ambiguous. We find merit in the Estate’s argument.
¶132 As an initial matter, we note that the Estate’s argument is in line with general principles of contractual interpretation, including the bedrock proposition that, when “a contract term is ambiguous, [trial] courts should consider extrinsic evidence to resolve the ambiguity.” See Brady v. Park, 2019 UT 16, ¶ 29, 445 P.3d 395. Neither side takes issue with the court’s determination that, at least for the gap periods, the Note was ambiguous with regard to interest rate.[19] But the Estate persuasively argues that, even for gap periods, the Note does give some indication of the parties’ intent: they wanted to apply a rate equivalent to the Salomon Smith Barney brokerage rate. And the Estate points out that its expert came up with a methodology, in keeping with the parties’ expressed desire to use brokerage rates rather than presumably lower statutory rates, for estimating the brokerage rates for the gap periods, and points out that the trial court even found that methodology to be “reasonable,” at least as applied to the shorter gap periods.
¶133 Moreover, courts that have construed the UCC interest rate statute have concluded that it should not be applied in situations where “an ascertainable interest rate is provided but the sum certain requirement fails for lack of evidence concerning a reasonable rate of interest.” See Commercial Services of Perry, Inc. v.Wooldridge, 968 S.W.2d 560, 565 (Tex. App. 1998). In particular, at least where competent extrinsic evidence exists that can be utilized to estimate a reasonable rate commensurate with the parties’ intentions, courts have declined to apply statutory default rates where the parties agreed, in their instrument, to an interest rate tied to a specific bank’s prime rate and where that bank goes out of business. See, e.g., Ginsberg 1985 Real Estate P’ship v. Cadle Co., 39 F.3d 528, 533 (5th Cir. 1994) (applying “an analogous prime rate,” rather than a default statutory rate, to calculate interest after a bank failure, where the contract called for interest at that bank’s prime rate plus 1%); FDIC v. Blanton, 918 F.2d 524, 532–33 (5th Cir. 1990) (determining that a default statutory rate was “inapplicable” where the parties had agreed upon an interest rate equivalent to a specific bank’s rate plus 1% and where the bank had failed, holding that “[t]he trial judge could have applied an analogous prime rate as consistent with the intent of the parties”). We consider the failed-bank situation helpfully analogous to this one, and find the analysis applied by the courts in those cases persuasive and useful in this situation.
¶134 In those cases, courts examine extrinsic evidence to make a finding regarding a rate that would be reasonable and most in line with the parties’ intent. See Central Bank v. Colonial Romanelli Assocs., 662 A.2d 157, 158 (Conn. App. Ct. 1995) (“When a variable interest rate is based on the rate of a failed institution, the trial court must determine whether the substitute rate is reasonable by examining the documents and testimony offered by the plaintiff.”); FDIC v. Cage, 810 F. Supp. 745, 747 (S.D. Miss. 1993) (“Because the rate of interest is a term which is essential to a determination of the rights and duties of the parties and because the parties to this action understandably failed to specify the interest rate to be applied upon the failure of [an institution], it is left to the Court to determine a reasonable rate of interest.”). Importantly, “in determining reasonableness” in situations involving a failed bank, “the court need not determine the exact methodology used by the failed bank in calculating its internal interest rate; such a determination would be impossible in many circumstances. Rather, the court must determine whether the substitute rate was reasonable based on all the circumstances of the particular case.” Ninth RMA Partners, L.P. v. Krass, 746 A.2d 826, 831 (Conn. App. Ct. 2000) (quotation simplified).
¶135 In this case, the trial court did not undertake this type of analysis. Instead, without fully evaluating the reasonableness of the Estate’s proffered extrinsic evidence (chiefly, the expert’s methodology), the court jumped straight to the UCC default rate, stating that “the UCC provides an adequate remedy at law to execute the intent of the parties” and “relieves the Court from adopting” the expert’s methodology. And the court did so without making any finding that the expert’s unrebutted testimony was unreasonable or unreliable; to the contrary, the court expressly found the expert’s methodology “reasonable,” at least for use over shorter gap periods. And it made little effort to explain why it found the expert’s methodology reasonable for shorter gap periods but not necessarily for longer ones; it stated only that the expert’s gap period rates were “hypothetical and speculative,” a criticism that would seem to apply to all gap periods regardless of their length, and that will apply, at least to some extent, any time an effort is made to estimate an interest rate for a bank that, for instance, has gone out of business. Instead of explaining why it rejected the expert’s conclusions, the court simply stated that it “does not adopt” the expert’s “method as a proper means to ascertain interest,” and instead elected to apply the UCC rate. Contrary to the court’s statement, the statute did not “relieve” the court of its obligation to apply an interest rate commensurate with the intentions of the parties, nor of its obligation to grapple with, and make specific findings regarding, the credibility and reasonableness of the extrinsic evidence offered by the Estate and its expert.
¶136 Certainly, if the court had made specific and supported findings that the expert’s methodology was unconvincing and unreasonable across the board, and that therefore the Estate’s extrinsic evidence was not credible, it may have been possible for the court to default to the UCC rate. In that scenario—where the other side (Robert and Jill) did not offer any extrinsic evidence of their own and where the Estate’s evidence was deemed not credible—there would exist no competent extrinsic evidence to assist the court in ascertaining a rate reasonably equivalent to the one the parties intended, and therefore defaulting to a statutory rate may be appropriate. But absent such findings, the court should make a determination, based on the extrinsic evidence offered, as to the interest rate most reasonably equivalent to the intent of the parties as expressed in the Note.
¶137 We therefore vacate the court’s interest-rate determination, and remand the case to the trial court for reassessment of a reasonable rate of interest that best approximates the intentions of the parties. In so doing, the court should specifically assess the reasonableness of the Estate’s expert’s methodology. To the extent the court finds the expert’s methodology reasonable—as it already has with respect to short gap periods—it should apply that methodology, given the absence of other extrinsic evidence. The court should resort to the UCC statutory rate only to the extent it finds the expert’s methodology unreasonable, and not merely because the expert’s effort to estimate a rate that, by definition, does not exist is somewhat hypothetical. We imagine that this reassessment might be done by resort to the existing evidentiary record, but it will certainly be within the court’s discretion to hold additional proceedings if necessary.
C. The Form of the Judgment
¶138 Next, the Estate raises several issues with the form of the judgment the court entered in this case. First, the Estate challenges the court’s award of damages against it related to repairs to the marital home. Second, the Estate wonders who the proper judgment creditors are. Finally, and relatedly, the Estate raises setoff-related issues arising from the fact that it obtained an award against both Robert and Jill; it asks us to instruct the trial court to enter a separate judgment in favor of Robert and Jill, or to otherwise resolve the issues related to the court’s decision to set off the money owed to the Estate against the money the Estate owes to Robert. We find merit, at least to some extent, in all of the Estate’s complaints related to the form of the judgment, and we therefore vacate the court’s judgment and remand these issues to the trial court for clarification.
1
¶139 First, the Estate complains about the court’s award of damages to Robert, and against the Estate, for damages to the marital home. Its main complaint in this regard is that Robert did not point to any evidence that he—as opposed to Jeana—had actually been damaged.[20] This challenge is well-taken.
¶140 The trial court found, in determinations not challenged on appeal, that the marital home “was in excellent repair and condition” at the time of Dean’s death, but that Margene did not continue to properly maintain the property afterward. After Margene’s death, Jeana purchased the home, and made significant repairs that were necessitated by Margene’s failure to properly maintain the home. The court found that Jeana purchased the home for full value—without the benefit of any discount for the condition of the home—and then made the repairs to the home out of her own pocket. In view of these apparently undisputed facts, the court determined, in its main post-trial ruling, that the damages related to the home repairs were “owed to Jeana.”
¶141 Despite determining that any damages in this regard were owed to Jeana, the court’s judgment—entered some months after its main post-trial ruling—reflected that these damages were to be paid to Robert. Robert offers no good explanation for this, asserting simply that he and Jeana, “as beneficiaries” of the Trust, “have standing and are entitled to damages” related to the repairs to the marital home. But standing is one thing; evidence of damages is another. We agree with the Estate that Robert— personally, as distinct from Jeana—offered no evidence that he sustained damages related to the repairs to the home, and that the judgment in this case should be modified to remove any obligation by the Estate to pay Robert for those damages.
2
¶142 The Robert-or-Jeana issue related to repairs to the marital home is just one confusing result of the court’s decision to list Robert—and only Robert—as judgment creditor. By this point in the opinion, it should be apparent that—for the most part, and with certain exceptions such as perhaps the payment to Robert’s ex-wife—the damages Taylor caused were visited upon the Trust, and all its beneficiaries, and not just upon Robert. Yet the trial court—over objection—determined to list Robert as the sole judgment creditor, even though it awarded the full amount of the Trust’s damages. This was error and requires us to vacate the judgment and remand the issue for clarification.
¶143 The court can remedy this overarching error in one of two ways. First, it could elect to enter judgment in favor of not just Robert but, instead, either (a) the Trust (or, alternatively, the trustees of the Trust in their official capacity) or (b) all three beneficiaries, each to the extent of their damage. Second, it could elect to have Robert remain as the sole judgment creditor but, in this event, it would need to reduce the damages award to reflect the fact that Robert is entitled to receive only one-third of any damages sustained by the Trust.
¶144 We offer no opinion as to which option the court should choose on remand. Each has potential procedural pitfalls; from our review of the record, the party status of Jill and Jeana is somewhat unclear. But one thing the court may not do is enter judgment in favor of Robert, personally, in the full amount of the Trust’s damages.
3
¶145 Next, the Estate raises the related issue of how to memorialize the judgment in its favor, and against Robert and Jill, for unpaid interest on the Note. The court’s judgment resolved this issue by way of setoff, awarding damages to Robert and against the Estate associated with the Estate’s determined vicarious liability for Taylor’s actions as trustee, and then setting off against that amount the interest Robert owed to the Estate. The Estate complains about the way the court handled this, pointing out that—even if the court correctly applied setoff principles with regard to Robert—the court awarded no money in Jill’s favor and therefore could not have applied setoff principles with regard to Jill’s obligation to pay interest to the Estate. In other words, the Estate complains that the court held that it was entitled to recover several hundred thousand dollars from Jill but gave the Estate no way to actually go about collecting on this award. Again, the Estate’s complaint is well-taken; the court erred in the way it applied setoff principles under these circumstances.
¶146 This issue may, however, be rendered moot by this court’s determination that the Estate is not vicariously liable for Taylor’s actions as trustee, see supra Part II.A, and by its determination that the Estate is not liable to Robert (as opposed to, potentially, Jeana) for the repairs to the marital home, see supra Part II.C.1. Unless the court, after reconsidering Robert’s potential claim for constructive trust, actually imposes such a trust, no judgment will be entered against the Estate in favor of Robert or Jill. In any event, and even if the court ends up entering a judgment for constructive trust against the Estate and in favor of the Trust’s beneficiaries, the court in clarifying judgment-related issues should make sure that the judgments properly account for the Estate’s award against both Robert and Jill for unpaid interest.
D. Attorney Fees
¶147 Finally, the Estate appeals the denial of its request for attorney fees incurred in support of its claim for unpaid interest on the Note. Its claim is rooted in the language of the Settlement Agreement and related Note, which both have attorney fee provisions; the one contained in the Note requires Robert and Jill “to pay all reasonable costs and expenses of collection of any amount due under this Note including reasonable attorney’s fees.” Neither Robert nor Jill contests the Estate’s claim that, at least conceptually, the Estate would be entitled to recover attorney fees incurred in obtaining its judgment for unpaid interest on the Note. After all, the Estate prevailed on that specific claim. Indeed, in its attorney fees ruling, the trial court acknowledged that Robert and Jill “as guarantors of the [N]ote would owe fees [to the Estate] pursuant to a strictly construed reading of” the Note’s attorney fees provision.
¶148 But the trial court nevertheless denied the Estate’s claim for attorney fees, for several reasons. First, and chiefly, the court denied the Estate’s claim because, in the court’s view, the Estate had failed to sufficiently allocate its incurred fees between its successful and unsuccessful claims. Under our law, a party requesting attorney fees has an obligation to allocate its fees between claims on which it is entitled to fees and claims “for which there is no entitlement to attorney fees,” and should limit its fee request to only those specific fees incurred in aid of claims on which it is entitled to fees. See Zion Village Resort LLC v. Pro Curb USA LLC, 2020 UT App 167, ¶ 62, 480 P.3d 1055 (quotation simplified). A requesting party who fails to do so “makes it difficult, if not impossible, for the trial court to award . . . fees because there is insufficient evidence to support the award.” See Jensen v. Sawyers, 2005 UT 81, ¶ 132, 130 P.3d 325. Indeed, if a requesting party makes no effort to allocate its fees, a court “may, in its discretion,” elect to “not award wholesale all attorney fees” or may “deny fees altogether for failure to allocate.” Burdick v. Horner Townsend & Kent, Inc., 2015 UT 8, ¶ 59, 345 P.3d 531 (quotation simplified). But a court’s discretion in this regard is not unlimited, and “is not an invitation to forego a reasoned analysis.” Id. ¶ 60. Indeed, in Burdick, our supreme court determined that a trial court had abused its discretion by denying a request for attorney fees, in its entirety, for failure to allocate, noting that the movant’s “affidavit clearly identifie[d] 282 hours attributable only to” the successful claim. Id. The court remanded the matter to the trial court to “conduct a reasonableness analysis and attempt to discern what fees may be divided between the” successful claims and the unsuccessful claims. Id. ¶ 61.
¶149 In this case, some of our rulings described herein (see supra Parts II.A, II.B, and II.C) have changed the landscape with regard to allocation enough to require a remand, so that the Estate can resubmit its fee request in light of our rulings and so that the trial court can, in light of those rulings, reassess the quality of the Estate’s effort to allocate its requested fees. Most notably here, the fees the Estate incurred in advocating for its expert’s methodology for calculating the rate of interest may—depending on how proceedings on remand turn out—need to be included in the award. But in any event, we have some concerns with the trial court’s original analysis, and we express those concerns here in an effort to provide guidance on remand.
¶150 First, we are not convinced that the Estate’s allocation efforts—even the first time around—were so poor as to necessitate a complete denial of its attorney fees claim. In its ruling, the trial court acknowledged that “the [E]state made some effort to” allocate fees, “as it removed or modified fees claimed for work advancing arguments or upon which it did not prevail.” The record bears this out. The Estate eliminated (wholly or partially) from its fee request some forty-eight line items totaling nearly $30,000 of fees. To be sure, the Estate requested over $174,000 in fees, even after the allocation, and one could conceivably argue, depending on the circumstances, that reducing only $30,000 from fees totaling more than $200,000 does not constitute sufficiently deep cuts. But the Estate’s allocation effort does, to our eye, appear to be detailed, targeted, and undertaken in good faith. The Estate’s main claim—and the primary reason for its presence in the litigation—was the one for unpaid interest on the Note; it does not seem to us implausible that the majority of its fees would have been incurred in aid of litigating that claim. In situations like this, where a party has taken a good-faith and detailed run at allocation, the better approach—if a trial court remains of the view that the cuts are not quite deep enough—is to make a reduced award rather than to deny the request in its entirety. Wholesale denial of a fee request on allocation grounds should be reserved for situations where a party either makes no effort to allocate at all, see Burdick, 2015 UT 8, ¶ 59 (stating that a court may “deny fees altogether for failure to allocate” (emphasis added)), or where a party makes only token or wholly inadequate attempts to allocate.
¶151 Next, the court mentioned several other factors that influenced its decision to deny the Estate’s fee request that were, in our view, not a proper basis for denial. For instance, the court noted that, for many years, “no significant steps were taken to timely collect on the [N]ote,” and appeared to hold this against the Estate in assessing its claim for fees. But it was the Trust’s responsibility for pursuing repayment of the Note, at least until Margene’s death (at which point unpaid interest became payable to the Estate); any delays in pursuing collection from 2004 through 2015 cannot be laid at the feet of the Estate and are, in any event, beside the point. After Margene’s death, and after the principal amount of the Note was effectively paid off in connection with the first distribution to the Trust beneficiaries, the Estate soon pursued this action to recover the unpaid interest. There is no basis to hold delays in enforcement against the Estate in connection with assessing its claim for fees.
¶152 Next, the court speculated that the provision of the Settlement Agreement directing that unpaid interest on the Note was to be paid to the Estate, rather than to the Trust and its three beneficiaries, “was contrary to the intent and past practice of” Dean, and the court stated that it was “troubled” by that provision. The court noted that this sentiment was “not central to its decision,” but it should go without saying that the court should not have taken this into account at all in connection with assessing the Estate’s fee request.[21]
¶153 In short, we vacate the court’s order denying, in its entirety, the Estate’s claim for attorney fees; we do so largely because, in our view, the rulings set forth elsewhere in this opinion have changed the landscape enough to necessitate a reassessment of that claim. And we remand the matter to the trial court for reassessment of that claim consistent with this opinion.
CONCLUSION
¶154 We reject all but one of Taylor’s arguments on appeal. The trial court did not abuse its discretion in denying Taylor’s motion to amend. Taylor has not carried his burden, on appeal, of showing error in the court’s partial summary judgment ruling, or of demonstrating abuse of discretion in its decision to exclude Taylor’s experts. We also affirm much of the court’s damages award against Taylor, but vacate the court’s award of damages against Taylor related to the payment to Robert’s ex-wife.
¶155 We find merit in most of the Estate’s arguments on appeal. The court erred in holding the Estate vicariously liable for the actions Taylor took as trustee. The court also erred in its approach to calculating the interest owed to the Estate on the Note, as well as in various aspects of its judgment. In addition, we remand the question of the Estate’s entitlement to attorney fees.
¶156 Accordingly, we vacate the judgment entered by the trial court, and remand this case for further proceedings consistent with this opinion; those proceedings should, among other things, involve evaluation of Robert’s potential claim for constructive trust against the Estate, reassessment of the amount of interest the Estate is owed, clarification of the judgment, and reassessment of the Estate’s claim for attorney fees incurred in connection with its successful claim for unpaid interest.
[1] Because several of the individuals involved in this case are members of the same family, we often refer to them by their first names, with no disrespect intended by the apparent informality.
[2] This fact, along with the others in this factual recitation, is presented “in a light most favorable to the trial court’s findings,” as is required of us in an “appeal from a bench trial.” See Huck v. Ken’s House LLC, 2022 UT App 64, n.1, 511 P.3d 1220 (quotation simplified), cert. denied, 525 P.3d 1260 (Utah 2022).
[3] In 2020, our legislature amended and renamed this statute, titling it the “Uniform Fiduciary Income and Principal Act.” Utah Code § 22-3-101. No party suggests that the recent amendments are relevant to this case. In this opinion, we refer to this statute as the UPIA, the title it had during the events giving rise to this case.
[4] Robert’s ex-wife was eventually dismissed from the lawsuit prior to trial, and is not a party to this appeal.
[5] This ruling was later amended to remove all reference to any such costs.
[6] The record is somewhat unclear as to the identity of the person(s) or entity from whom Jeana purchased the home—that is, whether she purchased the home from the Trust or bought out her siblings’ interest in the home directly after it had been conveyed to them as tenants in common. Ultimately, this issue is immaterial to our analysis.
[7] Jill and Jeana also requested an award of attorney fees, but the court denied those claims for various reasons. The propriety of those rulings is not at issue in this appeal.
[8] The judgment also recites that the court “will award attorneys’ fees to” Robert, but it makes no effort to quantify those fees. As noted, the court did later quantify those fees in a ruling issued about four months after it signed the judgment, awarding Robert $441,546.50 in fees and $137,148.38 in costs. But the record submitted to us does not include any amended or supplemental judgment including those fees.
[9] In addition to the issue it raised regarding the form of the judgment, the Estate also raised objections relating to the court’s ruling that it was jointly and severally liable for Taylor’s actions.
[10] At one point in his appellate brief, Taylor mentions in passing that the trial court “made no finding under Utah Code § 75-7814(2) regarding whether or not a lay trustee may rely on professional counsel and accounting advice, and whether such reliance demonstrates reasonable care.” That statute provides that trustees may delegate “investment and management functions” to a professional as long as the trustee engages in certain oversight, and if trustees do so, they are “not liable to the beneficiaries or to the trust for the decisions or actions of the agent to whom the function was delegated.” Utah Code § 75-7-814(2). But Taylor did not invoke this statute in opposing Robert’s summary judgment motion, and any argument that the trial court erred by not considering the statute is therefore unpreserved. And in any event, Taylor does not argue that he delegated any specific task or function to any professional pursuant to this statute.
[11] Whether advice of counsel is the sort of affirmative defense that is considered waived if not pleaded in a responsive pleading is an interesting question. We are aware of Utah law stating that, at least in certain contexts, “reasonable reliance on the advice of counsel is an affirmative defense.” See Hodges v. Gibson Products Co., 811 P.2d 151, 159–60 (Utah 1991). But other courts have held that, at least in some circumstances, advice of counsel does not need to be pleaded in an answer. See, e.g., LG Philips LCD Co. v. Tatung Co., 243 F.R.D. 133, 139 (D. Del. 2007). Because the parties have not briefed this issue, and because it is only tangentially related to the question at hand, we offer no opinion on whether advice of counsel is the sort of affirmative defense that is waived if not included in a responsive pleading.
[12] Taylor argues that the court should not have considered much of this evidence because it was attached to Robert’s reply brief submitted in support of his summary judgment motion. He argues that Robert’s “obligation was to present all claimed relevant facts with his initial motion” and that “[n]ew materials cannot be raised in a reply memorandum.” But Robert did not raise any new issue in his reply; he merely responded to Taylor’s claims—included in his memorandum opposing Robert’s motion—regarding IRA ownership. The court did not err in considering the materials Robert submitted in connection with his reply brief in support of his motion.
[13] The court did, however, allow one of Taylor’s financial experts to offer rebuttal testimony at trial.
[14] In this same vein, Taylor makes a cursory and unsupported allegation in his brief that Robert cannot recover for “hypothetical growth in value” of Trust assets because his expert “[r]elied on [s]peculative [a]ssumptions.” But he does not suggest what these speculative assumptions were. Thus, this allegation, like some of his other damages assertions, is inadequately briefed.
[15] Taylor does not appeal the question of whether he—as opposed to Margene or the Estate—should be liable for the repairs to the marital home. Per the Trust, it was Margene—and not the trustee—who was responsible for “perform[ing] such repairs and maintenance as may be required to maintain the property in the condition it was maintained prior to [Dean’s] death.” Because this issue was not appealed, we do not address its merits.
[16] We are also aware of Taylor’s motion, filed with this court on June 30, 2023, asking us, “pending [our] imminent ruling,” to stay enforcement of the judgment. However, now that we have decided the case, the motion to stay has been rendered moot. See M.N.V. Holdings LC v. 200 South LLC, 2021 UT App 76, ¶ 17 n.10, 494 P.3d 402 (determining that a motion to stay had been mooted by the issuance of the opinion); Koyle v. Davis, 2011 UT App 196, ¶ 7, 261 P.3d 100 (per curiam) (recognizing that our resolution of a case on appeal “renders the motion to stay moot”), cert. denied, 263 P.3d 390 (Utah 2011).
[17] Similarly, the Estate’s failure to object to evidence that could conceivably have supported a constructive trust claim does not constitute implied consent to trial of an unpleaded vicarious liability claim. See Hill v. Estate of Allred, 2009 UT 28, ¶ 48, 216 P.3d 929. As discussed below, Robert may or may not have properly pleaded a claim that a constructive trust be imposed on Estate assets, at least to the extent that those assets consist of wrongfully distributed Trust principal; we offer no opinion on that question. But even assuming, for purposes of this discussion, that he did properly plead a claim for constructive trust, such a claim is a far cry from a claim for complete vicarious liability for all actions, and the Estate’s perceived acquiescence in admission of evidence supporting a constructive trust claim does not necessarily signal consent to trial of a vicarious liability claim.
[18] At oral argument before this court, Robert’s attorney hinted at a fourth theory, and suggested that the court, in ruling that the Estate was vicariously liable for Taylor’s actions as trustee, might have been applying a contract-based construct. But the court’s written rulings on this topic do not appear to rely on any such theory. In addition, we are aware of no specific contractual obligation that might be utilized for this purpose. The only obligation Margene had under the Trust documents was the duty to keep the home in good condition. She was never the trustee, never had any authority to distribute Trust assets, never signed the Trust, and did not receive Trust assets upon any condition, and therefore never had any contractual obligation regarding those assets. See, e.g., Bloom Master Inc. v. Bloom Master LLC, 2019 UT App 63, ¶ 13, 442 P.3d 1178 (“To form an enforceable contract, the parties must have a meeting of the minds on the essential terms of the contract.” (quotation simplified)). We therefore reject any contract-based argument for vicarious liability.
[19] And neither Robert nor Jill makes any argument that the UCC rate should apply whenever contractual ambiguity exists with regard to the interest rate. In general, “a court’s legal determination that ambiguity exists within a text leads to the conclusion that” a factfinder will need to consider extrinsic evidence. See Jessup v. Five Star Franchising LLC, 2022 UT App 86, ¶ 42, 515 P.3d 466. This general principle appears to apply here. At least, neither Robert nor Jill makes any assertion that, given the language of the UCC, this constitutes one of those “other specific areas of the law . . . where clarity between parties is itself at issue” and in which “the presence of ambiguity . . . suggests that a party may be entitled to a judgment as a matter of law.” Id. (describing some of those exceptional situations). That is, Robert and Jill do not assert that the UCC rate should apply whenever ambiguity in the words used in the instrument prevents a court from easily ascertaining the agreed-upon interest rate. See Utah Code § 70A3-112(2). Because Robert and Jill do not make this argument, we offer no opinion as to its merits.
[20] The Estate also complains about the amount of this damages award, asserting that it should be for $29,439 instead of $33,500. There was evidence supporting both damages figures, and the trial court was within its discretion to select the slightly higher one. We therefore reject the Estate’s challenge to the amount of this portion of the damages award.
[21] The Estate also asserts that the trial court more heavily scrutinized its fee request than it did Robert’s, asserting that—like the Estate—Robert also failed to prevail on all of his claims and motions, and therefore should also have been required to allocate his requested fees between successful and unsuccessful endeavors. The propriety of the court’s fee award to Robert is not at issue in this appeal, and we therefore decline to comment on the court’s handling of Robert’s fee request, other than to state that courts should, of course, evaluate fee requests from the various parties in the case by the same standards.
This is a more complex question than it might at first appear.
First, we need to address the matter of people who confuse beliefs with facts. If I had a dollar for every client or potential client parent who came to me claiming that the other parent was far more wealthy than he or she was letting on, I myself would be a millionaire. But that doesn’t stop most parents from making utterly unfounded allegations to the court that the other parent has income greater than he or she is reporting, has money stashed away in all kinds of secret bank accounts and other places, and or is receiving income from unearned sources, such as trusts or inheritance or investments or rental properties or intellectual property, etc.
Please bear in mind that the court is not required to believe claims uncorroborated by any credible evidence, no matter how strenuously you may assert those beliefs.
Now, in situations where in fact, a parent is not employed but does receive unearned income of some kind or another, that income can, and almost certainly will be, considered for child support calculation purposes. At the risk of oversimplifying the definition of unearned income, it is basically money that is not earned from active employment.
The Utah Code defines actual (as opposed to imputed*) income for child support calculation purposes as follows:
(1) As used in the guidelines, “gross income” includes prospective income from any source, including earned and nonearned income sources which may include salaries, wages, commissions, royalties, bonuses, rents, gifts from anyone, prizes, dividends, severance pay, pensions, interest, trust income, alimony from previous marriages, annuities, capital gains, Social Security benefits, workers’ compensation benefits, unemployment compensation, income replacement disability insurance benefits, and payments from “nonmeans-tested” government programs.
*But what if a parent is capable of earning an income but simply fails or refuses to work for an income? That is where imputation of income comes into play. In Utah, in the context of child support calculation, “imputed income” means income that if a parent is found to be capable of earning a certain amount of money, then that parent is treated for child support calculation purposes as if he/she is earning that income, even if he/she is not in fact earning it. Here is how the Utah Code imputes (and does not impute, in certain situations—see subsection 8(d) below) income for child support calculation purposes:
(8)
(a) Income may not be imputed to a parent unless the parent stipulates to the amount imputed, the parent defaults, or, in contested cases, a hearing is held and the judge in a judicial proceeding or the presiding officer in an administrative proceeding enters findings of fact as to the evidentiary basis for the imputation.
(b) If income is imputed to a parent, the income shall be based upon employment potential and probable earnings considering, to the extent known:
(i) employment opportunities;
(ii) work history;
(iii) occupation qualifications;
(iv) educational attainment;
(v) literacy;
(vi) age;
(vii) health;
(viii) criminal record;
(ix) other employment barriers and background factors; and
(x) prevailing earnings and job availability for persons of similar backgrounds in the community.
(c) If a parent has no recent work history or a parent’s occupation is unknown, that parent may be imputed an income at the federal minimum wage for a 40-hour work week. To impute a greater or lesser income, the judge in a judicial proceeding or the presiding officer in an administrative proceeding shall enter specific findings of fact as to the evidentiary basis for the imputation.
(d) Income may not be imputed if any of the following conditions exist and the condition is not of a temporary nature:
(i) the reasonable costs of child care for the parents’ minor children approach or equal the amount of income the custodial parent can earn;
(ii) a parent is physically or mentally unable to earn minimum wage;
(iii) a parent is engaged in career or occupational training to establish basic job skills; or
(iv) unusual emotional or physical needs of a child require the custodial parent’s presence in the home.
So, in answer to your question about whether a parent can be ordered to pay child support even if he or she does not have a job and earn an income that way, the answer is yes, that parent can be ordered to pay child support.
Because divorce is not about a spouse (man or woman) getting “half of everything”.
Depending upon whether a state is a “community property” state or an “equitable distribution” state, here is how property is divided between spouses in a divorce:
A community-property state is state in which spouses hold property that is acquired during marriage (other than property acquired by one spouse by inheritance, devise, or gift) as community property. Otherwise stated, all property that is acquired during the marriage by either spouse (other than property acquired by one spouse by inheritance, devise, or gift) or by both spouses together is jointly and equally owned and will be presumed to be divided in divorce equally between the divorcing spouses. Nine states are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
An equitable distribution state seeks to divide property in divorce in a fair, but not necessarily equal, manner. An equitable property state court can divide property between the spouses regardless of who holds title to the property. The courts consider many factors in awarding property, including (but not limited to) a spouse’s monetary contributions, nonmonetary assistance to a spouse’s career or earning potential, the efforts of each spouse during the marriage, the length of the marriage, whether the property was acquired before or after marriage, and whether the property acquired by one spouse by inheritance, devise, or gift. The court may take into account the relative earning capacity of the spouses and the fault of either spouse (See Black’s Law Dictionary, 11th ed.). Equitable distribution is applied in the non-community property states.
So, does a spouse “get half of everything” in divorce? Possibly, but not always, and now you know why.
JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and JOHN D. LUTHY concurred.
TENNEY, Judge:
¶1 James and Blanche Cox were married for over 20 years, during which time they had 10 children and acquired a large number of marital assets. In September 2012, Blanche filed for divorce.[1] After 4 years of pretrial litigation and then 14 days of trial, the district court issued a 35-page divorce ruling that settled various issues relating to child custody, child support, alimony, and the division of the marital estate.
¶2 James now appeals, arguing that many of the court’s rulings were not supported by adequate findings. We agree with James with respect to each challenged ruling. We accordingly vacate those rulings and remand for further proceedings.
BACKGROUND
¶3 James and Blanche Cox were married in 1990. During their marriage, they had 10 children and acquired a large number of assets. In September 2012, Blanche filed for divorce. After 4 years of litigation, the case went to trial, and that trial occurred over the course of 14 days between December 2016 and May 2017. In January 2017 (while the trial was proceeding), the court issued a bifurcated divorce decree granting Blanche’s request for a divorce and reserving other issues for further hearings and determinations.
The Ruling
¶4 In October 2017, the court issued a 35-page Ruling and Memorandum Decision (the Ruling) that entered findings of fact and legal determinations regarding many issues related to child custody, child support, alimony, and the valuation and division of the marital estate. This appeal implicates the court’s findings and determinations regarding essentially three groups of issues: the parties’ marital properties, alimony and child support, and marital debts.[2]
Marital Properties
¶5 The court found that James and Blanche “enjoyed the benefit or acquired” five properties during their marriage: (1) the Hildale Home, (2) the Henderson Home, (3) the Eagle Mountain Home, (4) the Rockville Property, and (5) the Cedar Highlands Lots. The court then entered findings and made rulings regarding how to divide the parties’ marital interest in each property.
¶6 The Hildale Home: The court found that James built this home (located, as our reference would suggest, in Hildale, Utah) before his marriage to Blanche. The court found that James, Blanche, and their children lived in this property until 2010, after which they moved to a different residence. The court heard testimony that title to the Hildale Home was held by the United Effort Plan Trust (the Trust). But the court then concluded that no evidence had been presented of the value of James’s interest in the Trust and that “establishing the value of a beneficial interest in property of the [Trust]” would be “practically and legally impossible.” The court acknowledged that Blanche had submitted an appraisal of the Hildale Home at trial (which, according to the record on appeal, estimated its value as being around $200,000), but the court concluded that the appraisal was deficient because it failed to account for costs and fees associated with the Trust ownership. From all this—and without any further explanation— the court then ruled that Blanche was “entitled to an award of $100,000” based on the home’s value.[3]
¶7 The Henderson Home: The court found that this home was purchased by James in 2004 for $420,000. It found that after the parties fell behind on mortgage payments, at which point they still owed around $288,000, the house was “lost in a short sale in 2013 for $225,000.” The court made a finding that the fair market value of the home at the time, according to Zillow, was $323,861.
¶8 But the court also heard competing testimony from the parties about whether the loss of the home could have been avoided. From Blanche, the court heard testimony that the home “could have been rented out” but that James refused to sign papers that would have modified the loan and, theoretically, allowed the parties to avoid losing it. From James, however, the court heard testimony that maintaining or leasing the home wasn’t actually possible for several different reasons.
¶9 From this, the court found that “[t]he parties would likely have had at least $100,000 in equity to split if they had kept” the Henderson Home and “rented it as suggested by [Blanche] numerous times.” The court then ruled that James “should be responsible to, and give [Blanche] credit for, $50,000 in equity representing her share of the lost asset dissipated by him.”
¶10 The Eagle Mountain Home: The court found that James and Blanche bought this home in 2009 and made a $120,000 down payment on it, $80,000 of which was borrowed from James’s mother. The court found that they moved into the home sometime in 2010 and began using it as their primary residence. James testified that he had at one point intended to sell the Eagle Mountain Home in an effort “to cover all the debts” on the parties’ credit cards but that Blanche refused to cooperate with him on the sale. Evidence presented at trial suggested that the home was sold in 2015 by a bankruptcy trustee for $520,000, with the parties still owing $292,000 at that time. Without citing any specific piece of evidence, the court found that if the Eagle Mountain Home had “not been lost to a forced sale, [Blanche] would have been able to receive at least another $25,000 today because of the current market value of $606,000,” and the court then ruled that she was “entitled to that sum.”
¶11 The Rockville Property: The court described this as a “7.5 acre parcel of farm property” located near Rockville, Utah. In its ruling on how to divide the marital interest in this property, the court referred to evidence it had received indicating that the parties were “forced to sell” the property for $270,000 after falling behind on the mortgage payments, as well as evidence showing that the parties still owed around $190,000 on the property when it was sold.
¶12 But the court then referred to several sources of evidence it had received that suggested that this property had a higher value and could have been sold for more. For example, it referred to evidence that a realtor had listed what the court thought was a similar 11.4 acre parcel for $1,195,000 (though the court then acknowledged that it was “debatable” whether this comparison provided an accurate valuation for the Rockville Property). The court also noted testimony that a realtor had valued the property at “approximately $900,000” due to “28 [shares of] water rights [that were] attached to it.” And the court referred to an “analysis from Zillow” that suggested the property’s value was $1,195,000.
¶13 From all this, the court then found that the forced sale of the property for $270,000 was a loss that “cost the parties at least $450,000 each,” and the court awarded Blanche “damages of $450,000 offset by monies she did receive in the amount of $42,000.”
¶14 The Cedar Highlands Lots: The Cedar Highlands Lots were “two lots down by Cedar City,” one of which was around 2 acres and the other around 2.5 acres. The court found that the lots were purchased for $40,000 each sometime in 2003 but that they were later “lost” through a forced sale because of the parties’ ongoing failure to pay various taxes and fees.
¶15 At trial, there was conflicting evidence and argument about the amount of the loss suffered by the parties because of the sale of these lots. James testified that the parties lost $60,000, while Blanche claimed that they lost somewhere between $153,000 and $280,000 (with her estimate being largely based on the lots’ appreciation in value since the time that the parties had purchased them—and, thus, the parties’ loss of potential equity by virtue of the forced sale). The court ultimately found that the parties’ inability to “pay the property taxes and Homeowners Association fees . . . resulted in [an] $80,000 loss to the parties.” The court did not explain how it had arrived at the $80,000 amount, nor did it explain how this loss was to be distributed between the parties.
Alimony and Child Support
¶16 Blanche’s Income: Under an initial subheading of the Ruling that was entitled “The Parties[’] Income,” the court found that Blanche is “an experienced bookkeeper with QuickBooks who has elected to be employed by About Faceology,” but that she was currently a “self employed Uber/Lift driver and has been so since 2015.” Under a subsequent subheading entitled “Income of the Parties,” however, the court then determined that “[f]or child support purposes [Blanche’s] income cannot be imputed at more than [the] minimum wage of $1,257 per month.” Elsewhere in the Ruling, and without explanation for the discrepancy, the court found that Blanche’s imputed minimum wage income was actually $1,260 per month (rather than $1,257). The court included no explanation for its conclusion that Blanche’s income could not be imputed at more than the minimum wage.
¶17 Child Support: At the time of the Ruling, the parties had five minor children. The court initially ordered James to pay $3,781 per month in child support. Elsewhere in the Ruling, however, and again without explanation, the court stated that it was ordering James to pay $3,336 per month in child support.
¶18 Alimony: Turning to alimony, the court noted that under the controlling statute, it should consider a number of factors. One of the factors it considered was Blanche’s “financial condition and needs.” With respect to this factor, the court opined that Blanche’s “needs have been overstated in her financial declarations,” but the court made no ruling about Blanche’s financial condition and what her needs actually were. With respect to Blanche’s earning capacity, the court again noted that Blanche “claim[ed] she earns just a little better than minimum [wage] even though she is an experienced and sophisticated bookkeeper with many years of experience having run, managed, overseen and monitored millions of dollars in income and expenses that ran through the parties[’] businesses.” But the court made no further findings about her particular earning capacity as it related to a potential alimony award. The court also noted that there were “minor children in the home,” five of whom were “younger than eighteen years of age or have not yet graduated from high school with their expected class.” But the court made no findings about how (or how much) these children impacted Blanche’s earning capacity. Finally, with respect to James’s ability to pay alimony, the court found that James was a “voluntarily under employed” electrician, and it then opined that “[t]here is no question that [Blanche] claims that her needs exceed hers and [James’s] monthly incomes.” Considering these factors together, the court then ordered James to pay $8,286 per month in alimony.
Marital Debts
¶19 Finally, the court made certain findings concerning the “business debt” that was “incurred” by the parties during the marriage. While the divorce proceedings were pending, James filed a Chapter 7 bankruptcy petition. In the Ruling, the court found that, after the bankruptcy proceedings had begun, James incurred $30,000 in debt while purchasing stock in his business and business-related property from the bankruptcy trustee. Since the court determined that Blanche was “entitled to 50% of [the] value” of the business, the court then concluded that she was entitled to an award of $15,000 as a result of this debt.
¶20 The court also noted that Blanche had “received financial compensation from the sale of assets and the conversion of assets into cash.” But the court opined that it was “difficult, if not impossible, to decipher whether each expenditure was personal, business related, or partially business-related.” From this, and without further explanation, the court awarded Blanche “judgment against [James] in the amount of $50,000.”
Motions for Clarification
¶21 James and Blanche were both dissatisfied with the Ruling, and in January 2018, they each filed a motion requesting clarification. Each motion raised a host of issues regarding alleged errors.
¶22 Of note here, in her motion, Blanche asked for clarification “as to whether or not” she was entitled to $25,000 for the Eagle Mountain Home or, instead, “another amount.” She argued that an award of $25,000 “seem[ed] incorrect mathematically” because if the fair market value of the Eagle Mountain Home was $606,000, and the home sold for $520,000, the “resulting equity would have been $86,000, which if divided equally would result in [Blanche] receiving judgment for $43,000,” as opposed to $25,000. Blanche also requested clarification as to the court’s determination “that the loss to the parties” concerning the Cedar Highlands Lots was $80,000. She argued that, based on the evidence presented at trial, the loss was $280,000. Blanche also requested clarification regarding the court’s determination of marital debts, specifically, whether the $15,000 was “to be added to the $50,000 for a total of $65,000” or whether “there [was] another number the court considered.” Finally, Blanche requested clarification of the court’s order regarding child support, given that in one portion of its Ruling the court ordered James to pay child support in the amount of $3,781 per month, and in another portion it altered that amount to $3,336 per month.
¶23 In his motion, James likewise requested clarification of various aspects of the Ruling. Among other things, he asked the court to “enter supplemental, amended, and or additional findings” regarding its ruling that Blanche was “entitled to $100,000” concerning the Hildale Home, explaining that he was “unaware of any evidence upon which the [court] could have relied in finding the $100,000 in equity the [court] awarded” Blanche. James also asked for clarification on the court’s findings concerning the Henderson Home, Eagle Mountain Home, and Rockville Property, asserting that the court had not “identified the facts upon which it relied” in making its calculations. Regarding the Henderson Home, James alleged that the court’s finding that “the parties would likely have had at least $100,000 in equity if the home had been rented” for the years 2013 through 2017 “fail[ed] to account for the costs of managing a rental property from a long distance, the likelihood of vacancies, the cost of utilities, maintenance, repairs, property taxes” and other related fees. Regarding the Eagle Mountain Home, James argued that the Ruling did not “accurately account for the additional $25,000” that Blanche received from the bankruptcy trustee “in addition to the $102,486.28 she received” from the sale. Regarding the Rockville Property, James requested clarification as to what facts the court relied upon to conclude that “the parties owned 28 shares of water,” given that the evidence “actually showed,” in his view, that they owned only 19 shares of water. Additionally, James requested clarification as to the court’s comparison of the Rockville Property to a parcel of “11.4 acre[s] of land with Virgin River frontage that was listed for $1,195,000.” Finally, with respect to the marital debts, James asked the court to “enter supplemental, amended and or additional findings” that would “identify the facts upon which [the court] relied in awarding [Blanche] $15,000 representing [the business’s] hypothetical equity or value.”
¶24 In the meantime, the Office of Recovery Services (ORS) intervened in the case based on its obligation to provide child support enforcement services. ORS filed a memo in response to Blanche’s motion for clarification in which it likewise requested clarification of the child support amount. After recounting its view of the evidence, ORS recommended that if Blanche’s income was imputed at minimum wage, and if James’s income was imputed at $18,500 per month, James should be ordered to pay $3,236 per month for the five minor children.
¶25 In August 2018, the court issued a ruling on James’s and Blanche’s motions. With respect to the child support amount, the court now ordered that James’s monthly obligation be $3,236 per month, thus apparently adopting ORS’s recommendation. With respect to the properties, the court now ruled—without explanation—that Blanche was entitled to $25,000 in relation to the Eagle Mountain Home and $40,000 for the Cedar Highland Lots. And with respect to the marital debts, the court found— again without explanation—that “[t]he $15,000 amount awarded is to be added to the $50,000 amount awarded for a total of $65,000” to be awarded to Blanche.
¶26 The court ordered Blanche’s counsel to prepare the final findings of fact and conclusions of law. In a November 2018 filing, however, Blanche alleged that she was unable to do so without “additional findings” regarding, among others, the marital debts. In May 2019, the court heard additional oral arguments. After the parties filed additional objections and motions, the case was reassigned from Judge Lynn Davis—who had heard the trial testimony and had issued both the Ruling and the rulings on the motions for clarification—to Judge Robert Lunnen. Judge Lunnen then heard oral arguments on the parties’ objections and outstanding motions.
The Supplemental Decree
¶27 In April 2021, the court (through Judge Lunnen) issued a “Supplemental Decree of Divorce” (the Supplemental Decree).[4]
¶28 The Supplemental Decree reiterated and incorporated many of the findings and determinations from the Ruling. As in the Ruling, for example, the court awarded Blanche $100,000 for the Hildale Home, $50,000 for the Henderson Home, and the (clarified) amount of $40,000 for the Cedar Highlands Lots. But without explanation, the court altered the order regarding the Eagle Mountain Home, awarding Blanche $43,000 as opposed to the $25,000 that was previously ordered. Also without explanation, the court altered the order regarding the Rockville Property, first concluding that Blanche’s offset should be $38,000, not $42,000, and now awarding Blanche $412,000 from this property as opposed to the $408,000 that had previously been awarded.
¶29 The court also determined that Blanche’s income should be imputed at minimum wage for a total of $1,260 per month. Based on its findings about the parties’ incomes, it then ordered James to pay $3,236 per month in child support, and it again ordered him to pay $8,286 per month in alimony.
¶30 Finally, the court awarded Blanche $65,000 relating to the marital debts. The court explained that $15,000 of that amount “represent[ed] her interest” in various purchases made by James from the bankruptcy trustee and that the remaining $50,000 represented “her interest in other assets, business and otherwise.”
¶31 James timely appealed.
ISSUE AND STANDARD OF REVIEW
¶32 James argues that the district court issued “inadequate” fact findings to explain its rulings regarding the marital properties, child support and alimony, and marital debts. “We review the legal adequacy of findings of fact for correctness as a question of law.” Lay v. Lay, 2018 UT App 137, ¶ 4, 427 P.3d 1221 (quotation simplified); see also Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262 (“We review the legal sufficiency of factual findings—that is, whether the trial court’s factual findings are sufficient to support its legal conclusions—under a correction-of-error standard, according no particular deference to the trial court.” (quotation simplified)).[5]
ANALYSIS
¶33 A district court’s “[f]indings of fact are adequate . . . only when they are sufficiently detailed to disclose the steps by which the district court reached its ultimate conclusion on each issue.” Oldroyd v. Oldroyd, 2017 UT App 45, ¶ 5, 397 P.3d 645. When assessing a challenge to the adequacy of a district court’s findings, we look to whether the court “adequately disclosed the analytic steps” it took in reaching its conclusions. Keiter v. Keiter, 2010 UT App 169, ¶ 21, 235 P.3d 782. In this sense, the court’s findings of fact must show that its “judgment or decree follows logically from, and is supported by, the evidence.” Id. ¶ 17 (quotation simplified). “This obligation facilitates meaningful appellate review and ensures the parties are informed of the trial court’s reasoning.” Shuman v. Shuman, 2017 UT App 192, ¶ 5, 406 P.3d 258; see also Fish v. Fish, 2016 UT App 125, ¶ 22, 379 P.3d 882 (explaining that findings “are adequate when they contain sufficient detail to permit appellate review to ensure that the district court’s discretionary determination was rationally based”). While “unstated findings can be implied if it is reasonable to assume that the trial court actually considered the controverted evidence and necessarily made a finding to resolve the controversy, but simply failed to record the factual determination it made,” Fish, 2016 UT App 125, ¶ 22 (quotation simplified), we “will not imply any missing finding where there is a matrix of possible factual findings and we cannot ascertain the trial court’s actual findings,” Hall v. Hall, 858 P.2d 1018, 1025–26 (Utah Ct. App. 1993) (quotation simplified).
¶34 James argues that a number of the court’s findings were inadequate. His arguments address three groups of findings— namely, findings regarding (I) marital properties, (II) child support and alimony, and (III) marital debts. We address each group in turn.[6]
Marital Properties
¶35 James first challenges the adequacy of the findings that supported the rulings about how to value and distribute the parties’ marital properties. We recognize at the outset that district courts “have considerable discretion in determining property distribution in divorce cases.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 11, 440 P.3d 757 (quotation simplified). But while a district court “does not have to accept [a party’s] proposed valuation” of an item in the marital estate, the court “does have to make findings sufficient to allow us to review and determine whether an equitable property award has been made.” Taft v. Taft, 2016 UT App 135, ¶ 53, 379 P.3d 890. In ruling on such a claim, we will uphold a district court’s “valuation of marital assets” if “the value is within the range of values established by all the testimony, and as long as the court’s findings are sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate conclusion on each factual issue was reached.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 64, 507 P.3d 385 (quotation simplified), cert. denied, 525 P.3d 1259 (Utah 2022).
The Hildale Home
¶36 James first argues that the court’s findings regarding the Hildale Home were inadequate. In James’s view, the court “simply concluded that $100,000 was an appropriate amount of an award without providing factual findings” supporting “the appropriateness” of that award. We agree.
¶37 The court’s discussion of the Hildale Home spans roughly two pages of the Ruling. Much of the discussion concerns the ownership of the home. The court found that the home’s title is held by the Trust, that James’s interest in the home is that “of a beneficiary” to the Trust, and that Blanche, by contrast, is “not a legal beneficiary” of the Trust. But the court then found that “[n]o evidence was presented to the court of the value [of] [James’s] beneficial interest” in the Trust and that “establishing the value of a beneficial interest in property of the [Trust] is practically and legally impossible[,]” in part, because “the Trust is not receptive to, nor responsive to, legal inquiries.” The court also recognized that Blanche submitted an appraisal of the home, but it then concluded that the appraisal was not an adequate mechanism for establishing the home’s value because the appraisal failed to account for “title to the home being in the [Trust], the costs of getting the [Hildale Home] conveyed from the [Trust], or the thousands of dollars owed to the [court] appointed Trustee of the [Trust] which the Trustee is owed for administering the [Trust’s] assets.” After discounting its ability to rely on either James’s interest in the Trust or Blanche’s appraisal, the court ruled that the property was “a marital asset” to some “narrow extent.” Without further explanation, it then ruled that while it couldn’t grant title to Blanche, she was “entitled to an award of $100,000.”
¶38 We recognize the difficulties that the court faced with this trial in general—as should be clear by now, this was a very complicated divorce with a lot of things to decide and divide. And as evidenced by the preceding paragraph, the nature of parties’ apparent interest in the Hildale Home made the question of how to divide that interest particularly complicated. But even so, we see nothing in the Ruling that “adequately disclosed the analytic steps” the court took, Keiter, 2010 UT App 169, ¶ 21, when deciding that Blanche was entitled to $100,000. The court clearly explained what it thought it couldn’t rely on, but it didn’t explain what it thought it could rely on or how it arrived at this particular amount. Without such an explanation, James has no meaningful way to challenge that $100,000 award, nor do we have any meaningful way to assess whether it was legally warranted in light of the “matrix of possible factual findings” on this issue that are apparent from the record. Hall, 858 P.2d at 1025 (quotation simplified). We accordingly vacate this determination.
The Henderson Home
¶39 James next argues that the court “did not provide any analysis” as to how it determined there was $100,000 in equity in the Henderson Home and that, as a result, the $50,000 award to Blanche was based on inadequate findings. We agree.
¶40 The court found that the home was purchased by James in 2004 for $420,000. It explained that by August 2012, James and Blanche were “months behind in their [mortgage] payment” and that they owed $288,000 when the home was “lost in a short sale in 2013 for $225,000.” The court made a finding that the fair market value of the home at the time—according to Zillow—was $323,861.[7] The court found that James and Blanche “would likely have had at least $100,000 in equity to split if they had” managed to keep the home, but because James “ignored” Blanche’s suggestions to rent the home out, which in theory would have prevented them from losing it, it then ruled that James “should be responsible to, and give [Blanche] credit for, $50,000 in equity representing her share of the lost asset dissipated by him.” It appears the court thus based the $50,000 award on its finding that “the parties could likely have rented and made money as shown or just maintained [the Henderson Home] and sold it for profit presently.”
¶41 James’s initial argument here is that it’s unclear how the court arrived at the $100,000 in equity that it then divided. In response, Blanche suggests that this amount could have been derived from the court’s apparent acceptance of the home’s fair market value as being $323,861 (a value derived from Zillow— which, again, neither party has challenged on appeal as being improper), an amount that is approximately (though, we note, not precisely) $100,000 more than the parties received in the short sale. We have some concern that Blanche is asking us to do too much inferential work on our own, and we could vacate on this basis alone. But in any event, the court’s division of the apparent equity also seems to have been based on a dissipation (or, perhaps, a waste) determination stemming from James’s conduct. Assuming this was so, the court’s findings about James’s conduct, whether the home could actually have been rented out, what the parties could have received in rent, and whether this unspoken amount would actually have prevented them from losing the home were all either missing or decidedly cursory. We’ve previously held, however, held that when a court rules that a party “should be held accountable for the dissipation of marital assets,” the court must support the ruling with “sufficiently detailed findings of fact that explain the trial court’s basis” for that ruling, and we’ve also laid out a number of factors that “may be relevant to” and could support such a ruling. Rayner v. Rayner, 2013 UT App 269, ¶¶ 19–21, 316 P.3d 455 (quotation simplified). While that list is not mandatory or exhaustive, we still have an inadequate findings-based foundation here from which we could review what seems to have been an implicit dissipation determination. When coupled with the lack of explanatory findings about the basis for the equity determination, we conclude that the findings about this home are, as a whole, legally inadequate to support meaningful appellate review of this ruling. We accordingly vacate them.
The Eagle Mountain Home
¶42 James argues that the court’s findings regarding the Eagle Mountain Home were legally inadequate. We agree.
¶43 In the Ruling, the court (through Judge Davis) initially awarded Blanche $25,000 for this home. But the court failed to explain the analytic steps it took to arrive at that amount. The court did enter a few findings about this home—namely, that the parties made a $120,000 down payment when they purchased the home in 2009 ($80,000 of which was borrowed from James’s mother), that they were forced to sell it in 2015 in conjunction with James’s bankruptcy, and that, as a result of that sale, Blanche received “one half” of its equity. But the court made no findings about the sale price or how much equity the parties had in the home at the time of the sale. And then, without any explanation, the court opined that “[h]ad it not been lost to a forced sale,” Blanche “would have been able to receive at least another $25,000 today” because of the home’s “current market value.” The court provided no basis for the $25,000 amount, and we see no reasonable basis in its findings for inferring one.
¶44 Of note, the court (through Judge Lunnen) then changed the awarded amount in the Supplemental Decree, now awarding Blanche $43,000 for it. But the court didn’t explain why it increased this award from the award that had previously been entered in the Ruling. And while Blanche suggests on appeal that the court had now accepted a new valuation of the home that she offered in her motion for clarification, the court never said that it was doing so, nor did it provide any other explanation for why it increased this award at all, let alone by this particular amount.
¶45 In light of this procedural history, it’s unclear to us what analytic steps led the court to first award Blanche $25,000 for this home and what caused the court to later change that award to $43,000. As a result, the findings with respect to this home are legally inadequate and are therefore vacated.
The Rockville Property
¶46 James argues that the court’s findings about the Rockville Property are legally inadequate because it’s “not clear” how the court “reached its valuation of the Rockville Property” or how it divided that value as part of its division of the marital estate. We agree.
¶47 In the Ruling, the court explained that the Rockville Property was a “7.5 acre parcel of farm property” owned by James and Blanche near Rockville, Utah. As for its value and how to determine that value, the court pointed to three options: (1) it noted that a realtor had listed a similar 11.4 acre parcel for $1,195,000, though the court opined that this valuation was “debatable”; (2) the court noted that Blanche “discussed” its value with a realtor who “indicated back then” (which, though unsaid by the court, seems from context to have been in 2013) that the “lot was worth approximately $900,000, due to the 28 water rights attached to it”; and (3) the court pointed to a “[c]urrent market value analysis from Zillow” that “estimate[d]” the property’s value at $1,195,000. The court then found that the parties were “forced to sell” the property in December 2013 for $270,000 due to financial troubles. And the court apparently faulted James for this, determining that at the time of the forced sale, the parties “only owed approximately $190,000” on the property, that it could have been refinanced, and that it was James’s fault that they did not do so. From this, the court found that the forced sale “cost the parties at least $450,000 each,” and it accordingly awarded Blanche “damages of $450,000 offset by monies she did receive in the amount of $42,000.”
¶48 From an adequacy-of-the-findings perspective, the initial problem here is that the court never stated whether it was accepting $1,195,000 or $900,000 as the property’s value. Given that the property’s value would be the numerator for any division of it as a marital asset, this omission is, of course, significant. And while Blanche invites us to engage in some loose math that would account for both possibilities and arrive at the same endpoint, the difference between the two initial valuations might matter if James wished to mount a sufficiency of the evidence challenge. Moreover, to the extent that the court’s determination about how to divide the property’s value turned on an implicit dissipation determination, we again note that the court failed to support such a determination with adequate findings. And finally, while the court offset the award to Blanche by “monies she did receive in the amount of $42,000,” an amount that it later changed to $38,000 in the Supplemental Decree, the court didn’t explain the basis for either amount in either ruling.[8]
¶49 Given the unanswered questions about how the court valued both this property and the offset, we have no basis for conducting a meaningful review of this award. We accordingly vacate it.
The Cedar Highlands Lots
¶50 James’s final property-related challenge is to the findings regarding the Cedar Highlands Lots. In James’s view, the court improperly failed to “indicate . . . how the $80,000 was calculated.” We again agree.
¶51 In the Ruling, the court found that James and a business partner had purchased the two lots for $40,000 each, that Blanche had “controlled the book-keeping for the marital businesses,” and that the lots “were lost when the parties were unable or could not pay the property taxes and Home Owners Association fees,” thus “result[ing] in [an] $80,000 loss to the parties.” In a subsequent ruling, the court determined that this loss should now result in an award of $40,000 to Blanche, and that award was later confirmed in the Supplemental Decree.
¶52 From the court’s findings, it’s unclear why the court determined that there was an $80,000 loss. The court seems to have assumed that the lots were completely lost with no return in value, but the court never said so. And more importantly, even assuming that this was the implicit finding, the court never explained why it concluded that Blanche should receive an award of $40,000 as the result of this particular loss to the marital estate of $80,000. Without such an explanation, we have no meaningful basis for reviewing the ruling. As a result, we vacate it.
Child Support and Alimony
¶53 James challenges the adequacy of the findings relating to child support and alimony. James’s challenges here fall into two groups: first, he challenges the adequacy of the findings relating to Blanche’s income (which, as explained below, matter to both child support and alimony); and second, with respect to the alimony determination, he challenges the adequacy of the court’s findings relating to Blanche’s financial condition and needs.
Blanche’s Income
¶54 James argues that the court’s findings regarding Blanche’s income were inadequate because they failed to “provide any reasoning for disregarding [Blanche’s] earning capacity.” We agree.
¶55 A party’s income matters to a determination of both child support and alimony. First, with respect to child support, a “noncustodial parent’s child support obligation is calculated using each parent’s adjusted gross income.” Twitchell v. Twitchell, 2022 UT App 49, ¶ 34, 509 P.3d 806 (quotation simplified); see also Utah Code §§ 78B-12-202, -301 (establishing guidelines for child support awards). Importantly, the court “is required to enter detailed and specific findings on all material issues which must be considered when making a child support award.” Breinholt v. Breinholt, 905 P.2d 877, 881 (Utah Ct. App. 1995) (quotation simplified). But “so long as the steps by which the ultimate conclusion on each factual issue was reached are apparent, a trial court may make findings, credibility determinations, or other assessments without detailing its justification for finding particular evidence more credible or persuasive than other evidence supporting a different outcome.” Shuman, 2017 UT App 192, ¶ 6 (quotation simplified). Second, with respect to alimony, a court must examine, among other factors, “the recipient’s earning capacity or ability to produce income.” Miner v. Miner, 2021 UT App 77, ¶ 16, 496 P.3d 242 (quotation simplified). And a court must in “all cases . . . support its alimony determinations with adequate findings . . . on all material issues,” and “failure to do so constitutes reversible error, unless pertinent facts in the record are clear, uncontroverted, and capable of supporting only a finding in favor of the judgment.” Id. ¶ 17 (quotation simplified).
¶56 Of note, when “there is insufficient evidence of one of the statutory alimony factors, courts may impute figures.” Gardner v. Gardner, 2019 UT 61, ¶ 98, 452 P.3d 1134 (quotation simplified). For example, a “court may impute income to a former spouse for purposes of calculating alimony after finding that the former spouse is voluntarily unemployed or voluntarily underemployed.” Fish, 2016 UT App 125, ¶ 15. And it “is not unusual for courts to impute income to a spouse who has not worked during the marriage (or who has not worked for a number of years preceding the divorce) but who is nevertheless capable of producing income.” Petrzelka v. Goodwin, 2020 UT App 34, ¶ 26, 461 P.3d 1134 (emphasis in original). But when a court imputes income, the “imputation cannot be premised upon mere conjecture; instead, it demands a careful and precise assessment requiring detailed findings.” Christensen v. Christensen, 2017 UT App 120, ¶ 22, 400 P.3d 1219 (quotation simplified); see also Reller v. Argenziano, 2015 UT App 241, ¶ 33, 360 P.3d 768 (“Before imputing income to a parent, the trial court must enter findings of fact as to the evidentiary basis for the imputation.” (quotation simplified)).
¶57 Income can likewise be imputed as part of a child support determination. See Utah Code § 78B-12-203(8). But, as with an alimony award, a court must support such an imputation with adequate findings. See id. § 78B-12-203(8)(a) (explaining that in contested cases, “[i]ncome may not be imputed to a parent unless,” after an evidentiary hearing on the matter, the court “enters findings of fact as to the evidentiary basis or the imputation”); id. § 78B-12-203(8)(b) (detailing the evidentiary bases upon which a court may impute income for child support purposes); see also Rayner, 2013 UT App 269, ¶ 10 (“Imputation cannot be premised upon mere conjecture; instead, it demands a careful and precise assessment requiring detailed findings.” (quotation simplified)).
¶58 Here, the court determined that although Blanche was currently working as a “self employed Uber/Lift driver,” her “income cannot be imputed at more than minimum wage of $1,257 per month.” In a different portion of the Ruling, however, the court found that Blanche’s “gross income” should actually be imputed at “$1,260 per month.”
¶59 On appeal, James doesn’t focus on this three-dollar discrepancy. Rather, James argues that the court erred by failing to explain why Blanche’s income should be imputed at minimum wage at all. As James points out, the court elsewhere found that Blanche is “an experienced bookkeeper with QuickBooks who has elected to be employed by About Faceology,” and it further found that she was “an experienced and sophisticated bookkeeper with many years of experience having run, managed, overseen and monitored millions of dollars in income and expenses that ran through the parties[’] businesses.”
¶60 Having reviewed the Ruling, we see no explanation for the court’s determination that, although Blanche is an experienced bookkeeper with the skill set to manage millions of dollars in income for a company, her income should still be imputed at minimum wage. In an attempt to justify this on appeal, Blanche points to a passing statement from the alimony portion of the ruling in which the court noted that the parties “have ten children, five of which are younger than eighteen years of age or have not yet graduated from high school with their expected class.” But as James points out in response, the parties had even more minor children at home during the years in which Blanche was working as a bookkeeper with responsibilities for “millions of dollars in income.” And while it’s possible that the court believed that something had now changed that would prevent Blanche from still doing this work (such as her new status as a post-divorce single parent), the court never said this or entered any findings to support such a determination, it never explained why it was implicitly determining that Blanche could work as an Uber/Lyft driver but not as a bookkeeper, and it entered no findings to explain why her current employment as an Uber/Lyft driver would result in an income imputation of minimum wage.
¶61 To be clear: as with the other issues in this appeal, we express no opinion about the proper resolution of any of these questions. But without an explanation from the district court, James has no basis for properly challenging the decision about Blanche’s income, nor do we have an adequate basis for reviewing it. Given the importance of Blanche’s income to both child support and alimony, we accordingly vacate those rulings.
Blanche’s Financial Condition and Needs
¶62 As part of its alimony determination, the court was also required to consider Blanche’s “financial condition and needs.” Miner, 2021 UT App 77, ¶ 16 (quotation simplified). James argues that the court failed to enter adequate findings to support this assessment. We agree.
¶63 In the Ruling, the court noted that Blanche had claimed that she had “monthly needs of $18,565,” but it then concluded that these needs were “overstated.” And while Blanche had also suggested that she needed the alimony award to account for “over $200,000 in credit card and business debts,” the court suggested that this debt was either accounted for by other portions of its ruling or had “been discharged in the bankruptcy case.”
¶64 But even so, while the court then concluded that James “simply does not make sufficient money to satisfy all of [Blanche’s] claims” about what “she reasonably needs to support herself,” the court did not make any determination about what Blanche’s needs actually are. As James correctly points out, the absence of such an explanation prevents us from conducting a meaningful review of how this factor should weigh into the court’s alimony award, a problem that is compounded by the failure discussed above to adequately explain its determination about Blanche’s income.
¶65 We accordingly vacate the alimony award to allow the court to enter more detailed findings and, “if necessary, recalculat[e] . . . appropriate alimony.” Fitzgerald v. Fitzgerald, 2005 UT App 67U, para. 6 (quotation simplified); see also Eberhard v. Eberhard, 2019 UT App 114, ¶¶ 39–40, 449 P.3d 202 (faulting a district court for not “spelling out” “how much more [the petitioner] actually needs each month to pay down her debt and elevate herself to the marital standard of living,” thus leaving the appellate court “unable to discern whether the alimony award, in fact, exceeds her needs”).
III. Marital Debts
¶66 Finally, James challenges the adequacy of the court’s findings with respect to the parties’ marital debts. We agree that these findings are inadequate.
¶67 “In issuing a divorce decree, a trial court must include an order specifying which party is responsible for the payment of joint debts, obligations, or liabilities of the parties contracted or incurred during marriage.” Fox v. Fox, 2022 UT App 88, ¶ 32, 515 P.3d 481 (quotation simplified), cert. denied, 525 P.3d 1263 (Utah 2022); see also Utah Code § 30-3-5(3)(c)(i). Utah law “requires only a fair and equitable, not an equal, division of the marital debts.” Fox, 2022 UT App 88, ¶ 32 (quotation simplified). A district court is in the “best position to weigh the evidence, determine credibility and arrive at factual conclusions”; as a result, a district court’s division of marital debts is “entitled to a presumption of validity.” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified). But, again, the district court must enter findings of fact that are “sufficiently detailed to disclose the steps by which [it] reached its ultimate conclusion on each issue.” Oldroyd, 2017 UT App 45, ¶ 5.
¶68 Here, the court found that the “parties incurred business debt while married.” James challenges the adequacy of the findings with respect to two of those debts.
¶69 First, the court found that as a result of James’s bankruptcy, James took on $30,000 in debt to finance the purchase of his business’s stock and other business-related property. In the court’s view, Blanche was “entitled to 50% of [the] value” of the business, which meant, in its view, that she was also entitled to $15,000. But the court never explained why it concluded that Blanche was entitled to this amount. While it’s possible, as Blanche now suggests, that the court thought that James had drawn the $30,000 from marital assets—and, thus, that $15,000 of it belonged to Blanche—the court didn’t say this, and its reference to this as “$30,000” in “debt” that James had incurred is somewhat at odds with this inference. In the absence of any explanation, we vacate this ruling.
¶70 Second, at the close of the “Marital Debts” section of its ruling, the court found that Blanche had “received financial compensation from the sale of assets and the conversion of assets into cash.” But it then opined that it was “difficult, if not impossible, to decipher whether each expenditure was personal, business related, or partially business-related.” Without any further explanation, the court then held that Blanche
was “awarded judgment against [James] in the amount of $50,000.”
¶71 It’s entirely unclear to us what the basis for this $50,000
award was. So far as we can tell, the court seems to have concluded that Blanche had already received some prior distributions from marital assets and that she should now receive $50,000 more. But there’s no explanation for how the court arrived at this particular amount, what the amount was linked to, or why it would be listed alongside an analysis of “Marital Debts.” Without any such explanation, we vacate this award.
CONCLUSION
¶72 We agree with James’s assertion that the challenged findings were not legally adequate and that these inadequacies impaired both his ability to challenge the court’s various rulings and our ability to review them. We accordingly vacate the above rulings and remand the case with instructions for the court to enter more detailed findings and then alter any of its rulings as may be necessary.
[1] Because the parties share the same last name, we’ll follow our normal practice and refer to them by their first names, with no disrespect intended by the apparent informality.
[2] In this Background, we’ll recount the main findings regarding each ruling at issue on appeal, but in some instances, additional relevant findings will be discussed in the Analysis below.
[3] With respect to some (though not all) of the dollar amounts included in the rulings at issue, the court added “.00” signifiers. For readability, those have been omitted throughout this opinion.
[4] As noted above, the court had previously entered a bifurcated divorce decree while the trial on the parties’ assets and the like was still ongoing.
[5] As evidenced by the passages quoted above, there’s something of a disconnect in how we’ve referred to this kind of argument in past cases. In some cases, we’ve described it as an argument about the “legal adequacy” of the district court’s findings, see, e.g., Lay v. Lay, 2018 UT App 137, ¶ 20, 427 P.3d 1221, but in others, we’ve described it as an argument about the “legal sufficiency” of the findings, see, e.g., Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262. For consistency’s sake, it might be better if bench and bar alike settled on a single usage. And on reflection, we suggest that such an argument should be described in adequacy terms.
The reason for this is to reduce the potential for confusing this kind of argument with the similar sounding but substantively distinct “sufficiency of the evidence” argument. At the risk of over-simplification: a sufficiency of the evidence argument asserts that there was insufficient evidentiary support for a particular factual finding. As detailed more fully below, however, the argument at issue here—a challenge to the adequacy of the findings—asserts that the court’s findings did not adequately explain the basis for the court’s rulings, thereby impairing our ability to review those rulings (for sufficiency of the evidence or anything else).
[6]Two notes are warranted at the outset—one about our usage patterns regarding the rulings at issue, and one about a threshold argument made by Blanche.
First, as discussed above, there are two decisions that largely drive the various arguments in this case: the Ruling and the Supplemental Decree. The Ruling was issued by Judge Davis, who heard the trial evidence, while the Supplemental Decree was issued by Judge Lunnen, who was assigned to the case after the Ruling was issued. At one of the hearings in the intervening period, Judge Lunnen responded to a party’s argument by stating that “[t]he findings, they’re set in stone. So all this is . . . a result of the findings.” As noted, however, Judge Lunnen did alter a few of the Ruling’s legal determinations in the Supplemental Decree. In consequence of how this all played out, the Supplemental Decree recites many of the findings that were issued in the Ruling, though not with the same level of detail. It instead essentially incorporates the bulk of the Ruling by implicit reference. For this reason, the parties’ arguments on appeal have largely focused on whether the findings from the Ruling were adequate, and we’ll follow suit. To avoid redundancy, we won’t repeatedly mention whether we think the findings from the Supplemental Decree were likewise inadequate (even if they were reiterated in the Supplemental Decree); instead, we’ll discuss the Supplemental Decree only in those instances where it differs in some meaningful way from the Ruling (usually because of an altered legal determination).
Second, in her opening brief, Blanche argues that James did “not comply with Utah’s marshaling requirement” in his briefing on appeal. But the marshaling requirement applies when a party “seeks to prevail in challenging the sufficiency of the evidence to support a factual finding or a verdict on appeal.” State v. Nielsen, 2014 UT 10, ¶ 40, 326 P.3d 645; see also State v. Wall, 2020 UT App 36, ¶ 53, 460 P.3d 1058; Wilson v. Sanders, 2019 UT App 126, ¶ 17, 447 P.3d 1240. As noted, however, James is not arguing that there was insufficient evidence to support any particular finding. Rather, James is arguing that the findings were inadequate to explain the court’s various rulings. As we’ve explained, an argument about the adequacy of the findings presents a legal question. Because of this, “marshaling is not required.” Jensen v. Jensen, 2009 UT App 1, ¶ 8 n.3, 203 P.3d 1020; see also Woodward v. Fazzio, 823 P.2d 474, 477–78 (Utah Ct. App. 1991) (“There is, in effect, no need for an appellant to marshal the evidence when the findings are so inadequate that they cannot be meaningfully challenged as factual determinations. . . . Rather, appellant can simply argue the legal insufficiency of the court’s findings as framed.”).
[7] While a topic at oral argument, neither party raised on appeal the issue of whether the district court could appropriately rely on Zillow for its valuation of the property, as opposed to evidence submitted at trial. For this reason, we do not address the issue here.
[8] It seems possible (if not probable) that this offset was intended to reflect a determination that the parties received $80,000 in equity when they sold the property for $270,000 while still owing $190,000 on it. But if this was the determination, (1) the court didn’t say so, and (2) it also didn’t explain the basis for initially deviating upward by $2,000 to arrive at $42,000, nor did it explain the basis for subsequently deviating downward by $2,000 to arrive at $38,000.
Cassie J. Medura and Jarrod H. Jennings, Attorneys for Appellant
Douglas B. Thayer and Mark R. Nelson, Attorneys for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN D. TENNEY concurred.
ORME, Judge:
¶1 Thomas E. Mower and Lidia V. Mower stipulated to a bifurcated divorce in which the district court dissolved their marriage but reserved for trial all other issues, which were the subject of contentious litigation. Thomas died after the trial concluded but shortly before the court issued its ruling that would have resolved all but one issue. As a result of Thomas’s death, the court held that it no longer had jurisdiction over the divorce action and closed the case, indicating that Lidia could pursue any surviving claims in probate court against Thomas’s estate.[1]
¶2 On appeal, Lidia argues that the court erroneously concluded that the unresolved claims in the divorce action abated on Thomas’s death. Thomas’s son, Thomas W. Mower (Thomas Jr.), in his capacity as special administrator of the Estate of Thomas E. Mower, by special appearance represents his late father’s interests on appeal. See generally Utah R. App. P. 38(a), (c). We hold that under the facts of this case, Thomas’s death did not deprive the court of jurisdiction to resolve most of the unresolved claims. Accordingly, we reverse and remand.
BACKGROUND
¶3 Thomas and Lidia married in 2001. Lidia initiated divorce proceedings in 2012. The ensuing litigation was very contentious and involved complex issues including grounds for divorce, a request for a retroactive increase in alimony,[2] custody of and parent-time with their child born during the marriage, child support, the potential equitable division of a large estate that was arguably “worth upwards of $150,000,000,”[3] and attorney fees.
¶4 In May 2013, on the parties’ stipulation, the district court entered a bifurcated decree of divorce, dissolving the parties’ marriage but reserving all other issues for trial. The court ruled that it would “value the estate as of the date this divorce decree enters rather than at the day of trial” and that “[a]ll other issues of dispute will remain open for further resolution by the Court.” Following entry of the bifurcated divorce decree, both parties remarried.
¶5 Four and a half years later, the bench trial in this case, which “included voluminous exhibits and witness testimony,” was held over the course of sixteen days between November 2017 and December 2018. Although the matter came under advisement awaiting a final ruling in January 2020, the district court “held status conferences to work through issues as they arose,” with the most recent one being held in July 2020.
¶6 Thomas passed away on August 2, 2020. The following day, the district court issued a ruling stating it would close the divorce action in twenty days unless it received a valid objection and a supporting memorandum. Lidia objected, filing a Motion for Entry of Final Property Division and a Rule 25 Motion to Substitute Party. Regarding the latter motion, Lidia requested that “the personal representative or other appropriate party” be substituted in the divorce action “to allow the Court to issue a final ruling regarding property settlement and all outstanding financial issues in this case.” See generally Utah R. Civ. P. 25(a)(1) (“If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties.”). Thomas’s counsel opposed Lidia’s objection and motions.[4]
¶7 In February 2021, following argument on the issues, the court overruled Lidia’s objection and denied her motions. The court first stated that shortly before Thomas’s death, it had completed “its findings of fact and was prepared to issue a ruling reserving only a single outstanding issue that [it] intended to invite the parties to address via supplemental briefing.” Despite this, following a lengthy discussion of Porenta v. Porenta, 2017 UT 78, 416 P.3d 487, the court held that its prior orders regarding child support, parent-time, and custody abated upon Thomas’s death and that Lidia, as the surviving party in a bifurcated divorce, was required “to pursue unresolved equitable claims to marital property before a probate court.” A few months later, the court issued a Final Order, stating, “Due to the untimely death of [Thomas], this court no longer has jurisdiction over this matter and this matter is closed.” ¶8 Lidia appeals.
ISSUE AND STANDARD OF REVIEW
¶9 Lidia argues that the court erred in closing the divorce action on the ground that Thomas’s death caused it to lose jurisdiction.[5] “We review a court’s determination of jurisdiction for correctness, granting no deference to the lower court.” In re S.W., 2017 UT 37, ¶ 7, 424 P.3d 7.
ANALYSIS
¶10 In concluding that Thomas’s death caused it to lose jurisdiction over the divorce action, the district court relied heavily on our Supreme Court’s opinion in Porenta v. Porenta, 2017 UT 78, 416 P.3d 487. In that case, during the pendency of a divorce action, the husband executed a quitclaim deed transferring his interest in the marital home to his mother in an effort to prevent the home from being distributed as part of the marital estate. Id. ¶¶ 2–3. The husband thereafter died, causing the district court to dismiss the divorce case for lack of jurisdiction. Id. ¶ 5. The wife then sued the mother, seeking to set aside the quitclaim deed under the Utah Fraudulent Transfer Act (the UFTA). Id. ¶ 6. The district court in that case ultimately ruled that the husband’s transfer of his interest in the home to his mother was fraudulent under the UFTA. Id. ¶ 8.
¶11 The mother appealed, arguing that the wife’s claim was barred because the UFTA requires an ongoing debtor-creditor relationship at the time a claim under the act is filed, which relationship the husband’s death had extinguished. Id. ¶ 9. Specifically, the mother argued that the wife’s claim against the husband “for the whole of the marital estate, including the right to preserve the joint tenancy” in the marital home, id. ¶ 14 (quotation simplified), became unenforceable when the husband died because one “cannot bring a claim against a dead person” and because “court orders that award a spouse with property abate upon the death of a spouse,” id. ¶ 16. See generally id. ¶ 12 (“The existence of a claim, or right to payment, is at the heart of the debtor-creditor relationship.”); id. ¶ 19 (“A claim for equitable distribution arises when one party in a marriage threatens divorce.”).
¶12 Quoting its prior decision in In re Harper’s Estate, 265 P.2d 1005 (Utah 1954), our Supreme Court reaffirmed that
when the death of one of the parties occurs after the entry of a divorce decree and before the decree is final the decree becomes ineffective to dissolve the marriage, death having terminated that personal relationship. However, the occurrence of death does not abate the action itself and to the extent that property rights are determined by the decree it remains effective and becomes final.
Porenta, 2017 UT 78, ¶ 20 (quotation simplified). See id. ¶ 28 (reaffirming the precedent set forth in In re Harper’s Estate). In other words, the Court held that “[t]he death of a spouse during a divorce proceeding abates the action concerning the dissolution of marriage, but it does not abate the action itself when certain property rights have been determined by the court.”[6]See id. ¶ 26 (quotation simplified). Conversely, “all interlocutory orders that are effective only during litigation,” such as orders restraining the parties from selling property or dissipating the marital estate, “abate upon the dismissal of a divorce case.” Id. ¶ 27. The court noted that this was in line with “the general rule followed in virtually all jurisdictions . . . that, after one of the spouses dies during a divorce proceeding, and during the time an appeal is pending or during the time when an appeal may be taken, a divorce or dissolution action abates with respect to marital status of the parties but does not abate with respect to property interests affected by the decree.” Id. ¶ 20 (quotation simplified).
¶13 Finally, the Court held that “[c]laims that survive the death of a party are typically chargeable against that party’s estate” and cited rule 25(a)(1) of the Utah Rules of Civil Procedure as a means through which to pursue such claims. Id. ¶ 30. See Utah R. Civ. P. 25(a)(1) (“If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties.”). Because the Court presumed that the wife’s “claim for the whole of the marital estate, including the right to preserve the joint tenancy” in the marital home was not extinguished and was still valid,[7] it held that “a debtor-creditor relationship existed between Husband’s estate and Wife at the time Wife filed her UFTA claim.” Id. ¶ 36 (quotation simplified).
¶14 In sum, as relevant to the issue presented in the current appeal, Porenta provides three major takeaways. First, if a spouse dies prior to entry of a final divorce decree, the marriage no longer requires dissolution because death already “terminated that personal relationship.” Id. ¶ 20 (quotation simplified). See 27A C.J.S. Divorce § 194 (2022) (“A cause of action for divorce is purely personal, ends on the death of either spouse, and does not survive for the benefit of a third party.”); 24 Am. Jur. 2d Divorce and Separation § 118 (2022) (“[A] divorce suit abates when one party dies while the suit is pending and before a decree on the merits, because the death terminates the marriage, thus rendering the divorce suit moot as it relates to the parties’ marital status.”). Second, court orders entered prior to the final divorce decree determining the property rights of the parties do not abate on the spouse’s death. See Porenta, 2017 UT 78, ¶ 20. However, any “interlocutory orders that are effective only during litigation abate upon the dismissal of a divorce case.” Id. ¶ 27. See id. ¶ 27 n.13 (“This is not unique to the area of divorce law. Interlocutory orders that expressly expire at the end of litigation do just that, regardless of the type of case or how the litigation finally ends.”). And third, certain unresolved claims or rights arising from a divorce action may still be pursued following the spouse’s death. See id. ¶ 36. See also 24 Am. Jur. 2d Divorce and Separation § 118
(“[G]iven the circumstances presented, a portion of the dissolution action may survive an abatement of the rest of the action.”).
¶15 Regarding the third point, because the issue had not been adequately briefed, the Porenta Court specifically declined to address “[w]hether a claim for equitable distribution or some other property claim survives the death of a spouse during a divorce proceeding,” Porenta,2017 UT 78, ¶ 17, which the Court characterized as “an issue of first impression in Utah,” id. ¶ 28. Put differently, although the Court held that a district court’s orders determining the parties’ property rights do not abate upon a spouse’s death, it declined to determine whether the same was true for unresolved claims for equitable distribution or other property claims. In any event, the case before us is on a different footing, which likewise does not necessitate that we address that specific issue.
¶16 Unlike in Porenta, Thomas died after the district court entered a bifurcated divorce decree dissolving the parties’ marriage but leaving all unresolved issues for a trial that ultimately would not be held for several more years. See generally Utah R. Civ. P. 42(b) (“The court in furtherance of convenience or to avoid prejudice may order a separate trial of any claim, cross claim, counterclaim, or third party claim, or of any separate issue or of any number of claims, cross claims, counterclaims, third party claims, or issues.”). Accordingly, because Thomas and Lidia’s marriage had already been dissolved at the time of Thomas’s death, we need not address the effect the death of a spouse has on the underlying claim for equitable distribution of the marital estate in the situation where the parties are still legally married at the time of the death.
¶17 Rather, the issue before us is more straightforward. As previously discussed, the reason a divorce action generally abates upon the death of a party is because the death already “terminated that personal relationship,” Porenta, 2017 UT 78, ¶ 20 (quotation simplified), thereby “rendering the divorce suit moot as it relates to the parties’ marital status,”[8] 24 Am. Jur. 2d Divorce and Separation § 118. But here, the parties stipulated to a bifurcated divorce, and their marriage had been dissolved several years prior to Thomas’s death. Indeed, both Thomas and Lidia had remarried. For that reason, unlike in Porenta, Thomas’s death had no legal effect on the parties’ already dissolved marriage and therefore the ground on which the divorce action discussed in Porenta abated—i.e., mootness—is not present here.
¶18 Utah courts regularly use bifurcation under rule 42(b) of the Utah Rules of Civil Procedure “to allow divorcing spouses to more expeditiously obtain a divorce before embarking upon the sometimes more complex and time-consuming tasks of determining property division and deciding matters of support.” Parker v. Parker, 2000 UT App 30, ¶ 8, 996 P.2d 565. It is uncontested that a district court’s jurisdiction “to enter equitable orders relating to the property belonging to the marital estate” is unaffected by the bifurcation. Porenta, 2017 UT 78, ¶ 19 (quotation simplified). See Utah Code Ann. § 30-3-5(2) (LexisNexis Supp. 2022). Indeed, the Utah Constitution directs, “The district court shall have original jurisdiction in all matters except as limited by this constitution or by statute[.]” Utah Const. art. VIII, § 5. See Utah Code Ann. § 78A-5-102(1) (LexisNexis Supp. 2022) (“Except as otherwise provided by the Utah Constitution or by statute, the district court has original jurisdiction in all matters civil and criminal.”). Furthermore, divorce courts are generally “well
¶19 Here, because the parties’ marriage was already dissolved prior to Thomas’s death, mootness—a jurisdictional bar, see State v. Legg, 2016 UT App 168, ¶ 25, 380 P.3d 360—does not apply to most of the claims at issue.[9] Because no other constitutional or statutory bar to the district court’s jurisdiction exists in the case before us, the district court erred in determining that it lacked jurisdiction over all of the claims that remained at issue and in dismissing the divorce action on that ground. See Estate of Burford v. Burford, 935 P.2d 943, 955 (Colo. 1997) (stating that when one party to a divorce proceeding died following dissolution of the parties’ marriage in a bifurcated divorce, “the dissolution action did not abate, and the district court properly maintained jurisdiction over the marital estate to conduct hearings to resolve financial matters raised in the dissolution proceedings”); Fernandez v. Fernandez, 648 So. 2d 712, 714 (Fla. 1995) (agreeing “that the trial court maintained jurisdiction to enter the final judgment determining the parties’ property rights subsequent to the wife’s death” where the court had dissolved the marriage prior to her death); Barnett v. Barnett, 768 So. 2d 441, 442 (Fla. 2000) (per curiam) (“[T]he death of a party after entry of a written, signed judgment of dissolution but prior to the rendition of a decision on a timely motion for rehearing concerning matters collateral to the adjudication of dissolution did not affect the dissolution decree or divest the court of jurisdiction to decide the remaining issues between the parties.”); 27A C.J.S. Divorce § 194 (“Once a decree in divorce is granted and, thereafter, one of the parties dies, the court can continue with the equitable distribution of marital property.”).
¶20 In cases such as this, in which “a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties.” Utah R. Civ. P. 25(a)(1). See Porenta, 2017 UT 78, ¶ 30 (stating that “[c]laims that survive the death of a party are typically chargeable against that party’s estate” and citing rule 25(a)(1) of the Utah Rules of Civil Procedure as a means through which this may be achieved). But whether to substitute a party remains within the district court’s discretion. See Bradburn v. Alarm Prot. Tech., LLC, 2019 UT 33, ¶ 8, 449 P.3d 20 (“A district court’s substitution ruling is a discretionary one[.]”). Additionally, as Thomas Jr. points out, the district court “has inherent discretionary authority to abstain from exercising jurisdiction where another court has concurrent jurisdiction.” See Kish v. Wright, 562 P.2d 625, 628 (Utah 1977) (“[A]s part of the inherent power that our district courts have, as courts of general jurisdiction, they undoubtedly could refuse to exercise jurisdiction if convinced that it would place an unreasonable burden upon some or all of the parties, or upon the court, to try the case here.”); id. (“[T]he trial court does have concurrent jurisdiction and the power of discretion as to whether or not it will invoke that jurisdiction in a particular case.”). These are all considerations that we leave to the district court’s discretion on remand.[10]
CONCLUSION
¶21 The district court was not required to dismiss the divorce action for lack of jurisdiction following Thomas’s death. We therefore reverse and remand to the district court with instructions to reconsider Lidia’s Motion for Entry of Final Property Distribution and Rule 25 Motion to Substitute Party.
[1] Because the individuals share the same last name, we follow our usual practice of referring to them by their first names, with no disrespect intended by the apparent informality.
[2] Lidia sought a retroactive increase of alimony for 51 months, which represented the span between entry of a temporary order awarding her alimony and her remarriage.
[3] This included the determination of what portion of the large estate constituted marital property and what portion constituted Thomas’s separate property.
[4] Thomas’s counsel continued to represent Thomas’s interests immediately after his death pursuant to Stoddard v. Smith, 2001 UT 47, 27 P.3d 546. See id. ¶ 11 (“An attorney has an ethical obligation to take the necessary steps to protect a deceased client’s interests immediately following the client’s death[.]”).
[5] Thomas Jr. asserts that the district court did not actually rule that it lost jurisdiction over the divorce action. Instead, he suggests that the court simply exercised its “inherent equitable discretion in deciding to leave [Lidia] to pursue those claims in probate court.” But although the court’s initial ruling did not invoke the specific term “jurisdiction,” it nonetheless concluded, with our emphasis, that “Utah precedent requires a surviving party in a bifurcated divorce to pursue unresolved equitable claims to marital property before a probate court.” And in its Final Order, the court clarified, “Due to the untimely death of [Thomas], this court no longer has jurisdiction over this matter and this matter is closed.” Accordingly, the court did, in fact, conclude that it lacked jurisdiction and closed the divorce action on that ground.
Lidia also argues that the district court abused its discretion when it denied her motion to substitute Thomas’s personal representative in the divorce proceeding under rule 25 of the Utah Rules of Civil Procedure. But because the basis of the court’s denial of that motion was its lack of jurisdiction, which ruling we ultimately reverse, we remand to the district court with instructions to reconsider the rule 25 motion on the merits. See generally State v. De La Rosa, 2019 UT App 110, ¶ 4, 445 P.3d 955 (“Trial courts do not have discretion to misapply the law.”) (quotation simplified).
[6] Our Supreme Court also abandoned, as “clearly dictum,” a statement in one of its prior decisions that purported to overrule In re Harper’s Estate. See Porenta v. Porenta, 2017 UT 78, ¶ 22, 416 P.3d 487. Namely, the Court abandoned the statement that “the death of one or both parties to a divorce action during the pendency of the action causes the action itself to abate and the married couple’s status, including their property rights, reverts to what it had been before the action was filed.” Id. (quotation simplified). In other words, the Court rejected “the proposition that the parties’ property interests in the marital estate are frozen in time during the pendency of divorce litigation” and that “[i]f a party dies before the divorce becomes final, . . . property rights in the marital estate . . . are transported back in time to what they held before the divorce case was filed,” id. ¶ 23, which includes the reversal of any transfers of property that might have occurred during the pendency of the divorce action, id. ¶ 23 n.8.
[7] The court employed this presumption because the mother had not carried her burden of persuasion regarding whether property claims raised in a divorce proceeding survive the death of a spouse. See Porenta, 2017 UT 78, ¶¶ 32, 36; infra ¶ 15.
[8] The mootness doctrine “is a constitutional principle limiting our exercise of judicial power under article VIII of the Utah Constitution” and “not a simple matter of judicial convenience.” Transportation All. Bank v. International Confections Co., 2017 UT 55, ¶ 14, 423 P.3d 1171 (quotation simplified). “A case is deemed moot when the requested judicial relief cannot affect the rights of the litigants,” State v. Lane, 2009 UT 35, ¶ 18, 212 P.3d 529 (quotation simplified),thereby rendering a decision “purely advisory,” Transportation All. Bank, 2017 UT 55, ¶ 15 (quotation simplified). established as courts of equity that retain jurisdiction over the parties and subject matter for the purposes equity may demand.” Potts v. Potts, 2018 UT App 169, ¶ 13, 436 P.3d 263 (quotation simplified).
[9] Not all claims raised in the current divorce action concerned property rights. For example, it is undisputed that the claims related to custody, child support, and parent-time abated upon Thomas’s death. On remand, the district court should dismiss any remaining non-property claims that were rendered moot by Thomas’s death.
[10] We note that, sequentially, it may be more prudent for the district court to equitably distribute Lidia and Thomas’s marital estate—which potentially represents only a portion of Thomas’s vast estate that is the subject of the probate proceeding—rather than punting these issues to the probate court, especially where the district court had already prepared a ruling resolving all but one of the issues raised in the years-long divorce action that it superintended.
My name is Stephanie from flingorlove.com and honestly, I usually wouldn’t bother emailing about this, but I researched and gathered as much data and stats as I could about various divorce statistics and put it all together in a massive blog post (84 stats to be precise).
Julie J. Nelson and Alexandra Mareschal, Attorneys for Appellant and Cross-appellee
Thomas J. Burns and Aaron R. Harris, Attorneys for Appellee and Cross-appellant
JUDGE DAVID N. MORTENSEN authored this Opinion, in which JUDGE GREGORY K. ORME and JUSTICE DIANA HAGEN concurred.[1]
MORTENSEN, Judge:
¶1 After a lengthy marriage, Rayna and Glen Mintz[2] divorced and have since been involved in ongoing litigation regarding the distribution of marital property. Rayna and Glen now raise various issues for review, including questions about alimony, property distribution, and dissipation awards. In response to these appeals, we affirm in part, reverse in part, and remand to the district for further proceedings.
¶2 Through more than twenty years of marriage, Rayna and Glen enjoyed a relatively luxurious lifestyle. During the marriage, in addition to meeting their regular expenses, Rayna and Glen invested money essentially as savings. Before 2014, they made deposits into investment accounts “when money was left over after normal marital spending,” and after 2014, they made direct deposits into investment accounts as part of Glen’s employment. Historically, they spent money freely, traveled frequently, and treated themselves to a variety of entertainment—often with other people. For Rayna’s part, she often invited friends to join her on different jaunts across the globe or visits to the theater. For Glen’s part, as is relevant to this appeal, he invested both time and substantial money into an extramarital affair.
¶3 Rayna and Glen financed this lifestyle through substantial income generated by Glen’s employment as an investment advisor managing the assets and investments of various clients. As a salaried employee for his employer (Employer), Glen “did not sell . . . a client list to [Employer]”; instead, he expanded the clients he serviced by creating relationships with other employees and assisting other employees in managing their clients’ assets. As part of Glen’s compensation, Employer offered cash awards distributed as forgivable loans. For each loan, Employer provided the cash to Glen up front and then forgave Glen’s payback obligation each year, leaving Glen with a decreased payback obligation but an increased tax obligation. The cash awards were deposited directly into Glen and Rayna’s investment accounts.
¶4 When Rayna discovered Glen’s infidelity, the couple sought a divorce. Ultimately, the district court made several determinations relevant to this appeal. First, although Rayna would be awarded alimony, a monthly amount for investment would be excluded from the calculation because she presented insufficient evidence to show that the parties’ investments were “standard practice during the marriage” or that they “helped form the couple’s standard of living.”
¶5 Second, although an amount for entertainment was included as a historical expense in alimony calculations, the court “divided by four” the amount Rayna had proposed because the entertainment amount was calculated based on a time “when two minor children also lived in the home.”
¶6 Third, although the list of clients Glen serviced could be considered an asset, Glen did not own a “book of business,” and accordingly, whatever value his client list contained could not be divided between the parties.
¶7 Fourth, although Glen had admitted to dissipating $75,000 on his extramarital affair and although the court determined that Rayna should be entitled to “half” that amount, in an appendix to the district court’s findings of fact and conclusions of law, designating the specific property distributions, the court provided no amount in the space for money awarded to Rayna because of Glen’s dissipation.
¶8 And fifth, although Rayna would receive what Glen argued was an investable property distribution, the court declined to include investment income in its alimony calculation because (1) the likelihood of a specific return was uncertain, (2) Rayna’s investment income should be left unencumbered as was Glen’s, and (3) the parties had traditionally reinvested investment income instead of living off it.
¶9 Following entry of the divorce decree, Rayna filed a motion to enforce, asserting that various investment accounts at issue in the divorce “were not divided immediately after trial and that they subsequently appreciated in value.” Accordingly, Rayna sought an order requiring Glen to transfer holdings “equivalent to her proportionate share of appreciation since trial.” However, before the hearing on that motion, Rayna filed a notice of appeal. At the hearing, the court determined that the enforcement order Rayna requested would require the court to not just enforce the order but to “read language into [the decree] and interpret [the decree] in a way that modifie[d] or amend[ed]” it. Because a notice of appeal had been filed in the case, the court determined it had been “divested of jurisdiction” to amend the decree and therefore could not provide the relief Rayna requested.
¶10 On these issues, Rayna and Glen both appeal.
ISSUES AND STANDARDS OF REVIEW
¶11 First, Rayna contends that the court abused its discretion through its award of alimony. Specifically, Rayna contends that (1) the court “misapplied Utah law” when it declined to award alimony consistent with historical investment and (2) the court entered unsupported findings of fact in reducing her entertainment expenses. “We review a district court’s alimony determination for an abuse of discretion and will not disturb its ruling on alimony as long as the court exercises its discretion within the bounds and under the standards we have set and has supported its decision with adequate findings and conclusions.” Gardner v. Gardner, 2019 UT 61, ¶ 16, 452 P.3d 1134 (cleaned up). However, misapplication of the law is a de facto abuse of discretion, and an alimony award based on a misapprehension of the law will not be upheld. See Bjarnson v. Bjarnson, 2020 UT App 141, ¶ 5, 476 P.3d 145. Moreover, an alimony award based on clearly erroneous findings of fact will be overturned, see Leppert v. Leppert, 2009 UT App 10, ¶ 8, 200 P.3d 223, as will be an incorrect determination that evidence is insufficient to support an award, see Kimball v. Kimball, 2009 UT App 233, ¶ 14, 217 P.3d 733. “[U]nder our clearly erroneous standard, we will disturb a court’s factual findings only where the court’s conclusions do not logically follow from, or are not supported by, the evidence.” Gardner, 2019 UT 61, ¶ 32.
¶12 Second, Rayna contends that the district court erred when it determined that the list of clients Glen managed as an investment advisor (the book of business) was not a divisible marital asset. “Determining and assigning values to marital property is a matter for the trial court,” and an appellate court “will not disturb those determinations absent a showing of clear abuse of discretion.” Talley v. Talley, 739 P.2d 83, 84 (Utah Ct. App. 1987).
¶13 Third, Rayna contends that the district court failed to award or reimburse her half of the amount that Glen dissipated. “Where the trial court’s conclusions of law do not properly follow from the findings of fact, those conclusions can be overturned on appeal.” Cowley v. Porter, 2005 UT App 518, ¶ 46, 127 P.3d 1224.
¶14 Fourth, Rayna contends that the court erred in determining, based on the divorce decree’s language, that it lacked jurisdiction to grant Rayna appreciation on investment account awards. We review for correctness the district court’s interpretation of a divorce decree, Mitchell v. Mitchell, 2011 UT App 41, ¶ 5, 248 P.3d 65, and the district court’s “determination on jurisdictional issues,” National Advert. Co. v. Murray City Corp., 2006 UT App 75, ¶ 11, 131 P.3d 872 (cleaned up).
¶15 Fifth, on cross-appeal, Glen contends that the district court abused its discretion when it did not “determine an amount of income that Rayna [would] be able to earn from her awarded investment account assets and . . . apply that income to her ability to pay for her marital standard of living.” As indicated above, we review the district court’s alimony determination for abuse of discretion. See Gardner, 2019 UT 61, ¶ 16.
ANALYSIS
I. Alimony
A. Investment
¶16 Rayna contends that the district court erred in excluding from the alimony award an amount reflective of historical investment. Specifically, Rayna argues that the court misunderstood the phrases “standard practice” and “marital standard of living” as these phrases have been employed in Utah caselaw concerning the appropriateness of alimony awards that include amounts for investment or savings. Rayna argues that the parties made deposits into investment accounts as a standard practice that contributed to their marital standard of living, and she asserts that she should have received a higher alimony award to be able to continue this practice and maintain her standard of living. On appeal, we conclude that the district court erred in its application of the law on this point.
¶17 In Bakanowski v. Bakanowski, 2003 UT App 357, 80 P.3d 153, we indicated that “while the recipient spouse’s need to fund post-divorce savings, investment, or retirement accounts may not ordinarily be factored into an alimony determination, we cannot say that the ability to fund such post-divorce accounts may never be taken into account as part of” that analysis. Id. ¶ 16. Rather, “[t]he critical question is whether funds for post-divorce savings, investment, and retirement accounts are necessary because contributing to such accounts was standard practice during the marriage and helped to form the couple’s marital standard of living.” Id. (emphasis added); see also Knowles v. Knowles, 2022 UT App 47, ¶ 57 n.8, 509 P.3d 265; Miner v. Miner, 2021 UT App 77, ¶ 58 n.8, 496 P.3d 242. Thus, the court should, as a legal matter, ensure it employs the correct legal definitions of standard practice and marital standard of living, apply the facts of a given case to those definitions, and then determine whether the facts as found meet the criteria for a savings-based alimony award.
¶18 First, the district court erred in concluding that Rayna and Glen’s undisputed course of conduct did not demonstrate a standard practice. See Bakanowski, 2003 UT App 357, ¶ 16; Kemp v. Kemp, 2001 UT App 157U, paras. 3–4, 2001 WL 522413. When the Bakanowski court provided the test for appropriate consideration of savings, investment, and retirement accounts in alimony calculations, it cited Kemp v. Kemp, in which the court reasoned that because “the parties had made regular savings deposits,” including savings in the alimony award could help “maintain the recipient spouse’s marital standard of living.” See 2001 UT App 157U, paras. 3–4 (emphasis added).
¶19 An event must certainly be recurring but need not be uniformly systematic to be considered “regular.” See id. at para. 3. Indeed, “something can be done ‘regularly’ if done whenever the opportunity arises, though the actual time sequence may be sporadic.” Youth Tennis Found. v. Tax Comm’n, 554 P.2d 220, 223 (Utah 1976); see also Allen Distrib., Inc. v. Industrial Comm’n, 604 P.2d 938, 940 (Utah 1979) (reciting the then-enacted workers’ compensation laws that provided that “regularly” could include employment “continuous throughout the year or for only a portion of the year” (cleaned up)); Holt v. Industrial Comm’n, 87 P.2d 686, 689 (Utah 1939) (defining “regularly employed” to include “all employees who are employed and engaged in the usual or regular business of the employer, regardless of whether they were regularly or only casually or occasionally employed” (cleaned up)). Thus, even though an activity may “occur[] at intermittent times,” it can still be a regular activity. See Youth Tennis, 554 P.2d at 223 (cleaned up); see also B.L. Key, Inc. v. Utah State Tax Comm’n, 934 P.2d 1164, 1166 (Utah Ct. App. 1997). And although “regular” could also be understood to require methodic uniformity, see Valentine v. Farmers Ins. Exch., 2006 UT App 301, ¶ 11, 141 P.3d 618 (noting that “‘regular use’ connotes use that is consistent with a recurring pattern or uniform course of conduct or dealing” and that it “embodies use that is marked by a pattern of usage or some frequency of usage”); Youth Tennis, 554 P.2d at 223 (noting that “one of the meanings of the term ‘regular’ is: ‘Steady or uniform in course, practice or occurrence’” (quoting Black’s Law Dictionary 1450 (Rev. 4th Ed. 1968))), there exists no requirement that savings or investment deposits be made with uniform frequency.
¶20 Accordingly, even if savings deposits and investments do not occur on an exact timetable, such marital expenditures can be considered a standard practice, see Bakanowski, 2003 UT App 357, ¶ 16, in those infrequent and unusual circumstances where a party can produce sufficiently persuasive evidence that savings deposits and investments were a recurring marital action “whenever the opportunity ar[ose], though the actual time sequence may be sporadic.” See Youth Tennis, 554 P.2d at 223; see also Bakanowski, 2003 UT App 357, ¶ 16.
¶21 The district court found that Rayna did not present “sufficient evidence” to show that contributing to savings and investment accounts was the standard practice during the marriage. But on appeal, neither party appears to dispute that the district court was presented with evidence that before 2014 the parties invested substantial amounts of income at least yearly and that after 2014 a substantial portion of Glen’s income was deposited directly into investment accounts at least yearly. Accordingly, for nearly a decade immediately preceding the divorce, the parties set aside substantial money for investments at least annually. This undisputed evidence established that the parties followed a regular pattern, i.e., a “standard practice,” see Bakanowski, 2003 UT App 357, ¶ 16, of investing a portion of their annual income. In other words, given these undisputed facts, we conclude the district court applied too narrow a definition of standard practice in rejecting this evidence as insufficient.
¶22 Second, to justify an alimony award that includes an amount for investment, the parties’ acts of investing must also contribute to the “marital standard of living.” Id. “Standard of living is defined as a minimum of necessities, comforts, or luxuries that is essential to maintaining a person in customary or proper status or circumstances.” Howell v. Howell, 806 P.2d 1209, 1211 (Utah Ct. App. 1991) (cleaned up) (emphasis added). In other words, in the alimony context, the marital standard of living is all that the parties enjoyed during the marriage—including luxuries and customary allocations—by virtue of their financial position. See id.; see also Rule v. Rule, 2017 UT App 137, ¶ 15, 402 P.3d 153.
¶23 In Knowles v. Knowles, 2022 UT App 47, 509 P.3d 265, the trial court refused to include tithing expenditures as part of the alimony calculation because it was “not a necessary living expense.” Id. ¶ 57 (cleaned up). On appeal, we reversed that decision, explaining that it “ignored the requirement that [trial courts] assess the expense based on how the parties chose to spend and allocate their money while married.” Id. (emphasis added). “By failing to assess whether the parties’ expenditures were consistent with the marital standard of living, the court abused its discretion.” Id.
¶24 The marital standard of living analysis is not merely a question about what the parties spent their money on or whether they spent it at all. Rather, in terms of alimony, the marital standard of living analysis is about whether the parties’ proposed points of calculation are consistent with the parties’ manner of living and financial decisions (i.e., the historical allocation of their resources). Something may contribute to the marital standard of living even though it may not result in a direct benefit or detriment to the marital estate’s net worth.
¶25 Like the trial court in Knowles, the district court here did not fully consider how the parties chose to “allocate” their income. See id. The parties’ choice to devote a substantial portion of income to investment and savings—much like the parties in Knowles chose to devote a substantial portion of their income to tithing, see id.—contributed to the parties’ marital standard of living. The court should consider this evidence in determining the amount of investment and savings expenditures to include in its alimony calculations. See id.; see also, e.g., Lombardi v. Lombardi, 145 A.3d 709, 716 (N.J. Super. Ct. App. Div. 2016) (“An appropriate rate of savings can, and in the appropriate case should, be considered as a living expense when considering an award of maintenance.” (cleaned up)); Bryant v. Bryant, 534 S.E.2d 230, 232 (N.C. Ct. App. 2000) (“The trial court may also consider established patterns of contributing to savings as part of the parties’ standard of living.” (cleaned up)); In re Marriage of Stenzel, 908 N.W.2d 524, 536 (Iowa Ct. App. 2018) (“[R]etirement savings in a reasonable sum may be a part of the needs analysis in fixing spousal support.”).
¶26 Below, the district court declared that “Rayna ha[d] not convinced the court that [the couple’s] savings [practices] somehow helped form the couple’s standard of living.” The court continued, “There was no evidence that the deposits into the investment accounts were used to fund future purchases or otherwise contributed to the marital standard of living.” In making this ruling, the district court apparently relied on Kemp, where the court found that “during their marriage, the parties had made regular savings deposits to fund future major purchases, rather than making those purchases on credit.” 2001 UT App 157U, para. 3. Including saved money in the “marital standard of living,” however, does not require a party to spend it, as the parties did in Kemp. Our precedent does not exclude prudent saving from the definition of the marital standard of living. Indeed, it would be a perverse state of the law if we, as a rule, always included in an alimony calculation all sums parties spent, even imprudently, but excluded sums wisely saved.
¶27 The parties presented evidence (and on appeal the parties continue to agree) that the investments were meant to facilitate future financial growth; that during the economic recession in 2008, the parties dipped into their investments to maintain their standard of living; and that they later used investments to pay tax obligations incurred because of Glen’s compensation structure. The very fact that such a substantial amount of Glen’s income went straight to investment that then served to pay off a tax obligation represents the type of allocation that constituted part of the marital standard of living. An understanding of the marital standard of living that is restricted to direct and immediate expenses is simply too limited. Instead, the use of marital funds to cover the parties’ investments and savings—provided it was standard practice during the marriage—is a proper consideration in determining the marital standard of living. See Bakanowski, 2003 UT App 357, ¶ 16.
¶28 In sum, the district court erred in concluding that insufficient evidence supported Rayna’s request to include amounts for investment in alimony calculations. The undisputed evidence established that it was both a standard practice to invest marital assets annually and that this pattern of investment contributed to the marital standard of living. We remand the case to the district court to recalculate alimony based on the amount that the couple’s historical investment contributed to the marital standard of living. See Bjarnson v. Bjarnson, 2020 UT App 141, ¶ 5, 476 P.3d 145 (“We will reverse if the court has not exercised its discretion within the bounds and under the standards we have set.” (cleaned up)).
B. Entertainment
¶29 Rayna also contends that the district court “entered a factual finding that was unsupported by the evidence regarding [her] entertainment expenses.” This is so, she argues, because testimony at trial established that the amount she originally requested for entertainment as part of her living expenses was “carved out . . . for her alone” and because the evidence, including the exhibit used to calculate her living expenses, did not otherwise suggest that the amount should have been reduced as it was by the district court. We agree that the district court’s reduction of Rayna’s entertainment expenses was based on clearly erroneous findings of fact because “the court’s conclusions do not logically follow from” and are not supported by “the evidence.” See Gardner v. Gardner, 2019 UT 61, ¶ 32, 452 P.3d 1134.
¶30 In determining the amount for entertainment expenses to include in its alimony calculation, the district court stated that the amount “presents expenses calculated for . . . years . . . when two minor children also lived in the home. Therefore, this amount should have been divided by four.” The district court reduced the amount it considered in its alimony calculation related to entertainment accordingly. However, this does not follow from the evidence presented at trial.
¶31 As an initial matter, when asked about the entertainment line item, Rayna testified that she loved “to go to concerts,” that she went “to New York City to the ballet [and] to the theater,” and that she generally hosted a friend on those trips. And testimony from Rayna’s expert on the matter explained that the amount was for “entertainment that she would normally spend on a monthly basis” and, specifically, that the amount was “what she actually spent if . . . carved out [for] her alone.” (Emphasis added.)
¶32 Glen attempts to provide support for the district court’s apparently contrary finding by suggesting that several line items on Rayna’s living-expense exhibit included a note that the amount was for “Rayna Only,” and that based on this notation, the district court “acted within its appropriate discretion” when it determined the amount requested for entertainment should be reduced because that line item did not include that note. However, in our review of the exhibit referred to by Glen, of the thirty-nine line items listed, only three specify that the amount was for “Rayna Only.” Yet some of the unmarked items reflect amounts the parties agree were spent on Rayna alone. Therefore, the absence of the “Rayna Only” notation does not necessarily reflect that those items were not for “Rayna Only.” And further, a line item for “Money Spent on Kids” specifically notes that it includes “Entertainment” expenses for those children. If Rayna’s entertainment expenses included money spent on the children, there would be no need to include a separate line item for entertainment under “Money Spent on Kids.” Moreover, we note that the district court’s determination that the amount should be “divided by four” because “two minor children also lived in the home” does not quite add up. Rayna and two children add up to three, and whether the court also included Glen or the friends Rayna often hosted is unclear from the court’s findings of fact. Either way, the justification does not appear to support the reduction.
¶33 Accordingly, the district court’s reduction of the alimony amount requested for entertainment contradicts not only the direct testimony at trial but also the very exhibit on which the court expressly based its findings. Because the court’s conclusions do not logically follow from and are not supported by the evidence, we determine that this portion of the award is based on clearly erroneous findings of fact, and we therefore remand to the district court for clarification and correction of the matter. See Leppert v. Leppert, 2009 UT App 10, ¶ 8, 200 P.3d 223; Gardner, 2019 UT 61, ¶ 32.
II. Book of Business
¶34 Rayna next opposes the district court’s determination that the book of business “was not a divisible marital asset.” However, to prevail on such a contention, Rayna would need to show that the court clearly abused its discretion, see Talley v. Talley, 739 P.2d 83, 84 (Utah Ct. App. 1987), something she has not done here.
¶35 In dealing with Rayna’s argument that Glen owned a book of business that should be a divisible marital asset, the district court first explained that the alleged book of business, comprising “a client list and the assets under management from these clients,” constituted an “asset” as a legal matter —a determination neither party appears to challenge on appeal. But the court did not stop there, determining next that this “asset” was owned not by Glen but by Employer.
¶36 The court explained its reasoning in over five pages of detailed findings of fact and conclusions of law. Throughout those pages, the district court explained, among other things, that although Glen had extensive experience in his field and a portion of his compensation required him to meet lofty expectations concerning the funds he managed, “[w]hen Glen began work for [Employer], he did not sell a book of business or a client list to [Employer]”; “[n]owhere within [the relevant employment documents] did [Employer] indicate that it was purchasing any client list from Glen or that Glen was selling anything at all to [Employer]”; and “Rayna ha[d] not presented any evidence that Glen sold any client list, client information, or other asset to [Employer] as a condition of his hiring.” Further, Glen “worked as an employee of [Employer]”; “ha[d] been paid a salary . . . as a W-2 employee”; and “expand[ed] the client list” by, in part, “creat[ing] relationships with other . . . employees who advise individuals that they service to place assets under Glen’s management.” The court then noted that often “Glen manages assets owned by numerous individuals and entities with whom he has no personal relationship.”
¶37 The court then described various agreements concerning Glen’s compensation and employment and highlighted portions of those agreements. One read,
All information concerning [c]lients of [Employer], former clients of [Employer], and prospective clients of [Employer] must be treated as confidential and must not be disclosed to anyone outside of [Employer.] . . . [I]n the event Employee’s employment is terminated for any reason whatsoever[,] Employee may not take any records or information referring or relating to [c]lients of [Employer], former clients of [Employer] and prospective clients of [Employer], whether originals or copies, in hard copy or computerized form.
Another read,
Employee may not directly or indirectly use, maintain, take or disclose any Confidential Information, except . . . in the course of carrying out Employee’s duties for [Employer] during Employee’s employment[.] . . . “Confidential Information” . . . includes . . . client relationships and prospective client relationships, client lists and contact information, client information (including but not limited to clients’ past and present financial conditions, investment practices, preferences, activities, objectives, and plans and other client data Employee obtained while in [Employer’s] employ)[.] . . . Employee further expressly agrees that, in the event his or her employment terminates, Employee’s use of Confidential Information, including but not limited to any information referring or relating to clients of [Employer], former clients of [Employer] and prospective clients of [Employer], must immediately cease and that Employee must immediately return, destroy or delete, any Confidential Information whether in hard copy or computerized form, including in any electronic device owned by Employee.
The court then reasoned, “[i]f the clients were clients, relationships, or contracts that Glen owned, he would not be subject to any restrictions with respect to the manner in which he stored, maintained, or utilized any of the client information, either during or after his employment with [Employer]. Similarly, if the client information was owned by Glen, he would not be subject to any restrictions.” Significantly, the court noted that “individuals and entities that own the assets under management have no contractual obligation to continue to use Glen to manage their assets; they are free to select a different . . . adviser [of Employer] at any time.” These individuals had “not contracted with Glen” but instead had “contracted with” Employer. And finally, the court reasoned that “[t]he terms Glen was offered by [Employer] were not negotiated. He did not negotiate higher pay or different terms but simply accepted employment on the terms offered by [Employer]. If Glen owned the book of business[,] he would have been in a position of greater leverage and been able to negotiate with [Employer].” In short, the district court determined that because Glen’s interactions with the book of business did not demonstrate ownership, “Glen [did] not own the book of business.”
¶38 Rayna attacks this determination primarily based on the alleged existence of alternative evidence. First, she asserts that evidence that Glen had some control over the book of business and its fruits and that the book of business included the information of some clients he had obtained before joining Employer demonstrated that Glen owned the book of business. But regardless of whether such evidence was before the district court, it would not contradict the findings the court did make— findings on which it relied to determine that, on the whole, Glen did not own the book of business. And although Rayna contends that “the evidence showed that [Employer] hopes to buy Glen’s book of business when he retires or transitions out of the industry and would facilitate the transfer of all of his clients to another advisor within [Employer],” this argument fails to acknowledge that the district court specifically considered this evidence in its findings of fact and ultimately found that the evidence did not deserve “any weight” because of a “lack of any testimony or other evidence by anyone who actually knew anything about” such a buy-out program. Indeed, “if there is evidence supporting a finding, absent a legal problem—a fatal flaw—with that evidence, the finding will stand, even though there is ample record evidence that would have supported contrary findings.” See Hinds v. Hinds-Holm, 2022 UT App 13, ¶ 28 n.4, 505 P.3d 1136 (cleaned up). And here Rayna has not demonstrated that such a flaw exists.
¶39 Because none of Rayna’s arguments on appeal show that the court clearly abused its discretion in its thorough and record-supported explanation of why Glen did not own the book of business, her contention on appeal is unavailing and we affirm the district court’s determination.
III. Dissipation
¶40 Rayna also contends that the district court erred when it included in the final distribution only half of the amount it determined Glen dissipated and failed to award Rayna any of it. Indeed, the district court found that “the amount of dissipation attributable to [Glen’s affair] is $75,000” and that “[t]hese funds were marital funds, for which Glen was entitled to half and Rayna to half.” But in the next line, the court, in seeming contradiction, stated, “Through dissipation, Glen spent half of $37,500 which Rayna was entitled to and therefore should be added to Glen’s [distribution] column.”
¶41 On appeal, the parties agree that Rayna is owed $37,500 due to Glen’s dissipation of $75,000. But the parties do not agree about the meaning of the court’s order or its associated appendix distributing the marital property. Having viewed both the court’s order, as recited above, and the appendix that purports to effectuate that order, we remand this issue to the district court for clarification.
¶42 Because the parties agree that the full amount of dissipation is $75,000 and that Rayna is thus entitled to $37,500, the only matter for us on appeal is to ensure that the order of the district court reflects that agreement. And it does not appear to do so. The court’s appendix lists three columns: one for the value of a given property item, one for Rayna’s portion of the property, and one for Glen’s portion of the property. In Rayna’s and Glen’s respective columns, a number was entered without parentheses to indicate a positive sum owed to the party, and a number was entered inside parentheses to indicate a sum to be subtracted from the ultimate distribution. For the line-item entry for dissipation, instead of $75,000, the value was listed as only $37,500. More important for our present purposes, Rayna’s column for that line item is empty whereas Glen’s contains $37,500 without parentheses, indicating a positive sum. As we read this entry, it appears that the incorrect dissipation amount was entered into the value, and instead of Rayna being awarded half of that $75,000, the amount of $37,500 was given to Glen. This was error.
¶43 On remand, the district court should correct this error and the associated appendix to indicate without ambiguity that the full amount of dissipation is $75,000 and that Rayna will be awarded $37,500 as her share of that total.[4]
IV. Property Distribution Appreciation
¶44 Rayna lastly contends that the district court “abused its discretion when it refused to award [her] a proportional share of the appreciation that accrued on the marital investment accounts” as she requested in her motion to enforce. She asserts that the court mischaracterized her motion to enforce as a motion to amend and that it accordingly erred in determining that it lacked jurisdiction to provide the relief she requested. On appeal, Rayna appears to maintain that her motion below was nothing more than a motion to enforce the decree; that the court had jurisdiction to enforce its decree; and that in determining that the order she requested would require an amendment (as opposed to mere enforcement), the court inherently “determined the decree did not already offer Rayna a proportional amount of the appreciation.” We agree with the district court that the relief Rayna sought would have required an amendment to the decree and that the court did not have jurisdiction to amend that decree once the notice of appeal had been filed.
¶45 We note that a “trial court is [generally] divested of jurisdiction upon the filing of an appeal.” Ortiz v. Crowther, 2017 UT App 133, ¶ 2, 402 P.3d 34 (per curiam). But a court may still enforce its decree even if an appeal has already been sought.[5] See Cheves v. Williams, 1999 UT 86, ¶ 48, 993 P.2d 191. Accordingly, because “Rayna filed a motion to enforce the decree,” she asserts that the court should have reached the merits of the issue she presented to it. But “[t]he substance of a motion, not its caption, is controlling.” DeBry v. Fidelity Nat’l Title Ins. Co., 828 P.2d 520, 523 (Utah Ct. App. 1992). And here, although Rayna titled her motion as one “to enforce,” the requested relief does not match that title. Cf. CBS Enters. LLC v. Sorenson, 2018 UT App 2, ¶¶ 11–12, 414 P.3d 925.
¶46 The decree instructed Glen “to ‘transfer’ equities valued at the exact amounts set forth.” (Emphasis added.) But in her motion, Rayna requested not only those exact amounts but also “post-trial appreciation over and above the exact figures set forth.” On appeal, Rayna concedes that “the decree said nothing about who should receive the appreciation that accrued” post-trial. Accordingly, we agree with the district court that to award the relief that Rayna sought would require the district court to “read language into” the decree “in a way that modifie[d] or amend[ed]” it. See Mitchell v. Mitchell, 2011 UT App 41, ¶ 5, 248 P.3d 65 (“We interpret a divorce decree according to established rules of contract interpretation.” (cleaned up)); see also Brady v.Park, 2019 UT 16, ¶ 53, 445 P.3d 395 (“If the language within the four corners of the contract is unambiguous, the parties’ intentions are determined from the plain meaning of the contractual language . . . .” (cleaned up)).
¶47 Because Rayna filed her notice of appeal before the district court ruled on her request for post-trial appreciation of the investment distribution, the district court had been divested of jurisdiction to alter the divorce decree in the way Rayna requested. See Ortiz, 2017 UT App 133, ¶ 2. Accordingly, we affirm the district court’s determination.
V. Investment Income
¶48 On cross-appeal, Glen contends that the district court abused its discretion when it did not include in its alimony calculation an amount reflecting Rayna’s ability to earn income from awarded investment accounts and apply that amount toward Rayna’s unmet needs.[6] Initially, Glen asserts that the district court “fail[ed] to consider Rayna’s ability to earn” income from these sources, but in the remainder of his argument, he proceeds to explain why the court’s actual consideration of her ability to earn income from investment accounts is based on unsupported findings or is otherwise unjustified.
¶49 For its part, the district court acknowledged Glen’s argument that Rayna would receive an investable property distribution that could provide “at least” a six percent return. While Utah “caselaw directs district courts to consider all sources of income when determining alimony, it does not dictate that all sources of income be counted as income received”—instead district courts have “broad discretion to treat sources of income as the court sees fit under the circumstances.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 21, 449 P.3d 202. The court then provided three justifications for its determination that “it would be inequitable to include interest, dividend or other unearned income potentially generated from investment assets received in the marital property award.”
¶50 First, the court explained that the “ability to obtain a 6% return is not sufficiently certain for the court to rely on.” It noted the inconsistency of historical returns, Rayna’s discretion to use her distribution for purposes other than investment, and the difficulty of projecting future investment income. Second, the court explained that “[i]t would be inequitable for Glen to be able to keep his share of the investments and retain their income stream to reinvest as he continues to generate professional income, while Rayna would retain only the investments after being compelled to expend her investment income to pay her living expenses.” The court felt that such an order would “wrongly deprive[] Rayna of the full benefit and value of” her distribution and that she should be able to “grow” any investments she would make without the obligation to use that money for providing for her own standard of living. Third, the district court explained that “[i]t was the parties’ regular practice not to spend or live off investment income, but rather to entirely reinvest that income.” Accordingly, the court refrained from applying any amount of potential investment income toward Rayna’s projected earning capacity.
¶51 In determining whether a spouse should receive alimony, the general rule is that a court should first take care of property distribution. See Batty v. Batty, 2006 UT App 506, ¶ 5, 153 P.3d 827 (“[An alimony] evaluation properly takes into account the result of the property division, particularly any income-generating property [the receiving spouse] is awarded, but alimony is not meant to offset an uneven property award. Rather, as a matter of routine, an equitable property division must be accomplished prior to undertaking the alimony determination.”). Then, depending on how the property distribution works out— especially considering income-generating property—the court considers whether alimony will be necessary for a spouse to meet demonstrated needs. See Burt v. Burt, 799 P.2d 1166, 1170 (Utah Ct. App. 1990) (“Alimony is appropriate to enable the receiving spouse to maintain as nearly as possible the standard of living enjoyed during the marriage and to prevent the spouse from becoming a public charge.” (cleaned up)); see also Batty, 2006 UT App 506, ¶ 4 (“In determining alimony, the trial court must consider three important factors: (1) the financial condition and needs of the spouse claiming support, (2) the ability of that spouse to provide sufficient income for him or herself, and (3) the ability of the responding spouse to provide the support. Although a trial court is given considerable discretion in determining an alimony award, failure to consider these factors constitutes an abuse of discretion.” (cleaned up)). And as we held in Eberhard v. Eberhard, 2019 UT App 114, 449 P.3d 202, while the district court must consider all potential sources of income, it is not required to count those sources of income. Id. ¶ 21. This is nothing more than an expression of the rule that a district court has “broad discretion to treat sources of income as the court sees fit under the circumstances.” Id.
¶52 Here, contrary to Glen’s assertion, the district court did, in fact, consider Rayna’s ability to earn income from her distributed investment assets in reaching its determination that she would still require additional alimony to support herself to the level of the marital standard of living. See Dobson v. Dobson, 2012 UT App 373, ¶ 21, 294 P.3d 591 (stating that for the purposes of determining alimony, “the needs of the spouses are assessed in light of the standard of living they had during marriage” (cleaned up)). Given that the district court considered Rayna’s ability to earn income in reaching its determination that she was entitled to alimony, the question before us is whether the circumstances allowed the district court to refrain from counting any future investment income Rayna may receive in its calculation. None of Glen’s arguments attacking the court’s determination persuade us that the court exceeded its discretion here.
¶53 First, Glen argues that the court’s determination that the “ability to obtain a 6% return is not sufficiently certain for the court to rely on” contradicts its other findings. Specifically, he cites a finding that states “Glen’s income has consistently increased” and “[o]ther than general economic uncertainty, there was no evidence at trial that this trend would not continue.” He then claims that this statement contradicts the court’s determination that Rayna would not obtain a return on her investments.
¶54 However, the two findings are not comparable at their roots. Regarding Rayna’s potential income, the court was specifically discussing income resulting from a return on investments; but regarding Glen’s income, the court was noting an increase in his income as a whole, including that income derived from gainful employment and not exclusively income derived from any returns on Glen’s ongoing investments. A projection that Glen’s income as a whole, salary and all, will continue to increase is not incompatible with a determination that a return on investment income is insufficiently certain to rely on.
¶55 As part of this argument, Glen also characterizes an unrelated finding from the court’s ruling as a determination that Rayna’s relevant accounts were “not easily liquidated” and asserts that the court’s statement that Rayna may choose to liquidate a portion of these investments contradicts that finding. But this description of the court’s finding is simply inaccurate— the court noted that the “accounts [were] not liquid,” and it made no statement about whether there would be difficulty in liquidating them. And even if the accounts were difficult to liquidate, it would, again, not be incongruous with the court’s other findings, specifically that Rayna could choose to liquidate, any difficulty notwithstanding.
¶56 Further, Glen asserts that the court unjustifiably determined that both parties should “grow” their investments but that growth on Rayna’s accounts was uncertain. Again, these findings are not incongruous—the district court could reasonably find that a return was uncertain, that requiring Rayna to use any return to provide for her needs would prevent her from increasing the amount invested, and that Rayna deserved the opportunity to have her investment returns be reinvested for potential future growth.
¶57 Second, Glen asserts that the court gave Rayna freedom to reinvest her investment returns while it restricted Glen to using his investment returns to pay for both the taxes owed on his forgiven loans and Rayna’s alimony award. As to the alimony award, we note that Glen has not directed us to anywhere in the record where the district court explained that he must pay for Rayna’s alimony using investment income, and as such, Glen is free to provide for Rayna’s alimony using whatever resources he desires, whether it be his salary, proceeds from a mortgage or other loan, or, indeed, his investment income.
¶58 Third, Glen asserts that the court’s finding that “Lilt was the parties’ regular practice not to spend or live off investment income, but rather to entirely reinvest that income” contradicts its acknowledgment that Glen incurred a tax obligation from the forgiven loans. However, we note that although Glen maintains on appeal that he used the forgivable-loan investment returns to pay tax obligations, Glen has not pointed to the court ever making a finding to that effect, and thus the findings are not inconsistent. Further, although such evidence was before the court, the court also stated that “Glen did not include his own investment income in his Financial Declaration as income available to pay alimony or to otherwise meet his own need.” That fact, the court stated, “demonstrate[d] that neither party considered investment income as income to be spent or expended, but rather as a vehicle to increase savings and net worth.” While a pattern of using investment returns to pay tax obligations may not be completely compatible with a pattern of using returns to “increase savings and net worth,” we do not view this apparent inconsistency as enough to persuade us that the court abused its discretion.
¶59 In sum, Glen has not demonstrated that the court abused its discretion in refusing to count Rayna’s potential investment returns as income toward her ability to meet her living expenses. Accordingly, we affirm the district court on this point.
CONCLUSION
¶60 First, we remand to the district court to apply the correct standard to the evidence regarding investments and savings and to adjust the alimony award based on calculations that account for Rayna’s historical spending on future investments; we also remand to the district court to adjust the alimony award based on calculations that account for Rayna’s historical spending on entertainment. Second, we affirm the district court’s determination that Glen did not own the book of business. Third, we remand to the district court to ensure that Rayna is awarded the $37,500 owed to her due to Glen’s dissipation. Fourth, we affirm the district court’s determination that the relief Rayna requested in her motion to enforce would have required it to amend the decree and that it lacked jurisdiction to do so. And fifth, we affirm the district court’s decision not to include potential investment income in calculating Rayna’s actual income. On remand, we instruct the district court to engage in further proceedings as necessary to effectuate the holdings provided in this opinion.
[1] Justice Diana Hagen began her work on this case as a judge of the Utah Court of Appeals. She became a member of the Utah Supreme Court thereafter and completed her work on the case sitting by special assignment as authorized by law. See generally Utah R. Jud. Admin. 3‑108(4).
[2] Due to the parties’ shared surname, we employ their given names.
[3] The parties are appealing an order from a bench trial. “We view the evidence in a light most favorable to the trial court’s findings, and therefore recite the facts consistent with that standard. However, we present conflicting evidence to the extent necessary to clarify the issues raised on appeal.” Kidd v. Kidd, 2014 UT App 26, n.1, 321 P.3d 200 (cleaned up).
[4] The district court’s view, which we endorse, is that Glen spent $75,000 in marital funds on his affair—not a proper marital purpose. Half of that amount was essentially his, but the half belonging to Rayna should properly be restored to her by Glen.
[5] Notwithstanding this general rule, the lower court may, in addition to dealing with motions to enforce the decree address clerical errors and other mistakes “arising from oversight or omission” that the appellate court asks it to address even after an appeal has been filed. See Utah R. Civ. P. 60(a); see also Cheves v. Williams, 1999 UT 86, ¶ 45, 993 P.2d 191 (“We have also recognized exceptions to [the general] rule, in the interest of preventing unnecessary delay, where any action by the trial court is not likely to modify a party’s rights with respect to the issues raised on appeal, or where the action by the trial court is authorized by rule or statute.” (cleaned up)).
[6] Although the district court did not impute income to Rayna based on investment earnings, it did impute to her some income based on an undisputed amount of earning capacity.
On October 26, 2022, the Maryland Court of Special Appeals ruled against a husband who claimed that the infidelity penalty in a postnuptial agreement between him and his wife was void because it lacked consideration, was unconscionable and was the result of undue influence. Eight years after they married, the wife discovered her husband was engaged in an extramarital affair. As part of the process of reconciliation, the wife asked the husband that, among other things, he enter into a postnuptial agreement that husband would pay $5 million if he engaged in “inappropriate and/or immoral conduct” with his former any new paramour (paramour is a more formal term for an illicit lover of a married person). Husband not only was willing to agree the wife’s multimillion dollar penalty idea, he proposed increasing the penalty to $7 million as a showing of his good faith. Against his lawyer’s advice, husband made the agreement with his wife.
The husband subsequently engaged in another extramarital affair, and so the wife filed for divorce and sought to enforce the $7 million infidelity penalty. Husband objected, but the trial court sided with the wife. Husband then appealed that decision, but the appeals court sided with the wife as well. The court of appeals rejected the husband’s claim that the post-nuptial agreement was not substantively unconscionable where the redistribution of the parties’ assets did not “shock the conscience” of the court even though it created a somewhat imbalanced distribution of assets. The seven million dollar penalty provision in the post-nuptial agreement that was triggered if husband engaged in adultery was not against public policy in the absence of fraud, mistake, duress, or undue influence.
And the court of appeals found that the seven million dollar penalty provision in post-nuptial agreement that was triggered if husband engaged in adultery was not unconscionable given the parties’ assets and that husband controlled whether the provision was triggered. The husband says he will challenge the ruling of the Maryland Court of Special Appeals in the higher Maryland Court of Appeals. If you want to read the decision of the Maryland Court of Special Appeals, I’ve included the link to it below.
Brian E. Arnold and Lauren Schultz, Attorneys for Appellee
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 Prior to their marriage, Robben Ann Oldroyd (Ann) and Farrell Lynn Oldroyd (Farrell) built a home on property owned by Ann. Ann paid for the materials and contractors used in the construction of the home, and Farrell contributed his skills and labor to build the specialty log home. When the parties divorced many years later, a dispute arose regarding their relative interests in the home. This is the third time questions relating to their dispute have come before this court. In the current appeal, we are asked to consider whether the district court erred in awarding Farrell a share of Ann’s premarital equity in the home based on its application of the contribution and extraordinary situation exceptions to the separate-property presumption. We conclude that the contribution exception does not apply to premarital contributions and that the extraordinary situation exception does not apply because Farrell had other means of protecting his alleged interest in the home. Accordingly, we reverse the district court’s ruling and remand with instructions for the court to award the disputed equity to Ann.
BACKGROUND
¶2 This is the third time this matter has come before this court. See Oldroyd v. Oldroyd (Oldroyd I), 2017 UT App 45, 397 P.3d 645; Oldroyd v. Oldroyd (Oldroyd II), 2019 UT App 155, 474 P.3d 467. Each appeal has concerned the parties’ home. Ann purchased the land on which the home was built before the parties were married. Oldroyd I, 2017 UT App 45, ¶ 2. While Ann and Farrell were dating, Ann arranged to have the home built. Id. Ann paid for the costs of materials and construction, but Farrell contributed “supervision, labor, work, expertise, and conceptual direction” for the construction. Id. ¶¶ 2, 4 (quotation simplified). Subsequently, the parties married and lived together in the home, but the land and home remained in Ann’s name alone. Id. ¶ 2.
¶3 While both parties agree that Ann should receive a credit for what she spent on the land on which the home was built, the parties disagree about how the remaining equity in the home should be distributed. Farrell argues that all remaining equity should be shared equally between the parties. Ann, on the other hand, maintains that she should receive a credit for both the amount she spent on the land and the amount she spent on construction costs before the parties divide the remaining equity.[1]
¶4 In its original findings of fact and conclusions of law in the parties’ divorce, the district court found that Farrell’s nonmonetary contributions were “roughly equal” to Ann’s financial contributions and that he had therefore acquired “a separate premarital interest in the improvements on the property.” Id. ¶ 4
(quotation simplified). However, we overturned that determination on appeal because the court “did not explain what legal theory gave rise to that equitable interest.” Id. ¶ 8.
¶5 On remand, the district court again determined that Farrell had a premarital interest in the home but this time premised its ruling on a theory of unjust enrichment. Oldroyd II, 2019 UT App 155, ¶ 4. However, we once again reversed the court’s ruling, this time on the basis that Farrell had never asserted an unjust enrichment claim. Id. ¶¶ 7–9.
¶6 In Oldroyd II, we further explained that Farrell’s pleadings did not raise a claim that he had acquired a premarital interest in the home. Rather, Farrell asserted that because he had “exerted hours and money into the home, including trade work,” he “should be awarded a sum certain from [Ann’s] equity in the home for all the work he has completed on the home, and for value of his trade work that he has performed for investment on the marital home.” Id. ¶ 7 (quotation simplified). In other words, Farrell raised not an equitable claim “for a premarital interest in property,” but “a claim for an equitable award of a portion of [Ann’s] premarital asset.” Id. However, because the district court had not considered equitable bases on which Farrell might be entitled to a share of Ann’s premarital interest, we left open the possibility that the court might determine that such an award was appropriate. Id. ¶ 11 & n.3.
¶7 On remand, the district court, for the third time, awarded Farrell a share of equity in the home. This time, the court recognized that the property was Ann’s premarital asset but concluded that Farrell was entitled to a portion of Ann’s premarital equity based on the contribution exception and the extraordinary situation exception. Ann again appeals.
ISSUE AND STANDARD OF REVIEW
¶8 Ann asserts that the district court erred in awarding Farrell a share of her equity in the home because Farrell’s contributions occurred prior to the marriage and the extraordinary situation exception is not applicable. “We generally defer to a trial court’s categorization and equitable distribution of separate property,” Lindsey v. Lindsey, 2017 UT App 38, ¶ 26, 392 P.3d 968 (quotation simplified), so long as the court’s judgment “fall[s] within the spectrum of appropriate resolutions,” id. ¶ 29.
ANALYSIS
¶9 Historically, we have recognized three equitable exceptions that may justify an award of one spouse’s premarital property to the other spouse: (1) the commingling exception, (2) the contribution exception, and (3) the extraordinary situation exception. See Lindsey v. Lindsey, 2017 UT App 38, ¶ 33, 392 P.3d 968. Only the contribution exception and the extraordinary situation exception are at issue in this case.
¶10 As a threshold matter, we note that it is somewhat unclear from the district court’s discussion whether it was relying on the contribution exception, the extraordinary situation exception, or both exceptions in awarding the disputed funds. The parties’ arguments on appeal primarily concern the applicability of the extraordinary situation exception, and they appear to be operating under the assumption that the court’s decision rested on that exception. However, given that the court’s application of the extraordinary situation exception was based on its determination that Farrell’s premarital contributions made it equitable to award him a share of Ann’s premarital property, we think it appropriate to address both exceptions in our analysis.
I. Contribution Exception
¶11 “Under the contribution exception, a spouse’s separate property may be subject to equitable distribution [upon divorce] when the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property, thereby acquiring an equitable interest in it.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 35, 392 P.3d 968 (quotation simplified). Common examples include a spouse working for the other spouse’s premarital business without taking a salary, see, e.g., Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah Ct. App. 1993), or a couple using marital funds to make improvements to or pay a mortgage on a premarital property, see, e.g., Schaumberg v. Schaumberg, 875 P.2d 598, 601 (Utah Ct. App. 1994). However, as we noted in Oldroyd II, “[p]revious cases addressing equitable division of premarital assets have involved contributions made to those assets during the course of the marriage,” and “Utah courts have not had the opportunity to assess the extent to which one spouse’s premarital contributions to another spouse’s premarital assets may be considered in the context of a divorce court’s equitable division of property.”[2] 2019 UT App 155, ¶ 11 n.3, 474 P.3d 467.
¶12 Having now been presented with the opportunity to consider the applicability of the contribution exception to premarital contributions, we are convinced that it does not apply in this context. Unlike a married person, an unmarried person has no reasonable expectation of any benefit from or entitlement to separate property owned or acquired by their significant other. Here, Farrell chose to assist Ann in building her home without seeking compensation.[3] At that time, even though he may have expected to eventually marry Ann and live in the home with her, he had no guarantee that would happen. “As a general rule, . . . premarital property is viewed as separate property, and equity usually requires that each party retain the separate property he or she brought into the marriage.” Walters v. Walters, 812 P.2d 64, 67 (Utah Ct. App. 1991) (quotation simplified), superseded by statute on other grounds as stated in Whyte v. Blair, 885 P.2d 791 (Utah 1994). Only “where unique circumstances exist” may a trial court “reallocate premarital property as part of a property division incident to divorce.” Id. “Generally, trial courts are . . . required to award premarital property, and appreciation on that property, to the spouse who brought the property into the marriage.” Elman v. Elman, 2002 UT App 83, ¶ 18, 45 P.3d 176.
¶13 Farrell had several options for protecting his interests, which he chose not to take advantage of. First, he could have entered into a contract with Ann requiring her to pay him for his services. Second, he could have negotiated a prenuptial agreement acknowledging his premarital contributions and granting him an interest in the home in case of divorce. Third— though likely an undesirable option given his relationship to Ann—Farrell could have filed a lawsuit bringing a quasi-contract claim, such as unjust enrichment, to obtain compensation for his services. However, the contribution exception is simply not one of the options available where the contributions occurred prior to the parties’ marriage.
II. Extraordinary Situation Exception
¶14 Just as Farrell’s premarital contributions to Ann’s premarital asset cannot support an award to him of Ann’s separate property under the contribution exception, they also cannot support an award under the extraordinary situation exception.
¶15 “The bar for establishing an extraordinary situation is high, traditionally requiring that invasion of a spouse’s separate property is the only way to achieve equity.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 46, 392 P.3d 968 (quotation simplified). “A quintessential extraordinary situation arises when a spouse owns separate property but lacks income to provide alimony.” Id. In that circumstance, “an equitable distribution of the [separate property] would be well within the trial court’s discretion.” Kunzler v. Kunzler, 2008 UT App 263, ¶ 37, 190 P.3d 497 (Billings, J., concurring in part and dissenting in part); see also Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct. App. 1990) (“The court may award an interest in the inherited property to the non-heir spouse in lieu of alimony.”). The doctrine has also been applied in situations where a person did not contribute directly to their spouse’s premarital asset but their contributions to the marital estate allowed their spouse to enhance their own separate assets rather than the marital estate. SeeHenshaw v. Henshaw, 2012 UT App 56, ¶ 20 & n.7, 271 P.3d 837 (affirming an award of premarital ranch property to a wife, despite the fact that the value of the ranch had depreciated during the marriage, because the wife had borne “the financial burdens of the family in order to allow [the husband] to work almost exclusively on the ranch”); Elman v. Elman, 2002 UT App 83, ¶ 24, 45 P.3d 176 (affirming an award of stock in a premarital business to a wife whose income-earning activities allowed her husband to quit his job and devote time to managing and growing his premarital assets rather than contributing to marital assets). Taking on “domestic burdens” to make possible a spouse’s full-time participation in a premarital business may also be an extraordinary situation where the bulk of the business’s value is developed during the marriage. Savage v. Savage, 658 P.2d 1201, 1204 (Utah 1983).
¶16 But none of those examples reflect the situation we have here. Farrell seeks a portion of Ann’s premarital asset as payment for the work he did on the home prior to the couple’s marriage, not because Ann lacks the resources to pay alimony or enhanced her own separate asset during the marriage in lieu of contributing to the marital estate. And as we discussed above, Farrell had several options to protect his financial interests and to be compensated for his contributions to the home before marrying Ann. The fact that he chose not to employ any of these options does not give rise to the type of inequity that can be addressed only through the extraordinary situation exception. As a general matter, “equitable relief should not be used to assist one in extricating himself from circumstances which he has created.” Utah Coal & Lumber Rest., Inc. v. Outdoor Endeavors Unlimited, 2001 UT 100, ¶ 12, 40 P.3d 581 (quotation simplified). Thus, the district court exceeded its discretion in awarding Farrell a portion of Ann’s premarital asset based on the extraordinary situation exception.
CONCLUSION
¶17 Because we conclude that the contribution exception does not apply to premarital contributions to premarital property, that exception cannot be used to award Farrell a portion of Ann’s premarital interest in the home. Moreover, because Farrell had several options for seeking reimbursement for his premarital efforts, which he declined to exercise, awarding him an interest in the home at this stage of the proceedings is not justified under the extraordinary situation exception. Accordingly, we reverse the court’s award of the disputed portion of the home’s equity and remand with instructions to award the disputed equity to Ann.
Julie J. Nelson, Millcreek, Erin B. Hull, Salt Lake City, for appellant
Martin N. Olsen, Beau J. Olsen, Midvale, for appellee
ASSOCIATE CHIEF JUSTICE PEARCE authored the opinion of the Court,
in which CHIEF JUSTICE DURRANT, JUSTICE PETERSEN, JUSTICE HAGEN,
and JUDGE HARRIS joined.
Due to their retirement, JUSTICE HIMONAS and JUSTICE LEE did not
participate herein; JUSTICE DIANA HAGEN and COURT OF APPEALS
JUDGE RYAN M. HARRIS sat.*
[*] JUSTICE DIANA HAGEN became a member of the Court on May 18, 2022 but sat as a visiting judge prior to her confirmation.
ASSOCIATE CHIEF JUSTICE PEARCE, opinion of the Court:
INTRODUCTION
¶1 After litigating their divorce for a year, David Taylor asked his soon-to-be ex-wife, Jill Taylor, to arbitrate. David apparently hoped for an expeditious resolution that would allow him to receive favorable tax treatment of the alimony he was about to pay. After the arbitrator issued his decision, David moved the district court to invalidate the award under section 78B-11-107 of the Utah Uniform Arbitration Act, arguing that the arbitration agreement he proposed was invalid because it was contrary to public policy to arbitrate divorce actions. David alternatively asked the court to vacate the award, arguing that the arbitrator had manifestly disregarded the law. The district court denied David‘s motion.
¶2 The Utah Uniform Arbitration Act does not permit a party who participates in arbitration without objection to then contest an arbitration award by arguing that it is based on an infirm agreement to arbitrate. But even if David was able to contest the award, the arbitration agreement he sought was not invalid. Unless and until the Legislature provides additional guidance, the intersection of the Utah Uniform Arbitration Act and Utah family code permits parties to arbitrate the aspects of a divorce that the Taylors agreed to arbitrate. As for David‘s assertion that the arbitrator manifestly disregarded the law, even if we assume that is still a viable challenge to an arbitration award, David has not shown that the arbitrator manifestly disregarded the law. We affirm the district court.
BACKGROUND
¶3 In August 2017, Jill Taylor filed for divorce from her husband, David Taylor. Jill and David stipulated to joint legal and physical custody of their two children but were unable to agree on, among other things, alimony, child support, and the appropriate division of their assets.
¶4 David wanted to resolve the parties‘ remaining issues by the end of 2018 so that he could avoid changes to the tax treatment of alimony that were slated to take effect the following year. To expedite a resolution, David asked Jill to attend arbitration in lieu of trial. Jill obliged, and the parties signed an arbitration agreement. The agreement provided that the Utah Uniform Arbitration Act (UUAA) would apply. See UTAH CODE §§ 78B-11-101 to -131. The agreement also named a retired district court judge as the arbitrator.
¶5 The parties engaged in an arbitration process that saw the arbitrator meet with each party separately and repeatedly. The arbitrator reviewed various expert reports as well as documents that detailed the parties’ employment history, earnings, and job prospects.
¶6 To determine Jill‘s income, the arbitrator reviewed evidence regarding Jill‘s past employment in finance and pharmaceutical sales. He also reviewed a report David‘s vocational expert prepared that detailed wage estimates for various jobs available to Jill based on Jill‘s qualifications and prior work experience. The arbitrator also spoke with Jill, who explained that she was currently working as an aide in the Park City School District and that she intended to seek employment as an elementary school teacher once she had completed her degree in elementary education.
¶7 After considering the parties‘ positions and submissions, the arbitrator issued an award. Among other things, the arbitrator‘s award calculated alimony, set the amount of child support, and divided the parties‘ assets.
¶8 As part of that decision, the arbitrator estimated Jill‘s future income. The arbitrator concluded that “[Jill] should be allowed to work in the field of her choice—education, and she should be given time to complete her degree.” He calculated Jill‘s income for 2019 – 2021 based on her salary as an aide and her ability to find work during the summer, and for 2022 according to her ability to secure a full-time teaching position once she had completed her degree. As to alimony, the arbitrator awarded Jill spousal support based on the parties‘ current financial situations and spending needs, including Jill‘s tuition costs.
¶9 A few months after the arbitrator issued the award, David moved the district court to correct three mathematical miscalculations. The district court made two of those corrections and entered the corrected award.
¶10 Less than two months later, David changed counsel and moved the district court to invalidate the entire arbitration award pursuant to section 78B-11-107 of the UUAA.[1] David argued that “[a]n arbitration agreement is not valid or binding in the divorce context” for three “well-defined” policy reasons.
¶11 David first claimed that arbitration interfered with a court’s “inherent” and “nondelegable” authority to decide divorce issues. As David saw it, “[b]ecause parties cannot divest a court of jurisdiction by stipulati[on]” or delegation to a third party, it was necessarily true that they could not divest a court of jurisdiction by arbitration.
¶12 David next asserted that the UUAA permits modification of an arbitration award “only in . . . very limited circumstances,” and such a “bar against modif[ication] . . . is flatly against the policy of ensuring that district courts retain ongoing jurisdiction to modify divorce-related rulings.”
¶13 David additionally contended that the UUAA’s limited appeal procedures impermissibly restrict the parties’ statutory right to appeal the arbitrator‘s child support determination.
¶14 Alternatively, David asked the district court to vacate the arbitration award because the arbitrator manifestly disregarded the law—and thus exceeded his authority—when he calculated Jill’s imputed income.[2] David claimed that Utah law requires the arbitrator to consider a list of factors when calculating the parties’ incomes. See UTAH CODE § 78B-12-203(8)(b)(i)–(x). And David asserted that the arbitrator had substituted his “personal view” in place of those factors when he opined that Jill’s income should be based on her desire “to work in the field of her choice.”
¶15 David also argued that the arbitrator manifestly disregarded the law when he included Jill’s tuition costs in the alimony budget. David contended that those costs were “not a part of the parties’ standard of living during the marriage, nor [were they] a ‘need,’” and were thus “the epitome of an unnecessary expense, given that [Jill was] intending to pay to attend school so that she may earn less than she already earns.”
¶16 Jill moved the district court to confirm the arbitration award and enter a decree of divorce.
¶17 A court commissioner heard the parties’ motions. The commissioner denied David’s motion and granted Jill‘s. The commissioner concluded that contrary to David‘s position, public policy supports the arbitration of divorce cases. She reasoned that arbitration does not interfere with a court‘s continued jurisdiction because ―[o]nce the arbitration award is reduced to a Decree of Divorce, the [c]ourt maintains jurisdiction to modify the decree based upon a material and substantial change in circumstances.” The commissioner also concluded that ―waiving the right to appeal is not contrary to law” because parties routinely waive their right to appeal ―when the parties stipulate and a Decree of Divorce is entered.”
¶18 As to David’s claim that the arbitrator had manifestly disregarded the law, the commissioner determined that the arbitrator’s calculation regarding Jill‘s income was ―rational and evidence based.” She explained that Utah law does not require a court to calculate income according to ―the highest level.” Rather, ―[t]he imputation need[ed] to be reasonable and equitable,” and ―[i]t [was] not unreasonable to allow [Jill] to select a job that gives her a decent living rather than maximizing what a vocational evaluator opines.” The commissioner also upheld the arbitrator’s alimony award. The commissioner explained that ―the standard of living during the marriage was such that [Jill] did not need to work full time.” Therefore, ―[t]he fact that tuition was provided so [Jill] could increase her earning potential, and that alimony was actually limited to the same time period as child support, was reasonable and equitable.”
¶19 David asked the district court to overrule the commissioner’s decision and made basically the same arguments he had included in his motion to invalidate or vacate the arbitration award.
¶20 The district court denied David’s request to overrule the commissioner and confirmed the arbitration award. The court held that ―Utah law does not preclude divorces from being arbitrated” for four reasons. The court first determined that ―the plain language of the [UUAA] does not preclude divorce actions from being arbitrated,” and ―had the Utah legislature intended for divorce actions to be precluded from being arbitrated, it would have indicated so.” The court next opined that the same public policies that favor arbitration in the civil context—―just, speedy, and inexpensive outcomes”—also ―support parties being able to resolve their divorce cases in Utah via arbitration.” The court stated that ―[i]n fact, [David] invoked and relied on these policy considerations by proactively requesting to arbitrate this matter . . . as opposed to setting it for trial.” The court further reasoned that ―the plain language of the [UUAA] indicates that district court judges retain jurisdiction and the authority to vacate or amend arbitrations that run afoul of Utah law.” Therefore, the court said, ―[i]t follows that for divorce cases that have been arbitrated, a district court . . . cannot change or amend arbitration awards if [it] merely disagree[s] with the arbitrator’s findings and conclusions” but it can ―vacate or amend arbitration awards that contain provisions that run contrary to established Utah law.” The court finally concluded that even if ―any substantive appellate rights are waived” by participation in arbitration, that waiver ―is not contrary to Utah law, as Utah law indicates that there are various procedures wherein parties may agree to pursue expedited outcomes of their matters in exchange for giving up certain appellate rights.”
¶21 The district court also concluded that the arbitrator had not manifestly disregarded the law. The court determined that ―[the arbitrator]’s method of imputing [Jill]‘s income complied with Utah law.” The district court reasoned that Utah law required the arbitrator to calculate Jill‘s income by considering the relevant statutory factors, which, according to the court, ―do[] not define ’employment potential and probable earnings‘ as being the equivalent of the highest or maximum amount of salary that a party could attempt to obtain” and ―recognize[] that a parties‘ ’employment potential and probable earnings‘ encompass[] more considerations than just salary calculations for any given job.” And the court held that the arbitrator had ―effectively considered and applied the pertinent statutory factors” and ―was not unreasonable” in permitting Jill to work in the field of her choice, which would allow for ―more stable and ongoing” employment than if the arbitrator ―require[d] [Jill] to work a job in a field that she had not been working in for many years.”
¶22 Additionally, the district court opined that “[the arbitrator]‘s alimony determinations” also “complied with Utah law.” The court reasoned that the arbitrator acted in accordance with the statute when he based the alimony award on expenses, such as Jill‘s tuition costs, that “existed at the time of the arbitration.” The district court also noted that the arbitrator had ―limited [David]‘s alimony obligation—i.e., . . . [he] did not order an alimony award for the length of the marriage, nor did [he] order that the alimony award . . . remain the same regardless of [Jill]‘s efforts to obtain employment as a teacher.”
¶23 ―In sum,” the district court concluded, ―[the arbitrator]‘s findings and decisions regarding [Jill]‘s imputed income and the alimony award were informed, reasonable, equitable, and complied with Utah law.” David appeals.
STANDARD OF REVIEW
¶24 ―In reviewing the order of the district court confirming, vacating, or modifying an arbitration award, we grant no deference to the court‘s conclusions of law, reviewing them for correctness.” Softsolutions, Inc. v. Brigham Young Univ., 2000 UT 46, ¶ 12, 1 P.3d 1095; see also Westgate Resorts, Ltd. v. Adel, 2016 UT 24, ¶ 9, 378 P.3d 93 (―When we hear an appeal from a district court‘s review of an arbitration award, . . . we review the district court‘s interpretation of the UUAA . . . for correctness, without deference to its legal conclusions.”).
ANALYSIS
THE DISTRICT COURT CORRECTLY DENIED DAVID‘S
MOTION TO INVALIDATE THE ARBITRATION AWARD
Utah Law Does Not Permit David to Contest the Validity
of the Arbitration Agreement After He Participated in
Arbitration Without Objection
¶25 David asks us to reverse the district court, set aside the arbitration agreement and award, and “order the district court to conduct a regular divorce trial.”
¶26 Section 78B-11-107 of the UUAA, the provision on which David hangs his appeal, states in pertinent part: ―An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.” UTAH CODE § 78B-11-107(1).
¶27 David reads section 78B-11-107 to mean that a matter is not eligible for arbitration if there is “a ground that exists at law or in equity for the revocation of a contract.” David argues that if a matter is not eligible for arbitration, the parties‘ arbitration agreement—and any arbitration award flowing from that agreement—is invalid.
¶28 ―When interpreting a statute, our primary objective is to ascertain the intent of the legislature,” ―[t]he best evidence” of which ―is the plain language of the statute itself.” McKitrick v. Gibson, 2021 UT 48, ¶ 19, 496 P.3d 147 (alteration in original) (citations omitted). ―[W]e read the plain language of the statute as a whole[] and interpret its provisions in harmony with other statutes in the same chapter and related chapters.” State v. Bess, 2019 UT 70, ¶ 25, 473 P.3d 157 (alterations in original) (citation omitted).
¶29 By its plain language, section 78B-11-107 speaks to the “valid[ity], enforceab[ility], and irrevocab[ility]” of an arbitration agreement. See UTAH CODE § 78B-11-107(1). Section 78B-11-107 establishes the standard by which a court may judge—or the parties may contest—the existence of a “valid, enforceable, and irrevocable” arbitration agreement. But while section 78B-11-107 instructs us on how to assess the validity of an arbitration agreement, it does not speak to what to do with an arbitration award.
¶30 Other sections of the UUAA, however, do tell us what to do when a party challenges an arbitration award. Cf. Jenkins v. Percival, 962 P.2d 796, 799–800 (Utah 1998) (explaining that “[s]eparate parts of an act should not be construed in isolation from the rest of the act,” and “constru[ing]” two sections of the UUAA “in tandem so as to give full effect to the intended scope of the Act” (citation omitted)). UUAA section 78B-11-123, for instance, explains that a court must confirm an arbitration award “unless the award is modified or corrected . . . or is vacated” pursuant to the grounds set forth in section 78B-11-124. One of those grounds permits a court to vacate an arbitration award “if[] . . . there was no agreement to arbitrate, unless the person [contesting the award] participated in the arbitration proceeding without raising an objection [as to lack or insufficiency of notice] not later than the beginning of the arbitration hearing.” UTAH CODE § 78B-11-124(1)(e) (emphasis added).
¶31 David does not argue, in the words of section 78B-11124(1)(e), that “there was no agreement to arbitrate.” He instead argues that the arbitration agreement, though existing, is invalid. Stated differently, David contends that section 78B-11-124(1)(e) does not govern his challenge because he had an agreement to arbitrate, just not a valid one. This argument elevates form over function. An argument that there is no arbitration agreement differs in degree, but not kind, from an argument that there is no valid arbitration agreement. Therefore, when a party seeks to set aside an arbitration award by contesting the validity of the arbitration agreement, that claim must be analyzed under the strictures of section 78B-11124(1)(e).
¶32 Importantly, then, if a party participates in arbitration without proper objection, she is unable to challenge the resulting arbitration award for want of a valid arbitration agreement.[3] Section 78B-11-107 is simply not a mechanism that allows a party to see what result she gets in arbitration before deciding to contest the validity of the arbitration agreement.
¶33 David did not object to arbitration. He asked for it. And without proper objection, see id. § 78B-11-124(1)(e), David cannot rely on section 78B-11-107 to invalidate the arbitration award.[4]
Divorce Cases Are Arbitrable
¶34 David lost the chance to contest the arbitration agreement and award when he participated in arbitration without objection, and so we affirm the district court‘s denial of David‘s motion to invalidate. But we recognize that even if we were to reach the merits of David‘s argument, it would still fail.
¶35 David argues that the UUAA and Utah divorce law conflict such that divorce cases are not eligible for arbitration. He claims that family code and case law impose a ―nondelegable duty” on district courts to make and modify final decisions regarding alimony, property division, child support, and custody. David contends that this is incompatible with the UUAA, which, according to David, ―does not allow a court to supplant its own judgment for that of the arbitrator” and ―does not allow ongoing jurisdiction for modification.” And he asks us to resolve this conflict by concluding that the ―more particular” divorce law prevails over ―the general Arbitration Act.” See, e.g., Lyon v. Burton, 2000 UT 19, ¶ 17, 5 P.3d 616 (―[A] statute dealing specifically with a particular issue prevails over a more general statute that arguably also deals with the same issue.”).
¶36 Jill claims there is no conflict between divorce law and the UUAA. As she reads it, ―[t]he plain language of the [UUAA] shows that there is nothing in the statute to indicate that divorce cases should be precluded from arbitration.” Jill also argues, among other things, that the UUAA does not divest a district court of its authority to ensure that arbitration awards are equitable and based in law and that family code expressly preserves a court‘s continuing jurisdiction to modify a divorce decree.
¶37 We begin our analysis ―by looking at the plain language of the statute[s] because it is ‗the best evidence of legislative intent.‘” Rosser v. Rosser, 2021 UT 71, ¶ 42, 502 P.3d 294 (citation omitted). ―Our first undertaking in this regard is to assess the language and structure of the statute[s].” State v. Rushton, 2017 UT 21, ¶ 11, 395 P.3d 92. In so doing, “[w]e presume that the legislature used each word advisedly, and that the expression of one [term] should be interpreted as the exclusion of another . . . .” Bountiful City v. Baize, 2021 UT 9, ¶ 42, 487 P.3d 71 (second alteration in original) (citation omitted) (internal quotation marks omitted).
¶38 The UUAA governs the arbitration process in Utah. See UTAH CODE § 78B-11-101 to -131. It “applies to any agreement to arbitrate made on or after May 6, 2002.”[5] UTAH CODE § 78B-11-104(1) (emphasis added). The UUAA further states that “[a]n agreement . . . to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.” Id. § 78B-11-107(1) (emphasis added). More simply put, the UUAA applies to “any agreement to arbitrate” “any existing or subsequent controversy arising between the parties to the agreement.” Id. §§ 78B-11-104(1), 107(1) (emphases added); see also Miller v. USAA Cas. Ins. Co., 2002 UT 6, ¶ 33, 44 P.3d 663 (“Under the [UUAA], parties can agree to arbitrate any controversy.”). The UUAA does not expressly exempt any action or issue, including those related to divorce, from its provisions. Thus, by the UUAA‘s plain language, the Taylors‘ agreement to arbitrate certain aspects of their divorce—alimony, property division, and child support—falls into the category of “any agreement to arbitrate.”
¶39 Neither Utah‘s family code nor case law, moreover, squarely addresses the arbitrability of divorce issues. Utah Code section 30-3-10.9—the only section of our family code in which the word “arbitration” appears—states that divorcing parents must include in their parenting plan “[a] process for resolving disputes,” such as “counseling,” “mediation or arbitration by a specified individual or agency,” or “court action.” UTAH CODE § 30-3-10.9(3)(a)–(c). That section also states that “the district court has the right of review from the dispute resolution process.” Id. § 30-3-10.9(4)(f). But while the code seemingly allows divorcing parties to submit “future disputes” over the provisions of a parenting plan to non-binding arbitration, it does not explicitly forbid—or permit—parties from agreeing to arbitrate their divorces.
¶40 David argues that plain language, by itself, does not answer the question. And he credibly points to sections of Utah family law that seem to conflict with the provisions of the UUAA dealing with vacatur and modification. He argues that these conflicts require us to conclude that it is contrary to public policy for divorcing parties to submit their alimony, property division, child support, and custody-related disputes to arbitration.
¶41 We take David‘s point. A plain language look at the UUAA and our family code spotlights two statutory schemes that do not speak to each other. The Legislature could have spelled out, either in the UUAA or our family code, if, when, and what portions of a divorce may be submitted to arbitration. It did not. But that does not end our inquiry.
¶42 ―If,” after looking at plain language, ―there is doubt or uncertainty as to the meaning or application of the provisions” at issue, Osuala v. Aetna Life & Cas., 608 P.2d 242, 243 (Utah 1980), ―we attempt to construe [the provisions] in harmony, and such that ‗effect is given to every provision,‘” I.M.L. v. State, 2002 UT 110, ¶ 26, 61 P.3d 1038 (citations omitted); see also Field v. Boyer Co., 952 P.2d 1078, 1081 (Utah 1998) (―[I]t is the Court‘s duty to harmonize and reconcile statutory provisions, since the Court cannot presume that the legislature intended to create a conflict.” (citation omitted)). We accomplish this task by ―analyz[ing] the [statutes] in [their] entirety, in the light of [their] objective, and . . . in accordance with the legislative intent and purpose.” Osuala, 608 P.2d at 243 (footnote omitted). In other words, we try to read the statutes together in a way that best keeps faith with what the Legislature wanted those statutes to accomplish.
The UUAA Provisions Limiting Judicial Review Did Not Prevent the Taylors from Submitting Their Divorce Issues to Arbitration
¶43 The first area of potential conflict David highlights is the ability of the district court to disregard an arbitration award before it is entered. David contends that our divorce law demands that a district court retain final authority to reject an agreement between the parties or input by a third party ―based on equity.”[6] David claims that the UUAA, in contravention of divorce law, confines a district court‘s authority to disturb an arbitration award to the ―limited circumstances” laid out in section 78B-11-124. In other words, David argues that in the divorce context, an agreement between the parties or input by third parties can only constitute a recommendation to the district court, whereas under the UUAA, they are binding and difficult to set aside.
¶44 As an initial matter, we note the strong state policies underlying both the UUAA and Utah divorce law. As to arbitration, our law has long ―favor[ed] arbitration as a speedy and inexpensive method of adjudicating disputes” and ―easing court congestion.” Robinson & Wells, P.C. v. Warren, 669 P.2d 844, 846 (Utah 1983); accord Giannopulos v. Pappas, 15 P.2d 353, 356 (Utah 1932). We have held that ―judicial review of arbitration awards should not be pervasive in scope or susceptible to repetitive adjudications,” but rather ―strictly limited to the statutory grounds and procedures for review.” Robinson & Wells, 669 P.2d at 846; see also Buzas Baseball, Inc. v. Salt Lake Trappers, Inc., 925 P.2d 941, 947 (Utah 1996) (―A trial court faced with a motion to vacate or modify an arbitration award is limited to determining whether any of the very limited grounds for modification or vacatur exist.”); Duke v. Graham, 2007 UT 31, ¶ 8, 158 P.3d 540 (―A district court‘s review of an arbitration award should be narrowly confined to those grounds established by statute.”). ―As a general rule,” therefore, ―an arbitration award will not be disturbed on account of irregularities or informalities in the proceeding or because the court does not agree with the award as long as the proceeding was fair and honest and the substantial rights of the parties were respected.” DeVore v. IHC Hosps., Inc., 884 P.2d 1246, 1251 (Utah 1994).
¶45 Utah family law is likewise driven by strong public policy. Foremost among these is the bedrock understanding that equity should prevail when a marriage dissolves. See UTAH CODE § 30-3-5(1) (2018), amended by and renumbered as UTAH CODE § 30-3-5(2) (2022) (―When a decree of divorce is rendered, the court may include in the decree of divorce equitable orders.” (emphasis added)); see also Iverson v. Iverson, 526 P.2d 1126, 1127 (Utah 1974) (―[A]ll aspects of proceedings in divorce matters are equitable . . . .”); Lord v. Shaw, 665 P.2d 1288, 1291 (Utah 1983) (―A divorce action is highly equitable in nature . . . .”). When making divorce-related decisions, therefore, a district court is generally given ―broad discretionary powers” to craft an equitable result. Despain v. Despain, 610 P.2d 1303, 1305–06 (Utah 1980); see also UTAH CODE § 30-3-5(8)(e) (2018), amended by and renumbered as UTAH CODE § 30-3-5(10)(d) (2022) (requiring a court to ―consider all relevant facts and equitable principles” in determining alimony).
¶46 David correctly points out that we have held that an agreement between the parties serves only as a recommendation to the district court. See, e.g., Callister v. Callister, 261 P.2d 944, 946, 948– 49 (Utah 1953) (―[A]n agreement or stipulation between parties to a divorce suit . . . is not binding upon the court in entering a divorce decree, but serves only as a recommendation. . . . [T]he law was intended to give courts power to disregard the stipulations or agreements of the parties in the first instance and enter judgment . . . as appears reasonable . . . .”). And he contends that ―[b]ecause parties cannot divest a court of jurisdiction by stipulating to an agreement, it follows that they cannot divest a court of jurisdiction by delegating that task to . . . an arbitrator.”
¶47 Those cases stand for the proposition that parties cannot insulate stipulations they make regarding property division and alimony from judicial review. And we stand by that law. But we conclude that, in the absence of an express statutory prohibition, when divorcing parties make an informed and voluntary decision to submit their alimony and property-related disputes to a neutral third-party arbitrator under the UUAA, the strong policies allowing parties to choose to arbitrate their disputes overtake those policies favoring more robust judicial review.[7]
¶48 Arbitrations concerning alimony and division of marital property do not differ substantially from the types of cases that are routinely arbitrated. See, e.g., HITORQ, LLC v. TCC Veterinary Servs., Inc., 2021 UT 69, 502 P.3d 281 (compelling arbitration of a claim for dissolution of a veterinary clinic); Harold Selman, Inc. v. Box Elder Cnty., 2011 UT 18, 251 P.3d 804 (concluding that the Ombudsman‘s Office has statutory authority to arbitrate an ownership dispute between private property owners and Box Elder County); Shipp v. Peterson, 2021 UT App 25, 486 P.3d 70 (reinstating an arbitration award granting life insurance proceeds to listed beneficiary). In both camps of cases, adult parties—often aided by counsel—agree to have a neutral third party decide what is equitable. The policies favoring equitable decision-making that animate our family law do not disappear, but that work is outsourced to a neutral third party. And safeguards remain in place to revisit the outcome of the arbitration if the process is, among other things, tainted by fraud, corruption, or misconduct, or if the arbitrator exceeds her authority. See UTAH CODE § 78B-11-124(1).
¶49 Put another way, while we continue to recognize our state‘s policy in favor of ensuring that an arbitration award addressing alimony or marital property is equitable, we do not find that policy to be so strong as to require us to treat divorcing spouses— particularly those represented by counsel—differently from other parties who want to arbitrate their disputes. Therefore, until the Legislature amends one or the other of those statutory schemes to provide otherwise, we see no reason to revoke the trust we place in arbitrators to decide a property dispute between two parties, dealing at arm‘s length and capable of contracting, just because those parties are (or were) married. We thus conclude that nothing in the Utah family code prevents parties from agreeing to arbitrate their alimony and property disputes under the UUAA. Nor does any provision of the family code conflict with allowing the parties to agree to limit judicial review of the resulting award to those grounds given in section 78B-11-124 of the UUAA. See UTAH CODE § 78B-11-124(1).
¶50 Other courts have reached similar conclusions. The Supreme Court of New Jersey, for example, has concluded that “parties may bind themselves in separation agreements to arbitrate disputes over alimony.” Faherty v. Faherty, 477 A.2d 1257, 1262 (N.J. 1984). The court explained, “It is fair and reasonable that parties who have agreed to be bound by arbitration in a formal, written separation agreement should be so bound. Rather than frowning on arbitration of alimony disputes, public policy supports it.” Id. In line with this reasoning, the Faherty court held that “[a]s is the case with other arbitration awards,” an award addressing alimony is subject to the limited judicial review provided in its arbitration act. Id.
¶51 The Idaho Court of Appeals has, for many of the same reasons, decided that when divorcing parties submit their property-related disputes to arbitration, “judicial review of the award . . . is distinctly limited” to the statutory grounds provided in its arbitration act. Hughes v. Hughes, 851 P.2d 1007, 1009 (Idaho Ct. App. 1993). The Hughes court saw no difference between arbitration agreements between spouses and arbitration agreements between other parties who “have decided to substitute the final and binding judgment of an impartial entity conversant with the business world for the judgment of the courts.” Id. (citation omitted). And it held these agreements to the same standard: “Having chosen to submit the property division question to an arbitrator for resolution, the parties limited their recourse for judicial review.” Id. at 1009–10; see also Kelm v. Kelm, 623 N.E.2d 39, 41–42 (Ohio 1993) (pointing out its past “recogni[tion]” of “the validity and enforceability of agreements to arbitrate in many areas of the law,” as well as “the benefits of arbitration,” and “see[ing] no reason why” agreements to arbitrate domestic relations matters, including agreements to arbitrate alimony, “should not be included”); Miller v. Miller, 620 A.2d 1161, 1163–64 (Pa. Super. Ct. 1993) (determining that “parties should be able to settle their domestic disputes out of court,” and that “parties who have agreed to arbitrate should be bound by that decision”); Kovacs v. Kovacs, 633 A.2d 425, 432 (Md. Ct. Spec. App. 1993) (holding that arbitration awards regarding “alimony and property issues, if otherwise valid,” may ―be adopted without further consideration”); Bandas v. Bandas, 430 S.E.2d 706, 708 (Va. Ct. App. 1993) (noting that ―[n]owhere in the Uniform Arbitration Act, as adopted by Virginia, are courts required to review an arbitration agreement in a domestic relations context with more scrutiny than other disputes” and thus restricting judicial review of arbitration agreements in domestic relations cases to ―the standard set forth” in its Uniform Arbitration Act).
¶52 While we wait for further legislative clarity, we join these jurisdictions in concluding that divorcing parties may agree to subject their alimony and marital property disputes to the benefits and limitations of the UUAA.
¶53 The outcome changes in the child support and custody context. By statute, these issues are determined by the best interest of the child. See UTAH CODE § 30-3-5(5)(a) (2018), amended by and renumbered as UTAH CODE § 30-3-5(7)(a) (2022); id. § 78B-12-210(3). We have stated that parties may not agree to divest a district court of its responsibility to ensure that decisions concerning child support and custody are in the best interests of the child.
¶54 In In re E.H., for example, ―[w]e granted certiorari to consider the custody of a young boy, E.H.,” in light of a stipulation between E.H.‘s biological mother and adoptive parents ―assigning a psychologist the task of making recommendations concerning E.H.‘s best interests.” 2006 UT 36, ¶¶ 1, 3, 137 P.3d 809. We considered, specifically, ―whether the stipulation . . . was an impermissible delegation of authority to a third party.” Id. ¶ 3.
¶55 We explained that while ―the law favors the settlement of disputes,” id. ¶ 20, ―there are certain agreements that so compromise the core responsibilities of the court that they cannot be honored,” id. ¶ 21. And we concluded,
The stipulation between the mother and the adoptive parents did not unconstitutionally strip the district court of core functions because the district court did not surrender to [the psychologist] its authority to enter a custody order. Rather, the court merely agreed to follow a process for the determination of the best interests of E.H. and to uphold this process so long as it adequately served that end.
Id. We thus ―ultimately upheld the stipulation because the parties‘ arrangement ‗adequately served [the] end‘ of determining E.H.‘s best interest and the district court had ‘satisf[ied] itself that [the psychologist]‘s recommendations were properly arrived at.‘” R.B. v. L.B., 2014 UT App 270, ¶ 14, 339 P.3d 137 (alterations in original) (quoting In re E.H., 2006 UT 36, ¶¶ 21, 28). ―[We] further held that even when the parties in a custody dispute agree to be bound by an evaluator‘s findings, the district court retains ‗the ultimate authority to preside over the proceedings, to satisfy itself that [the evaluator‘s] recommendations were properly arrived at, and to enter a final order.‘” Id. (second alteration in original) (quoting In re E.H., 2006 UT 36, ¶ 28).
¶56 Following In re E.H.‘s lead, the court of appeals has concluded ―that parties cannot stipulate away the district court‘s statutory responsibility to conduct a best-interest analysis.” Id. ¶ 16. The court of appeals observed that ―Utah law has recognized that in the context of a child‘s well-being, interests in finality rank below the child‘s welfare,” and that ―[t]he same logic applies to judgments predicated on stipulated agreements.” Id. ¶ 17; see also Cox v. Hefley, 2019 UT App 60, ¶ 26, 441 P.3d 769 (reaffirming R.B.).
¶57 There is another reason why, absent express legislative authorization, arbitration awards dealing with child custody and support must be seen as non-binding recommendations to the district court. ―Arbitration agreements are creatures of contract.” Createrra, Inc. v. Sundial, LC, 2013 UT App 141, ¶ 8, 304 P.3d 104. As such, arbitration agreements ―bind only those who bargain for them.” Bybee v. Abdulla, 2008 UT 35, ¶ 8, 189 P.3d 40. And Utah law does not permit a parent to bargain away their child‘s right to have a district court decide the child‘s best interests.
¶58 Under Utah law, for example, ―a parent cannot release his or her minor child‘s prospective claims for negligence.” Rutherford v. Talisker Canyons Fin. Co., 2019 UT 27, ¶ 15, 445 P.3d 474 (reaffirming our decision in Hawkins ex rel. Hawkins v. Peart, 2001 UT 94, 37 P.3d 1062, superseded by statute, UTAH CODE § 78B-4-201 to -203, as stated in Penunuri v. Sundance Partners, Ltd., 2013 UT 22, 301 P.3d 984). Taking cues from ―Utah law provid[ing] various checks on parental authority to ensure a child‘s interests are protected,” and from the absence of any law ―granting parents in Utah a general[,] unilateral right to compromise or release a child‘s existing causes of action without court approval or appointment,” we reasoned that preinjury releases for negligence signed by a parent on behalf of a minor child violate ―public policies favoring protection of minors with respect to contractual obligations.” Hawkins, 2001 UT 94, ¶¶ 11, 12.
¶59 The Superior Court of Pennsylvania has voiced similar concerns about divorcing parents contracting away a child‘s right to have a court review decisions affecting the child‘s best interest. In line with these concerns, that court concluded that a trial court must be able to ensure that an arbitrator‘s custody determinations are in the best interest of the child. Miller v. Miller, 620 A.2d 1161 (Pa. Super. Ct. 1993). The superior court opined,
Parties to a divorce action may bargain between themselves and structure their agreement as best serves their interests. They have no power, however, to bargain away the rights of their children. Their right to bargain for themselves is their own business. They cannot in that process set a standard that will leave their children short. Their bargain may be eminently fair, give all that the children might require and be enforceable because it is fair. When it gives less than required or less than can be given to provide for the best interest of the children, it falls under the jurisdiction of the court‘s wide and necessary powers to provide for that best interest. It is at best advisory to the court and swings on the tides of the necessity that the children be provided. To which the inter se rights of the parties must yield as the occasion requires.
Id. at 1165–66 (quoting Knorr v. Knorr, 588 A.2d 503, 505 (Pa. 1991) (addressing agreements between parents concerning child support)); see also Kovacs, 633 A.2d at 431 (concluding that “the chancellor‘s responsibility to ensure the best interests of the children supersedes that of the parents” and requiring a chancellor to determine that an arbitrator‘s decision is in the best interests of the child before entering it).
¶60 The Supreme Court of New Jersey has also recognized that “[t]he right of parents to the care and custody of their children is not absolute.” Fawzy v. Fawzy, 973 A.2d 347, 358 (N.J. 2009) (alteration in original) (citation omitted). “Indeed,” the court noted, “the state has an obligation, under the parens patriae doctrine, to intervene where it is necessary to prevent harm to a child.” Id. at 358–59 (footnote omitted). Relying on this doctrine, the court concluded that while “the right to arbitrate child custody and parenting time serves an important family value,” the review of an arbitration award is subject to judicial review beyond “the confines of [New Jersey‘s] Arbitration Act” when “there is a claim of adverse impact or harm to the child.” Id. at 360–61. Notably, New Jersey‘s harm standard poses “a significantly higher burden than a best-interests analysis,” requiring a party to allege a level of harm akin to “grant[ing] custody to a parent with serious substance abuse issues or a debilitating mental illness.” Id at 361.
¶61 We note that some states have expressed these concerns and come out differently. The Supreme Court of South Carolina, for instance, has concluded that ―arbitration of children‘s issues is not permitted.” Singh v. Singh, 863 S.E.2d 330, 334 (S.C. 2021). The Singh court explained that ―[l]ongstanding tradition of this state places the responsibility of protecting a child‘s fundamental rights on the court system,” and that ―[p]arents may not attempt to circumvent children‘s rights to the protection of the State by agreeing to binding arbitration with no right of judicial review.”8 Id.; see also Kelm, 749 N.E.2d at 301–03 (allowing arbitration of child support issues, but not of custody issues because it ―advances neither the children‘s best interests nor the basic goals underlying arbitration”).
¶62 Harmonizing the statutory schemes and recognizing the strong policies underlying the protection of children and the UUAA leads us to a decision like that reached in Pennsylvania and New Jersey—agreements to arbitrate child support and custody are not contrary to public policy. But any award that flows from these agreements must be in the best interests of the child. A district court retains the authority to ensure that an arbitration award addressing child support or custody satisfies the best-interests standard and may hear a challenge to the arbitration award on that basis.9
A Court Retains Continuing Jurisdiction to Modify an Arbitration Award in a Divorce Case Pursuant to Utah Code Section 30-3-5
¶63 David also argues that the UUAA and Utah divorce law conflict in another area—modification. David contends that under the UUAA, a district court can modify an arbitration award ―only under limited circumstances involving minor procedural, mathematical, or factual errors, and can only do so within ninety
8 The Singh decision was also based on the court‘s reading of its Alternative Dispute Resolution Rules, which, the court concluded, ―implicitly limit[ed] binding arbitration to issues of property and alimony.” 863 S.E.2d at 333.
9 Had David argued that the arbitrator‘s decision on child support was not in the best interests of the children, our conclusion might have triggered a remand. But at no point—either before the district court or on appeal—has David argued that the arbitration award was contrary to the children‘s best interests.
days.” ―But in the divorce context, district courts must retain jurisdiction forever to enter modified decrees ‘as is reasonable and necessary‘ or ‘based on a substantial change in circumstances,‘ or when the ‘best interests‘ of the child so require.” (Citations omitted.) (Internal quotation marks omitted.)
¶64 As David points out, the UUAA indicates that a court may modify or correct an arbitration award for only those reasons it sets forth. See UTAH CODE § 78B-11-125. Family code, on the other hand, provides that a district court retains continuing jurisdiction to modify any divorce-related orders. Specifically, Utah Code section 30-3-5 states that a court ―has continuing jurisdiction to make subsequent changes or new orders for the custody of a child and the child‘s support, maintenance, health, and dental care, and for distribution of the property and obligations for debts as is reasonable and necessary.” Id. § 30-3-5(3) (2018), amended by and renumbered as UTAH CODE § 30-3-5(5) (2022); see also id. § 78B-12-210(9)(a) (2008), amended by UTAH CODE § 78B-12-210 (2022). Under that same section, a court also ―has continuing jurisdiction to make substantive changes and new orders regarding alimony based on a substantial material change in circumstances not foreseeable at the time of the divorce.” Id. § 30-3-5(8)(i)(i) (2018), amended by and renumbered as UTAH CODE § 30-3-5(11)(a) (2022) (stating that a court has continuing jurisdiction to make such changes and new orders ―based on a substantial material change in circumstances not expressly stated in the divorce decree or in the findings that the court entered at the time of the divorce decree”). Under our family code, therefore, a divorce court ―retains continuing jurisdiction over the parties, and power to make equitable redistribution or other modification of the original [divorce] decree as equity might dictate.” Despain, 610 P.2d at 1305; see also Potts v. Potts, 2018 UT App 169, ¶ 13, 436 P.3d 264 (―[D]ivorce courts are well established as courts of equity that retain jurisdiction over the parties and subject matters for the purposes equity may demand.” (citation omitted)).
¶65 We considered the trial court‘s powers to modify a divorce decree in Barraclough v. Barraclough, 111 P.2d 792 (Utah 1941) (per curiam). There, a divorcing couple ―entered into a written stipulation” setting alimony. Id. at 792 (internal quotation marks omitted). The trial court granted the divorce and based the alimony award on the parties‘ stipulation. Id. at 792–93. Five months later, one of the parties ―petitioned the lower court to modify the decree as to alimony.” Id. at 793 (internal quotation marks omitted). The trial court denied the petition, ―determin[ing] that the ‘stipulation‘ . . . constituted ‘a lump sum, complete and final settlement of all alimony . . ., and that such settlement ha[d] become a final judgment as to alimony.” Id.
¶66 We reversed the trial court. We explained,
In a divorce action the trial court should make such provision for alimony as the present circumstances of the parties warrant, and any stipulation of the parties in respect thereto serves only as a recommendation to the court. If the court adopts the suggestion of the parties it does not thereby lose the right to make such modification or change thereafter as may be requested by either party based on some change in circumstances warranting such modification.
Id.; see also Jones v. Jones, 139 P.2d 222, 224 (Utah 1943) (concluding that the ability of a divorce court to modify an alimony award based upon the parties‘ stipulation ―can no longer be considered an open question in this State” under Barraclough).
¶67 The court of appeals has relied, in part, on our holding in Barraclough to conclude that even a ―non-modification provision [does] not divest the court of its continuing jurisdiction” to modify a divorce decree. Sill v. Sill, 2007 UT App 173, ¶ 9, 164 P.3d 415. In Sill v. Sill, ―the parties reached a stipulation and property settlement agreement,” under which the parties agreed to monthly alimony and ―the division of real and personal properties.” Id. ¶ 3. ―The trial court approved the Agreement and incorporated its provisions into the parties‘ . . . divorce decree.” Id. ¶ 4. Later, one of the parties sought to modify the decree by ―reduc[ing] the amount of alimony he agreed to pay.” Id. ¶ 5. The trial court dismissed the petition, concluding that ―both parties had waived the right to modify any terms of the Agreement.” Id. ¶¶ 5–6.
¶68 To examine the effect of the parties‘ non-modification provision, the court of appeals first turned to Utah Code section 303-5 and noted ―the significance of the legislature‘s inclusion of the adjective ‗continuing‘ to refer to the court‘s jurisdiction.” Id. ¶ 10. The court next turned to supreme court case law, noting that we had repeatedly held that ―parties cannot by contract divest a court of its statutorily granted subject matter jurisdiction to make alimony modifications, even if the parties intend the alimony provisions to be nonmodifiable.” Id. ¶¶ 12–14, 17. ―[C]onsidering section 30-3-5[]‘s continuing jurisdiction language and Utah case law,” the court of appeals determined that the trial court had erred when it dismissed the petition to modify. Id. ¶ 17; see also Cox, 2019 UT App 60, ¶ 30 (concluding under Sill, that a ―third party neutral‘s decisions regarding parent-time” are subject to modification).
¶69 Harmonizing the statutory schemes, we conclude that even when parties agree to arbitrate their divorce-related dispute, they are entitled to seek modification of the resulting award ―as is reasonable and necessary,” UTAH CODE § 30-3-5(3) (2018), or ―based on a substantial material change in circumstances,” id. § 30-3-5(8)(i)(i) (2018).[8]
¶70 To summarize, divorcing parties may agree to submit their alimony, property, child support, and custody-related disputes to arbitration. Judicial review of a resulting arbitration award, moreover, is limited to only those grounds provided in the UUAA, except when the arbitration award covers child support and custody. In those cases, a district court has the independent responsibility to ensure that the award is in the best interests of the child. Once an award is entered in the form of a decree of divorce, the entire decree is subject to modification as Utah Code section 30-3-5 provides.
¶71 We emphasize that the conclusions we reach today follow from our best efforts to harmonize two statutory schemes that do not talk directly to each other. And we recognize that our Legislature is best equipped to break the silence between the statutes. We note in this regard that the Uniform Law Commission has approved a Uniform Family Law Arbitration Act (UFLAA), which has been adopted in a handful of states. See Family Law Arbitration Act, UNIF. L. COMM‘N, https://www.uniformlaws.org/committees/community-home?CommunityKey=ddf1c9b6-65c0-4d55-bfd7-15c2d1e6d4ed (last visited May 13, 2022); see also MONT. CODE ANN. § 40-16-101 to -128; N.D. CENT. CODE § 32.29.4.-01 to -26; HAW. REV. STAT. § 658j-1 to -27; ARIZ. R. FAM. LAW P. 67.2.
¶72 Under the UFLAA, parties may agree to submit any ―family law dispute” to arbitration, UNIF. FAM. L. ARBITRATION ACT § 5, with a few exceptions, id. § 3(b) (clarifying that the UFLAA ―does not authorize an arbitrator” to grant a divorce, terminate parental rights, grant an adoption or guardianship, or determine the status of a child in need of protection). As to the grounds on which a court can modify or vacate an arbitration award prior to confirmation, the UFLAA tracks the UUAA, compare id. §§ 17, 18(a), 19(a)(1)–(7), with UTAH CODE §§ 78B-11-121(1), -124(1)(a)–(f), -125(1), with one important distinction—a court can modify or vacate an award ―determin[ing] a child-related dispute” when the award ―is contrary to the best interests of the child,” UNIF. FAM. L. ARBITRATION ACT § 19(b), (c). A court can also modify an award ―based on a fact occurring after confirmation” in accordance with the arbitration agreement or state law. Id. § 22.
¶73 Other states have enacted their own statutes authorizing family law arbitration. See MICH. COMP. LAWS § 600.5071; N.C. GEN. STAT. § 50-41(a); N.M. STAT. ANN. § 40-4-7.2(A). In states with statutes allowing arbitration of a child-related dispute, an award on the topic is generally subject to modification or vacatur when the award is adverse to the best interests of the child. See GA. CODE. ANN. § 19-9-1.1; TEX. FAM. CODE ANN. § 153.0071(b); MICH. COMP. LAWS § 600.5080(2); N.C. GEN. STAT. § 50-54(a)(6); N.M. STAT. ANN. § 40-4-7.2(T); see also COLO. REV. STAT. § 14-10-128.5 (authorizing ―[a]ny party . . . to move the court” to conduct a ―de novo hearing” to modify an arbitration award ―concerning the parties‘ minor or dependent children”); but see FLA. STAT. § 44.104(14) (prohibiting parties from arbitrating ―any dispute involving child custody, visitation, or child support”). These statutes also generally allow for modification of a confirmed arbitration award in accordance with state rules or statutes. See, e.g., MICH. COMP. LAWS § 600.5080(3); N.C. GEN. STAT. § 50-56.
THE ARBITRATOR DID NOT MANIFESTLY
DISREGARD THE LAW
¶74 David next argues that ―[a]t a minimum, the award should be vacated because the arbitrator exceeded his authority by manifestly disregarding Utah law.” David claims that the arbitrator manifestly disregarded the law when he imputed Jill‘s income and included Jill‘s tuition costs in the alimony award.
¶75 Our case law has recognized that a court may vacate an arbitration award ―if [the arbitrator‘s] decision demonstrates a manifest disregard of the law.” Westgate Resorts, Ltd. v. Adel, 2016 UT 24, ¶ 10, 378 P.3d 93. But we have since called Westgate’s conclusion into question. See Ahhmigo, LLC v. Synergy Co. of Utah, 2022 UT 4, 506 P.3d 536.
¶76 In Ahhmigo, we explained that the manifest disregard standard had its genesis in United States Supreme Court dicta. Id. ¶ 26 (discussing Wilko v. Swan, 346 U.S. 427, 436–37 (1953)). In later cases, SCOTUS declined to comment on the standard‘s survival, see Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576, 585–87 (2008); Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672 n.3 (2010), ―creat[ing] a split among jurisdictions as to whether the manifest disregard standard remains a viable ground for vacatur” under the Federal Arbitration Act, Ahhmigo, 2022 UT 4, ¶ 28 (citing cases).
¶77 Ahhmigo also addressed the standard‘s precarious position in our case law. Id. ¶¶ 31–36. We observed that ―we have never applied the standard to vacate an arbitration award.” Id. ¶ 37. We also explained that ―we have been less than clear when we have talked about the link between the manifest disregard standard and the UUAA,” id. ¶ 38—that is, ―we [could not] say whether the manifest disregard standard operates as only a gloss on section 78B-11124(1)(d) of the UUAA, or whether it is a standalone ground on which a court may vacate an arbitration award,” id. ¶ 40. Looking to ―each of the grounds for vacatur” under the UUAA, we ―wonder[ed] if perhaps manifest disregard of the law is better thought of as a way of sussing out whether the arbitrator exceeded her authority in a manner that deprived the parties of the benefit of their bargain.” Id. ¶¶ 41, 43. ―At the very least,” we ―view[ed] with suspicion a standard that permits a party to ask a district court to vacate an award based upon what is, in essence, an argument that the arbitrator misapplied the law dressed up as an argument that the arbitrator disregarded the law.” Id. ¶ 45.
¶78 Ahhmigo notwithstanding, neither party has asked us to abandon the manifest disregard standard. And so we proceed to apply the standard under our case law as it currently sits.
¶79 ―‗[M]anifest disregard‘ is an extremely deferential standard.” Westgate Resorts, 2016 UT 24, ¶ 11. To meet this standard, a party must prove three elements:
First, the [arbitrator]‘s decision must actually be in error. Second, the error ―must have been obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator.” Third, the [arbitrator] must have ―appreciate[d] the existence of a clearly governing legal principle but decide[d] to ignore or pay no attention to it.”
Id. (third and fourth alterations in original) (citation omitted).
¶80 David first argues that the arbitrator manifestly disregarded the law when he calculated Jill‘s imputed income. David claims that the arbitrator failed to ―consider the significant money that [Jill] will be able to earn from investing her property division.” And he contends that the arbitrator based Jill‘s income ―not on the statutory factors, but on his own judgment that [Jill] should be allowed to work in the field of her choice . . . and given time to complete her degree.”
¶81 Utah Code specifies that imputation of income for alimony or child support purposes must ―be based upon employment potential and probable earnings.” UTAH CODE § 78B-12-203(8)(b). ―In evaluating a spouse‘s ’employment potential and probable earnings,‘ courts are instructed to consider, among other factors, available employment opportunities, the spouse‘s health and relevant work history, and ‘prevailing earnings and job availability for persons of similar backgrounds in the community.‘” Bond v. Bond, 2018 UT App 38, ¶ 7, 420 P.3d 53 (citing UTAH CODE § 78B-12-203(8)(b)(i)–(x)).
¶82 David cannot successfully demonstrate that the arbitrator manifestly disregarded the law when he calculated Jill‘s income because he does not show that the arbitrator‘s decision was ―actually . . . in error,” let alone that any error in the arbitrator‘s decision was ―obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator.” Westgate, 2016 UT 24, ¶ 11 (citation omitted).
¶83 We first note, as the district court did, that Utah law does not require the arbitrator to impute Jill‘s income according to her highest historical salary or possible property investments. It requires, instead, that the arbitrator consider an array of factors and impute Jill‘s income based on her ―employment potential and probable earnings.” See UTAH CODE § 78B-11-203(8)(b). And contrary to David‘s assertion, the arbitrator did not ignore this framework. As the district court found, the arbitrator ―effectively considered and applied the pertinent statutory factors.” Specifically, the arbitrator considered Jill‘s employment history in the financial and pharmaceutical sales sectors and a report submitted by David‘s vocational expert listing various jobs available to Jill based on her skillset and prior work experience. The arbitrator also spoke with Jill, who explained that while she was currently working as an aide, she was in the process of completing a degree in elementary education and intended to secure a full-time teaching position once her degree was complete. Considering all of these factors, the arbitrator imputed Jill‘s income. The arbitrator thus did not manifestly disregard the law.
¶84 David also argues that the arbitrator manifestly disregarded the law when he ―provid[ed] a line-item in [Jill‘s] alimony budget for her to obtain the education necessary to work in [the teaching] profession.” He contends that Utah Code instructs courts to calculate alimony according to a spouse‘s “needs” and “the standard of living existing at the time of separation.” According to David, Jill‘s tuition costs were “neither part of the parties‘ standard of living during the marriage nor a ‘need.‘”
¶85 When determining alimony, a district court must consider a series of factors, including “the financial condition and needs of the recipient spouse.” UTAH CODE § 30-3-5(8)(a)(i)–(vii) (2018), amended as and renumbered by UTAH CODE § 30-3-5(10)(a)(i)–(vii) (2022). In accordance with those factors, “[a]s a general rule, the court should look to the standard of living, existing at the time of separation.” Id. § 30-3-5(8)(e) (2018), amended as and renumbered by UTAH CODE § 30-35(10)(e) (2022). “However, the court shall consider all relevant facts and equitable principles and may, in the court‘s discretion, base alimony on the standard of living that existed at the time of trial.” Id.
¶86 We again find no “obvious” error in the arbitrator‘s decision. The arbitrator determined that Jill‘s tuition costs constituted a component of Jill‘s “financial condition” and spending “needs,” and factored those costs into the standard of living that existed at the time of arbitration. This is expressly sanctioned by Utah law. See id. § 30-3-5(8)(a)(ii), (e).
¶87 Ultimately, while David may disagree with the arbitrator, that does not equate to manifest disregard. After all, manifest disagreement and manifest disregard are different. See Pac. Dev., L.C. v. Orton, 2001 UT 36, ¶ 15, 23 P.3d 1035 (refusing to vacate an arbitration award for manifest disregard of the law because “[the appellant]‘s manifest disregard argument simply amount[ed] to a ‘manifest disagreement‘ with the arbitrator‘s findings and final award” (citation omitted)).
CONCLUSION
¶88 David asked his then-wife, Jill, to submit to arbitration the parties‘ disputes regarding alimony, property division, and child support. Jill agreed. David now asks us to invalidate the award under section 78B-11-107 of the UUAA. He argues that the plain language and policies of our state‘s arbitration and divorce laws conflict such that the parties‘ arbitration agreement is unenforceable.
¶89 But having participated in arbitration without objection, David lost the chance to rely on section 78B-11-107 to contest the arbitration award in his divorce case. We also reject David‘s argument that Utah law prevents parties from submitting at least some aspects of their divorce action to arbitration. Judicial review of arbitration awards dealing with divorce-related issues, however, varies depending on the issue and its underlying policies. Parties may arbitrate questions concerning alimony and property division and agree to the limited judicial review the UUAA contemplates. The strong policies underlying statutory provisions ensuring the protection of children, on the other hand, dictate that a court maintain the ability to consider whether an arbitration award addressing child support or custody is in the best interests of the child.
¶90 Concerning modification, a court retains continuing jurisdiction to modify orders relating to property distribution or children ―as is reasonable and necessary,” UTAH CODE § 30-3-5(3) (2018), amended by and renumbered as UTAH CODE § 30-3-5(5) (2022), and orders relating to alimony ―based on a substantial material change in circumstances,” id. § 30-3-5(8)(i)(i) (2018), amended by and renumbered as UTAH CODE § 30-3-5(11)(a) (2022).
¶91 David alternatively asks us to invalidate the arbitration award for manifest disregard of the law. Even assuming that standard remains viable, it has not been met. We affirm the district court.
I was awarded the house in the divorce. My ex’s things are still here and he/she won’t pick them up. When are they deemed abandoned?
Utah Code § 67-4a-201 provides, in pertinent part that property is presumed abandoned if the property is unclaimed by the apparent owner “the earlier of three years after the owner first has a right to demand the property or the obligation to pay or distribute the property arises.”
Utah Code § 67-4a-208 (Indication of apparent owner interest in property) provides, in pertinent part:
(1) The period after which property is presumed abandoned is measured from the later of:
(a) the date the property is presumed abandoned under this part; or
(b) the latest indication of interest by the apparent owner in the property.
(2) Under this chapter, an indication of an apparent owner’s interest in property includes:
(a) a record communicated by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held;
(b) an oral communication by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held, if the holder or the holder’s agent contemporaneously makes and preserves a record of the fact of the apparent owner’s communication;
(c) presentment of a check or other instrument of payment of a dividend, interest payment, or other distribution, or evidence of receipt of a distribution made by electronic or similar means, with respect to an account, underlying security, or interest in a business association;
(d) activity directed by an apparent owner in the account in which the property is held, including accessing the account or information concerning the account, or a direction by the apparent owner to increase, decrease, or otherwise change the amount or type of property held in the account;
(e) a deposit into or withdrawal from an account at a banking organization or financial organization, including an automatic deposit or withdrawal previously authorized by the apparent owner other than an automatic reinvestment of dividends or interest;
(f) any other action by the apparent owner which reasonably demonstrates to the holder that the apparent owner knows that the account exists; and
(g) subject to Subsection (5), payment of a premium on an insurance policy.
(3) An action by an agent or other representative of an apparent owner, other than the holder acting as the apparent owner’s agent, is presumed to be an action on behalf of the apparent owner.
(4) A communication with an apparent owner by a person other than the holder or the holder’s representative is not an indication of interest in the property by the apparent owner unless a record of the communication evidences the apparent owner’s knowledge of a right to the property.
(5) If the insured dies or the insured or beneficiary of an insurance policy otherwise becomes entitled to the proceeds before depletion of the cash surrender value of the policy by operation of an automatic premium loan provision or other nonforfeiture provision contained in the policy, the operation does not prevent the policy from maturing or terminating.
Utah Family Law, LC | divorceutah.com | 801-466-9277
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGE
GREGORY K. ORME and JUSTICE DIANA HAGEN concurred.[1]
HARRIS, Judge:
¶1 DiAnn Sheri Fox appeals several aspects of a comprehensive set of rulings issued by the trial court following a two-day divorce trial, including various findings relating to the court’s alimony award, its division of marital debts, and its determination that her ex-husband, Benjamin Davis Fox, was not voluntarily underemployed. For the reasons discussed below, we affirm the court’s orders.
BACKGROUND
¶2 DiAnn and Ben[2] were married in 1997, while Ben was in college and about to start medical school. After completing his training, Ben became a successful neurosurgeon with his practice centered in St. George, Utah. In the marriage’s final years, Ben was making more than $1 million per year, with his monthly pay sometimes as high as $110,000. Ben and DiAnn have six children together, four of whom were minors at the time of trial.
¶3 In keeping with Ben’s impressive income, the parties lived a lavish lifestyle during the marriage. To support that lifestyle, Ben spent a significant amount of time at work—as much as 80 to 100 hours per week. And even when he was not working, Ben was often “on call,” meaning that he had to stay within fifteen minutes of the hospital in case of a medical emergency. Ben took more “on call” shifts than any other physician in his practice. Part of the reason Ben worked such a taxing schedule—even for a neurosurgeon—was because he was qualified as both a neurosurgeon and as a neurointerventionalist, and his services were often in demand. Ben testified that, as a result, he was becoming burnt out and “physically and emotionally exhausted,” and that his work schedule was not sustainable. Due to his schedule, Ben spent comparatively little time with the children, leaving DiAnn largely responsible for their day-to-day care.
¶4 DiAnn has a bachelor’s degree in elementary education and worked full-time as a teacher before the couple’s children were born. While Ben was still in medical school, however, Ben and DiAnn decided that DiAnn would not generally work outside the home but instead would care for their children full-time. At the time of trial, DiAnn was working part-time for the local school district, earning ten dollars per hour.
¶5 In 2018, DiAnn filed for divorce. As part of her petition, DiAnn sought primary physical custody of the children, child support, alimony, equitable division of the marital debts, and equitable division of the marital property. A few months later, the trial court entered a temporary order awarding DiAnn primary physical custody of the children, with Ben allowed parent-time pursuant to Utah Code section 30-3-35.1. The court ordered Ben to pay $12,313 per month in child support, and $21,030 per month in alimony. The parties were also ordered to continue paying $2,500 ($1,250 each) per month to DiAnn’s father, to whom they owed a significant amount of debt.
¶6 After DiAnn filed for divorce, but prior to trial, Ben relocated to Florida and accepted employment there as a neurosurgeon. In his new position, Ben was paid less than he had been paid in St. George: instead of earning as much as $110,000 per month, Ben was now earning some $80,000 per month (nearly $1 million annually) in gross income. But in Florida, Ben had a less hectic work schedule, typically working 50 to 60 hours per week as opposed to the 80 to 100 hours per week he had often been working in St. George.
¶7 Also prior to trial, DiAnn filed a financial declaration with the trial court. In that declaration, she claimed $32,577.24 in monthly expenses, including—among other things—$16,132.24 for the mortgage payments on the parties’ large house; $1,880 for maintenance on the house; $2,000 for food and household supplies; $2,400 for utilities; $1,250 for half of the loan payments to her father; $855 for the children’s extracurricular activities; and $577.24 for travel, which included the costs associated with a timeshare condominium the couple owned in Hawaii.
¶8 Soon thereafter, the case proceeded to a bench trial, which was held over two days in September 2020. During the trial, the court heard testimony from DiAnn and Ben, as well as several other witnesses. DiAnn asked the court to find that Ben was voluntarily underemployed—because he was earning less in Florida than he had in St. George—and additionally asked that Ben’s higher St. George salary be imputed to him for the purposes of child support and alimony. In light of this request, and based on her expert’s testimony that the parties had established a standard of spending some $70,000 per month during the marriage, DiAnn asked the court to award her $11,050 per month in child support and some $35,000 per month in alimony.
¶9 In response to DiAnn’s argument that he was voluntarily underemployed, Ben called an expert to testify that, even with his reduced income, Ben’s earnings were above the 90th percentile of income for neurosurgeons in the United States. Ben thus requested that alimony and child support be calculated based on his Florida income and that the court reject DiAnn’s assertion that he was voluntarily underemployed.
¶10 We will discuss some of the particulars of the court’s ruling in more detail below, on an issue-by-issue basis. But in broad strokes, the court ruled in relevant part as follows: (a) the parties were awarded joint legal custody of the children; (b) DiAnn was awarded primary physical custody; (c) Ben was allowed parent-time pursuant to Utah Code section 30-3-37; (d) Ben’s monthly income would be calculated based on his Florida income, not his St. George income; (e) DiAnn’s net income was initially set at $699 per month, but would increase to $2,915 per month after two years; (f) Ben was not voluntarily underemployed; (g) Ben was ordered to pay DiAnn $9,760 per month in child support, which would decrease as the children transitioned into adulthood; (h) Ben was ordered to pay DiAnn $15,039 per month in alimony for a period of two years, and then $12,995 per month for another 22 years, unless terminated earlier “upon the death of either party, the remarriage or cohabitation of [DiAnn], or for any other reason under Utah law”; and (i) DiAnn was assigned sole responsibility for the marital debt owed to her father.
ISSUES AND STANDARDS OF REVIEW
¶11 DiAnn now appeals various aspects of the trial court’s rulings, and presents three principal issues for our review.[3] First, she challenges various aspects of the court’s alimony award. We review a court’s “alimony determination for an abuse of discretion and will not disturb its ruling on alimony as long as the court exercises its discretion within the bounds and under the standards our supreme court has set and so long as the trial court has supported its decision with adequate findings and conclusions.” Miner v. Miner, 2021 UT App 77, ¶ 11, 496 P.3d 242 (quotation simplified).
¶12 Second, DiAnn argues that the court abused its discretion when it assigned her the sole responsibility for the parties’ debt owed to her father and included the full payment for that debt in its alimony calculation. “The trial court’s division of debts is reviewed for abuse of discretion.” Boggess v. Boggess, 2011 UT App 84, ¶ 2, 250 P.3d 86 (per curiam). And because trial courts are in the “best position to weigh the evidence, determine credibility and arrive at factual conclusions, they have considerable latitude” to equitably divide marital debt “and their actions are entitled to a presumption of validity.” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified). “Accordingly, it would be inappropriate for an appellate court to reverse on an isolated item of property or debt distribution.” Id. (quotation simplified). “Rather, we must examine the entire distribution to determine if the trial court abused its discretion.” Id. (quotation simplified).
¶13 And finally, DiAnn asserts that the court erred when it found that Ben was not voluntarily underemployed. We “review the trial court’s finding of voluntary unemployment or underemployment and its calculation of imputed income for an abuse of discretion.” Christensen v. Christensen, 2017 UT App 120, ¶ 10, 400 P.3d 1219. “We will not disturb a trial court’s findings of fact unless they are clearly erroneous, that is, unless they are in conflict with the clear weight of the evidence, or this court has a definite and firm conviction that a mistake has been made.” Pope v. Pope, 2017 UT App 24, ¶ 4, 392 P.3d 886 (quotation simplified).
ANALYSIS
¶14 We begin with DiAnn’s challenge to the trial court’s alimony award, analyzing each aspect of that challenge in turn.
We then turn to DiAnn’s assertion that the court abused its discretion in assigning her the marital debt owed to her father. We conclude by examining DiAnn’s challenge to the court’s finding that Ben was not voluntarily underemployed.
I. Alimony
¶15 “Under Utah law, the primary purposes of alimony are: (1) to get the parties as close as possible to the same standard of living that existed during the marriage; (2) to equalize the standards of living of each party; and (3) to prevent the recipient spouse from becoming a public charge.” Miner v. Miner, 2021 UT App 77, ¶ 14, 496 P.3d 242 (quotation simplified). “Alimony is not limited to providing for only basic needs but should be fashioned in consideration of the recipient spouse’s station in life in light of the parties’ customary or proper status or circumstances, with the goal being an alimony award calculated to approximate the parties’ standard of living during the marriage as closely as possible.” Id. (quotation simplified).
¶16 During their marriage, DiAnn and Ben enjoyed a high standard of living, and in an attempt to approximate that standard of living, the trial court ordered Ben to pay DiAnn more than $15,000 per month in alimony for two years, and nearly $13,000 per month for 22 years thereafter. DiAnn takes issue with this alimony award.
¶17 But in so doing, DiAnn does not challenge the court’s decision about the duration or future reduction of the award, nor does she take issue with any of the specific line-item calculations the court made in arriving at the total alimony amount. Instead, DiAnn advances two other arguments. First, she asserts that the court erred by not starting its analysis by making a separate finding regarding the parties’ “marital standard of living,” and by not taking that standard of living sufficiently into account. Second, DiAnn argues that the court abused its discretion when it included the children’s extracurricular activity expenses in its alimony calculation, and then ordered that DiAnn be responsible for those expenses. We address each of these arguments, in turn.
A. Marital Standard of Living
¶18 DiAnn’s first challenge is an assertion that the trial court failed to properly take into account the parties’ marital standard of living. Specifically, relying on Rule v. Rule, 2017 UT App 137, 402 P.3d 153, DiAnn argues that the court failed to start its alimony analysis by making a separate finding specifically calculating the overall marital standard of living, and asserts that the court erroneously “moved straight to an arbitrary needs-based alimony analysis.” This, DiAnn asserts, contradicts the “roadmap” set out in Rule. In particular, DiAnn points to her own expert’s analysis—that the parties were spending, on average, more than $70,000 per month during the marriage—and asserts that the court should have concluded that she is entitled to half that amount in alimony, at least as long as Ben is able to pay it.
¶19 DiAnn misreads Rule. To be sure, in that case we noted that one of the purposes of alimony is “to get the parties as close as possible to the same standard of living that existed during the marriage,” and we categorized it as “inherently problematic for a trial court to attempt to design an alimony award that advances the overall goal of allowing the parties to go forward with their lives as nearly as possible at the standard of living enjoyed during marriage without first determining what that standard was in the first instance.” See id. ¶¶ 14, 18 (quotations simplified). But we clarified that a court appropriately takes that standard of living into account by “assess[ing] the needs of the parties, in light of their marital standard of living.” Id. ¶ 19 (quotation simplified); see also id. ¶ 15 (noting that trial courts are required “to determine the parties’ needs and expenses . . . in light of the marital standard of living”). The ceiling on a recipient spouse’s alimony award is represented by that spouse’s needs, viewed in light of the marital standard of living. See id. ¶ 17 (“The receiving spouse’s needs ultimately set the bounds for the maximum permissible alimony award.”); see also Vanderzon v. Vanderzon, 2017 UT App 150, ¶ 61, 402 P.3d 219 (stating that “in no case may the trial court award [the recipient spouse] more alimony than [his or] her demonstrated need”); Jensen v. Jensen, 2008 UT App 392, ¶ 13, 197 P.3d 117 (stating that, “regardless of the payor spouse’s ability to pay more, the recipient spouse’s demonstrated need must constitute the maximum permissible alimony award” (quotation simplified)). There is usually no need for a trial court to make a separate specific finding regarding the overall “marital standard of living” as measured by the total amount of money spent each month by the couple while they were married, and we did not intend to imply otherwise in Rule.
¶20 Indeed, in that case we made clear that we were not prescribing any deviation from the “established . . . process to be followed by courts considering an award of alimony.” See Rule, 2017 UT App 137, ¶ 19; see also id. ¶ 13 (citing the statute now codified at Utah Code section 30-3-5(10)(a), and stating that “courts must consider the statutory” alimony factors, which are “the financial condition and needs of the recipient spouse,” “the recipient’s earning capacity,” and “the ability of the payor spouse to provide support” (quotation simplified)). The first step in that process is for the court to “assess the needs of the parties, in light of their marital standard of living.” Id. ¶ 19 (quotation simplified). “This means that the court must determine the parties’ needs reasonably incurred, calculated upon the standard of living enjoyed during the marriage.” Id. (quotation simplified). In the next step, the court must “determine the extent to which the receiving spouse is able to meet [his or] her own needs with [his or] her own income,” and if the receiving spouse “is able to meet all [his or] her needs with [his or] her own income, then [the court] should not award alimony.” Id. (quotation simplified). Finally, and only if the court determines that the recipient spouse cannot meet his or her own needs, the final step in the process is for the court to “assess whether the payor spouse’s income, after meeting his [or her] needs, is sufficient to make up some or all of the shortfall between the receiving spouse’s needs and income.” Id. ¶ 20 (quotation simplified).
¶21 The trial court followed this three-step process in this case. It made twenty-three separate line-item findings regarding DiAnn’s reasonable monthly expenses, using her requested amounts as a starting point, and it adjusted four of the line items downward and three of them upward. The court determined that DiAnn’s reasonable monthly needs, as adjusted, amounted to $25,424.61. And on appeal, DiAnn does not take issue with any of the twenty-three specific line-item findings. That is, she does not assert that any of those particular findings—for instance, her housing expenses, or her automobile expenses—are not in harmony with the marital standard of living.
¶22 The court also made findings regarding DiAnn’s ability to earn income, and determined that her net income (after taxes) was $699 per month for the first two years, and then would be adjusted to $2,915 per month. The court then subtracted her income and the child support payments from her needs, and determined that DiAnn would have a monthly shortfall of $15,039 per month for the first two years, which would narrow to $12,995 per month after that. On appeal, DiAnn does not specifically challenge these calculations, including the court’s findings regarding her ability to earn income.
¶23 Finally, the court assessed whether Ben had the ability to pay DiAnn’s demonstrated shortfall, and determined that he did, even using Ben’s Florida income rather than his St. George income, and even after paying child support and meeting his own reasonable monthly needs. DiAnn’s only complaint about this analysis is that the trial court erred by using Ben’s Florida income for the basis of its computation, as opposed to his St. George income. But DiAnn of course does not quibble with the court’s ultimate conclusion that Ben can meet every dollar of her demonstrated shortfall.
¶24 We perceive no error in the procedure the trial court employed in computing DiAnn’s alimony award. As noted, the court appropriately went through the three-step process required by applicable law. If DiAnn believed that the court inappropriately assessed any of her individual expenses, as measured in light of the marital standard of living, she had every opportunity to challenge any of the specific line-item calculations the court relied on in determining her monthly needs. See Miner, 2021 UT App 77, ¶¶ 20–63 (evaluating an appellant’s challenges to eleven separate line items in a trial court’s calculation of a recipient spouse’s needs). But she does not challenge any of them.
¶25 DiAnn has therefore not carried her appellate burden of demonstrating that the trial court failed to appropriately take into account the marital standard of living in calculating her needs. In this case, the court was not required to make any specific finding regarding how much total money the parties spent each month during the marriage, and it was certainly not required to presumptively award DiAnn half of any such amount as alimony. In short, we perceive no abuse of discretion in the manner in which the court assessed DiAnn’s needs or in which it took into account the parties’ marital standard of living, and on that basis we reject DiAnn’s first challenge to the alimony award.
B. Extracurricular Activities
¶26 DiAnn next contends that the court abused its discretion when it included the minor children’s extracurricular activity expenses in its alimony award to DiAnn. Specifically, she argues that the extracurricular expenses should have been included in an increased child support award instead of the alimony award or, alternatively, that the court should have “issued a separate award equitably dividing the expenses.” We disagree.
¶27 Presumptive monthly child support payment amounts are set by statutory schedule, depending on the incomes of the parents and the precise custody arrangement between them. See Utah Code Ann. §§ 78B-12-205, -212, -301 (LexisNexis 2018). These presumptive monthly payments are designed to include nearly all reasonable needs of children, except for items that are statutorily excluded (such as, for instance, medical expenses and work-related childcare expenses). See Davis v. Davis, 2011 UT App 311, ¶ 17, 263 P.3d 520 (noting that medical expenses and work-related childcare expenses have been “singled out” by the legislature as something that “parents are ordered to pay in addition to their regular child support obligations”). “Child-rearing expenses” that are “not statutorily distinguished from regular child support should be considered part and parcel of the child support award.” Id. (quotation simplified).
¶28 In particular, we have held that “school fees” and “extracurricular activities” are presumed to be included in the “regular child support” payment amount, and ordinarily “must be satisfied, if at all, out of the parties’ combined child support obligations.” Id. ¶¶ 15, 17. Certainly, parties can agree “to share such additional expenses in the interest of their children,” but if they are unable to reach agreement on that score, such expenses “must generally be budgeted as part of child support.” Id. ¶ 15. Thus, in the present case, any expenses associated with the extracurricular activities in which the Fox children participate were designed to be budgeted as part of the $9,760 that DiAnn receives in child support each month.
¶29 Based on Davis, then, the trial court would have been on completely solid ground to decline DiAnn’s request to include a line item of $855 for “extracurricular activities” in her list of monthly expenses for purposes of the alimony calculation. But the court went ahead and included that line item in its computation of DiAnn’s monthly needs for alimony purposes anyway, effectively giving DiAnn an $855 monthly bump in alimony to which she may not have been entitled.[4]
¶30 DiAnn looks this gift horse quite squarely in the mouth and complains that the court should have given her this bonus payment in a different form: by issuing a separate award— consisting of neither child support nor alimony—commanding Ben to pay the extracurricular expenses. Apparently, she is concerned that, if she remarries, Ben’s obligation to pay these expenses will evaporate along with the other alimony line items. Certainly, the trial court could—within the wide discretion afforded trial courts in such matters—have made such an award, provided it adequately explained its reasons for doing so. See id. ¶ 17 (noting that a court can deviate from the presumptive child support guidelines and order a higher amount designed to include “school fees,” but such an order “must be supported by a specific finding on the record supporting the conclusion that use of the guidelines would be unjust, inappropriate, or not in the best interest of the children” (quotation simplified)). But DiAnn falls far short of persuading us that the court abused its discretion by opting not to do so, especially given that she included this line item in her financial declaration, which was the basis for her alimony request. On this basis, we reject DiAnn’s second challenge to the court’s alimony award.
II. Marital Debt
¶31 DiAnn next asserts that the trial court abused its discretion when it divided the marital debt in such a way as to give her full responsibility for the parties’ $181,000 obligation owed to DiAnn’s father, and then included a $2,500 line item for payments servicing that debt in DiAnn’s alimony award (thereby effectively requiring Ben to pay that debt as part of his alimony obligation). We perceive no abuse of discretion in the trial court’s orders regarding the marital debt owed to DiAnn’s father.
¶32 In issuing a divorce decree, a trial court must include “an order specifying which party is responsible for the payment of joint debts, obligations, or liabilities of the parties contracted or incurred during marriage.” Utah Code Ann. § 30-3-5(2)(c)(i) (LexisNexis Supp. 2021). Importantly, our law requires only “a fair and equitable, not an equal, division of the marital debts.” Sinclair v. Sinclair, 718 P.2d 396, 398 (Utah 1986) (per curiam). And as already mentioned, because trial courts are in the “best position to weigh the evidence, determine credibility and arrive at factual conclusions, they have considerable latitude” in dividing marital debt, and their actions in this regard “are entitled to a presumption of validity.” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified).
¶33 In the present case, we cannot say that the trial court abused its discretion in assigning the marital debt owed to DiAnn’s father to DiAnn. By way of counterbalance, the court assigned Ben full responsibility for his medical school debts (totaling some $145,000), and made each party responsible for the debts on their respective vehicles. This division makes practical sense, because it relieves DiAnn of any responsibility for debts associated with Ben’s medical education, and it relieves Ben of any direct responsibility (aside from alimony) for debts owed to DiAnn’s father. The court recognized, however, that this distribution of debts gave DiAnn “approximately $24,000 more in debts” than it gave Ben, but the court stated that it would “use its distribution of property to equalize this imbalance of debts.” DiAnn makes no argument that the court failed to remedy this imbalance. Indeed, the court awarded the parties’ timeshare condominium in Hawaii to DiAnn alone, and it also awarded DiAnn three of the four cars owned by the parties. Additionally, the court awarded DiAnn an offset of $10,000 “to compensate her for any dissipation of the marital estate” on the part of Ben, and also awarded her $50,000 for attorney fees from any proceeds made from the sale of the marital house prior to the parties evenly splitting any remaining proceeds. Under the circumstances presented here, DiAnn has not demonstrated any inequity or abuse of discretion in the manner in which the court divided the parties’ marital debts.
¶34 Furthermore, while DiAnn was indeed assigned responsibility for the entire debt owed to her father, a line item for the $2,500 monthly payment of that debt was included in her alimony award. Thus, while the court made DiAnn responsible for that debt, it is Ben, and not DiAnn, who is (at least indirectly) paying for it. DiAnn nevertheless complains about this seemingly favorable arrangement, again expressing concern that, if she were to remarry, Ben’s obligation to front her the money to service the debt owed to her father would evaporate along with the other alimony line items. Perhaps a trial court, within the scope of its discretion, could have done what DiAnn envisions. But under the specific facts of this case, it is not an abuse of discretion for the court to have equitably divided the debt, and then to have required Ben to pay DiAnn an alimony amount that includes the debt service payments on the obligation owed to DiAnn’s father. Given the circumstances as they existed at the time of trial, DiAnn has not demonstrated that the court’s orders regarding the parties’ debt to DiAnn’s father exceeded the court’s wide discretion in such matters.
III. Voluntary Underemployment
¶35 Finally, DiAnn argues that the trial court abused its discretion when it found, for purposes of calculating child support and alimony, that Ben was not voluntarily underemployed. Specifically, DiAnn asserts that because Ben took a job in Florida that paid him less than what he had been making in St. George, the court should have concluded that Ben is voluntarily underemployed and should have calculated child support and alimony based on Ben’s previous St. George salary.
¶36 As an initial matter, we note that this entire issue is irrelevant to the alimony computation, given our determination (discussed above) that the trial court did not abuse its discretion in making its alimony award. Even using Ben’s Florida salary for purposes of computing Ben’s income, the trial court found that Ben had the financial ability to make up 100% of the difference between DiAnn’s income and her reasonable needs. See supra ¶¶ 19, 23–24. Thus, even if we were to agree with DiAnn that Ben was voluntarily underemployed and that the trial court should have used his St. George salary in computing his income, DiAnn’s alimony award would not change. But because the issue could still matter to the child support calculation, we proceed to address the merits of DiAnn’s challenge to the trial court’s findings regarding voluntary underemployment.
¶37 “A court may impute income to an underemployed spouse.” Rayner v. Rayner, 2013 UT App 269, ¶ 7, 316 P.3d 455 (quotation simplified). In order to do so, however, the court must determine that the spouse “is voluntarily . . . underemployed.” Id. (quotation simplified). We agree with DiAnn that Ben’s employment actions—in taking a new job in Florida—were voluntary. See id. (“A spouse is voluntarily unemployed or underemployed when he or she intentionally chooses of his or her own free will to become unemployed or underemployed.” (quotation simplified)). But DiAnn has not persuasively demonstrated that the trial court abused its discretion in determining that Ben was not underemployed.
¶38 The determination as to whether a party is underemployed requires examination of all the relevant circumstances, and not just whether a party’s salary has recently dropped. Indeed, a party’s “current earnings, as compared to his [or her] historical income, is merely one element in the matrix of factual issues affecting the ultimate finding of whether [a party] is underemployed.” Hall v. Hall, 858 P.2d 1018, 1026 (Utah Ct. App. 1993); see also Vanderzon v. Vanderzon, 2017 UT App 150, ¶ 65, 402 P.3d 219 (stating that “income imputation shall be based upon employment potential and probable earnings as derived from employment opportunities, work history, occupation qualifications, and prevailing earnings for persons of similar backgrounds in the community” (quotation simplified)).
¶39 In the present case, the trial court did not abuse its discretion in finding that Ben was not underemployed. Certainly, Ben’s income is lower in Florida than it was in St. George. And a drop in income can be an important factor in determining that a spouse is underemployed. See, e.g., Arnold v. Arnold, 2008 UT App 17, ¶ 7, 177 P.3d 89. But the mere fact that a spouse’s income has fallen does not necessarily mandate a finding of underemployment.[5] In the present case, the court was presented with ample evidence to support its determination that Ben— despite his lower salary—was not underemployed. Ben had not left his profession—he was employed as a neurosurgeon in St. George, and he was employed as a neurosurgeon in Florida. And even in Florida, Ben still made a lot of money; indeed, Ben’s expert testified that Ben’s Florida salary—nearly $1 million per year— was above the 90th percentile for neurosurgeons nationwide, not just for doctors. The trial court also credited Ben’s testimony that the work schedule he had been maintaining in St. George was not sustainable, and that he was “over-worked and burnt out.” And in Florida, Ben was still working 50 to 60 hours per week, up to half again as much as a typical full-time job. All of this evidence supports the court’s finding that Ben was not underemployed, voluntarily or otherwise.
¶40 Under these circumstances, we cannot say the court abused its discretion in finding that Ben was not voluntarily underemployed. While the court’s determination was perhaps not the only permissible one under the circumstances, it is “entitled to a presumption of validity,” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified), was supported by competent evidence, and did not constitute an abuse of discretion.
CONCLUSION
¶41 We perceive no abuse of the trial court’s discretion in its alimony award, its division of marital debts, or its determination that Ben was not voluntarily underemployed. On that basis, we reject DiAnn’s appellate challenges.
What are the most important changes to the family law in the 19th century and 20th century up to today, and why?
In my opinion (and in no particular order):
No-fault divorce
Abolition of the doctrine of coverture (femme couvert)
Tender Years doctrine (and the abrogation of the Tender Years doctrine)
Statutory child support
Same sex marriage
We need to get one misconception out of the way immediately, and that is that wives were treated as the husband’s property in the past. They were not.
This does not mean that women were treated differently than men and husbands under the law, but women were not treated as their husbands’ property and unmarried women could own property and enter into contracts. See Husband and Wife Are One–Him: Bennis v. Michigan as the Resurrection of Coverture (4 MIJGL 129, Amy D. Ronner Michigan Journal of Gender & Law)
At common law, an adult single woman could own, manage and transfer property. She could sue and be sued. She could likewise earn money and enjoy it as her own. Once that same woman married, however, her status changed radically; coverture subsumed her legal identity into her husband’s.
Blackstone described coverture status as follows:
By marriage, the husband and wife are one person in law: that is, the very being or legal existence of the woman is suspended during the marriage, or at least is incorporated and consolidated into that of husband: under whose wing, protection, and cover, she performs everything; and is therefore called in our law-French a feme covert, foemina viro co-operta; is said to be covert-baron, or under the protection and influence of her husband, her baron, or lord; and her condition during her marriage is called her coverture. Upon this principle, of an [sic] union of person in husband and wife, depend almost all the legal rights, duties and disabilities, that either of them acquire by the marriage. The coverture doctrine prevented a man from granting anything to his wife or from entering into a contract with her. Such actions would be futile because they would “suppose her separate existence . . . and to covenant with her, would be only to covenant with himself.”
The coverture merger was not mere metaphysics, but imposed real disabilities on the married woman. For example, a wife relinquished the control of her real property to her “baron” and although he could not alienate the rents and profits, he was not obligated to account for them to her. Moreover, her husband enjoyed complete control of his wife’s interests, which meant that he could alienate them and unilaterally pocket the proceeds. All chattels that a woman owned at the time of marriage and those she acquired thereafter belonged to her husband. The suspension of a wife’s legal identity also meant that she could not sue or be sued at law unless her husband had joined in the action or “ha[d] abjured the realm, or is banished.”
Coverture prohibited husband and wife from testifying for or against each other in trials “principally because of the union of person.” That is, such testimony would be irrebuttably presumptively self-serving or self-incriminating. In criminal law, a husband and wife could not comprise a conspiracy because one person could not conspire with himself. They also could not steal from one another because the property belonged essentially to only one–him. In other situations the wife was utterly divested of free will and viewed as “inferior to him, and acting by his compulsion.” For example, because certain criminal acts on her part, short of treason or murder, were viewed as if done under his “command,” coverture bestowed upon the married woman a specie of immunity.
Utah Family Law, LC | divorceutah.com | 801-466-9277
JAMES M. DUFFIN III,
Appellee and Cross-appellant,
v. BRANDY E. DUFFIN,
Appellant and Cross-appellee.
Opinion
No. 20200361-CA
Filed May 12, 2022
Third District Court, West Jordan Department
The Honorable Matthew Bates
No. 184400962
T. Jake Hinkins and Kurt W. Laird, Attorneys for Appellant and Cross-appellee
Martin N. Olsen and Beau J. Olsen, Attorneys for Appellee and Cross-appellant
JUDGE DAVID N. MORTENSEN authored this Opinion, in which JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS concurred.
MORTENSEN, Judge:
¶1 In prototypical fashion, a young married couple—James and Brandy Duffin[1]—set about building a new house. They prequalified for a loan, hired a real estate agent, paid a deposit of $1,000 with marital funds, entered into a contract with a builder, went to a design center to pick out finishes, and attended the closing together. However, in atypical fashion, James’s father and grandfather reimbursed the $1,000 deposit, paid an additional $18,000 as a preconstruction deposit, and at closing paid the balance of the purchase price of $410,875 in cash. Only James’s name was placed on the deed. Months later, as James and Brandy’s marriage relationship deteriorated, James deeded the property to himself and his father. A divorce action was filed, and at trial, the district court concluded, among other things, that any interest James and Brandy had in the house was not marital property and that Brandy should be awarded attorney fees. Brandy appeals, claiming that any interest she and James have in the house is a marital interest. James cross-appeals, challenging the determination on fees. We reverse the district court’s determination regarding the house, but we affirm the decision regarding attorney fees.
BACKGROUND
¶2 Brandy and James were married in March 2015. They had two children during their union.
¶3 In April 2016, Brandy and James, having been approved for a loan of up to $360,000, entered into a real estate purchase agreement to purchase a house in West Jordan, Utah. Using a cashier’s check from an account in his name, James paid a security deposit of $1,000 on the contract.[2] James testified that his father (Father) reimbursed him for the $1,000, though he could not remember how that reimbursement occurred.
¶4 In June 2016, James’s grandfather (Grandfather) paid $18,000 for the preconstruction deposit, but James asserted that the money was actually an advance on Father’s inheritance from Grandfather. At closing, Father paid the outstanding balance on the home, again with money allegedly received as an advance on his own inheritance.
¶5 On February 8, 2017—the day before closing—James sent an email, titled “Loan Contract,” to Father stating that Father “is dispensing a loan of $429,875.42 to purchase a home,” which was identified as the house for which James and Brandy had signed the real estate purchase agreement. In that document, James identified himself as the party responsible for repayment of the loan. Notably, the Loan Contract did not mention interest or a payment schedule; rather, it provided that Father could “demand payment of this loan at anytime.”
¶6 Brandy and James moved into the completed house. A warranty deed conveying title of the house from the seller to James—Brandy’s name does not appear on the deed—was recorded on February 9, 2017.
¶7 About a year later, in February 2018, James added Father to the title of the house by executing and recording a new warranty deed. Brandy contended that the “marriage was struggling and divorce was a very real possibility” at the time James added Father to the title of the property.
¶8 As it turns out, Brandy and James separated in July 2018, and James petitioned for divorce in August 2018. James further asked that the assets and liabilities of the marital estate be divided equitably and that the parties bear their own attorney fees and costs.
¶9 As relevant here, in his financial declaration, submitted in October 2018, James listed the house as an asset with no amount owing, noting that it was a “[c]ash purchase” by Father and that it was acquired in his and Father’s names.
¶10 In her counter-petition, in addition to addressing custody and parent-time issues, Brandy requested that the house be sold and the equity split equally. Brandy also asked for attorney fees.
¶11 James later asserted—during the divorce proceedings— that he purchased the house on behalf of Father, who lived in California, and that he was just doing the “leg work” for Father. He also asserted that he and Brandy “weren’t prequalified on [their] own merits” but had used Father’s bank statements in the application.[3] However, James admitted that he never informed anyone that he was acting as the agent of Father. And James conceded that he was not aware of “written documentary evidence” indicating an agency relationship but that there were “certainly conversations” between him and Father to that effect.[4] James also contended that an agreement between him and Father gave James the option to purchase the house from Father.
¶12 Father echoed much the same in his deposition on the matter, saying that he had “been talking to [James] about purchasing a home for [him] in Utah for quite some time” and that James acted on his behalf in purchasing the house. Father explicitly stated that he “[a]bsolutely” never intended the house to be a gift to James. Father clarified, “I provided all the money. My son worked as my agent in obtaining that house. And it was always understood between my son and me that that was my house.” But Father admitted that there was no document that would evidence any sort of an agency relationship between them.
¶13 Father explained that his name was not on the deed to the house because he “wanted to empower” James by having him “go through the process” of purchasing a house. Father asserted that he was involved in the design of the house and “oversaw the whole thing.” But he admitted there were “no writings, no emails or text messages between the two of [them] about the house plans.” Rather, Father explained, “[I]t was just a . . . casual, loving, walking down the street, arm around my son,” asking, “What do you think, Jim?”
¶14 Father indicated that he needed to “subsidize the relationship [between James and Brandy] until it really got off . . . on a good start.” However, Father indicated that Brandy was never involved in the conversations about the help he was extending to them: “The whole . . . financial situation, . . . my support, my allowing them to live in that house, all of that was between me and my son.”
¶15 For her part, Brandy testified that there was never any discussion that the house would belong to anyone other than her and James. Specifically, she said there was never any mention made to her that the house was being built for Father or that Father had any input on the construction. She clarified that she and James “picked out all of the finishings” and the floor plan of the house. Brandy testified that at no time during construction did James ever indicate that he needed to check with Father to verify that he was “okay” with their design selections because it was going to be Father’s house. In terms of paying for the house, Brandy stated that she and James were prequalified for a loan on the house, that the $1,000 deposit was paid with a cashier’s check funded with money from their commingled accounts, and that she and James were present together at the closing. Brandy further testified that she and James completed the landscaping and added, among other features, a fence, basketball standard, and cement pad.
¶16 With regard to the house, the court found that it was not marital property. The court reasoned,
The parties went into this home with the expectation that they would purchase it together. They picked the lot, they picked the design of the home, they selected trim and other finishings in the home, and they entered into a [real estate purchase agreement] with [the seller], and the parties expected that they would have a mortgage and that they would pay for this home using their respective incomes. But when it came time to actually close on this transaction, that is not what happened. Instead, [Father] paid for the home in its entirety, and James was the only one who was put on the deed.
¶17 The court went on to note that James and Brandy “lived in the home for what is a relatively short duration. They did not pay rent, they did not pay any sort of mortgage or loan, they did not pay utilities or property taxes. Those were all paid by income from [Father] towards the home.” And even though James and Brandy did “contribute somewhat to the home by putting in some shrubberies, a basketball standard, putting down a concrete pad, [and] installing a small fence,” the court concluded that “given the large amount of equity in this home, upwards of $450,000, those small contributions . . . [did] not convert [the house] into a marital asset.”
¶18 The court concluded,
[The house] was an asset that was titled only in James’s name. It was paid for by [Father]. . . . To determine that it was a marital interest would essentially be to give to Brandy a tremendous windfall of something that was not acquired in any rational sense of the word by the efforts of the marriage or the work or efforts of the marriage. So to the extent that there is any interest in the home, it is not a marital interest and to the extent that James has an interest in the home, it is not a marital interest.[5]
¶19 Lastly, the court awarded attorney fees to Brandy, at least in part:
Given the parties’ respective incomes, particularly that James has income a little bit more than four times the income that Brandy has, Brandy has a need for assistance in paying her attorney’s fees [and] those fees were necessary for her to be able to defend herself in this divorce action. However, she did not prevail 100 percent on all of her claims[6] and everything she was seeking, so the Court hereby awards her 60 percent of her attorney’s fees.
¶20 Both parties appeal, Brandy with respect to the determination that any interest she and James had in the house was not marital property, and James with respect to the award of attorney fees.
ISSUES AND STANDARDS OF REVIEW
¶21 Brandy contends that the district court erred in concluding that any interest she and James had in the house acquired during the course of the marriage was not marital property and thus not subject to distribution. “We will not disturb a property award unless we determine that there has been a misunderstanding or misapplication of the law resulting in substantial and prejudicial error, the evidence clearly preponderates against the findings, or such a serious inequity has resulted as to manifest a clear abuse of discretion.” Nakkina v. Mahanthi, 2021 UT App 111, ¶ 16, 496 P.3d 1173 (cleaned up).
¶22 In his cross-appeal, James contends that the district court erred in ordering him to pay 60% of Brandy’s attorney fees pursuant to Utah Code section 30-3-3(1). “We review the district court’s award of attorney fees under Utah Code section 30-3-3, including the amount of the award, for abuse of discretion.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 6, 449 P.3d 202.
ANALYSIS
I. The Status of the Parties’ Putative Interest in the House as Marital Property
¶23 “Marital property is ordinarily all property acquired during marriage and it encompasses all of the assets of every nature possessed by the parties, whenever obtained and from whatever source derived.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 14, 440 P.3d 757 (cleaned up). “Separate property, in contrast, is typically a spouse’s premarital property or property received by gift or inheritance during the marriage.” DeAvila v. DeAvila, 2017 UT App 146, ¶ 15, 402 P.3d 184.
¶24 “In Utah, marital property is ordinarily divided equally between the divorcing spouses and separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse.” Olsen v. Olsen, 2007 UT App 296, ¶ 23, 169 P.3d 765. Specifically,
When dividing property in a divorce, the court should first properly categorize the parties’ property as part of the marital estate or as the separate property of one or the other. Then, the court should presume that each party is entitled to all of that party’s separate property and one-half of the marital property, regardless of which spouse’s name appears on the title to the marital property.
Allen v. Ciokewicz, 2012 UT App 162, ¶ 46, 280 P.3d 425 (cleaned up); see also Bradford v. Bradford, 1999 UT App 373, ¶ 26, 993 P.2d 887 (stating that marital property may be distributed equitably “regardless of who holds title”).
¶25 Here, the district court erred in its determination that insofar as James or Brandy had a property interest in the house, that interest was not marital.
¶26 Throughout the pendency of the divorce proceedings, James explicitly rejected the notion that the house was a gift. And there is no indication in the record that James received the house as part of his inheritance. Nor was the house James’s premarital asset—it was indisputably acquired during the marriage. Thus, there is no evidence to suggest that any interest James might have in the house qualifies as James’s separate property. See Keiter v. Keiter, 2010 UT App 169, ¶ 22, 235 P.3d 782 (“Generally, premarital property, gifts, and inheritances may be viewed as separate property, and the spouse bringing such separate property into the marriage may retain it following the marriage.” (cleaned up)).
¶27 But there is ample evidence that any interest James and Brandy had in the house was marital property. Brandy and James both signed the real estate purchase agreement. As the district court explicitly noted, they both entered into the agreement with the expectation that they were purchasing the house together and that they would have a mortgage together. They picked the lot, they paid a $1,000 deposit, they selected the design, and they chose the finishings. The two factors that the district court pointed to as indicating that the house was not marital property were that James was the only one on the deed and that Father paid for the house in its entirety. But neither of these circumstances is sufficient to transform whatever interest James and Brandy have in the house from marital property to separate property.
¶28 First, that Brandy was never on the deed to the house in no way indicates that any interest James and Brandy might have in the house was somehow not marital property. In fact, just the opposite is true. “[A] marital asset is defined functionally as any right that has accrued during the marriage to a present or future benefit.” Jefferies v. Jefferies, 895 P.2d 835, 837 (Utah Ct. App. 1995). By having his name entered into the warranty deed and having his name placed on the title, James obtained the house in fee simple. See Utah Code Ann. § 57-1-12(2) (LexisNexis 2020). And because he obtained title during the marriage—and because the house was not a gift or inherited—whatever interest he had in the house became marital property. See Marroquin, 2019 UT App 38, ¶ 14 (defining marital property as “all property acquired during marriage” (cleaned up)). In other words, once James acquired title, Brandy acquired title because the acquisition took place during the marriage, and there was no exception (i.e., gift or inheritance) indicating otherwise.
¶29 Second, that Father paid for the house also fails to render “nonmarital” any interest James and Brandy might have in it. As our case law makes abundantly clear, “marital property ordinarily includes all property acquired during marriage, whenever obtained and from whatever source derived.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 31, 392 P.3d 968 (cleaned up); accord Marroquin, 2019 UT App 38, ¶ 14; DeAvila, 2017 UT App 146, ¶ 15; Dunn v. Dunn, 802 P.2d 1314, 1317–18 (Utah Ct. App. 1990). That James and Brandy used someone else’s money to purchase the house does not—standing alone—make their interest in the house nonmarital property. Most people, when they purchase a home, use someone else’s money (usually a lender’s) to do it—indeed, Father providing the money to purchase the house looks somewhat like just such a loan. And granted, the source of money by which the house was acquired would potentially render James’s interest in the house nonmarital if Father had gifted the money to James alone or if it represented James’s inheritance. But that’s not what happened here. As already noted, the record does not support a conclusion that the money was a gift to James or part of his inheritance, and the district court did not conclude otherwise.
¶30 On this note (i.e., that Father paid for the house while James and Brandy made a minimal contribution), the district court, citing Jefferies v. Jefferies, 895 P.2d 835 (Utah Ct. App. 1995), and Dunn v. Dunn, 802 P.2d 1314 (Utah Ct. App. 1990), concluded, “These cases suggest that marital property is not just any property obtained, but property that is obtained through the efforts of the marriage, and suggests that a windfall to one party or the other may not necessarily be marital property.” From this “suggestion” that it perceived in these two cases, the district court concluded that James and Brandy did not contribute sufficiently to the house to make any interest they might have in it marital property.
¶31 But obtaining property “through the efforts of the marriage” is not the defining condition that makes property marital; rather, it is the mere acquisition of property during marriage. As this court has often repeated, “marital property ordinarily includes all property acquired during marriage, whenever obtained and from whatever source derived.” Lindsey, 2017 UT App 38, ¶ 31 (cleaned up). Our case law nowhere mentions “the efforts of the marriage” as being necessary to making property so acquired marital. Thus, acquisition—from whatever source—during the marriage is the hallmark condition that renders property marital, not the maintenance or growth of that property by the efforts of the parties. To be clear, our case law employs the modifier “ordinarily” to account for the situation where property acquired by “gift or inheritance during the marriage,” see DeAvila, 2017 UT App 146, ¶ 15, remains separate property unless it has been transformed to marital property by commingling or the contribution of the non-receiving spouse, see Keyes v. Keyes, 2015 UT App 114, ¶ 28, 351 P.3d 90 (stating that “separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse” unless it loses “its separate character . . . through commingling or if the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property” (cleaned up)). Thus, the district court’s misstep here was in applying the concept of “the efforts of the marriage” as a condition for all property acquired during the course of a marriage to become marital, when our case law has limited that concept to the efforts of the non-receiving spouse in transforming separate property into marital property.
¶32 In sum, we reverse the district court’s determination that the couple’s property interest in the house, insofar as they had an interest, was not marital. The extent to which Brandy and James even have an interest in the property is an issue that will be decided in the separate lawsuit. See supra note 5. But to the extent they are adjudicated to have an interest in the house, that interest is marital property subject to equitable distribution between them.
II. The Award of Attorney Fees
¶33 On appeal, James asserts that the district court erred in awarding Brandy attorney fees because it did not make a detailed factual analysis of either Brandy’s financial need for assistance or James’s ability to pay and because the district court took into account whether Brandy prevailed on her claims. These challenges raise different legal theories from the ones James raised below with regard to Brandy’s attorney fees request.
¶34 “Parties are required to raise and argue an issue in the [district] court in such a way that the court has an opportunity to rule on it.” State v. Johnson, 2017 UT 76, ¶ 18, 416 P.3d 443 (cleaned up). “When a party fails to raise and argue an issue in the district court, it has failed to preserve the issue, and an appellate court will not typically reach that issue absent a valid exception to preservation.” Issertell v. Issertell, 2020 UT App 62, ¶ 21, 463 P.3d 698 (cleaned up). “As to preservation, our case law draws a distinction between new ‘issues’ (like distinct claims or legal theories) and new ‘arguments’ in support of preserved issues (such as the citation of new legal authority).” Hand v. State, 2020 UT 8, ¶ 6, 459 P.3d 1014.
¶35 Here, James is clearly trying to raise new issues. Below, James did not challenge the court’s analysis regarding Brandy’s financial need or his ability to pay. In fact, James explicitly challenged only the inclusion of fees associated with a protective order, the exclusion of certain reimbursements Brandy had received, the court’s handling of rule 54(d) of the Utah Rules of Civil Procedure as it applies to costs, and the exclusion of the costs James had paid for a custody evaluation. Nowhere did he assert that the court should not award Brandy attorney fees due to his or Brandy’s financial situation. In short, the legal theories he raised below in challenging Brandy’s attorney fee request were entirely different from the legal theories he attempts to raise now. He simply never gave the district court an opportunity to rule on the theories he now advances.
¶36 Because James failed to raise the same challenges to Brandy’s request for attorney fees that he is attempting to raise on appeal, his current challenges are unpreserved, and James does not ask us to apply any of the traditional exceptions to our preservation requirement.[7] On that basis, we decline to review the merits of James’s unpreserved challenges to the award of attorney fees.
CONCLUSION
¶37 Having concluded that to the extent the couple had a property interest in the house, the interest was marital, we reverse and remand for further proceedings consistent with this opinion. And we uphold the award of attorney fees to Brandy because the legal theories advanced on appeal were not preserved.
[1] Because the parties share the same last name, we refer to them by their given names.
[2] Brandy asserted that the cashier’s check was funded with commingled monies from her and James. See infra ¶ 15. James admitted that money from Brandy’s income may have gone into the account from which the cashier’s check was drawn.
[3] James’s name is identical to Father’s, with the exception of the suffix.
[4] James acted as agent for Father for the purchase of a different “property six houses away.” Indeed, the record contains another real estate purchase contract under Father’s name and address (as opposed to James and Brandy’s) that was signed by James. The record contains at least one piece of correspondence addressed to Father at this address.
[5] The court spoke in conditional terms about the extent of interest in the house—as do we—because Father has filed a pending quiet title action asserting his interest in the property.
[6] Brandy prevailed on various claims related to custody and child support.
[7] James argues that the court plainly erred in awarding attorney fees. But after his brief was submitted, this court held “that plain error review is not available in ordinary civil cases.” See Kelly v. Timber Lakes Prop. Owners Ass’n, 2022 UT App 23, ¶ 44, 507 P.3d 357. Accordingly, the plain error exception to our preservation rule does not apply to this situation.
James also argues that “rare procedural anomalies . . . prevented [him] from fully providing the [district court] the legal arguments and evidence to support the denial of Brandy’s request for attorney fees.” The “rare procedural anomaly” James identifies is the court’s statement that it was “very familiar with the state of the law with respect to attorneys fees under 30-3-3” such that it did not need “further briefing on this matter.” James argues that precluding him “from putting forth evidence and appropriate briefing rises to the level of an anomaly in the proceedings.” But we see no procedural anomaly that would have prevented James from raising the issue in a post-judgment motion, just as he did with his other challenges to the award of attorney fees.
Ryan A. Rudd and Nicholas S. Nielsen, Attorneys for Appellee
JUDGE DAVID N. MORTENSEN authored this Opinion, in which JUDGES GREGORY K. ORME and JILL M. POHLMAN concurred.
MORTENSEN, Judge:
¶1 When Vicki and Randall Beckham came before the district court for a bench trial on a divorce petition, Vicki[1] asked the court to order that she be a named beneficiary under one of the then-existing term life insurance policies on Randall. The court denied this request, a determination with which neither party takes issue. Despite both parties acknowledging that the policy had no value, however, and while expressly noting that the policy was not presented in evidence, the district court ordered Randall to reimburse Vicki the premiums she had paid for this “asset” for several years to the tune of $40,000. Randall appeals, claiming the district court erred in this award. We agree and reverse.
¶2 During the divorce proceeding, Vicki and Randall disputed how two term life insurance policies on Randall’s life should be treated. Vicki asserted that the court should award her a beneficiary interest in one of the policies. In ruling on the matter, the district court noted that the parties had failed to provide the court “with the policies at issue” and that it was “unclear whether these term life insurance policies were renewable by year, or after a number of years, or ended upon Randall’s death, or were terminated in the event of a divorce.” The court also stated that “Vicki’s counsel argued that they did not receive the policy in discovery,” and citing rule 37 of the Utah Rules of Civil Procedure, the court opined that “if that [was] the case, that issue could have and should have been resolved through the appropriate pretrial procedure.” See Utah R. Civ. P. 37(a)(1)(E) (“A party . . . may request that the judge enter an order . . . compelling discovery from a party who fails to make full and complete discovery.”).
¶3 Although the court determined that it “may award a life insurance beneficiary interest to a spouse upon divorce, under general principles of law concerning the apportionment of marital assets,” it declined to do so, reasoning that Vicki did not have a financial need for the insurance benefits, that the parties never reached an understanding regarding the apportionment of the life insurance policies, and that there was “no reason to perpetuate a relationship between” the parties by granting Vicki a beneficiary interest in a policy on Randall’s life. Accordingly, the court concluded that the policies would “remain with Randall” and that he would “continue to control the beneficiary designation going forward.”
¶4 However, the court found that the parties had treated the “two policies as marital assets during the marriage,” that each party had “spent a significant amount on annual premiums,” that the “policies were clearly part of the parties’ future planning and provided a benefit to them,” and that the “evidence was clear that each party used their own funds to pay for the respective policies.”
¶5 Accordingly, the court determined that Vicki should be reimbursed for her contribution to the premiums of one of the policies:
[I]n the interest of fairness and equity, Vicki should be awarded $40,000 from Randall to reimburse her for the annual premiums she paid for the policy over the past eight years. The testimony at trial was very clear that each party used their own funds to pay for the respective policies. Thus, Vicki contributed to an asset that will remain with Randall; it is thus fair and equitable for him to reimburse her for the amounts she paid—amounts that have maintained the policy and allowed Randall to perpetuate that [p]olicy on behalf of his newly named beneficiaries.
Randall appeals, asserting that the district court should not have ordered reimbursement of premiums paid during the marriage.
ISSUE AND STANDARDS OF REVIEW
¶6 Randall argues that the district court erred “in invoking its equitable powers to order [him] to reimburse [Vicki] for term life insurance policy premiums paid during the marriage.” “A district court has considerable discretion considering property division in a divorce proceeding, thus its actions enjoy a presumption of validity. We will disturb the district court’s division only if there is a misunderstanding or misapplication of the law indicating an abuse of discretion.” Johnson v. Johnson, 2014 UT 21, ¶ 23, 330 P.3d 704 (cleaned up). And “[w]hen a district court fashions an equitable remedy, we review it to determine whether the district court abused its discretion.” Collard v. Nagle Constr., Inc., 2006 UT 72, ¶ 13, 149 P.3d 348; accord Kartchner v. Kartchner, 2014 UT App 195, ¶ 14, 334 P.3d 1.
ANALYSIS
¶7 In a divorce proceeding, a district court is empowered to enter “equitable orders relating to the children, property, debts or obligations, and parties.” See Utah Code Ann. § 30-3-5(1) (LexisNexis Supp. 2021). Here, the district court characterized the life insurance policy as a marital asset. Citing Utah Code section 30-3-5, the court noted its authority to divide marital assets and indicated that the parties had “treated” the policy as a “marital asset[] during their marriage” and that “Vicki contributed to an asset that will remain with Randall.”
¶8 The court explicitly acknowledged that it did not have access to the life insurance policies because the parties did not provide them to the court.[3] Given this lacuna, the court acknowledged that it was “unclear whether these term life insurance policies were renewable by year, or after a number of years, or ended upon Randall’s death, or were terminated in the event of a divorce.” But the court also noted that Vicki “could have and should have” resolved the lack of production “through the appropriate pretrial procedure,” presumably a statement of discovery issues seeking to compel discovery. See Utah R. Civ. P. 37(a)(1)(E).
¶9 Given the court’s acknowledgment that it was unaware of the nature of the policy, it follows that it was equally unaware whether the policy was still in effect or if it had cash value. Indeed, Vicki took the position at trial that the insurance policy had no value: “[T]hese . . . term life insurance policies . . . don’t have value. It’s contingent upon an act.” And she explicitly stated that the policy had no “cash value” and was limited to “[j]ust the death benefit.” Randall also took the position that the policy had “no value.” Neither the district court’s findings of fact and conclusions of law nor the parties’ briefs on appeal point to any record basis on which to base a conclusion that the insurance policy retained any value. Instead, all the value related to the policy—as far as the record indicates—was consumed during the marriage.[4]
¶10 Accordingly, Vicki was not entitled to reimbursement for the premiums for the simple reason that either she or the marital estate received the value—in the form of mitigating the risk in the event of Randall’s death—of the premiums she paid. Short of collecting on a claim, mitigation of risk is generally the very nature of the benefit one receives from insurance. Vicki may indeed be entitled to reimbursement if the premiums had enhanced the value of Randall’s estate to her exclusion. But on the record before us, the payment of the insurance premiums did not enrich Randall such that he continued to enjoy—to the exclusion of Vicki—the benefit of the premiums after the divorce. Or put another way, there is no record evidence that Randall “is retaining some sort of good purchased with the money” spent on the life insurance premiums. See In re Marriage of Fluent, No. 16-1321, 2017 WL 2461601, at *3 (Iowa Ct. App. June 7, 2017).[5] Rather, the only conclusion that the sparse evidence could sustain is that the “benefit” of the insurance premiums was received by Vicki during the corresponding terms of life insurance coverage. And this benefit consisted of protection from the risk associated with Randall’s potential death during each of the paid terms of the policy—a benefit that was consumed in each term. But after each paid term lapsed, Randall did not retain some benefit from the premiums—or at least there is no record evidence of a retained benefit. Thus, the premiums were not reimbursable to Vicki because she—or the marital estate—had already received the value of those premiums in the coverage the insurance policy provided on Randall’s life during the marriage.
¶11 Expressed differently, the premiums were a paid-for resource that had been consumed—like many household expenditures—during the marriage. And like the money paid for any other proper living expense incurred during a marriage, the money paid for the insurance premiums was not reimbursable upon divorce because the value of the expense associated with that item—in this case, assurance against risk provided by insurance premiums—was used up during the marriage. See Heckler v. Heckler, No. FA040084101S, 2005 WL 529940, at *1–2 (Conn. Super. Ct. Jan. 27, 2005) (denying, in a divorce proceeding, a husband’s request that his former wife reimburse him for “certain living expenses he paid on the wife’s behalf during the marriage”); see also Czepiel v. Allen, No. FA 9886060, 1999 WL 99097, at *1 (Conn. Super. Ct. Feb. 16, 1999) (“The court does not allow reimbursement for telephone bill expenses or other household expenses [that] were joint undertakings of their family . . . .”). The insurance premiums Vicki paid—even if they did proceed from her own earnings—were akin to the living expenses that are “part and parcel” of the daily marital undertaking. See Czepiel, 1999 WL 99097, at *2. As such, they were not reimbursable to her upon divorce as she had already received the value she bargained for in voluntarily assuming the expense of the premiums.
¶12 Thus, the expenditures for the insurance premiums fell into the category of normal living expenses voluntarily paid from marital assets, and they were not subject to reimbursement because they had been entirely exhausted and consumed in paying for a marital expense, namely, buying life insurance for Randall—from which Vicki would have benefited had Randall died during the term of the policy. See Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988) (“[I]n Utah, trial courts making ‘equitable’ property division pursuant to section 30-3-5 should . . . generally award property acquired by one spouse by gift and inheritance during the marriage (or property acquired in exchange thereof) to that spouse, together with any appreciation or enhancement of its value, unless . . . the property has been consumed . . . .” (emphasis added)); see also In re Marriage of Rolfe, 699 P.2d 79, 84 (Mont. 1985) (noting that the district court “erred in returning the value of” certain prenuptial property that had “long since been consumed” during the course of a fifteen-year marriage); In re Marriage of Fluent, 2017 WL 2461601, at *3 (determining that it was “inequitable” to require a wife to reimburse her former husband $74,000 of his own funds that he had voluntarily used during the marriage “to maintain the parties’ basic standard of living” and “for the benefit of both himself and his family, without providing any accounting for these expenditures or identifying any asset (beyond the marital home) into which the monies were allegedly spent” (cleaned up)).
¶13 Accordingly, the district court exceeded its discretion in ordering reimbursement where there was no evidence that Randall continued to benefit after the divorce from the previous payments of the premiums.
CONCLUSION
¶14 Because Vicki had already received the benefit of the insurance premiums she paid, we conclude that the district court exceeded its discretion in ordering Randall to reimburse Vicki $40,000 for the premiums.
[1] Our practice is to refer to parties by their first names when they share a last name.
[2] “On appeal from a bench trial, we view the evidence in a light most favorable to the trial court’s findings, and therefore recite the facts consistent with that standard.” Chesley v. Chesley, 2017 UT App 127, ¶ 2 n.2, 402 P.3d 65 (cleaned up).
[3] Insofar as Vicki attempts to cast the absence of the insurance policy as a failure of Randall to disclose it, we note that Vicki had the burden of producing evidence of the provisions of the policy in question. After Randall offered testimony of the policy’s cash value—testimony we note that Vicki appeared to agree with at trial when she characterized the policy as having no “value” apart from its value contingent on Randall’s death, see infra ¶ 9—Vicki had the burden of offering evidence of an alternative valuation. See Argyle v. Argyle, 688 P.2d 468, 470–71 (Utah 1984) (stating that if a party asserts that an asset should be valued by a different measure, then “the burden of offering further evidence on alternative methods of valuation” falls on that party); accord Beesley v. Beesley, 2003 UT App 202U, para. 2.
[e]ach premium payment gives rise to an enforceable contractual right of coverage for an additional period of time. As premiums are paid over the life of the policy, distinct property interests in coverage for various periods of time arise. Of those distinct property interests, only one is worth anything in hindsight: coverage for the term during which the insured dies.
In re Marriage of Burwell, 164 Cal. Rptr. 3d 702, 713 (Cal. Ct. App. 2013). “Prior terms of coverage only lack value in hindsight (i.e., when it is certain the contingency has failed). Prospectively, all coverage terms have at least expected value.” Id. at 713 n.12. Thus, here the policy had no value in the sense that the premium coverage periods had expired without the contingency occurring, and these are the very terms for which Vicki received reimbursement.
[5] It is unclear how the district court found that Randall benefited from the payment of premiums by allowing him to “perpetuate” the policy for “his newly named beneficiaries.” At best, this benefit identified by the court seems speculative because the court had explicitly stated that it did not have access to the policies and that it was “unclear whether these term life insurance policies were renewable by year, or after a number of years, or ended upon Randall’s death, or were terminated in the event of a divorce.”
[6] The court ordered Randall to pay Vicki a cash payment of $68,750 plus any gains realized from non-retirement accounts and IRAs. This amount consisted of equalizing payments of $23,658.50 for non-retirement assets, $2,913 for IRAs, $1,000 for gains on a non-retirement account, $1,250 for a half-interest in a burial plot, and $40,000 for the life insurance premium reimbursement. We note the sum of these values is $68,821.50, which is $71.50 more than the court’s addition yielded. On remand, the court should resolve this discrepancy.
DUANE CROFT KNOWLES, Appellant, v. CELIA FERN KNOWLES, Appellee.
Opinion
No. 20200032
Filed April 7, 2022
Second District Court, Farmington Department
The Honorable David R. Hamilton
No. 174700123
Julie J. Nelson and Alexandra Mareschal, Attorneys for Appellant
Emily Adams and Sara Pfrommer, Attorneys for Appellee
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES RYAN M. HARRIS and DIANA HAGEN concurred.
CHRISTIANSEN FORSTER, Judge:
¶1In 2016, Duane Croft Knowles and Celia Fern Knowles separated after nearly thirty years of marriage. During their separation, the district court awarded Celia1 temporary alimony and, after a bench trial, entered a final alimony award. Duane now appeals those awards, arguing the court abused its discretion in (1) declining to award him credit for purported overages he paid in temporary alimony, (2) calculating the parties’ expenses in determining the final alimony award, and (3) selecting the date to value the retirement accounts. We affirm in part and reverse in part and remand.
BACKGROUND2
¶2Duane and Celia were married in December 1989. They remained married for twenty-nine years, during which time they had six children. For the duration of the marriage, Duane worked as an optometrist and supported the family financially.
¶3In 2016, Duane and Celia separated. At that time, only two of the children were minors.3 Upon the parties’ separation, Celia remained in the marital home, which was paid off. Each month Duane used his income to pay the family’s bills and any remaining funds were then divided between the parties; in the initial months following their separation, Celia received $200 more per month than Duane, after which the excess was split 50/50. After several months of this informal arrangement, both parties filed motions for temporary orders, supported by financial declarations.
¶4In Celia’s financial declaration, she reported a nominal monthly income of $103.52 from her massage therapist side business but requested the court impute the minimum wage for full-time employment to her in the amount of $1,257 per month. Celia also declared that her monthly financial needs were $8,476.91. This total included, among other things, orthodontic expenses for one of the parties’ minor children and a monthly donation for tithing to Celia’s church.
¶5In Duane’s financial declaration, he reported a net monthly income of $9,671.08 from his job as an optometrist. Duane calculated his monthly expenses as $5,054.70 and included in those expenses a line-item for a tithing donation to his church.
¶6 The competing motions for temporary orders were reviewed before a commissioner in September 2017. Duane was ordered to pay Celia $3,797 in alimony each month, beginning in July 2017. The commissioner noted that “the issue of retroactive alimony prior to July 1, 2017,” would be “reserve[d]” and that Duane “shall receive credit for amounts he has paid [Celia] or on behalf of [Celia] during this time.” In calculating temporary alimony, the commissioner adjusted the stated monthly expenses for both parties, including eliminating the claimed monthly expense for tithing. The commissioner did not exclude, however, Celia’s claimed orthodontic expenses for the parties’ minor children.
¶7 Duane objected to the commissioner’s alimony recommendations, arguing that the commissioner had improperly calculated the parties’ needs by failing to “equalize the parties[’] standards of living” and “by failing to consider the parties[’] historical standard of living.” In addition, he argued that the temporary award should cover only the actual expenses of the parties and not “projected expenses” such as possible orthodontics for the parties’ ten-year-old child who did not yet have braces.
¶8Following briefing and argument on Duane’s motion, the district court sustained the commissioner’s recommendations as to the parties’ temporary expenses and incomes. In particular, the court noted that including the orthodontic expenses in calculating Celia’s needs “was not erroneous” because “[e]ven if orthodonti[cs] is not presently involved, it could occur in the immediate future.” However, the court agreed with Duane that some of Celia’s expenses were inflated and that alimony should be adjusted accordingly. The court then reduced the temporary alimony award from $3,797 to $2,809, with payments set to begin on July 1, 2017, the same day set by the commissioner in his initial order.4
¶9In 2019, two years after Duane filed for divorce, the parties went to trial. During the course of the two-day bench trial on financial issues, both parties testified, along with their respective experts.
¶10 Duane first challenged the district court’s award of temporary alimony, arguing that Celia’s financial declarations were not adequately supported and that she had failed to prove the marital standard of living and her actual needs. In support of this argument, Duane called as an expert a forensic accountant to testify regarding the parties’ marital standard of living. The expert first testified that prior to the parties’ separation in 2016, the monthly marital expenses for both parties together were $9,338, or $4,669 each. He then explained that Celia had requested $8,476.91 in her financial declaration but had been spending only around $4,755.02 per month. He also opined that, based on the parties’ historical spending, tithing donations to their church were part of the marital standard of living.
¶11In addition to challenging the amount of alimony, Duane asked the court to credit him $64,000 for what he characterized as an “overage” he paid in temporary alimony. In essence, Duane argued that the temporary alimony figure he had paid for approximately two years had been too high and asked the court to adjust that figure retroactively and award him the difference between what he had paid and what he should have paid. He argued that Celia had “intentionally dissipated the marital estate by overspending,” “over-inflat[ing] her needs,” and “refusing to work” despite having “the ability to work full time.”
¶12 Following trial, the district court entered its findings of fact and conclusions of law. Based on its analysis of the parties’ income and needs, the court awarded Celia $2,770 in permanent alimony per month moving forward.
¶13 In reaching that amount, the court first analyzed each party’s income. It calculated Duane’s monthly net income at $9,368, after averaging the prior four years of his annual income as stated in his tax returns. The court also imputed a monthly net income of $1,874 to Celia, finding that “she is voluntarily underemployed” and “capable of employment.”
¶14 The court then analyzed the needs of each party. It first declined to “award any donations or tithing for either party.” It reasoned that the tithing payments were “a religious preference” and “not a necessary living expense.”
¶15 Next, after examining Celia’s multiple financial declarations and other relevant evidence, the district court found that her post-divorce living expenses would be $5,382 per month. To reach this amount, the court excluded some of Celia’s claims for expenses, finding the supporting evidence “lacking, remote in time[,] and remote in detail.” But the court also added additional expenses for a future mortgage and for health insurance, which had not been included in Celia’s financial declarations.
¶16Finally, the court examined Duane’s financial declarations and supporting evidence and determined that his monthly post-divorce living expenses, excluding child support, would be $5,833. In so doing, the court excluded only “the expense of donations,” finding Duane’s other expenses “to be appropriate.”
¶17 After setting the amount of permanent alimony, the district court addressed both parties’ claims regarding alimony arrears and overpayments. Without addressing the merits of the parties’ arguments, the court summarily concluded that both parties had failed “to provide or to carry the weight of the evidence in their respective favor” and declined to credit Duane for any overpayments of temporary alimony.
¶18With respect to the parties’ retirement accounts, the court awarded each party “one-half of the value of the marital portion of the retirement accounts, . . . with a valuation date of August 2, 2019,” the date on which the court announced its oral ruling.
¶19 Following the district court’s oral ruling, Duane filed a document requesting further clarification on a number of issues, including, as relevant here, his taxpayer filing status and the valuation date of the retirement accounts. As to his taxpayer filing status, Duane noted that his “ability to pay should be reduced by $224/month as his taxable income will be higher” because of the change in his filing status following the divorce. As to the valuation date of the retirement accounts, Duane noted that the division date “should be the date of separation” and not the date of divorce.
¶20 In response to Duane’s request, the district court issued an order rejecting both arguments. First, it declined to change Duane’s taxpayer filing status, reasoning that Duane had not provided sufficient evidence to rebut its previous ruling. Second, it declined to change the valuation date of the retirement accounts. It acknowledged that “typically the date of division of retirement accounts is the date of divorce” but, due to the “totality of the circumstances” presented in this case, determined to use August 2, 2019 as the “date of division,” noting that the parties had not made “sufficient argument about a different division date being used.”
ISSUES AND STANDARDS OF REVIEW
¶21 Duane now appeals and raises three issues for our consideration. First, he contends that the district court erred “by failing to correct for overage paid in temporary alimony.” “District courts have considerable discretion in determining alimony and determinations of alimony will be upheld on appeal unless a clear and prejudicial abuse of discretion is demonstrated.” Burggraaf v. Burggraaf, 2019 UT App 195, ¶ 26, 455 P.3d 1071 (quotation simplified).
¶22 Second, Duane contends that the district court erred in calculating the amount of the permanent alimony award. Specifically, he argues that the court miscalculated the parties’ expenses by failing to include the tithing contribution each paid to their church, by “including an ongoing expense for orthodonti[cs],” and by “miscalculating [Duane’s] tax obligation.” We review a district court’s alimony determination for an abuse of discretion. See id. In determining alimony, a court exceeds its discretion if its alimony award “lacks a reasonable basis.” Redden v. Redden, 2020 UT App 22, ¶ 15, 461 P.3d 314.
¶23 Third, Duane contends that the district court erred by “setting an arbitrary valuation date for the retirement accounts rather than the date of separation.” “The [district] court in a divorce action is permitted considerable discretion in adjusting the financial and property interests of the parties, and its actions are entitled to a presumption of validity.” Rayner v. Rayner, 2013 UT App 269, ¶ 4, 316 P.3d 455 (quotation simplified). “Thus, we will not disturb a court’s distribution of marital property unless it is clearly unjust or a clear abuse of discretion.” Goggin v. Goggin, 2013 UT 16, ¶ 44, 299 P.3d 1079 (quotation simplified).
ANALYSIS
I. Overpayment of Temporary Alimony
¶24 Duane first contends that the district court abused its discretion by failing to credit him for what he considers to have been excess payments made to Celia pursuant to the court’s temporary alimony order. Duane argued below, and argues now on appeal, that the temporary alimony award was erroneous because Celia obtained it by submitting inflated and unjustified need claims that the district court rejected after hearing the evidence at trial. Specifically, he argues that the temporary award underestimated the amount of income to be imputed to Celia, relied on an inflated estimate of Celia’s needs, and included a triple award for the children’s medical expenses.
¶25 Celia first responds that Duane failed to preserve this issue below, with the exception of his claim regarding the triple award of medical expenses. She then asserts that Duane’s argument fails on the merits because his comparison of the temporary and final awards fails to account for changes in her circumstances during the two-year period between separation and trial. We turn first to the preservation argument and then address the merits.
A. Preservation
¶26 Celia asserts that Duane’s overpayment argument regarding her expenses and income is unpreserved because the argument Duane raised in the district court is based on an “entirely distinct legal theory” from the argument he raises on appeal. (Quotation simplified.) In the district court, Duane argued that he paid too much in temporary alimony because Celia had “dissipated the marital estate by overspending” and had refused to work. Celia asserts these arguments are distinct from the argument Duane raises here, which is that the temporary alimony award was overinflated because of adjustments to Celia’s alimony award made by the district court at the time of trial. We disagree with Celia’s characterization of the arguments and conclude that the issue was properly preserved.
¶27“Our preservation requirement is well-settled: we require parties to have raised and argued before the district court the issue that they raise and argue before us on appeal, and if a party does not, it has failed to preserve the issue.” True v. Utah Dep’t of Transportation, 2018 UT App 86, ¶ 23, 427 P.3d 338 (quotation simplified). “An issue is preserved for appeal when it has been presented to the district court in such a way that the court has an opportunity to rule on it.” State v. Rogers, 2020 UT App 78, ¶ 20, 467 P.3d 880 (quotation simplified). A party asserting error on appeal must have raised the issue before the district court “specifically, in a timely manner, and with support by evidence and relevant legal authority.” True, 2018 UT App 86, ¶ 24. “New arguments, when brought under a properly preserved issue or theory,” may be properly considered on appeal. Id. ¶ 32 (quotation simplified). “Such arguments include citing new authority or cases supporting an issue that was properly preserved.” State v. Johnson, 2017 UT 76, ¶ 14 n.2, 416 P.3d 443.
¶28 The arguments Duane raised repeatedly in the district court are, in fact, based on the same facts and legal theories as those he raises here. In the proceedings on temporary orders, Celia filed a financial declaration stating that her monthly need was $8,476.91, which was only $1,000 short of Duane’s entire net income. At that time, Celia was working a de minimis amount and had no expenses for health insurance or housing since she was residing in the paid-off marital home and receiving health insurance through Duane’s employment. The commissioner reduced some of Celia’s claimed expenses and imputed income to her based on full-time work at a minimum wage income and then recommended that Duane pay temporary alimony in the amount of $3,797 per month.
¶29 Duane objected to the commissioner’s recommendation, arguing that Celia’s requested amount far exceeded the marital standard of living. Duane requested that the district court immediately correct the inflated temporary alimony because he was concerned that the court would decline to correct it retroactively. The court agreed that some of Celia’s expenses were inflated and reduced the temporary award to $2,809. Dissatisfied with the court’s resolution of the issue, Duane filed a petition for interlocutory appeal with this court, again making the argument that the temporary alimony award was excessive because Celia’s claimed expenses were excessive. His petition was denied.
¶30 Having been only partially successful in urging the district court to reduce the temporary award before trial, Duane again challenged the temporary award at trial. Indeed, Duane maintains that much of his motivation to take the case to trial— rather than to settle out of court—was to have the temporary alimony award corrected. Duane filed a trial brief in which he argued that he should be credited for any overage he had paid in temporary alimony and that temporary alimony should be “reduced retroactively as it was incorrectly applied.” Specifically, Duane argued that Celia had “over-inflated her needs” and “misled the [c]ourt with her financial declaration.” After the district court announced its preliminary oral ruling, Duane argued in post-trial briefing that the court should award him a judgment for “alimony that was over-paid during the temporary orders.” And at oral argument on the post-trial issues, Duane again argued that “[t]he temporary order created a substantial inequity between the parties” and that he should be given a judgment for the amounts he overpaid. The court noted Duane’s argument but declined to analyze the merits of his arguments or credit him for any overpayment.
¶31 In short, Duane repeatedly argued below that the temporary alimony award was wrong for two broad reasons. First, he claimed that it was wrong due to Celia’s allegedly overstated expenses. Second, he claimed that it was wrong due to Celia’s allegedly understated earning capacity. Duane sought credit for these overages based on his argument that the evidence presented at trial failed to support the temporary award. This is the same argument that Duane advances here. The fact that Duane now illustrates the issue by pointing to the discrepancies between the temporary alimony order and the final alimony award (and noting the adjustments made to the final award to account for Celia’s increased expenses for housing and health insurance) does not change the essence of Duane’s argument. We therefore conclude that Duane adequately preserved the issue for our consideration.
B. Temporary Awards
¶32 Utah Code section 30-3-3(3) authorizes an award of temporary alimony “to provide money, during the pendency of the action, for the separate support and maintenance of the other party and of any children in the custody of the other party.” Utah Code Ann. § 30-3-3(3) (LexisNexis Supp. 2021). Although orders providing for temporary support are operative during the pendency of the divorce proceeding, they are not final orders from which an appeal of right may be taken. Rather, as interlocutory orders, they are subject to continuing review and modification by the district court until the issuance of a final judgment. See IHC Health Services, Inc. v. D & K Mgmt., Inc., 2008 UT 73, ¶ 27, 196 P.3d 588 (recognizing the broad discretion of district courts to reconsider and modify interlocutory rulings before final judgment).
¶33 Although district courts have discretion in fashioning temporary orders, temporary alimony is subject to the same requirements as a regular alimony award. See Dahl v. Dahl, 2015 UT 79, ¶¶ 85–98, 459 P.3d 276 (describing factors applied to temporary alimony and concluding the district court did not abuse its discretion in denying temporary alimony when wife failed to provide documentation of her needs). As is the case with awards of permanent alimony, temporary alimony awards must “follow[] logically from, and [be] supported by, the evidence.” Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 13, 80 P.3d 153 (quotation simplified).
¶34 Because of their nature, however, temporary awards are often based on limited evidence. Typically recommended by a domestic relations commissioner after a brief proffer hearing based largely on the financial declarations submitted by the parties, see Utah R. Jud. Admin. 6-401(2)(H), such temporary orders may result in awards that are not supported by the more substantial evidence presented at a later trial. For this reason, district courts have the authority to revisit temporary orders and, if warranted, retroactively modify them in the final divorce decree. See Utah Code Ann. § 30-3-3(4); id. § 30-3-5(4); id. § 78B12-112(4) (2018); Miner v. Miner, 2021 UT App 77, ¶ 101, 496 P.3d 242; McPherson v. McPherson, 2011 UT App 382, ¶¶ 12, 17, 23, 265 P.3d 839.
¶35 This court’s opinion in McPherson illustrates this point and is instructive here. There, husband appealed the district court’s denial of his request for a retroactive modification of his temporary alimony obligation. McPherson, 2011 UT App 382, ¶ 10. The court had based its initial temporary award on the recommendation of the domestic relations commissioner who, in turn, had based it on husband’s salary at the time of the initial support hearing. Id. ¶¶ 3, 5. When the court entered the temporary award, it was unaware that husband had since been fired from his job. Id. ¶ 5. Husband thereafter moved to amend the temporary order to recalculate his child support and alimony obligations in accordance with his then-decreased salary. Id. ¶ 7. The court denied the motion, reasoning that husband’s decreased salary was likely the result of his voluntary underemployment. Id. Following a bench trial, however, the court reversed course, finding that husband was not voluntarily underemployed. Id. ¶ 19. It therefore reduced husband’s future support obligations. Id. But it nevertheless denied husband’s request for a retroactive modification of his temporary support obligations, reasoning there was “no basis in law, fact, or equity to retroactively reduce the amounts.” Id. (quotation simplified).
¶36 On appeal, this court reversed and remanded with instructions for the district court to modify the temporary alimony award retroactively. Id. ¶ 24. While recognizing the considerable discretion district courts possess in determining alimony, we emphasized that such awards must be supported by an explanation based on the evidence. Id. ¶ 23. Because the temporary alimony award was based on the erroneous assumption (later rejected by the district court) that husband was voluntarily underemployed, there was no justification for the higher award. Id. ¶ 21. This court held that the district court abused its discretion by failing to retroactively modify husband’s temporary support obligations, reasoning that “[e]ven if the commissioner’s recommendations seemed well founded at the time of the hearings, once the premise of that decision was proved inaccurate, there was no reasoned basis to impose temporary support obligations that were mathematically impossible for [h]usband to pay.” Id. ¶ 23.
¶37Like the husband in McPherson, Duane argues the district court abused its discretion when it failed to credit him for temporary alimony payments that were higher than the amount the court determined was appropriate after hearing the evidence at trial. We therefore consider whether the district court’s refusal to modify the temporary alimony award was supported by its factual findings and rulings at trial.
¶38Duane identifies $62,627 in alleged discrepancies between the district court’s award of permanent alimony based on the trial evidence and its award of temporary alimony based on the proceedings before the commissioner. These consist of discrepancies between (1) Celia’s imputed income ($16,255 in overage); (2) Celia’s needs ($38,250 in overage); and (3) the amount awarded for medical expenses ($8,152 in overage). While Celia argues that these discrepancies are readily explainable, the district court offered no such explanation. Despite Duane’s request for reimbursement of what he argued was excessive temporary alimony, the court summarily declined to reconcile the differences, stating only that “neither party submitted sufficient evidence for arrears or overages.” But the district court’s summary refusal to consider the merits of the issue on the basis of insufficient evidence does not suffice, because the evidence supporting Duane’s request for reimbursement of asserted overages was the very same evidence that supported the court’s award of permanent alimony.5 Indeed, the court’s explanation for its refusal to address the discrepancies between the temporary and final award is no more sufficient than the McPherson court’s conclusory statement that there was “no basis in law, fact, or equity to retroactively reduce the amounts.” See 2011 UT App 382, ¶ 19 (quotation simplified). We therefore turn to the alleged discrepancies Duane identifies.
Celia’s Imputed Income
¶39 An alimony award must account for the ability of the recipient spouse to support themselves. See Utah Code Ann. § 30-3-5(9)(a)(ii) (LexisNexis Supp. 2021). At the temporary stage, the court imputed $1,225 in net income to Celia. But at trial, the court agreed with Duane and found that Celia was “voluntarily underemployed” and “capable of employment.” Based on the testimony presented at trial, the court imputed to Celia $1,874 per month in net income, which represented an increase of $649 per month over the amount imputed in the temporary award. And the court made no finding suggesting that Celia could not have earned that amount during the pendency of the proceedings, or otherwise justifying the discrepancy between the temporary order and its findings at trial. The court should have considered whether Celia had the same earning capacity during the separation.
Celia’s Needs
¶40 An alimony award also must account for the financial condition and needs of the recipient spouse. See id. § 30-3-5(9)(a)(i). At the temporary stage, when Celia was residing in the paid-off marital home and receiving health insurance through Duane’s employment, the court found that Celia had monthly expenses (needs) of $5,370. After imputing a monthly net minimum wage of $1,225 to Celia and giving Duane credit for $1,336 in monthly child support payments, the court entered a temporary alimony award of $2,809 per month.
¶41 At trial, however, the court found that evidentiary support for Celia’s expenses was “lacking, remote in time,” “remote in detail,” and “artificial.” It therefore disallowed many of her claimed expenses. It then added a monthly mortgage expense of $1,015 to account for the fact that Celia would be required to refinance the marital home to cash out Duane’s equity. It also added a monthly health insurance expense of $503 because Celia would no longer be eligible for insurance through Duane’s employer after the divorce. Following these adjustments, the court made a finding that Celia’s monthly post-divorce expenses were $5,382. Excluding the post-divorce adjustments for housing and health insurance, the permanent award based on the trial evidence was $1,530 per month less than the temporary award or a total of $38,250 over the twenty-five months that Duane paid support pursuant to the temporary order. Duane argues that the district court erred in failing to award him this overage.
¶42 Celia argues that this court should reject Duane’s argument because he failed to marshal the evidence supporting the district court’s permanent award. She argues that Duane disregarded the evidence supporting her need for support after “the collapse of her 27-year marriage where she was largely a stay-at-home parent.” But marshalling is not required, because Duane has not raised a sufficiency argument or challenged the district court’s factual findings. And Celia has not explained why the length of the marriage or her status as a stay-at-home parent justifies the discrepancies in the amount of the temporary and final awards, since these issues are properly considered in determining the length of the alimony award and the level of income to impute to the receiving spouse. See id. § 30-3-5(9)(a)(ii), (iv).
¶43 Celia next argues that Duane is committing a logical fallacy of false equivalence by comparing the temporary and final alimony awards because there are significant differences between the two kinds of awards. She posits that a spouse’s needs, ability to produce income, and support of minor children may change from the time a court orders temporary alimony to the time of the final award and suggests that this is the explanation for the discrepancies here. She asserts that she was able to earn more income as time went on because her children were growing and their medical needs had decreased. She therefore suggests the district court determined she could earn more after the divorce was final than during its pendency. A court could conceivably find that a party is able to earn more at the time of trial than at the time of temporary orders. But the court made no such finding here, and we note that at no point during the temporary proceedings did Celia argue that the children’s medical needs prevented her from working. Indeed, the commissioner imputed her minimum wage for full-time work, and the district court found that Celia was voluntarily underemployed and flatly rejected her argument that she could not work because of the children’s medical needs.
¶44Finally, Celia argues that Duane’s line-by-line comparison
of the temporary and permanent awards is misleading because an alimony award is based on a more generalized determination of the amount necessary for both parties to maintain the standard of living that they enjoyed prior to the divorce. Because the temporary award ($2,809) was only $39 higher than the final award ($2,770), Celia maintains that the court’s failure to make an adjustment could not have been an abuse of discretion. But this argument ignores the adjustment made to the temporary award to account for mortgage and health insurance expenses.6 And more importantly, it is at odds with the district court’s express finding that evidentiary support for Celia’s claimed expenses was “lacking, remote in time,” “remote in detail,” and “artificial.” The court should have considered the merits of Duane’s arguments regarding these discrepancies to determine whether a modification of the temporary alimony award was in order.
Medical Expenses
¶45 Duane also argues that the temporary alimony award erroneously included a triple award of medical expenses. The temporary orders awarded Celia approximately $400 per month for medical expenses for the parties’ children, as well as half the funds in the parties’ health savings account (HSA). In addition, the temporary orders required that Duane pay for half the children’s medical costs. Duane reasons that Celia should not have been awarded the $400 per month for medical expenses and half of the HSA account, because he was already required to pay for half of the children’s medical costs. And he argues this inequity was exacerbated at trial when the court awarded Celia an additional lump sum for orthodontic expenses and miscellaneous out-of-pocket medical expenses. Duane seeks a credit in the total amount of $8,152.
¶46 Celia disputes Duane’s claim, arguing that Duane has failed to demonstrate that the money she was awarded for medical expenses exceeded the actual needs of the family. She also points to the district court’s finding that she had established the amount of the medical expenses with receipts and testimony not refuted by Duane, and that the award was to be paid from the HSA, not in addition to it.
¶47Duane responds that Celia is confusing the district court’s award for medical expense arrearages with the ongoing expenses included in calculating Celia’s need. He explains the court included approximately $400 per month in medical expenses in calculating Celia’s expenses, awarded Celia half the HSA account, and then duplicatively ordered Duane to pay for half the children’s medical expenses during the temporary orders period. After trial, Celia was awarded $150 per month in health care expenses and Duane was awarded the entire HSA amount. As was the case with Duane’s claim to recover overages associated with Celia’s allegedly inflated expenses and underemployment, the district court did not engage with Duane’s arguments that the temporary alimony award was $541 too high, stating only that it “had previously ruled that [Celia] is entitled to an award of medical expenses” and that it would “not modify its previous ruling.” There was no legal justification for the court’s refusal to examine the merits of Duane’s claim.
Remand
¶48Temporary support orders are interlocutory in nature and therefore subject to continuing modification by the district court through the date of the final decree. Because they are often based on proffers that may differ from the actual evidence presented at trial, such temporary orders may result in awards that are not supported by the evidence presented at a later trial. For this reason, district courts have not only the authority, but the obligation, to revisit temporary orders when requested and, if warranted, to “true-up” or retroactively modify them to comport with the evidence.
¶49While district courts retain broad discretion in fashioning support orders in divorce proceedings, they are obligated to analyze a timely claim by a party seeking to true-up a temporary support order with the evidence received at trial. This true-up process consists of a two-part exercise. If a true-up is timely requested, the court should first make factual findings relevant to the temporary award to determine whether it was supported by the evidence. If the court finds, after hearing all the evidence presented at trial, that the temporary order was inappropriate, then the court should proceed to the second step: determining whether a true-up is warranted in the case at hand. In many cases, a party who has demonstrated that a temporary order was inappropriate and unsupported by the more comprehensive evidence presented at trial will be entitled to a retroactive modification of that order. See McPherson v. McPherson, 2011 UT App 382, ¶¶ 21–24, 265 P.3d 839. But in some cases, a court may find that such retroactive modification is inappropriate or inequitable, notwithstanding an inaccuracy or error in the temporary order. In making the determination whether to order a true-up, a court should identify the considerations bearing on its decision and should enter careful findings explaining the basis for that determination.
¶50Here, Duane was entitled to have the district court engage on the merits in determining whether he was entitled to a true-up. As we have discussed, Duane repeatedly asked the district court to consider his contention that the temporary alimony award was too high and timely sought an offset based on the evidence presented at trial. At trial, the court concluded that Celia should be imputed more income than was included in calculating the temporary alimony. It also found that Celia’s claimed expenses were lacking in evidentiary support. But it failed to analyze, explain, or reconcile the discrepancies between the numbers used to calculate the temporary and final alimony orders. It similarly failed to engage in or analyze Duane’s claim that both the temporary and final alimony orders had duplicated the award for the children’s medical expenses. This was an abuse of its discretion. We therefore remand the matter to the district court to complete the first step of the true-up process by making appropriate factual findings relevant to the temporary award to determine whether it was supported by the evidence. If the court finds the temporary order was overinflated, it must then determine whether a true-up is warranted. And it should also consider Duane’s claim that both the temporary and final alimony awards included a triple award of the children’s medical expenses.
II. Calculation of the Final Alimony Award
¶51Duane next contends that the district court erred, in three ways, in calculating the final alimony award: (1) it did not consider tithing paid to the parties’ church as consistent with the marital standard of living, (2) it failed to consider Duane’s post-divorce tax bracket, and (3) it included orthodontics as a permanent expense. We address each argument in turn.
A. Tithing
¶52 Duane argues that the district court miscalculated his ability to pay alimony by excluding expenses that it deemed unnecessary. According to Duane, the court analyzed whether the parties’ claimed expenses were “necessary,” rather than whether they were consistent with the “marital standard of living.” (Quotation simplified.) After doing so, it determined that tithing paid to the parties’ church was not a necessary obligation and therefore excluded it from Duane’s list of expenses, thus inaccurately increasing his ability to pay.
¶53 When setting an alimony award, the district court must consider a number of statutory factors, including “the financial condition and needs of the recipient spouse,” “the recipient’s earning capacity or ability to produce income,” and “the ability of the payor spouse to provide support.” Utah Code Ann. § 30-35(9) (LexisNexis Supp. 2021). “Furthermore, the award should advance, as much as possible, the purposes of alimony by assisting the parties in achieving the same standard of living they enjoyed during the marriage, equalizing the parties’ respective standards of living, and preventing either spouse from becoming a public charge.” Hansen v. Hansen, 2014 UT App 96, ¶ 6, 325 P.3d 864 (quotation simplified).
¶54 In adhering to these principles, this court has described the proper process to be followed by courts when awarding alimony:
First, the court must assess the needs of the parties, in light of their marital standard of living. Next, the court must determine whether the receiving spouse is able to meet [their] own needs with [their] own income. If the court finds that the receiving spouse is unable to meet [their] own needs with [their] own income, the court must then assess whether the payor spouse’s income, after meeting [their own] needs, is sufficient to make up some or all of the shortfall between the receiving spouse’s needs and income.
Redden v. Redden, 2020 UT App 22, ¶ 21, 461 P.3d 314 (quotation simplified). If the court determines after conducting this analysis “that there are insufficient resources to meet the baseline needs established by the marital living standard, the court should then equitably allocate the burden of the shortfall between the parties.” Rule v. Rule, 2017 UT App 137, ¶ 22, 402 P.3d 153.
¶55As an initial matter, the court must assess the needs of the parties not by applying its own sense of which expenses are truly necessary but, instead, by examining whether their claimed expenses are consistent with the standard of living the parties established during the marriage. See id. ¶ 15. This assessment is fact-sensitive and individualized and must be limited to a determination of whether the claimed needs are “based on the parties’ historical standard of living.” See Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 12, 80 P.3d 153; see also Anderson v. Anderson, 2018 UT App 19, ¶ 31, 414 P.3d 1069 (defining “standard of living as a minimum of necessities, comforts, or luxuries that is essential to maintaining a person in customary or proper status or circumstances” and “disavow[ing] the notion that standard of living is determined by actual expenses alone” (quotation simplified)). Indeed, it is not the job of the district court to “appl[y] its own sense of what was reasonable under the circumstances.” See Dobson v. Dobson, 2012 UT App 373, ¶ 29, 294 P.3d 591.
¶56 In comporting with this principle, this court has upheld alimony awards that included unique expenses—even expenses some observers might deem frivolous or unnecessary—where such expenses were consistent with the marital standard of living. See, e.g., Miner v. Miner, 2021 UT App 77, ¶¶ 22, 26, 44, 496 P.3d 242 (awarding receiving spouse, among other things, $1,000 per month for “tennis-related expenses,” $625 per month for “entertainment,” and $5,000 per month for horse care and maintenance where each expense was a historical marital expense supported by the evidence). Moreover, courts may infer that “the parties’ current expenses were based on the marital standard of living when the majority of the expenses in the [payor spouse’s] current financial declaration are identical in amount to those identified as marital expenses in the [receiving spouse’s] current financial declaration.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 48, 449 P.3d 202 (quotation simplified); see id. (finding that receiving spouse’s request for $300 per month for donations and gifts was reasonable “[i]n light of the fact that the court allocated the same amount for each party to spend on donations and gifts”). Accordingly, as long as a party’s claimed expenses are consistent with the marital standard of living, are based on sufficient factual findings, and advance, as much as possible, the purposes of alimony, such expenses should be included in the “needs” calculation.
¶57 The district court did not follow this process here, however. In setting the alimony award, the court did not analyze whether the parties’ tithing payments were an expenditure consistent with the marital standard of living. Instead, the court declined to “award any donations or tithing for either party” based on its finding that “tithing is a donation and . . . not a necessary living expense.” We agree with Duane that in so doing, the court eliminated the expense based on a subjective needs judgment that ignored the requirement that it assess the expense based on how the parties chose to spend and allocate their money while married. See Bakanowski, 2003 UT App 357, ¶ 12. And here, the parties presented evidence that their historical standard of living consistently included paying tithing to their church.7 By failing to assess whether the parties’ expenditures were consistent with the marital standard of living, the court abused its discretion. Accordingly, we reverse the court’s determination on this point and remand for the court to reassess the tithing expense following the process detailed above. The court should make a finding as to whether tithing was included in the parties’ marital standard of living and, if it was, should account for that expense in calculating alimony.8 If inclusion of tithing in the calculation results in a shortfall, the shortfall should be equitably allocated between the parties.
B. Tax Status
¶58Duane next argues that the district court miscalculated his ability to pay because it failed to consider his post-divorce tax obligation. When awarding alimony, the district court must consider “the ability of the payor spouse to provide support,” Utah Code Ann. § 30-3-5(9)(a)(iii) (LexisNexis Supp. 2021), which “includes consideration of the payor spouse’s tax obligations,” McPherson v. McPherson, 2011 UT App 382, ¶ 13, 265 P.3d 839.
¶59The court calculated Duane’s ability to pay by averaging “the last four years” of his net income as listed in his historical tax returns. Based on those returns, the court determined that Duane’s tax obligation would be $24,335.77. In making this determination, the court failed to consider that during each of those years the parties’ filing status was married filing jointly, but that after the divorce Duane’s filing status would—at least for a time—be single or head of household, which would increase his tax obligation. Because the court failed to properly consider Duane’s tax obligation, we reverse and remand for it to recalculate Duane’s post-divorce tax obligations.
C. Orthodontics
¶60 Duane next argues that the district court “mistakenly included $112 per month for orthodonti[cs] in the alimony award.” He contends that this award is improper because (1) no evidence supported an orthodontics expense “that will endure for the entire . . . length of the alimony,” (2) he already pre-paid orthodontics as part of temporary alimony, and (3) he was already ordered to pay half the children’s medical expenses. As previously discussed, the temporary alimony award included $167 per month for orthodontic expenses for the parties’ ten-year-old child who was not yet wearing braces. Duane sought an offset for this amount against the final alimony award and further argued that the alimony award for orthodontic expenses was duplicative in light of the court’s separate order that Duane pay half of the children’s medical expenses. But the district court declined to address Duane’s arguments. Because we have remanded these issues for further consideration, we need not resolve at this juncture Duane’s claims regarding the orthodontics expenses. Rather, we direct the district court to reexamine the issue and articulate the factual and legal basis for its decision.9
III. Valuation Date for the Retirement Accounts
¶61 Finally, Duane argues that the district court abused its discretion by assigning a valuation date to the parties’ retirement accounts that was “long after the date of separation, yet not the date of divorce.”
¶62“Generally, the marital estate is valued at the time of the
divorce decree or trial.” Jacobsen v. Jacobsen, 2011 UT App 161, ¶ 39, 257 P.3d 478 (quotation simplified). However, “a court has broad discretion to value the parties’ marital assets at a different time, such as that of separation, if it determines that the circumstances so warrant.” Petrzelka v. Goodwin, 2020 UT App 34, ¶ 47, 461 P.3d 1134. “[A]ny deviation from the general rule must be supported by sufficiently detailed findings of fact that explain the [district] court’s basis for such deviation.” Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct. App. 1993).
¶63 In this case, the parties separated on May 24, 2016. In 2019, the matter proceeded to a multi-day bench trial that took place between January and April. The court delivered its oral ruling on August 2, 2019. In that ruling, the court addressed the division of the parties’ retirement accounts, ordering that they “be divided . . . 50/50 to each party, effective . . . today, . . . August the 2nd.” Approximately four months later, on December 11, 2019, the court reduced its oral ruling to writing.
¶64Duane contends that the valuation date set by the district court is “arbitrary” and not supported by sufficient findings. He maintains that the court should have set the valuation date as the date of separation. We disagree.
¶65 The valuation date was not arbitrary; it was in fact consistent with the general rule that “the marital estate is valued at the time of the divorce decree or trial.” See Jacobsen, 2011 UT App 161, ¶ 39 (quotation simplified). Here, the court set the valuation date as August 2, 2019—the same date on which it delivered its oral ruling at the close of trial. Because the court followed the general rule of setting the valuation date at the time of trial, it was not required to articulate any additional findings of fact explaining its decision. See id.
¶66 Moreover, the district court was not presented with sufficient evidence to justify a departure from the general rule. After the court’s oral ruling, Duane filed a motion to alter or amend arguing, among other things, that the date of separation should be used as the valuation date because Celia did not contribute to the retirement accounts during the period between the separation and the date of the divorce and therefore should not benefit from the increase in its value.
¶67The court considered Duane’s motion and issued an order upholding its choice of valuation date. It explained that “due to the totality of the circumstances a firm date of August 2nd, 2019 is the date of division of the retirement assets. The Court finds that there was not sufficient argument about a different division date being used.” Given the lack of argument as to an alternative valuation date, the court had no option other than to set the date as the date “of the divorce decree or trial.” See id. (quotation simplified). Duane does not persuade us that the district court acted outside the bounds of its discretion in setting the valuation date for the retirement accounts.
CONCLUSION
¶68 The district court abused its discretion by failing to meaningfully address Duane’s argument that based upon the court’s own post-trial findings, he was entitled to an offset for overages paid in temporary alimony, including offsets arising from the amount of Celia’s imputed income and inflated expenses. The district court similarly erred in failing to consider Duane’s arguments regarding the award of medical expenses, including orthodontics. The district court also abused its discretion when calculating Duane’s ability to pay permanent alimony by excluding tithing as part of the marital standard of living and by underestimating Duane’s post-divorce tax obligation. But we affirm the court’s valuation date for the parties’ retirement accounts. We therefore reverse the district court’s alimony award and remand the matter to the court for reconsideration of the alimony award in accordance with this opinion.