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Category: Business Valuation

Lamb v. Lamb, 2024 UT App 16 – divorce, custody, business, home equity

2024 UT App 16

THE UTAH COURT OF APPEALS

JOSEPH EARL LAMB,

Appellee,

v.

SONYA ELIZABETH LAMB,

Appellant.

Opinion

No. 20210787-CA

Filed February 8, 2024

Third District Court, Salt Lake Department

The Honorable Robert P. Faust

No. 174904728

Mary Deiss Brown, Attorney for Appellant

Gregory G. Skordas, Gabriela Mena, and Allison R.

Librett, Attorneys for Appellee

JUDGE DAVID N. MORTENSEN authored this Opinion, in which

JUDGES RYAN M. HARRIS and AMY J. OLIVER concurred.

MORTENSEN, Judge:

¶1 Joseph Earl and Sonya Elizabeth Lamb’s divorce was decided at a bench trial.[1] As relevant here, Joseph was awarded custody of their children, ownership of a family business, and half the equity of the marital home. Sonya now challenges the court’s custody determination and the award of the business. She also challenges the manner in which the court determined the equity in the marital home. We affirm the district court’s rulings in all aspects.

BACKGROUND[2]

¶2        Joseph and Sonya married in 2007 and separated in July 2017. We address separately each of the district court’s determinations with which Sonya takes issue.

The Custody of the Children

¶3        Joseph and Sonya have three children, all of whom were minors when they divorced in August 2021. In November 2017, at a hearing for temporary orders, Sonya’s counsel told the court that Sonya had been the children’s primary caregiver “until recently.” Sonya also admitted that she was arrested in July 2017 and was facing charges for possession and use of drugs, but she asserted that she had “taken responsibility,” had “stopped using drugs,” was “sober and more than capable of caring for the children and continuing on as their primary caregiver,” and had “been attending Narcotics Anonymous and Al-Anon meetings.” Sonya asserted that Joseph had a “serious drug addiction problem.” Joseph claimed that Sonya had vacated the marital home shortly before her arrest, and he revealed that he obtained a protective order against her. The court acknowledged the allegations both sides made against the other but noted that Joseph currently had the children in his care and was living in the marital home. The court then determined that Joseph should maintain “custody of the children on a temporary basis.”

¶4        Apparently, the children remained in the temporary custody of Joseph until the parties’ divorce trial, where the court received the testimony of a “reunification therapist” (Family Therapist), who had been hired by the parties after the custody evaluator had been “unable to perform an evaluation due to the children spending less than minimum time” with Sonya.

¶5        Based on the testimony of Family Therapist, which we recount when relevant in our analysis below, the court found that “unification” between Sonya and the two older children was “lacking” because of acrimonious relationships. The court noted that Family Therapist had testified that progress in reunification therapy would “influence what possible custody” Sonya might have in the future relative to the older children. The court determined that it was “in the best interest of the children that reunification therapy” continue to allow Sonya the opportunity “to reunify her relationship with the children.”

¶6        Accordingly, the court found that it was in the children’s best interest that Joseph be “awarded sole physical custody and final decision making authority,” with both parties being awarded joint legal custody. With regard to the youngest child, the court awarded supervised parent-time to Sonya one night a week. The court awarded Sonya no parent-time with the older two children. The court noted that supervised parent-time for Sonya would “be flexible” and might “increase after the current reunification issues” and Sonya’s “medical issues” were addressed. The court also stated that Sonya’s “non-use of cannabis” needed to be verified because marijuana use was “a contributing factor” that brought on her mental health episodes.

The Business

¶7        During their union, the parties were financially supported, at least in part, by a business that distributed supplies to gas stations. During the divorce proceedings, Joseph maintained that he was in the process of purchasing the business from his father but that he did not have the money to pay for it. Joseph explained that he drew a salary for his work with the business. In contrast, Sonya maintained that she and Joseph agreed to buy the business in 2010 and that they completed paying off the business in 2016. Sonya claimed that she and Joseph signed a document “to take over the business” but that she did “not have the document.” Sonya did produce a different document that explicitly stated the business was being sold only to Joseph.

¶8        The district court awarded the business to Joseph, along with all its debts and obligations. In addition, the court, apparently recognizing that the business was possibly still owned by Joseph’s father, ordered that any money Joseph borrowed against the marital home to purchase the business would “not be used to reduce the total equity in the home” so as to reduce Sonya’s share of the home’s value. In making this award to Joseph, the court was clear that it was basing its decision “on the testimony” provided by Joseph.

The Marital Home

¶9        Based on a Zillow estimate[3] provided by Sonya, the court determined the value of the marital home to be $998,659, but the equity in the home was reduced by mortgages and liens on the property. Joseph testified that three mortgages, totaling $402,000, were on the property.[4] And the home was additionally encumbered by eleven liens. Two of these liens, totaling $2,414, were attributed to Sonya and Joseph. The remaining nine, totaling $256,521, were tax liens and civil judgments incurred by the previous owner of the home.[5]

¶10      The court received evidence that when Joseph and Sonya purchased the home in November 2009, it was subject to some existing debt. Joseph testified as follows:

Counsel: “Was there anything particular about that purchase [of the home]?”

Joseph: “We didn’t have the credit or the means to get into a home at the time, so my brother is a real estate agent and he’s good friends with [the previous owner] and said, ‘Hey, this house is available. If you like it, I can probably get you into it.’ And so we took him up on that and (inaudible) that we had to take on (inaudible).”

Counsel: “So there were other debts on that house when you purchased it?”

Joseph: “Yes        I didn’t know about all of them at the time, but yes.”

Counsel: “What are those debts?”

Joseph: “There’s a lot of tax liens from [the previous owner] throughout the years. There’s a couple of (inaudible) from Sonya and I, medical bills that weren’t paid. . . .”

Counsel: “And have you paid off the tax liens? The liens on the house?”

Joseph: “No.”

Thus, in a somewhat unusual arrangement, the parties appear to have purchased the home subject to certain liabilities, even if they did not know the precise extent of those liabilities. Presumably, these liabilities would have been offset by a reduction in the purchase price, making the home more affordable.

¶11      Adding the mortgages and liens together for an amount of $660,935, the court determined that equity in the home was $337,724. The court ordered Joseph to pay Sonya $168,862 as her share of that equity.

¶12      Sonya appeals.

ISSUES AND STANDARDS OF REVIEW

¶13 Sonya identifies multiple ways in which she believes the district court erred. But “[f]or the sake of brevity,” we “consolidate these grounds” and “set out in the opinion only so much . . . as we deem necessary to a decision of the questions involved herein.” Patterick v. Carbon Water Conservancy Dist., 145 P.2d 503, 505 (Utah 1944), overruled on other grounds by Timpanogos Plan. & Water Mgmt. Agency v. Central Utah Water Conservancy Dist., 690 P.2d 562 (Utah 1984).

¶14      Sonya first contends that the district court abused its discretion in making custody and parent-time decisions because it lacked sufficient information to make those decisions. “We review custody determinations deferentially, and so long as the district court’s discretion is exercised within the confines of the legal standards we have set, and the facts and reasons for the decision are set forth fully in appropriate findings and conclusions, we will not disturb the resulting award.” Kingston v. Kingston, 2022 UT 43, ¶ 20, 532 P.3d 958 (cleaned up).

¶15      Sonya next contends that the district court’s findings were “entirely inadequate to explain” its reasoning for awarding ownership of the business to Joseph. “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.” Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262 (cleaned up).

¶16      Lastly, Sonya argues that the district court’s “procedures and decisions regarding the division of equity in the marital home were illogical and manifestly unjust.” “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.” Mintz v. Mintz, 2023 UT App 17, ¶ 12, 525 P.3d 534 (cleaned up), cert. denied, 531 P.3d 730 (Utah 2023).

ANALYSIS

  1. A Note on Briefing

¶17      Sonya’s briefing is plagued by significant deficiencies and does not comply with the Utah Rules of Appellate Procedure for appropriate briefing. First, excluding the cases cited for the standards of review, Sonya cites only a single case in her opening brief, and she does so in a perfunctory fashion—making only a shallow attempt to explain its relevance to the issues. Sonya continues this trend in her reply brief, where she cites no cases at all. In this regard, she falls far short of appellate expectations. “A party may not simply point toward a pile of sand and expect the court to build a castle. In both district and appellate courts, the development of an argument is a party’s responsibility, not a judicial duty.” Salt Lake City v. Kidd, 2019 UT 4, ¶ 35, 435 P.3d 248; see also Utah R. App. P. 24(a)(8) (“The argument must explain, with reasoned analysis supported by citations to legal authority and the record, why the party should prevail on appeal.”); id. R. 24(b)(3).

¶18      Second, in her statement of the case, Sonya fails to include a single citation to the record. This is in contravention of our clearly stated rule. See Utah R. App. P. 24(a)(6) (“The statement of the case must include, with citations to the record: (A) the facts of the case, to the extent necessary to understand the issues presented for review; (B) the procedural history of the case, to the extent necessary to understand the issues presented for review; and (C) the disposition in the court or agency whose judgment or order is under review.” (emphasis added)). We note that Sonya somewhat more adequately cites the record in the argument section of her brief, but that is not what the Utah Rules of Appellate Procedure require, and by ignoring the rules to suit her briefing preferences, she does little to bolster judicial efficiency.[6]

¶19      We point out these deficiencies not to ridicule, disparage, or shame counsel, but to provide warning that future briefing of this nature will likely be deemed inadequate and that any arguments on the merits may not be substantively considered by this court. This court receives hundreds of briefs each year. They vary in quality and in their adherence to the rules. We recognize that members of the bar have a lot on their plates and occasionally miss a typo or overlook a citation. But wholesale disregard of briefing rules is quite beyond the pale and can have unwelcome consequences for attorneys (and their clients) who choose this risky path. See Ostler v. Department of Public Safety, 2022 UT App 6, ¶ 27, 505 P.3d 1119 (“We . . . retain discretion to not address an argument that is inadequately briefed.” (cleaned up)); accord State v. Schwenke, 2007 UT App 354U, para. 2; State v. Garner, 2002 UT App 234, ¶¶ 8–13, 52 P.3d 467. And we hasten to point out that the risk of ignoring briefing requirements should come as no surprise to any attorney in Utah owing to our multiple references to the issue over the years. See Trees v. Lewis, 738 P.2d 612, 612–13 (Utah 1987) (stating that the merits of a dispute need not be reached if an appellant “has not supported the facts set forth in [a] brief with citations to the record” as required by rule 24(a)(6) of the Utah Rules of Appellate Procedure); State v. Price, 827 P.2d 247, 249 (Utah Ct. App. 1992) (“We have routinely refused to consider arguments which do not include a statement of the facts properly supported by citations to the record.”); Koulis v. Standard Oil Co. of Cal., 746 P.2d 1182, 1184 (Utah Ct. App. 1987) (“If a party fails to make a concise statement of the facts and citation of the pages in the record where those facts are supported, the court will assume the correctness of the judgment below.”). That we have exercised our discretion to address the merits of the issues on appeal here should not be taken as an imprimatur sanctioning inadequate briefing but as a conduit to raise awareness of the risk of ignoring the rules.

¶20 We take this occasion to recall the advice offered by our supreme court several decades ago:

If the questions involved in a case are of sufficient importance to justify asking this court to decide them, they are worthy of the careful consideration of counsel presenting them. It is the duty of attorneys practicing in this court to present to the court the authorities supporting their views and to assist the court in reaching a correct conclusion.

State v. Thomas, 1999 UT 2, ¶ 13, 974 P.2d 269 (cleaned up). With that, we remind counsel of their responsibility to assist the judiciary in advancing jurisprudence through diligent advocacy, adherence to our rules, and competent representation.

  1. Custody and Parent-Time
  2. Disclosure

¶21      Sonya argues that the district court erred in admitting Family Therapist’s testimony when Joseph had not timely disclosed him as an expert witness pursuant to rule 26 of the Utah Rules of Civil Procedure, which requires disclosure “within 14 days after the close of fact discovery.” Utah R. Civ. P. 26(4)(C)(i). Sonya’s briefing on this point leaves much to be desired. She entirely ignores what happened at trial, instead substituting her own retrospective take on what she believes should have happened without attempting to explain why her timeliness argument should now be considered. Providing some persuasive caselaw—which may or may not exist—would have gone far to support her argument. But like the rest of her briefing, this part is inadequate.

¶22      A review of the record shows that Sonya did not object to Family Therapist’s testimony on the grounds of untimely disclosure. Instead, Sonya argued that Family Therapist had “far exceeded any kind of mandate,” that he had not signed confidentiality waivers, and that allowing his testimony created patient privacy and ethical violations. In her objection at trial, rule 26 was mentioned only in passing and not in a way that would suggest she was objecting on timeliness grounds. It certainly would not have been clear to opposing counsel that a rule 26 timeliness issue was being raised such that he would have known to argue a harmlessness or good-cause defense for the failure to disclose, which would have been an easy argument to make given that both Joseph and Sonya had jointly retained Family Therapist and Sonya knew about Family Therapist several years before trial. And it would not have been clear to the district court that it was being asked to rule on a timeliness-based objection. For these reasons, Sonya did not preserve any such objection for appellate review. See State v. Centeno, 2023 UT 22, ¶ 57, 537 P.3d 232 (“It is well established that we will not address the merits of an unpreserved issue absent a showing that an exception to the preservation rule applies.”).

  1. Hearsay

¶23 Sonya additionally argues that Family Therapist’s testimony, insofar as he testified as a fact witness, “was inadmissible hearsay and based entirely on his conversations with the parties and their children as their reunification therapist.” Sonya’s hearsay argument is difficult to follow and poorly briefed. Instead of analysis in support of her hearsay argument, she provides scant and unsupported assertions.

¶24      Sonya objected below to Family Therapist’s testimony on the grounds that it was hearsay. But the court ruled that it was not hearsay, concluding that Family Therapist’s testimony was not offered “for the truth of the matter asserted.” Rather, the court ruled that the “focus of [the] questioning” was, first, to allow the court “to find out how [the children were] doing, if they’re capable of going forward” and, second, to identify the present “obstacles” to “structuring visitation with [Sonya].” On appeal, Sonya makes no attempt to engage with the court’s reasoning, instead limiting her analysis to a blanket assertion that “it [was] evident” Family Therapist was “allowed to testify as an expert, offering hearsay, opinions and recommendations in [a] manner that simply is not permitted by the Rules of Civil Procedure.” Such superficial and undeveloped argument is simply not persuasive, most especially because it does not address the alleged error in the court’s reasoning. It is well settled that appellants who fail to “address the district court’s reasoning” also fail to carry their “burden of persuasion on appeal.” See Federated Cap. Corp. v. Shaw, 2018 UT App 120, ¶ 20, 428 P.3d 12; see also Spencer v. Spencer, 2023 UT App 1, ¶ 27, 524 P.3d 165; Bad Ass Coffee Co. of Haw. v. Royal Aloha Int’l LLC, 2020 UT App 122, ¶ 48, 473 P.3d 624.

  1. Custody Factors

¶25 Sonya next argues that the court did not address the custody factors outlined in section 30-3-10 of the Utah Code, making its custody findings insufficient. More specifically, Sonya argues that the court’s factual findings were deficient due to the court’s reliance on the testimony of Family Therapist in making those findings.

¶26 Section 30-3-10 states that in “determining any form of custody and parent-time . . . , the court shall consider the best interest of the child and may consider . . . other factors the court finds relevant,” including factors for each parent articulated in the code. Utah Code § 30-3-10(2) (emphasis added). These factors a court may consider are “not on equal footing.” Hudema v. Carpenter, 1999 UT App 290, ¶ 26, 989 P.2d 491. Instead, “it is within the trial court’s discretion to determine, based on the facts before it and within the confines set by the appellate courts, where a particular factor falls within the spectrum of relative importance and to accord each factor its appropriate weight.” Id. (emphasis added). “And where significant evidence concerning a particular factor is presented to the district court, findings that omit all discussion of that evidence must be deemed inadequate.” Twitchell v. Twitchell, 2022 UT App 49, ¶ 21, 509 P.3d 806. Thus, to “ensure that the trial court’s custody determination, discretionary as it is, is rationally based, it is essential that the court set forth in its findings of fact not only that it finds one parent to be the better person to care for the child, but also the basic facts which show why that ultimate conclusion is justified.” Id. ¶ 24 (cleaned up).

¶27      Here, the factors about which the court received significant evidence concerned Sonya’s ability to function as a parent, which the court received as testimony from Family Therapist. As we have explained above, Sonya’s challenges to the admissibility of Family Therapist’s testimony fail, and we accordingly conclude that the district court acted well within its discretion in relying on his testimony.

¶28      Regarding Sonya’s ability to parent the two older children, Family Therapist testified that they were “very angry” with Sonya and “announced that they would never see or talk to her again.” Their anger was due to their religious sensibilities and Sonya’s announcement that she was pregnant by a man other than their father during the pendency of the divorce.

¶29      With regard to Sonya’s parenting, Family Therapist stated that the youngest child was very frightened after “his last visit with [Sonya] when she was struggling psychiatrically.” Moreover, Family Therapist also testified the youngest child was beginning to see himself as Sonya’s “partner,” resulting in the child “becoming parentified.”[7]

¶30 Family Therapist further indicated that while he was unaware of Sonya’s “current condition or functioning,” Sonya had been “hospitalized and diagnosed with some issues.” He asserted that “safety” needed to be addressed, meaning that Sonya required a psychiatric evaluation to demonstrate that her “situation” was “under control.” He also indicated that Sonya needed to work on “being forthright with medications.” Sonya, by her own admission, had “suffered an isolated manic episode” related to bipolar disorder and “called the police for assistance” because she was suffering from “visual and auditory hallucinations.”

¶31    Sonya’s briefing on this point misses the mark because it entirely relies on the assumption that Family Therapist’s testimony was inadmissible, an assumption we conclude is without foundation. See supra ¶¶ 21–24. She does not explain why, in light of Family Therapist’s admissible testimony, the court’s consideration of the statutory custody factors was insufficient. Sonya’s briefing makes no attempt to explain why the court is not allowed to rely on the evidence it receives when making custody decisions.

¶32 Moreover, Sonya does not identify any “significant evidence,” see Twitchell, 2022 UT App 49, ¶ 21, as to the other factors in section 30-3-10 that the court received but left unaddressed. Instead, her briefing advances an argument that is entirely conclusory and unsupported by record citation or legal authority:

Although § 30-3-10 gives broad discretion to the court as to the relevance and appropriate weight to give each factor, the district court in this case simply did not have any information that would allow it to make findings as to most of the statutory factors. For instance, the district court did not know who the primary caretaker of the children during the marriage was. The district court did not know anything about the marriage. The district court would not permit any testimony relevant to Joseph’s moral character or his history of drug abuse and sexual proclivities. The Court would not allow any testimony as to Joseph’s inability and unwillingness to co-parent with Sonya. At the end of the day, the Court simply sidestepped its responsibility as an independent factfinder and deferred to [Family Therapist].

This might be a good argument if Sonya had supported it with citations to the record and to legal authority. As this argument stands before us, we are unable to verify what it asserts. But we suspect that Sonya might be indulging in hyperbole here. Indeed, Sonya’s assertion that “the district court did not know anything about the marriage” is patently false. Our review of the record indicates that the court, in fact, knew quite a bit about the marriage, such as its financial situation, issues related to the children, and the problems that led to its demise, to name just a few topics within its familiarity. And with regard to Joseph’s alleged use of illegal drugs, we found only one instance (subsequently echoed by Sonya’s attorney) in the record where Sonya asserted before the district court that Joseph had a “cocaine habit.” But the district court was free to “disregard such testimony if it [found] the evidence self-serving and not credible,” since the factfinder “is in the best position to judge the credibility of witnesses.” See Clark v. Clark, 2023 UT App 111, ¶ 37, 537 P.3d 633 (cleaned up). An isolated allegation made in passing certainly does not amount to “significant evidence,” see Twitchell, 2022 UT App 49, ¶ 21, especially given the district court’s role as the factfinder to judge the credibility of witnesses, see Ouk v. Ouk, 2015 UT App 104, ¶ 14, 348 P.3d 751. And as to the other statutory custody factors that Sonya asserts the court left unaddressed, she has not pointed us to any significant evidence that the court received with respect to those factors.

¶33      Thus, unlike the situation in Twitchell, where we concluded “that the district court exceeded its discretion by failing to include in its findings any discussion of the evidence relating to the abuse allegations against [the mother], her alleged neglect of [the child,] and her moral character, as well as the effect that evidence had on its best-interest analysis,” see 2022 UT 49, ¶¶ 22–23, 25, here there simply wasn’t significant evidence presented regarding section 30-3-10’s other custody factors. This lack of evidence—insofar as there was a lack—was not the court’s fault; it was Sonya’s fault for not presenting it. After all, a court cannot be faulted for failing to consider evidence that was not presented to it. In contrast, given the substantial evidence the court did receive about the serious mental health issues Sonya faced, we conclude that the district court did not abuse its discretion in its consideration of the statutory factors when determining that awarding physical custody to Joseph was in the best interest of the children.

¶34 In sum, Sonya has failed to show that the district court abused its discretion in accepting and relying on the testimony of Family Therapist in making custody determinations or that the district court did not properly address the statutory factors in determining custody of the children.

III. Ownership of the Business

¶35      Both parties agree that the district court concluded that the business was not a joint marital asset. The district court awarded the business to Joseph “[b]ased on [Joseph’s] testimony.” Along with awarding the business to Joseph, the court stated that Joseph was “responsible for payment of the purchase price of the business.”

¶36      Sonya’s briefing on this point is challenging because it consists largely of recounting financial matters pertaining to the marriage but unrelated to the ownership of the business. She then asserts, with no discernible effort to explain why, that the “findings/conclusions were entirely inadequate to explain the Court’s reasoning for giving ownership” of the business to Joseph. Her argument is difficult to follow, but its essence, insofar as we can tell, appears to be that the court erred in believing Joseph’s testimony over hers.

¶37 We disagree with Sonya that the court erred in crediting Joseph’s testimony regarding the ownership of the business over Sonya’s. Again, the court stated in its factual findings that its award of the business to Joseph was “[b]ased on [his] testimony.” In making this credibility determination, the court acted well within its discretion. “[W]here there exists evidence sufficient to support a court’s rulings regarding a divorcing couple’s finances, that ruling will be upheld on appeal, even if evidence was presented that might have cut the other way.” Clarke v. Clarke, 2023 UT App 160, ¶ 27. This is because “the fact-finder is in the best position to judge the credibility of witnesses and is free to disbelieve their testimony. Even where testimony is uncontroverted, a trial court is free to 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); see also Kimball v. Kimball, 2009 UT App 233, ¶ 20 n.5, 217 P.3d 733 (“[I]t is the trial court’s singularly important mission to consider and weigh all the conflicting evidence and find the facts.”).

¶38      Here, the district court was in the best position to judge the credibility of the parties. It clearly found Joseph’s testimony regarding the ownership of the business to be more credible. Sonya has provided no reasoned argument—apart from her assertion that she disagrees with it—as to why the district court’s conclusion that the business was not marital property was erroneous. Accordingly, Sonya has failed to meet her “burden on appeal to show that no reasonable person would take the view adopted” by the district court, and we therefore conclude that the district court did not err in awarding the business, along with its liabilities, to Joseph. See Ouk, 2015 UT App 104, ¶ 14.[8]

  1. Equity in the Marital Home

¶39      Sonya’s final claim is that the district court abused its discretion in dividing equity in the marital home. “In divorce actions, a district court is permitted considerable discretion in adjusting the financial and property interests of the parties, and its actions are entitled to a presumption of validity.” Gardner v. Gardner, 2019 UT 61, ¶ 18, 452 P.3d 1134 (cleaned up). Thus, in such proceedings,

we will reverse only if (1) there was a misunderstanding or misapplication of the law resulting in substantial and prejudicial error; (2) the factual findings upon which the award was based are clearly erroneous; or (3) the party challenging the award shows that such a serious inequity has resulted as to manifest a clear abuse of discretion. Because we can properly find abuse only if no reasonable person would take the view adopted by the trial court, appellants have a heavy burden to show that an alleged error falls into any of these three categories.

Id. (cleaned up).

¶40      Sonya’s claim focuses on three aspects of the court’s valuation of the home: (1) the mortgage amount, (2) the use of the Zillow estimate, and (3) the amount of the liens on the home. We address each in turn.

¶41      The Mortgage Amount. Sonya complains that the district court, based on Joseph’s testimony, should have used $298,000 as the amount owing on the mortgages rather than $402,000, an adjustment that would have benefitted her by increasing the equity she would have received. “Generally, the marital estate is valued at the time of the divorce decree or trial. However, in the exercise of its equitable powers, a trial court has broad discretion to use a different date, such as the date of separation, when circumstances warrant. If the trial court uses a date other than the date of the divorce decree, it must support its decision with sufficiently detailed findings of fact explaining its deviation from the general rule.” Rothwell v. Rothwell, 2023 UT App 50, ¶ 39, 531 P.3d 225 (cleaned up), cert. denied, 537 P.3d 1011 (Utah 2023). In response to Sonya’s motion for amended findings, the court explained, “[Joseph’s] statement of the mortgage balance of $298,000 was referring to the total amount of all three (3) mortgages. The Court also took that into evidence taking into account that it was [Joseph’s] best estimate according to what his monthly mortgage payments are and how much was deducted from the principal each month.” We understand this to mean that the court took into consideration that it was through Joseph’s extraordinary post-separation payment efforts that the mortgage amount had been reduced. Moreover, Sonya concedes in her reply brief that it was within the district court’s discretion to use the earlier mortgage total. Accordingly, we see no abuse of discretion in the court’s use of the date of the separation to determine the amount of the mortgages.

¶42      The Zillow Estimate. Sonya next complains that the home should have been valued at about $260,000 more than was indicated by the Zillow estimate the court used. The glaring problem with this aspect of Sonya’s complaint is that it was her counsel’s idea to use the Zillow estimate. In open court, her counsel looked up the estimate and announced it to the court. And the court proceeded to base its calculations on the very data Sonya’s counsel supplied. We simply will not countenance Sonya’s assertion that the district court erred in proceeding to use the estimate that Sonya herself, through counsel, provided. Sonya invited any error in this regard. See Somer v. Somer, 2020 UT App 93, ¶ 14, 467 P.3d 924 (“Where a party makes an affirmative representation encouraging the court to proceed without further consideration of an issue, an appellate court does not consider the party’s objection to that action on appeal.” (cleaned up)). In her briefing on appeal, Sonya points to nothing in the record that would have allowed the court to value the home using anything other than the Zillow estimate. Sonya does not challenge that the court acted on the only information it had and that Sonya herself provided. Accordingly, “given the absence of any expert financial testimony, . . . the paucity of assistance the parties offered the court,” and the representations made by Sonya’s counsel regarding the marital home’s value, we conclude that “the court in this instance made findings within its discretion and supported by the evidence it was given.” Clarke v. Clarke, 2023 UT App 160, ¶ 55.

¶43      The Liens. Sonya argues that the district court abused its discretion in counting third-party liens against the equity in the home. Given the evidence the court received, we see no error on the part of the court in this regard. Indeed, there was evidence to support the court’s determination that the third-party liens should be included in the calculation of the home’s equity. Joseph testified that when he and Sonya purchased the home, they did so knowing that they were assuming responsibility for some of the previous owner’s debts. This is an admittedly odd arrangement, but Joseph testified that they were willing to accept it because they were not in a financial position to purchase the home otherwise. Sonya offered no testimony or other evidence to contradict Joseph’s assertion, and she still points to nothing presented at trial that contradicted this evidence. Accordingly, we conclude that the factual findings that included the liability associated with the third-party liens were not clearly erroneous and that the court did not abuse its discretion in calculating the home’s equity.

CONCLUSION

¶44      Sonya has not demonstrated that the district court abused its discretion in its custody determination, in awarding the business to Joseph, or in its division of equity in the marital home. Affirmed.

Utah Family Law, LC | divorceutah.com | 801-466-9277


[1] Because the parties share a surname, we refer to them by their given names.

[2] As addressed below, neither party’s briefs included sufficient citations to the record. This shortcoming has necessitated us combing the record to establish some semblance of a background, something we are not obligated to do. See State v. Wright, 2019 UT App 66, ¶ 47 n.6, 442 P.3d 1185 (explaining the parties’ duty to cite the record in appellate briefs), cert. denied, 456 P.3d 391 (Utah 2019). Accordingly, our recitation of the facts is necessarily minimal as we limit it to what is essential to resolve the issues on appeal.

[3] Neither party produced an appraisal of the home or an appraisal witness at trial, leading the court to ask the parties, “Does anybody have any valuation [of the home] at all?” Sonya’s counsel answered, “Well, we could do it [with] Zillow.” At this point, while in court, Sonya’s counsel looked up the value and reported, “According to Zillow as of today, the estimated value is $998,659.” No objection was lodged at trial to the court receiving this information. “Zillow is a commercial website that provides, among other things, an estimated market value for many residential properties.” Chaudry v. Chaudry, No. 1794, 2021 WL 2910977, at *9 n.7 (Md. Ct. Spec. App. July 12, 2021).

[4] This number reflected the amount owing at the time of separation. At the bench trial, Joseph testified that the amount was currently about $298,000.

[5] Joseph’s counsel provided a LexisNexis report as evidence of the liens on the home. This report was admitted as evidence with no objection.

[6] Nor did Joseph’s counsel provide a single citation to the record in his brief. This shortcoming is most unhelpful. While an appellee is not required to file a brief, see, e.g.AL-IN Partners, LLC v. LifeVantage Corp., 2021 UT 42, ¶ 19, 496 P.3d 76, we observe that if a brief is filed, it would behoove counsel to provide record citations. After all, and at the risk of stating the obvious, record citations are required because in their absence it’s difficult, and at times impossible, to figure out what the parties are referencing.

[7] “Parentification is often referred to as growing up too fast. Typically, it occurs when a child takes on parental responsibility for their siblings or even their parents, taking care of a sibling or parent physically, mentally, or emotionally. This can damage a child’s mental well-being and lead to long-term mental health conditions such as depression and anxiety.” Amber Felton, What Is Parentification, Web MD, https://www.webmd.com/parenting /what-is-parentification [https://perma.cc/N6TT-Y7QN].

[8] Sonya also argues that the district court violated her constitutional due process rights by its “ongoing interference” with her counsel’s presentation of her case. Quite frankly, apart from a litany of complaints about the court requiring counsel to keep her questioning relevant, the contours of her argument on appeal are difficult to discern, and she fails to cite a single case in support of the argument. Accordingly, we decline to consider her due process argument because it is inadequately briefed. See Utah R. App. P. 24(a)(8) (“The argument must explain, with reasoned analysis supported by citations to legal authority and the record, why the party should prevail on appeal.”); see also Orlando Millenia, LC v. United Title Services of Utah, Inc., 2015 UT 55, ¶ 30 n.3, 355 P.3d 965 (“The briefing on this claim . . . is inadequate. [The appellant’s] briefing on this issue fails to cite any authority and makes no attempt to connect the law to the facts of this case.”).

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Establishing the existence or absence of business/commercial goodwill value in a divorce.

Sometimes a business is a marital asset.

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.

Utah Family Law, LC | divorceutah.com | 801-466-9277

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How Can You Tell if Your Lawyer Is Lying About Winning Cases if There Is No Evidence of It Online or in Paper Form?

Effectively, you can’t.

You might be able to verify whether your lawyer is telling the truth about his/her winning record if the lawyer is willing to give you the information about the case number, the parties, and the opposing lawyer, so that you could—with that information in hand—inquire with the opposing party and the opposing lawyer to see whether they can verify what your lawyer claims is true.

Utah Family Law, LC | divorceutah.com | 801-466-9277

https://www.quora.com/How-can-you-tell-if-your-lawyer-is-lying-about-winning-cases-if-there-is-no-evidence-of-it-online-or-in-paper-form

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State in Interest of P.J.R., 2023 UT App 27

THE UTAH COURT OF APPEALS

STATE OF UTAH, IN THE INTEREST OF P.J.R., A PERSON UNDER EIGHTEEN YEARS OF AGE.

C.S.,

Appellant,

V.

STATE OF UTAH,

Appellee.

Opinion

No. 20220264-CA

Filed March 23, 2023

Sixth District Juvenile Court, Manti Department

The Honorable Brody L. Keisel

No. 1097003

Emily Adams, Freyja Johnson, and Caleb Proulx,
Attorneys for Appellant

Sean D. Reyes, Carol L.C. Verdoia, and John M.
Peterson, Attorneys for Appellee

Martha Pierce, Guardian ad Litem

JUDGE RYAN M. HARRIS authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and DAVID N.
MORTENSEN concurred.

HARRIS, Judge:

¶1        C.S. (Mother) appeals an order terminating her parental rights regarding P.J.R. (Child). But Mother does not contest the juvenile court’s findings that there were grounds for termination and that termination was in Child’s best interest. Instead, Mother limits her appellate challenge to the court’s determination that the Division of Child and Family Services (DCFS) made reasonable efforts, during the course of the case, toward reunification of Mother and Child. Specifically, she claims that the court applied an incorrect evidentiary standard in arriving at its reasonable efforts determination and—alternatively—challenges the merits of that ultimate determination. We find Mother’s arguments unpersuasive, and therefore affirm.

BACKGROUND

¶2        In 2019, DCFS filed a petition seeking protective supervision of Mother’s five children, including Child. In the petition, DCFS alleged that Mother had abused and neglected Child, and specifically alleged (among other things) that, during an incident in the waiting room of a family counseling center, Mother “grabbed [Child] by the back-collar area of his shirt in such a manner that it restricted his ability to breathe and caused him to choke,” and then “shoved his face into the corner with force.” Even after Child “told Mother he was having difficulty breathing and that Mother was hurting him,” Mother “did not let up on his shirt or the forcing of his face into the corner.” At an ensuing shelter hearing, the juvenile court placed all five children in the temporary custody of DCFS.

¶3        Mother responded to the petition by admitting some of the State’s allegations and, with respect to the rest, neither admitting nor denying them; this response resulted in the court deeming the State’s allegations true. See Utah R. Juv. P. 34(e) (“A respondent may answer by admitting or denying the specific allegations of the petition, or by declining to admit or deny the allegations. Allegations not specifically denied by a respondent shall be deemed true.”). On the basis of Mother’s responses, the court adjudicated Child as abused and neglected by Mother. Mother appealed that adjudication order, and this court affirmed it but remanded for additional proceedings on issues not material to this appeal. See In re C.M.R., 2020 UT App 114, ¶ 33, 473 P.3d 184.

¶4        Following adjudication, the court issued a disposition order in September 2019, setting the primary permanency goal as reunification and the concurrent permanency goal as adoption. In connection with setting reunification as the primary permanency goal, the court adopted a service plan—prepared with Mother’s input and cooperation—and found, “by clear and convincing evidence,” that fulfillment of the plan’s terms would “constitute reasonable efforts on the part of . . . DCFS to finalize the permanency goals,” including reunification. Among other things, the plan required DCFS to “follow up with [Child]’s therapist to monitor his progress in therapy,” to follow up with Mother’s therapist regarding her treatment, to promptly communicate with Mother, to “assess [Mother]’s increase in parenting skills during supervised parent-time,” and to ensure that Child’s living, academic, and health needs were being addressed.

¶5        As the case progressed, friction arose between Mother and the DCFS caseworker. As Mother showed at trial, the conflict became apparent at one supervised visit between Mother and her daughters; in a “heated interaction,” the caseworker cut the visit short after observing Mother say certain things to her daughters that the caseworker deemed inappropriate. On a later occasion, the caseworker sent a text message to the guardian ad litem lamenting the fact that Mother received visitation with one of her daughters at all, noting that “[t]hese kids have been the victims of severe physical and emotional abuse for years.” Eventually, Mother refused to communicate with the caseworker (other than by text message) without her attorney present. Even the State’s attorney noticed that the caseworker was having a hard time keeping her “emotions out of this case,” and admonished the caseworker to be more circumspect in her communication.

¶6        Mother also came to believe that the caseworker was interfering with family therapy during the course of the case. Under the service plan, family therapy involving Mother and Child was to begin when Mother’s and Child’s therapists both recommended it, and the caseworker was supposed to follow up with both therapists. In December 2019, the caseworker apparently told Mother that Child’s therapist did not recommend face-to-face visits when, in fact, the caseworker had not yet communicated with Child’s therapist. The first documented communication between the caseworker and Child’s therapist about family therapy was in June 2020, about nine months after the service plan was put in place. However, some evidence shows that the caseworker had “reached out to [Child]’s therapist regularly throughout the case,” and that as of May 2020, Child’s therapist did not “recommend family therapy with [Mother] at this time.” But when the caseworker was asked at trial whether she communicated with Child’s therapist prior to June 2020, she stated that she did not recall. When the caseworker did reach out to Child’s therapist inquiring about family therapy, the therapist responded that before family therapy would be recommended, Mother would need to take a parenting course, continue her own therapy, and “take[] accountability for her actions and . . . learn[] . . . to regulate her own emotions.”

¶7        Shortly thereafter, Mother complained that the caseworker might be attempting to influence the therapists away from holding family therapy, and the caseworker then told the therapists that the court had instructed her to tell them that they were to communicate with each other (rather than through the caseworker as an intermediary) about “whether family therapy with [Mother] and [Child] would be in [Child’s] best interest.” By this point, Child’s therapist had come to believe that family therapy was now appropriate, and expressed interest in beginning the process. The caseworker said she would follow up to see whether Mother and Child were making progress from the therapy, but—apparently in response to Mother’s request that DCFS “back off”—she stated that she would “not be a part of the scheduling process.”

¶8      In August 2020, the caseworker learned that criminal charges had been filed against Mother, and informed the therapists of this fact. Mother believes that the caseworker implied that the conduct in question had occurred recently, when it had actually occurred prior to removal of the children from Mother’s care. After the therapists learned of the charges, communication between them seemed to halt, and family therapy between Mother and Child never did take place.

¶9        During the reunification period, the court held periodic review hearings to assess Mother’s progress under the service plan; at some of these hearings, Mother voiced concerns about the fact that family therapy was not occurring, and on other occasions she expressed concerns about certain statements the caseworker was alleged to have made. But for the most part Mother was non­specific about what else DCFS could have done to improve its efforts; indeed, on at least one occasion, the court expressly asked Mother’s attorney if “there’s anything else . . . as far as services go . . . that could be provided by [DCFS],” or if there was “anything else that you think [DCFS] should be providing to help [Mother] complete the service plan,” and counsel responded that he did not “have any specific request of [the court] right now.” The most specific complaint Mother raised was in August 2020 when she filed a “motion to take evidence and make findings regarding reasonable efforts” in which she accused DCFS of “hostility” and “actively work[ing] against the reunification goal.”

¶10      But by the time this motion was filed, the court had already made—on several different occasions during the reunification period—specific findings that DCFS was making reasonable efforts toward accomplishing the stated permanency goals, including reunification. For instance, in November 2019, the court after a hearing found that “DCFS has provided and is providing reasonable efforts to finalize the permanency goals.” Several months later, the court made a similar finding, noting along the way that Mother’s attorney “could not articulate other efforts that DCFS should be making to further the permanency goals.” In August 2020, the court found that “DCFS has and continues to provide reasonable efforts to finalize the child/children’s permanency goals and to comply with its court ordered responsibilities.” And a few weeks after that, the court did so again, noting that “[n]o party suggested efforts/services that could be provided by DCFS which are not already being provided.” There is no record of Mother making any objection to any of these interim findings regarding reasonable efforts.

¶11      In November 2020, after fourteen months of reunification services and with a permanency hearing looming, the parties engaged in settlement negotiations and entered into a stipulation that resolved many of the issues in the case. The parties and counsel then appeared before the court to put the terms of their stipulation on the record. Following the hearing, counsel for the State prepared an order memorializing the events of that hearing, and circulated it to Mother’s counsel for review. Mother’s counsel did not object or otherwise comment on the proposed form of the order, and therefore the State submitted it to the court “as being stipulated to,” and the court entered it as an order of the court. That order recites that the parties stipulated that “DCFS or other agency/ies continue to make reasonable efforts to assist the family finalize the service plan and its permanency goals.” The order recites that the parties also stipulated that the court would “terminate reunification services” as to Child, and that “termination of those services” was in Child’s best interest. Based on this stipulation, the court changed Child’s primary permanency goal from reunification to adoption. Mother did not object to the terms of this order, either before or after its entry, and did not object to the change in permanency goal.

¶12      Thereafter, the State filed a petition seeking the termination of Mother’s parental rights regarding Child. Some months later, the parties again entered into negotiations and agreed to resolve some of the issues surrounding the State’s termination petition. In particular, Mother stipulated “to the Court finding that it is in Child’s best interests and strictly necessary for the Court to terminate her parental rights should the Court also find legal grounds for terminating her parental rights.” After entry of this stipulation, the court scheduled a two-day termination trial to consider whether grounds for termination existed and whether DCFS had made reasonable efforts toward reunification.

¶13 The trial took place in November 2021. When the parties and their attorneys appeared for the first day of trial, the State informed the court that it did not intend to call any witnesses in its case-in-chief and, instead, asked the court to “take judicial notice of all the filings in the . . . case.” Mother objected to the court taking judicial notice of such a large quantity of material, arguing that she would never be able to respond to everything in the docket and the court would not have time to review so many documents. Eventually, the State narrowed its request to all the “findings and orders specific to [Child],” and Mother did not object. The court then agreed to take judicial notice of all its interim findings and orders regarding Child. The State then asked the court to take judicial notice of the court-ordered child and family plan pertaining to Child, psychological evaluations of Mother and Child, and court reports pertaining to Child; Mother did not object to the court taking judicial notice of the plan, but did object to the court taking judicial notice of the evaluations and court reports. The court initially took the matter under advisement, but later decided to take judicial notice of the service plan as well as the court reports, reasoning that they had been explicitly incorporated into the court’s previous orders and findings. The reports showed efforts the caseworker made, such as visiting all involved parties, providing transportation for Child, inspecting foster parents’ and Mother’s living situations, communicating with therapists, gauging Mother’s progress, promptly communicating with Mother, and ensuring Child had proper educational, medical, and mental health care.

¶14 The State then made its opening statement, pointing out that the only two issues for trial were grounds for termination and reasonable efforts, and arguing that grounds had already been established through the juvenile court’s previous adjudication that this court affirmed. Regarding reasonable efforts, the State argued that, throughout the entire proceeding, the juvenile court had periodically and continuously found that DCFS had made reasonable efforts toward reunification. The State also asserted that, at the end of the reunification period, Mother had stipulated—as part of the November 2020 stipulation prior to the permanency hearing—that DCFS had made reasonable efforts. The State asserted that it had sufficiently proven its case regarding grounds and reasonable efforts through the judicially noticed documents, and it rested its case without calling any witnesses.

¶15 After the State rested, Mother made a “motion for judgment as a matter of law,” arguing that the court’s previous orders “cannot as a matter of law be relied upon for a finding of reasonable efforts in the context . . . of a termination of parental rights trial” and that these orders were only “interim orders” and “can be revisited.” Mother also suggested that she never actually stipulated to a finding of reasonable efforts, even though the court’s order—to which she had not objected—stated otherwise. The court took Mother’s motion under advisement, and did not ever make an explicit ruling on it, but implicitly denied it by eventually making a ruling on the merits in the State’s favor.

¶16      Mother then proceeded with her case-in-chief, in which she called the caseworker and her therapist in addition to presenting her own sworn testimony. The caseworker testified about the events described above, outlining the actions she took to facilitate reunification and discussing her disagreements with Mother. Mother’s therapist testified about her sessions with Mother and the progress Mother made through therapy. Mother testified about the events, described above, that caused her to believe that DCFS was not making reasonable efforts toward reunification.

¶17      At the conclusion of trial, the court took the matter under advisement. About three months later, the court issued an oral ruling,[1] concluding that there were grounds to terminate Mother’s parental rights, and that the State had demonstrated that DCFS had indeed made reasonable efforts to facilitate reunification. After announcing its ruling, the court instructed the State to prepare an order reflecting the court’s ruling. The State did so, and circulated the proposed order to Mother; within her time to object, Mother filed an objection taking issue with one small part of the order, but did not make any objection to the order’s treatment of the proper evidentiary standard.

¶18      Eventually, the court signed a version of the written order prepared by the State, finding “by clear and convincing evidence” that grounds for termination existed because “Child was previously adjudicated to be abused and neglected” in an order that had been affirmed on appeal.

¶19 The court also found—based on “the review hearings, court reports, and other evidence”—that DCFS had provided reasonable efforts toward reunification, although the court did not specify which standard of proof (e.g., clear and convincing evidence or preponderance of the evidence) it was applying with regard to this determination. Among other things, the court found that DCFS had taken action to (i) ensure that Child’s medical, dental, and mental health needs were met, (ii) visit Child at placements, (iii) supervise visits, (iv) review education records, (v) transport Child, (vi) communicate with Child’s therapist, (vii) “coordinate[] virtual parent-time,” (viii) communicate with Mother, and (ix) answer questions and arrange visits. The court also noted that it had, throughout the pendency of the case, “consistently found reasonable efforts on the part of DCFS” in its previous orders and findings. However, the court did not treat these orders and findings as dispositive, and went on to examine the rebuttal evidence offered by Mother, directly addressing her two main arguments: “personal friction between the Mother and [the caseworker], and the delay in starting family therapy with all of the children.” Regarding the friction, the court noted that “DCFS cases are almost always high stress situations and there are bound to be disagreements between DCFS and the parent whose rights are at risk.” And in this case, the court determined that “[t]he disagreements here were based on the DCFS caseworker’s frustration/stress at the lack of progress made by [Mother], which in some sense suggests the DCFS caseworker’s desire for [Mother] to progress and move forward toward reunification.” Regarding the delay in family therapy, the court noted that “DCFS regularly reported that they were following up with the therapist and that the strategy taken by the therapist was determined by the therapist, not DCFS,” and concluded that, “while there may not have been perfection in the case, . . . DCFS has acted reasonably in their efforts.”

¶20 Accordingly, the court entered an order terminating Mother’s rights as to Child.

ISSUES AND STANDARDS OF REVIEW

¶21 Mother now appeals from the court’s termination order, but her appeal is narrowly targeted. As noted, Mother did not contest best interest at trial, after stipulating that termination of her parental rights to Child would be in Child’s best interest. And here on appeal, Mother does not contest the court’s determination that grounds for termination existed. She does, however, challenge—in three different ways—the court’s determination that DCFS made reasonable efforts toward reunification.

¶22 Her first challenge concerns the evidentiary standard the juvenile court applied in making its reasonable efforts determination. She contends that the court should have, but did not, apply a “clear and convincing evidence” standard in making its reasonable efforts determination. “The applicable burden of proof for termination proceedings is a question of law we review for correctness.” In re G.D., 2021 UT 19, ¶ 36, 491 P.3d 867.

¶23      Next, she challenges the merits of the court’s reasonable efforts determination, and this challenge has two parts. First, she contends that the court erred in denying her motion, made at the conclusion of the State’s case-in-chief, for “judgment as a matter of law.” In a bench trial, a motion for judgment as a matter of law’s “procedural counterpart,” Grossen v. DeWitt, 1999 UT App 167, ¶ 8, 982 P.2d 581, is a motion for involuntary dismissal, In re J.A., 2018 UT App 29, ¶ 26, 424 P.3d 913, cert. denied, 420 P.3d 704 (Utah 2018). Such a motion “should be granted when the trial judge finds that the claimant has failed to make out a prima facie case or when the trial judge is not persuaded by the evidence presented.” Accesslex Inst. v. Philpot, 2023 UT App 21, ¶ 33 (quotation simplified). “Whether a party has established a prima facie case is a question of law which we review for correctness.” In re M.L., 965 P.2d 551, 558 (Utah Ct. App. 1998).

¶24      Next, Mother challenges the court’s ultimate finding that DCFS made reasonable efforts toward reunification. “A court’s determination that DCFS made reasonable efforts to provide reunification services involves an application of statutory law to the facts that presents a mixed question of fact and law, requiring review of the juvenile court’s factual findings for clear error and its conclusions of law for correctness, affording the court some discretion in applying the law to the facts.” In re N.K., 2020 UT App 26, ¶ 15, 461 P.3d 1116 (quotation simplified). “Because reasonableness determinations are fact-intensive, we afford the juvenile court broad discretion in determining whether reasonable reunification efforts were made.” In re S.T., 2022 UT App 130, ¶ 17, 521 P.3d 887 (quotation simplified). “Absent a demonstration that the [reasonable efforts] determination was clearly in error, we will not disturb the determination.” In re K.F., 2009 UT 4, ¶ 52, 201 P.3d 985 (quotation simplified). “A finding of fact is clearly erroneous only when, in light of the evidence supporting the finding, it is against the clear weight of the evidence.” In re A.W., 2018 UT App 217, ¶ 23, 437 P.3d 640 (quotation simplified).

ANALYSIS

¶25 We first address Mother’s contention that the juvenile court applied an incorrect evidentiary standard in making its reasonable efforts determination. After that, we address Mother’s challenges to the merits of the court’s determination. For the reasons that follow, we are unpersuaded by Mother’s arguments.

I. Evidentiary Standard

¶26      Mother’s first assertion is that the juvenile court needed to make its reasonable efforts determination by clear and convincing evidence—rather than by the lower preponderance of the evidence standard—and that it did not do so. The first part of Mother’s assertion is correct, but the second part is unsupported by the record in this case.

¶27      With regard to what the proper legal standard is, Mother’s position is correct: the juvenile court needed to apply the clear and convincing evidence standard in making its reasonable efforts determination. Neither the State nor the guardian ad litem takes issue, in this case, with Mother’s position regarding the proper legal standard. And this position is clearly supported by statutory mandate. In all cases in which reunification services are offered, the reasonable efforts determination is a necessary part of the termination inquiry—it is mandated by the statutes governing termination proceedings, see Utah Code § 80-4-301(3)(a) (stating that, “in any case in which the juvenile court has directed the division to provide reunification services to a parent, the juvenile court must find that the division made reasonable efforts to provide those services before” terminating parental rights)—and all facts in termination cases must be established by clear and convincing evidence, see id. § 80-4-103(2)(a) (commanding juvenile courts, in all termination cases, to “require the petitioner to establish the facts by clear and convincing evidence”); see also In re Castillo, 632 P.2d 855, 857 (Utah 1981) (stating that the presumption of parental rights “should be overcome only by clear and convincing evidence”); Utah R. Juv. P. 41(b) (discussing “[t]he burden of proof in matters brought before the juvenile court,” and stating that “cases involving the permanent deprivation of parental rights must be proved by clear and convincing evidence unless otherwise provided by law”).

¶28      But the other half of Mother’s contention—that the juvenile court applied a different standard to its reasonable efforts inquiry—is simply not borne out by the record. As an initial matter, examination of the court’s order indicates that it was generally applying the clear and convincing evidence standard in this termination case. With regard to its determination about grounds for termination, the court specified that it was using the higher evidentiary standard, stating that it “finds that DCFS has proven, by clear and convincing evidence,” that grounds for termination are present. And later in its order, it specified that it was making its legal conclusions regarding termination “by clear and convincing evidence.” Significantly, nowhere in its order did the court reference, even obliquely, any other evidentiary standard. Moreover, earlier in the case, in the court’s September 2019 order approving the service plan, the court had indicated its awareness of the correct evidentiary standard, finding at that point, “by clear and convincing evidence,” that fulfillment of the service plan would “constitute reasonable efforts on the part of [DCFS] to finalize the permanency goals.”

¶29 Mother points out, however, that—while the court, in its final order, specified that its grounds determination and its legal conclusions were being made by clear and convincing evidence— the court did not specifically indicate that it was making its reasonable efforts determination by clear and convincing evidence. As noted, it did not indicate the application of a different evidentiary standard; rather, the reasonable efforts section of the court’s final order was simply silent regarding which evidentiary standard was being applied. As Mother sees it, any uncertainty about which standard the court was applying should be held against the court; in particular, she asks us to infer from this uncertainty that the court was applying an evidentiary standard to that section of its analysis that was different from what it specifically applied to the other sections.

¶30      But this is not the way such inferences work. Uncertainty in the record “is not a basis for reversal.” State v. Hummel, 2017 UT 19, ¶ 82, 393 P.3d 314. Indeed, “[u]ncertainty counts against the appellant, who bears the burden of proof on appeal, and must overcome a presumption of regularity as to the record and decision in the trial court.” Id. “Thus, a lack of certainty in the record does not lead to a reversal and new trial; it leads to an affirmance on the ground that the appellant cannot carry [the] burden of proof.” Id.

¶31      We encountered a similar situation in Gerwe v. Gerwe, 2018

UT App 75, 424 P.3d 1113. In that case, a district court determined, after an evidentiary hearing, that a man had fraudulently induced his ex-wife into signing a postnuptial agreement. Id. ¶ 3. But in so doing, the court was silent regarding which evidentiary standard it was applying; it “did not expressly state that [the ex-wife] presented clear and convincing evidence of fraudulent inducement,” but “it never suggested that a lower standard of proof applied.” Id. ¶ 13. On that record, we rejected the appellant’s assertion of error, stating that a “reviewing court will not presume from a silent record that the court applied an incorrect legal standard but must presume the regularity and validity of the district court’s proceedings, and that it applied the correct legal standard, in the absence of evidence to the contrary.” Id. (quotation simplified). We concluded our analysis by stating that “[b]ecause nothing in the record suggests that the court applied something less than the clear and convincing standard, [the appellant] cannot establish error.” Id. (quotation simplified).

¶32 So too here. Mother offers no evidence—aside from the uncertainty engendered by silence—that the juvenile court applied an evidentiary standard other than clear and convincing to its reasonable efforts determination. And as in Gerwe, this is not enough to satisfy Mother’s appellate burden, especially where the court—in two other places in the order—indicated that it was applying the clear and convincing standard.[2] On this basis, we reject Mother’s contention that the juvenile court applied an incorrect evidentiary standard.

II. Reasonable Efforts

¶33      Next, Mother challenges the merits of the juvenile court’s reasonable efforts determination, and this challenge has two parts. First, Mother asserts that the court erred in failing to grant the motion she made at the conclusion of the State’s case-in-chief. Second, she asserts that the court’s ultimate reasonable efforts determination was against the clear weight of the evidence. We address, and reject, each of these arguments, in turn.

A

¶34      At the end of the State’s witness-less case-in-chief, Mother made an oral motion for “judgment as a matter of law.” The court took the motion under advisement, but never issued an express ruling on it; the court implicitly denied the motion when it ruled in the State’s favor on the merits of the reasonable efforts question. Mother challenges the court’s implicit denial of that motion.

¶35      Although Mother referred to her motion as either a motion for summary judgment or a motion for judgment as a matter of law, in bench trials the proper reference is a motion for involuntary dismissal. See In re Trujillo, 2001 UT 38, ¶ 21 n.13, 24 P.3d 972 (stating that “a motion for a directed verdict contemplates only jury trials,” and “[i]n the context of a bench trial, the directed verdict’s procedural counterpart is a motion for involuntary dismissal”); accord Accesslex Inst. v. Philpot, 2023 UT App 21, ¶ 33. As already noted, the relevant question raised by such a motion—at least where the nonmovant bears the burden of proof on the issue at hand—is whether the nonmovant has, during its case-in-chief, made at least a prima facie case in support of its claim. See Accesslex Inst., 2023 UT App 21, ¶ 33 (stating that, where “the party making [the motion] is the party that does not bear the burden of proof,” the motion “should be granted when the trial judge finds that the claimant has failed to make out a prima facie case” (quotation simplified)). “A prima facie case has been made when evidence has been received at trial that, in the absence of contrary evidence, would entitle the party having the burden of proof to judgment as a matter of law.” In re J.A., 2018 UT App 29, ¶ 27, 424 P.3d 913 (quotation simplified), cert. denied, 420 P.3d 704 (Utah 2018). Thus, we must consider whether the State—the nonmovant who bore the burden of proof—made out at least a prima facie case in support of its reasonable efforts claim during its case-in-chief.

¶36      Our supreme court has defined “reasonable efforts” as a “fair and serious attempt to reunify a parent with a child prior to seeking to terminate parental rights.” In re K.F., 2009 UT 4, ¶ 51, 201 P.3d 985 (quotation simplified). Thus, in order to make a prima facie showing with regard to reasonable efforts, the State had to produce evidence that would—at least before consideration of any contrary evidence—show that DCFS had made a fair and serious effort to reunify Mother with Child during the reunification period. As noted, the State called no witnesses in its case-in-chief, choosing instead to rely entirely on documentary evidence that included the juvenile court’s previous interim orders and the court reports incorporated into those orders. But despite this unorthodox approach,[3] in our view the State did enough—on the facts of this particular case—to make at least a prima facie showing in support of its reasonable efforts claim.

¶37      The State’s evidence, such as it was, included the juvenile court’s interim orders, and those orders indicated that the court, in its ongoing supervisory role over the proceedings during the reunification period, had made multiple and repeated findings that DCFS had engaged in reasonable efforts to further the permanency goals, the primary one of which was reunification. The court never made a contrary finding, despite Mother having registered some dissatisfaction on this point at various stages of the case. Moreover, those interim orders incorporated the court reports, which included detailed accounts of the measures DCFS took to fulfill the requirements of the service plan, including visiting Child, providing transportation for Child, inspecting foster parents’ and Mother’s living situations, communicating with the therapists, gauging Mother’s progress on the service plan, communicating with Mother, and ensuring Child had proper educational, medical, and mental health care. Finally, at the end of the reunification period in November 2020, with a permanency hearing looming, Mother apparently stipulated that “DCFS or other agency/ies continue to make reasonable efforts to assist the family finalize the service plan and its permanency goals.” The use of the word “continue” in the stipulation could reasonably be taken to mean that Mother was acknowledging that, throughout the entirety of the reunification period up until the date of the stipulation, DCFS had made reasonable efforts to accomplish the permanency goals, including reunification. Thus, in this particular case, the State’s evidentiary presentation, despite its truncated and unorthodox nature, was sufficient to indicate— at least in the absence of Mother’s contrary evidence, which had yet to be presented—that DCFS had made a fair and serious effort to reunify Mother with Child.

¶38      We recognize that Mother was eventually able to point to at least some contrary evidence. For instance, Mother put on evidence about the ongoing friction between herself and the DCFS caseworker, and about the issues that came up regarding initiation of family therapy. In addition, Mother had some colorable arguments to make about the November 2020 stipulation, asserting that the parties’ actual agreement had not in fact included any stipulation about reasonable efforts and that, if any such stipulation had been reached, its scope was limited. But at the time the court was considering Mother’s motion for involuntary dismissal—at the close of the State’s case-in-chief— none of that evidence had been presented. And in assessing whether the State had made out a prima facie case regarding reasonable efforts, the court was not supposed to consider whatever contrary evidence Mother might eventually produce. The prima facie case inquiry is simply whether the State produced sufficient evidence, standing on its own and without considering any rebuttal, to support its claim. And on the facts of this unique case, we conclude that it did.

¶39 For these reasons, we discern no error in the juvenile court’s implicit denial of Mother’s motion for involuntary dismissal made at the conclusion of the State’s case-in-chief.

B

¶40 Finally, Mother challenges the juvenile court’s ultimate determination, made as factfinder after trial, that DCFS had made reasonable efforts to facilitate reunification. As noted already, we review this determination deferentially, giving “broad discretion” to the juvenile court “in determining whether reasonable reunification efforts were made.” See In re K.F., 2009 UT 4, ¶ 52, 201 P.3d 985; see also In re A.C., 2004 UT App 255, ¶ 12, 97 P.3d 706 (stating that a juvenile court “is in the best position to evaluate the credibility and competence of those who testify regarding the services that were provided” and to assess the reasonable efforts question). See generally supra ¶ 24.

¶41      Here, the juvenile court listened to the testimony of Mother, the caseworker, and Mother’s therapist, and examined the dozens of exhibits submitted by the parties. This same court had previously been involved in all of the interim review hearings during the reunification period, during which the court assessed DCFS’s reasonable efforts throughout the case. In issuing its ultimate determination, the court took its previous orders into account, but correctly did not treat them as completely dispositive of the question; instead, it considered those orders as potentially persuasive evidence supporting the State’s position, but evaluated that evidence in the context of the rebuttal evidence Mother offered.[4]

¶42 Indeed, the court directly addressed both of Mother’s specific arguments: that the “personal friction” between Mother and the caseworker indicated that the caseworker did not make reasonable efforts, and that the caseworker caused delay in the start of family therapy. With regard to the friction, the court rather astutely noted that child welfare cases “are almost always high stress situations and there are bound to be disagreements between DCFS and the parent whose rights are at risk.” But the court, after reviewing the friction in the context of the entire case, concluded that the disagreements between Mother and the caseworker, while regrettable, did not rise to the level of indicating that the caseworker had failed to provide reasonable efforts. On this record, we cannot say that such a determination is “against the clear weight of the evidence.” See In re A.W., 2018 UT App 217, ¶ 23, 437 P.3d 640.

¶43      With regard to the delay in family therapy, the court noted that, under the service plan, family therapy was not to begin until both Mother’s and Child’s therapists recommended it, and the court was aware that responsibility for scheduling the therapy sessions, once both therapists were on board, was to be up to the therapists themselves. The court, after reviewing this issue in context, concluded that most of the blame for any delay in family therapy should not be laid at the feet of the caseworker, observing that “DCFS cannot, nor should they be required to hold the hand of every party involved to ensure that those parties are also making some efforts,” and ultimately determined that, “while there may not have been perfection in the case, . . . DCFS has acted reasonably in their efforts.” On this record, we cannot say that this determination is against the clear weight of the evidence either.

¶44 Accordingly, we discern no abuse of the juvenile court’s discretion in its ultimate determination, made as factfinder after trial, that DCFS provided reasonable efforts toward reunification.

CONCLUSION

¶45 Mother has not carried her appellate burden of demonstrating that the juvenile court applied an incorrect evidentiary standard to its reasonable efforts determination. And we reject Mother’s challenges to the merits of the court’s ultimate determination that DCFS provided reasonable efforts toward reunifying Mother with Child during the reunification period.

¶46 Affirmed.

 

Utah Family Law, LC | divorceutah.com | 801-466-9277

[1] A transcript of the court’s oral ruling was not included in the record submitted to us.

[2] Moreover, Mother had an opportunity to bring this issue to the court’s attention prior to entry of the order. Recall that the court issued an oral ruling, which was then memorialized by the State into a written order and circulated to Mother for her input. Mother filed a limited, targeted objection to one point in the draft order, but—notably—did not raise any objection to the court’s discussion of the evidentiary standard it was applying to its determinations. Any lack of clarity about the standard being applied could easily have been remedied at that stage. See Jensen v. Skypark Landowners Ass’n, 2013 UT App 48, ¶ 6 n.4, 299 P.3d 609 (per curiam) (stating that a party who made “no objection to the form of the order” could not complain, for the first time on appeal, that the order was “vague and ambiguous”), cert. denied, 308 P.3d 536 (Utah 2013); cf. In re K.F., 2009 UT 4, ¶ 63, 201 P.3d 985 (stating that “[j]udicial economy would be disserved” by permitting an appellant to bring, “for the first time on appeal,” a challenge regarding the adequacy of the court’s findings, because such errors are “easy for a trial judge to correct” and are “best corrected when the judge’s findings are fresh in the judge’s mind,” and because “the only likely remedy is merely a remand to the trial court for more detailed findings”).

[3] It would not have been difficult for the State to call at least one critical live witness—the DCFS caseworker—in support of its reasonable efforts claim. The caseworker was available that day to testify, and indeed did testify when she was called to do so by Mother. We do not go very far out onto the proverbial limb by stating that, in most cases, it would be preferable (and, indeed, advisable) for the State, in reasonable efforts cases, to do more than simply rely on previous interim court orders, and we hope that our decision to affirm the juvenile court in this case does not encourage the State to present similarly truncated cases-in-chief in future reasonable efforts cases.

[4] Considering such orders, as well as Mother’s failure to formally object to them, as potentially persuasive but nondispositive evidence appears consistent with previous decisions by this court in reasonable efforts cases. See In re A.W., 2018 UT App 217, ¶ 31, 437 P.3d 640 (“Father also ignores the several times in the record in which the juvenile court made an unchallenged periodic finding—before its termination order—that DCFS had made reasonable efforts to provide him with reunification services.”); see also In re S.T., 2022 UT App 130, ¶ 21, 521 P.3d 887 (noting that, “[a]t no point did Mother object to the court’s findings or indicate that she needed additional or different services.”); In re A.C., 2004 UT App 255, ¶ 17, 97 P.3d 706 (“It is the parent’s responsibility to demand services if they are not offered prior to the termination hearing.” (quotation simplified)).

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Erickson v. Erickson – 2022 UT App 27

THE UTAH COURT OF APPEALS

DEAN ERICKSON,

Appellee,

v.

JANICE ERICKSON,

Appellant.

Opinion

No. 20200193-CA

Filed March 3, 2022

Third District Court, Salt Lake Department

The Honorable Todd M. Shaughnessy

No. 174901105

Albert N. Pranno, Attorney for Appellant

Jordan M. Putnam, Attorney for Appellee

JUDGE DIANA HAGEN authored this Opinion, in which

JUDGES GREGORY K. ORME and MICHELE M. CHRISTIANSEN

FORSTER concurred. HAGEN, Judge:

¶1        During their thirty-four years of marriage, Dean and Janice Erickson acquired substantial assets, including a veterinary pharmaceutical business.[1] But, in anticipation of their divorce, Janice engaged in an intentional scheme to dissipate those assets and devalue the marital estate. Solely because of Janice’s misconduct, the district court appointed a receiver, ordered a valuation of the couple’s business, and sanctioned Janice with the obligation to pay all Dean’s attorney fees and costs.

¶2        Janice now contends that the court erred when it failed to deduct her personal goodwill when calculating the value of the couple’s business, excluded her rebuttal expert on valuation, and imposed sanctions against her that were greater than the injury her misconduct caused Dean. We affirm on the first two issues and remand on the third.

BACKGROUND[2]

¶3        Dean filed for divorce from Janice in early 2017. The couple’s marital estate consisted of substantial assets, including a veterinary pharmaceutical business, Meds for Vets, LLC (Meds). Meds “is a pharmaceutical compounding business with many employees.” The company “does the majority of its business online through its website” and sells “to customers throughout the country.” At the time of the divorce, Meds employed three pharmacists who held the necessary licenses to conduct the business. Janice was one of those pharmacists and held “the majority of the licenses.” Janice also functioned “as the sole manager and chief executive officer of Meds.”

¶4        Around the time Dean filed for divorce, Janice entered into a series of fake business contracts with a friend for the purpose of dissipating marital assets. Dean moved the court for a temporary restraining order, asking the court to appoint a receiver for Meds. The court denied the temporary restraining order but appointed a receiver for Meds in an effort “to prevent further irreparable injury/harm to the marital estate through waste/dissipation of marital assets.” At the recommendation of the receiver, Janice was allowed to continue her role in the company due to her “familiarity with the industry, regulatory environment and existing relationship[] with the customer base . . . so as to not disrupt [Meds’] operations and employees.”

¶5        In addition to the oversight of Meds, the receiver had authority to conduct an “investigation concerning whether and how the joint marital assets . . . were used or misused and how to effectively separate the parties and their marital estate in all business regards.” In its final report to the court, the receiver concluded that Janice had dissipated known marital assets totaling $2,247,274. Janice accomplished that feat, in part, by unilaterally entering into a fraudulent “business relationship which resulted in a substantial and ongoing dissipation of marital assets.”

¶6        The receiver was also charged with “perform[ing] a valuation of the normalized operation of Meds.” The final report included a business valuation placing Meds’ value at $1,560,000. The valuation report explained the different factors considered, including “whether or not the enterprise has goodwill or other intangible value.” Ultimately, the valuation did not include any amounts associated with goodwill.

¶7        The court scheduled a trial on December 2, 2019, the Monday after the Thanksgiving holiday, to determine the final division of the marital estate. The pretrial disclosure deadline was set for November 4, but Janice moved to extend the deadline. The court granted her motion, extending the deadline to Tuesday, November 26 at 5:00 p.m.

¶8        Just before 5:00 p.m. on November 26, Janice filed a disclosure that identified a valuation expert she intended to call as a rebuttal witness. But she did not serve the disclosure on Dean’s attorney until after the deadline had passed. In addition, she did not provide the expert’s report to Dean’s attorney until the afternoon of Wednesday, November 27—the day before Thanksgiving and less than five days before trial.

¶9        On the first day of trial, Janice asked to call her valuation rebuttal expert as the first witness because it was the only day he was available to testify. Dean objected to the admission of the expert’s testimony because it was untimely disclosed, giving Dean insufficient time to prepare. The court allowed Janice to call the expert out of order and reserved its ruling on Dean’s objection until after the expert testified. During his testimony, the expert opined that the receiver’s valuation had overstated Meds’ value as an ongoing business by improperly considering Janice’s personal goodwill.

¶10 The court ultimately excluded the expert’s testimony based on Janice’s untimely disclosure. See Utah R. Civ. P. 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.”) The expert had testified that it had taken him only a few weeks to prepare his report, but that Janice had not hired him until shortly before trial. Accordingly, the court found that Janice “had ample opportunity to seek an independent valuation of the marital businesses at her own expense” and noted that it had “addressed this issue with [Janice] several times.” The court further found that Dean had an “understandable inability to be able to fully address [that information] in the limited time that remained prior to trial.”

¶11 The court alternatively ruled that even if it had not excluded Janice’s valuation rebuttal expert as untimely, his testimony was unpersuasive. The court rejected the expert’s opinion, based on Janice’s own representations, that Meds’ value was dependent on Janice’s personal goodwill. The court noted that Utah case law generally associates personal goodwill with “sole proprietorships essentially run by one person” and that such businesses are not “comparable to the situation here with [Meds].” The court also found that it had “not been provided any evidence from which [it could] draw a conclusion that [Janice’s] presence at [Meds], given the point to which its grown, is essential for that business to continue, given the number of employees and the extent of the operations that it has.”

¶12 After trial, the court entered a supplemental decree regarding the division of marital assets. The court “affirm[ed] and accept[ed] all recommendations, valuations, findings, and conclusions contained” in the receiver’s reports, unless the decree stated otherwise, “and incorporate[d] them by reference” into the decree, including the receiver’s $1,560,000 valuation of Meds.

¶13 Due to Janice’s “intentional efforts to dissipate marital assets,” the court also assigned the cost of the receivership and Dean’s attorney fees to Janice as a sanction for contempt and other misconduct. The court found that Janice’s behavior was sanctionable because she “engaged in substantial dissipation of marital assets” that was, “in some cases, in direct violation of this Court’s orders.” Indeed, “the approximately $2.5 million [she] dissipated . . . was one of the largest, if not the largest, blatant dissipation of marital assets the Court ha[d] ever seen.”

¶14 With respect to Dean’s legal fees, the court found that Janice’s contemptuous conduct forced Dean to incur “extraordinary legal costs in enforcing Court orders and attempting to track down and preserve marital assets” and that a “substantial amount of additional work [was] required to address the dissipation issues in this case” because of Janice. The court found that it was therefore appropriate and equitable to assign all Dean’s attorney fees to Janice because “[t]he lion’s share of [Dean’s] legal costs were incurred in connection with issues surrounding the dissipation of marital assets and the nefarious conduct engaged in by [Janice] in this case.”

¶15 More than three months after trial, Janice filed a motion for new trial pursuant to rule 59 of the Utah Rules of Civil Procedure, arguing that there was irregularity in the trial proceedings, that there was insufficient evidence to support the valuation of Meds, and that the court erred in awarding Dean attorney fees. The court dismissed that motion as untimely without reaching the merits.

ISSUES AND STANDARDS OF REVIEW

¶16 Janice now appeals, raising three issues. First, she contends the district court erred in the value it assigned to Meds because it failed to exclude the value of her personal goodwill. A district court is “entitled to a presumption of validity in its assessment and evaluation of evidence, and we defer to the district court’s findings of fact related to property valuation and distribution unless they are clearly erroneous.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 10, 440 P.3d 757 (cleaned up).

¶17 Second, she contends the court erred in excluding her valuation rebuttal expert as a sanction for untimely disclosure. “We review a district court’s decision [to impose] sanctions under rule 26(d)(4) for an abuse of discretion.” Segota v. Young 180 Co., 2020 UT App 105, ¶ 10, 470 P.3d 479 (cleaned up). We will find abuse of discretion where there exists an erroneous conclusion of law or “where there is no evidentiary basis for the trial court’s ruling.” Arreguin-Leon v. Hadco Constr. LLC, 2018 UT App 225, ¶ 15, 438 P.3d 25 (cleaned up), aff’d 2020 UT 59, 472 P.3d 927.

¶18 Third, she contends that the court erred when it ordered her to pay all Dean’s attorney fees and costs, rather than limiting the award to the amounts caused by her sanctionable conduct. “Both the decision to award attorney fees and the amount of such fees are within the sound discretion of the trial court.” Taft v. Taft, 2016 UT App 135, ¶ 86, 379 P.3d 890 (cleaned up).

ANALYSIS

I. The Valuation of Meds

¶19      In her challenge to the district court’s valuation of Meds, Janice argues that the court failed to consider the value of her personal goodwill.[3] “When valuing a business in marriage dissolution cases, district courts must consider whether goodwill is institutional or personal to one spouse.” See Marroquin v. Marroquin, 2019 UT App 38, ¶ 15, 440 P.3d 757. Goodwill is personal when the business “is dependent for its existence upon the individual who conducts the enterprise and would vanish were the individual to die, retire or quit work.” Stevens v. Stevens, 754 P.2d 952, 956 (Utah Ct. App. 1988). Personal goodwill is based on an individual’s “reputation for competency.” Marroquin, 2019 UT App 38, ¶ 15. And unlike institutional goodwill, personal goodwill is not subject to distribution in the marital estate. Id.

¶20      Janice contends that the district court erred as a matter of law by failing to consider whether the value of the business depended on goodwill that was personal to her and thus not divisible. We disagree. The district court did consider goodwill in valuing the business, but specifically found that there was no personal goodwill associated with Meds. Unless the court clearly erred, we presume this assessment is valid and we defer to its findings. See id. ¶ 10.

¶21      In finding that there was no personal goodwill associated with Meds, the court rejected Janice’s contention that Meds was comparable to a sole proprietorship and that her “personal goodwill, as opposed to entity or enterprise goodwill,” should have been excluded in valuing the company. The court concluded that Meds was unlike “sole proprietorships essentially run by one person”—where the value of the company rests primarily on the work and professional reputation developed by the proprietor—“given the number of [Meds] employees and the extent of its operations.”

¶22 On appeal, Janice claims that the court failed to consider the personal goodwill engendered by her own “management and licensure role” in Meds. Before the receiver’s appointment, Janice “had acted as sole manager and chief executive officer of the company,” but there was no evidence to suggest that placing someone else in that role would diminish the value of the company. Indeed, the court specifically found that it had not been “provided any evidence from which [it could] draw the conclusion that her presence at the business, given the point to which it’s grown, is essential for that business to continue given the number of employees and the extent of operations it has.” Janice has not demonstrated that those findings were clearly erroneous.

¶23 As evidence of her personal goodwill, Janice cites the receiver’s report that some Meds employees “attributed the company’s declining revenue, in part, to [Janice] being distracted by the divorce.” But the decline in Meds’ revenue during this period does not suggest that the company’s value was dependent on Janice being in a management role. To the contrary, the court found that Janice’s continued involvement was detrimental because she “continue[d] to take steps to harm and devalue” Meds, even after the appointment of the receiver. In other words, Meds’ declining revenue during that time was caused not by Janice’s inattention to her management role, but by her deliberate efforts to devalue the company.

¶24 Janice also points to the fact that the company used her licenses to operate in multiple states. The court found, however, that Meds holds the necessary pharmacy licenses among three pharmacists. And there was no evidence that Janice’s licenses could not be obtained by the other pharmacists already on staff or that Meds could not hire a replacement pharmacist with those licenses. Thus, the fact that some licenses were historically held by Janice does not undermine the court’s finding that the value of Meds as an ongoing business did not depend on Janice’s involvement.

¶25 In sum, the record shows that the court considered and rejected Janice’s contention that her personal goodwill was included in the valuation of the business, and Janice has not shown that those findings were clearly erroneous. Therefore, there is no basis on which to disturb the court’s valuation of Meds.

II. Excluding Janice’s Rebuttal Expert

¶26 Next, Janice challenges the court’s ruling excluding her valuation rebuttal expert based on her untimely disclosure. Expert disclosures are governed by rule 26 of the Utah Rules of Civil Procedure. Under that rule, proper disclosure of an expert witness requires the timely disclosure of “(i) the expert’s name and qualifications, . . . (ii) a brief summary of the opinions to which the witness is expected to testify, (iii) the facts, data, and other information specific to the case that will be relied upon by the witness in forming those opinions, and (iv) the compensation to be paid for the witness’s study and testimony.” Utah R. Civ. P. 26(a)(4)(A). “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.” Id. R. 26(d)(4). “Thus, Utah law mandates that a trial court exclude an expert witness disclosed after expiration of the established deadline unless the district court, in its discretion, determines that good cause excuses tardiness or that the failure to disclose was harmless.” Solis v. Burningham Enters. Inc., 2015 UT App 11, ¶ 21, 342 P.3d 812 (cleaned up); see also Arreguin-Leon v. Hadco Constr. LLC, 2018 UT App 225, ¶ 22, 438 P.3d 25 (“[I]f a party fails to disclose or supplement a discovery response, the evidence or testimony may not be used.”), aff’d 2020 UT 59, 472 P.3d 927.

¶27 Janice does not dispute that the disclosure of her valuation expert and his report was untimely. The question is whether Janice established an exception to the otherwise mandatory sanction of exclusion under rule 26(d)(4). We conclude that the district court did not exceed its discretion in rejecting Janice’s claim that her untimely expert disclosure was either harmless or justified.

¶28 First, the record amply supports the court’s conclusion that the untimely expert disclosure was not harmless. The court enlarged Janice’s time to serve her disclosures, extending her deadline from November 4 to November 26 at 5:00 p.m.—a mere six days before trial. On November 26, “shortly before 5:00 p.m.” Janice filed her expert disclosure with the court, but she did not serve that disclosure on Dean’s counsel until after the 5:00 p.m. deadline. Moreover, she did not serve the expert report until the following afternoon, the day before Thanksgiving. The timing left only the holiday weekend for Dean’s counsel to review the expert report and prepare to meet that testimony before the trial began on Monday. On the first day of trial, Janice called her rebuttal expert witness out of order, depriving Dean of any additional time he might have had to prepare during the course of the trial. The purpose of rule 26 is to eliminate unfair surprise and provide the opposing party with a reasonable opportunity to prepare for trial. Drew v. Lee, 2011 UT 15, ¶ 28, 250 P.3d 48. Here, the late disclosure deprived Dean of a reasonable opportunity to prepare to rebut the newly disclosed expert’s testimony. Under these circumstances, the district court acted well within its discretion in concluding that the late disclosure was not harmless.

¶29 Second, the record also supports the court’s determination that Janice had no good reason to delay disclosing her expert and his report. The court found that it gave Janice “months” to “call an expert to dispute the valuation that was done by the court-appointed receiver,” yet she waited until “a couple weeks” before trial to hire her valuation rebuttal expert. Moreover, the court found that Janice’s excuse for not hiring an expert—that she was waiting because she wanted the marital estate to pay for the expert—“carrie[d] no water with [the court]” because the court had made clear, at least since the previous August, that Janice had to pay for her own rebuttal valuation expert. Under these circumstances, the district court did not exceed its discretion in finding that the delay was unjustified.

¶30 We conclude that the district court did not abuse its discretion in finding that Janice’s untimely disclosure was neither excused for good cause nor harmless to Dean. Therefore, the district court correctly applied the automatic sanction dictated by rule 26(d)(4) and excluded the expert’s testimony.

III. Sanction of Attorney Fees and Costs

¶31 On appeal, Janice does not challenge the court’s finding that she engaged in sanctionable conduct and acknowledges that “the bulk of the court’s award of fees and allocation of costs were within the court’s authority.” Instead, she argues that the award was excessive because it included some attorney fees and costs not attributable to her sanctionable conduct. Because we cannot determine whether the attorney fees award exceeded the costs that Dean incurred as a result of Janice’s sanctionable conduct, we remand to the district court for further proceedings.

¶32 “[W]hen a court imposes an award of fees or costs as a sanction, its award must be limited to the amount actually incurred by the other party” as a result of the sanctionable conduct. Goggin v. Goggin, 2013 UT 16, ¶ 36, 299 P.3d 1079. In Goggin, the district court awarded the former wife all her attorney fees and costs after finding that they were “largely due to [her former husband’s] untoward and contemptuous behavior.” See id. ¶ 38 (cleaned up). Our supreme court reasoned that “this language implies that [the former wife] may have been awarded at least some attorney fees and out-of-pocket costs that were not caused by [the former husband’s] contemptuous behavior.” Id. (cleaned up). The supreme court therefore held that the district court had exceeded its discretion by awarding costs and fees in excess of the amount attributed to the sanctionable conduct. Id.

¶33 Here, it is not clear whether the district court limited the award to the fees and costs that Dean incurred as a result of Janice’s sanctionable conduct. In assigning the entire cost of Dean’s attorney fees and expenses to Janice, the court found that Dean had incurred “extraordinary legal costs in enforcing Court orders and attempting to track down and preserve marital assets” and that a “substantial amount of additional work [had been] required to address the dissipation issues in this case.” Yet the court also found that Dean’s legal fees and costs “incurred in connection with issues surrounding the dissipation of marital assets and the nefarious conduct engaged in by [Janice]” merely constituted the “lion’s share” of Dean’s legal fees. Like the district court’s use of the term “largely” in Goggin, the use of the term “lion’s share” here suggests that a portion of Dean’s fees and costs were not the direct result of Janice’s sanctionable conduct. To the extent that the attorney fees award included such additional costs, it exceeded the district court’s discretion.

¶34 Accordingly, we vacate the attorney fee award and remand for further proceedings. On remand, the district court should either make findings to support the determination that all Dean’s legal expenses were caused by Janice’s sanctionable conduct or modify the award to exclude any amounts not caused by that conduct.[4]

CONCLUSION

¶35 Janice has not shown that the court failed to consider goodwill in valuing the business or that it clearly erred in finding that there was no personal goodwill associated with Meds. Nor has she shown that the court exceeded its discretion in determining that her untimely expert disclosure was not harmless or justified. However, to the extent that the attorney fees award exceeded the costs Janice’s sanctionable conduct caused Dean to incur, the court exceeded its discretion in granting that award. Therefore, we remand for further proceedings on that issue consistent with this opinion.[5]

—————————————————————-

[1] As is our practice when parties share the same last name, we refer to each by their first names, intending no disrespect to either party.

[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, and we present conflicting evidence to the extent necessary to clarify the issues raised on appeal.” Nakkina v. Mahanthi, 2021 UT App 111, n.2, 496 P.3d 1173 (cleaned up).

[3] Janice also argues that there was “[i]rregularity in the proceedings” because the receiver “hire[d] a business valuator who is . . . a partner with the receiver at the [same] firm.” But this issue was not preserved. See Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48, ¶ 14, 48 P.3d 968 (explaining that for an issue to be preserved “(1) the issue must be raised in a timely fashion; (2) the issue must be specifically raised; and (3) a party must introduce supporting evidence or relevant legal authority” (cleaned up)). Janice did not challenge this alleged irregularity below. It appears that Janice may have attempted to raise the issue in a motion pursuant to rule 59 of the Utah Rules of Civil Procedure, see Utah R. Civ. P. 59(a)–(a)(1) (providing that “a new trial may be granted to any party on any issue” because of “irregularity in the proceedings of the court, jury or opposing party, or any order of the court, or abuse of discretion by which a party was prevented from having a fair trial”), but the district court properly refused to consider that motion as untimely, and the issue is therefore unpreserved for appeal, see Tschaggeny v. Milbank Ins. Co., 2007 UT 37, ¶ 30, 163 P.3d 615 (holding that an issue raised in an untimely posttrial motion was not preserved for appellate review where district court “properly refused to address the” untimely motion).

[4] Dean argues that even if the district court awarded attorney fees and costs not attributable to Janice’s contemptuous behavior, that error was harmless because a mathematical error resulted in Janice not paying the intended award. If the district court determines that “a clerical mistake or a mistake arising from oversight or omission” has occurred, the court may correct the mistake on remand. See Utah R. Civ. P. 60(a).

[5] “Although [Dean] requests attorney fees on appeal, because the trial court awarded [him] attorney fees only as a sanction for [Janice’s] conduct during litigation, we deny that request.” Liston v. Liston, 2011 UT App 433, ¶ 27, n.6, 269 P.3d 169.

Erickson v. Erickson – 2022 UT App 27

Utah Family Law, LC | divorceutah.com | 801-466-9277

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Wadsworth v. Wadsworth – 2022 UT App 5 – marital estate

2022 UT App 5 

THE UTAH COURT OF APPEALS 

  1. CANDI WADSWORTH,
    Appellant,
    v.
    GUY L. WADSWORTH,
    Appellee. 

Opinion
No. 20190106-CA
No. 20200430-CA
Filed January 13, 2022 

Third District Court, Salt Lake Department 

The Honorable Su Chon 

No. 104904966 

Michael D. Zimmerman, Troy L. Booher, and Julie J.
Nelson, Attorneys for Appellant 

Clark W. Sessions, T. Mickell Jimenez, Marcy G.
Glenn, and Kristina R. Van Bockern, Attorneys
for Appellee 

JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES RYAN M. HARRIS and RYAN D. TENNEY concurred. 

CHRISTIANSEN FORSTER, Judge: 

¶1 This appeal arises from the divorce and division of the marital estate belonging to H. Candi Wadsworth and Guy L. Wadsworth. Candi1 challenges various aspects of the district court’s marital property valuation, its decision to defer the payment of her share of the marital estate, its award of alimony, and various other findings and orders. Guy cross-appeals, raising challenges relating to terms of the deferred payment and the alimony award. In a separate appeal, Candi also challenges the district court’s decision not to grant her a security interest in her portion of the marital estate, which she will not receive in full until December 31, 2024. Because that issue is intertwined with various issues raised in the first appeal, we address both appeals in this consolidated opinion. 

¶2 We remand for the district court to add certain notes receivable to the value of the marital estate, to adjust its alimony award to account for Candi’s tax burden, to clarify its decision on whether security is required for the alimony award, and to grant Candi a security interest in her portion of the marital estate. We otherwise affirm the district court’s decision. 

BACKGROUND 

¶3 Candi and Guy married in 1979. Guy started Wadsworth Brothers Construction (WBC) in 1991, and over the years, it grew into a multimillion-dollar company. The parties also have interests in numerous other business entities, including two restaurants, a hotel, and various real estate holdings. 

¶4 In 2009, Candi filed for divorce, suspecting that Guy was involved in an extramarital affair. Guy denied the infidelity, and the couple reconciled. However, a year later, Guy confessed to an affair, and Candi again filed for divorce. 

Pre-Divorce Proceedings and Temporary Orders 

¶5 During the period between these two divorce filings, Guy purchased two restaurants, a plane, a cabin, and a yacht. He did not discuss any of these purchases with Candi, and she learned about them from other people. The yacht cost $2,502,800, but by the time of trial, the yacht was under water—Guy still owed $1,175,399, but the yacht was worth only $790,500. 

¶6 Without consulting Candi, Guy also assigned fractional shares of various marital entities to the Wadsworth Children’s 2007 Irrevocable Trust (the Trust) in 2009. Although the parties had created the Trust two years before, they had originally funded it with only $10. By the time of trial in 2017, the fractional shares held by the Trust were worth approximately $4 million. 

¶7 While the divorce was pending, Guy maintained control of the marital estate, apart from $1 million and two interest-generating accounts that he transferred to Candi early in the proceedings. In February 2012, the district court adopted the parties’ stipulation regarding temporary orders (the Stipulation) stating that, on a temporary basis, Guy “shall pay all of the children’s expenses as he has in the past as well as all of [Candi’s] expenses as he has in the past.” Because Guy was paying these expenses, he was not ordered to pay temporary child support or alimony at that time. The Stipulation also addressed the use of marital assets during the pendency of the divorce proceedings: 

  1. Based upon the parties’ stipulation, [Guy] shall maintain, in the regular course of business, the management and control of [WBC], as he has in the past.
  2. Based upon the parties’ stipulation, neither party shall sell, gift, transfer, dissipate, encumber, secrete or dispose of marital assets other than in the course of their normal living expenditures, ordinary and necessary business expenses and to pay divorce attorneys and expert fees and costs. [Guy] shall have the right to conduct the business hereinabove identified as he has in the past, which may include incurring debt, paying expenses and acquiring assets.

¶8 During the divorce proceedings, Candi asked the court to hold Guy in contempt based on alleged violations of the Stipulation. She asserted that he made numerous financial transactions that violated the Stipulation, including selling his home, buying a new home, selling a hotel, creating a new business entity and loaning it money, investing money in a property development company (FDFM), purchasing a jet to “flip,” and making an “undisclosed sale” of $697,448.72. The court accepted Guy’s and his estate planning attorney’s testimonies that “Guy had a history of setting up different corporate entities for liability protection purposes” and that he “did not create any entity or transfer any asset with the intention of hiding it from Candi.” The court found that “the transactions Candi complains of were consistent with Guy’s historical practice of transferring assets from one entity to another or from one form into another” and that those actions fell within the Stipulation’s condition permitting Guy “to conduct the business hereinabove identified as he has in the past, which may include incurring debt, paying expenses and acquiring assets.” The court also found that “[t]here is no indication that these transactions were out of the ordinary or done with the intent to hide assets.” 

¶9 In September 2014, Guy sought to modify the Stipulation, explaining that the parties’ last child had reached majority, that he had paid off the mortgage on Candi’s house, and that he had purchased Candi a new vehicle, thereby eliminating many of her expenses. Guy asked the court to modify its order to require him to pay Candi $20,000 per month rather than all her expenses without limit. Following a hearing in January 2015, the court ordered that Guy pay Candi $20,000 per month in temporary alimony. It also ordered that Candi “keep an accounting of how the money is spent if she desires more funds.” During the first month following the order, Candi exceeded the $20,000 budget and “she had to repay Guy for amounts she had previously spent as well as cancel planned travel with the children.” In April 2015, the court issued a written order in which it clarified that Guy should “reimburse” Candi “as to any payments beyond the $20,000” unless he could show it was “an inappropriate or excessive expense.” Candi never requested additional funds from Guy after the court issued the written April 2015 order. She claims this was because she elected to curtail her spending rather than ask Guy for extra money; she maintains that she did not believe he would comply with her requests and she did not want to incur more attorney fees to collect the money. During this period, Guy was spending approximately $60,000 per month. 

¶10 Guy represented that Candi continued to have access to the parties’ boats and planes, a cabin, free dining at the restaurants, and a country club and other exclusive resorts for which Guy continued to pay the membership fees. However, to use the planes and boats, Guy expected Candi to pay for the cost of the pilot, captain, and other expenses out of her $20,000 monthly funds. Candi did not do so because she understood the cost to be between $5,000 and $10,000 per trip. Candi also alleged that Guy refused a number of requests she made to use the parties’ shared assets. 

Procedural History of the Divorce 

¶11 The parties spent more than six years conducting discovery and other pretrial litigation before the matter finally came before the district court for an eight-day bench trial in February 2017. The court held a second four-day trial in May 2017 concerning Candi’s attempt to revoke the Trust. See infra ¶ 25. 

¶12 The court issued a Memorandum Decision, Findings of Fact and Conclusions of Law in September 2017 (the 2017 Findings). Subsequently, Candi filed a Motion to Clarify, and both parties also filed Motions to Amend. The court issued an order addressing those motions in May 2018 (the May 2018 Order). In response to that order, both parties filed additional Motions to Amend, which the district court ruled on in a Memorandum Decision and Order in October 2018 (the October 2018 Order). The court then directed Guy to prepare supplemental findings of fact to incorporate the various rulings encapsulated in the May 2018 Order and the October 2018 Order. 

¶13 Following the October 2018 Order, Guy filed an Ex Parte Motion for Expedited Entry of Decree of Divorce. Guy pointed out that new federal tax law would change how alimony was taxed for any divorce decrees entered on or after January 1, 2019. Instead of alimony being taxable to the payee spouse and deductible to the payor spouse, alimony would become taxable to the payor and deductible to the payee. Since the trial had occurred and the 2017 Findings had been entered over a year before, “predicated on the application of the existing divorce laws,” Guy asserted that it would be inequitable to enter the divorce decree after December 31, 2018. Although the court indicated that it believed “both parties are to blame” for the delays in finalizing the decree, it ultimately did enter Supplemental Findings of Fact and Conclusions of Law (the 2018 Supplemental Findings), as well as the Decree of Divorce, on December 31, 2018. 

¶14 The parties then filed a third set of cross-motions to amend the findings and conclusions, and the court held a hearing on those motions in early 2019. The court entered a Memorandum Decision and Order in May 2019, which it subsequently amended in June 2019 (the 2019 Order). The court directed Candi to prepare corrected Supplemental Findings of Fact and Conclusions of Law and a Supplemental Decree of Divorce. The court entered the Amended Supplemental Findings of Fact and Conclusions of Law (the 2019 Supplemental Findings) and the Amended Decree of Divorce on October 30, 2019. 

Expert Valuation of Marital Property 

¶15 Both parties hired experts to value the various business entities. Three aspects of that valuation and the district court’s findings are relevant on appeal: notes receivable, WBC’s backlog, and WBC’s equipment. 

Notes Receivable 

¶16 The balance sheets for three of the entities owned by Guy included in their accounting of liabilities loans that they owed to Guy—Immobiliare II, Ltd. owed Guy $252,861; Five Diamond Hospitality, Inc. owed Guy $706,605; and FDFM owed Guy $100,000. These liabilities were considered in the court’s final calculation of these entities’ value. However, the notes receivable on these loans—which belonged to Guy—were not counted as marital assets. 

¶17 The court made no mention of the notes receivable in its 2017 Findings. Candi raised this matter in her Motion to Clarify. Candi asked the court to add the value of the notes receivable to the value of the estate. In response, Guy did not assert that the notes had been included but nevertheless resisted their inclusion as part of the marital estate, arguing that Candi had not made the “request at trial and did not enter evidence of where the funds remain and in which entities or whether the funds are being used for business purposes.” The court found that “[t]he parties agree that the Court did not consider the three notes receivable” but observed that “[n]either party points to the record regarding this issue.” The court did not adjust its valuation of the estate based on the notes. 

¶18 Subsequently, Candi filed her second motion to amend, in which she again raised the matter of the notes receivable, among other things. In the October 2018 Order, the court found that Candi “does not show that those notes were not considered in the company valuations” and that it had “already addressed her argument” in the previous order. Guy was then asked to prepare supplemental findings based on the court’s order, and that version of the findings stated that “all Notes Receivable were included in the valuation of the various marital entities by the parties’ experts.” 

WBC’s Backlog 

¶19 As of June 30, 2016, WBC had a backlog of work— construction contracts that had been signed but for which the work had yet to be completed—amounting to an estimated value of approximately $75 million. Guy testified that WBC’s profit margin on such projects was typically between 5% and 7%. Candi’s expert estimated the projected net profit on the backlog to be $3,441,733. Guy’s expert estimated that the projects would realize a gross profit of $4,676,347, but he also opined that the backlog ultimately had “no value” because “the backlog in its current state” was not sufficient to sustain the company and could therefore be expected to start “absorb[ing] cash flow.” Guy also testified that WBC had struggled to make a profit since the recession and had to lay off workers and use capital to continue operating. He testified that WBC had failed to get some large contracts it was hoping for and that its backlog was less than in past years. Another witness, who advises large companies on marketing and selling their businesses, testified that “marketability” and “valuation methodologies” are “all centered around current backlog.” He explained that “in a construction company, they’re only as good as the backlog in front of them.” 

¶20 The court found that “the value of the projected backlog profit is $4 million.” However, the court adopted Guy’s expert’s valuation of WBC, which had assigned the backlog no independent value. The parties addressed the inconsistency in their motions to amend. Candi asked the court to adjust the overall valuation of WBC upward by $4 million to reflect its finding that the backlog profit was worth $4 million. Guy asked the court to change its finding that the backlog was worth $4 million to conform to its adoption of his expert’s valuation of the company, which assigned the backlog no value. In its May 2018 Order, the court found that Guy’s expert had “testified the backlog had no value to a potential buyer, and the Court adopted his valuation of WBC.” It also found that the other witness had testified that “any potential purchaser would not purchase the company based on a backlog.” Finally, it found that “Candi did not provide counter-testimony to” the “statements of no value in the backlog.” Accordingly, it concluded that “[t]he evidence supports that the backlog has no value in the valuation of the company” and amended its decision to state that “the backlog has no value.” These amended findings were incorporated into the 2018 Supplemental Findings. 

WBC’s Equipment 

¶21 Both parties hired experts to assess the value of WBC’s equipment. Guy’s expert had worked in the construction industry for twenty-five years and had been an appraiser for Ritchie Brothers Auctioneers for four years. To value the equipment, the expert used “internal standards that [Ritchie Brothers] has developed over time and experience” based on “historical auctions, personal experiences of appraisers, and knowledge of the world’s economic conditions.” Guy’s expert testified that Ritchie Brothers’ “business is derived primarily from stable operators exchanging equipment and updating equipment inventories in the normal course of business,” rather than wholesalers trying to resell and make additional profit, and that “80 percent of [their] sales . . . represent fair market value.” Guy’s expert and his team “personally inspected nearly all the pieces of equipment at issue”; “[t]hey turned on the machines, checked the miles and hours and verified the [vehicle identification numbers].” They appraised 569 items and estimated that “the entire package of equipment . . . would sell at unreserved public auction in the range of $13,890,300.” 

¶22 Candi’s expert is a member of the American Society of Appraisers and is an Accredited Senior Appraiser. He conducts appraisals based on the Uniform Standards of Professional Appraisal Practice (USPAP). He testified that “he evaluated the equipment at the fair market value of a ‘going concern’ business” and that he believed using “auction values” was more appropriate for a business that was trying to liquidate its inventory. Candi’s expert received a list of approximately 400 pieces of equipment with the make, model, description, and serial number. He “did not closely inspect each piece of equipment,” “did not start any of the equipment, did not look at the mileage or hours logged, and did not consider the condition of each piece.” He “took photos of the equipment and researched the values by contacting manufacturers, contractors, and dealers; consulting other sales [online]; and considering his prior appraisals and experience.” Ultimately, Candi’s expert valued the equipment at $22,499,255. 

¶23 The court found that the method used by Guy’s expert was “more accurate” and that his team was “more thorough in assessing the individual pieces of equipment.” The court rejected Candi’s assertion that selling equipment at “an auction house has the same connotation as a fire sale,” relying on the expert’s testimony that end users regularly buy heavy construction equipment at auction. It therefore adopted Guy’s expert’s $13,890,300 valuation of the equipment. 

Dissipation 

¶24 Candi argued to the district court that Guy had dissipated marital assets in anticipation of divorce, including spending money on his girlfriend; purchasing the yacht, a jet, and a wine collection; paying attorney fees for the Trust; and transferring money out of the estate into the Trust. Except as to $814,000 Guy spent on his girlfriend, for which it compensated Candi out of the marital estate, the court found that “Guy did not dissipate marital assets.” Although the court found that the legal fees spent on the Trust were not dissipation, it nevertheless allocated half of that value to Candi as part of the marital estate. As to the purchase of the yacht, jet, and wine, the court reasoned that Guy did not dissipate assets by purchasing these items because the items were still in the marital estate, and Candi was awarded half their value. The court also found that “[i]t was Guy’s historical practice to buy planes and boats” and that “[s]ome depreciation of” such assets “is to be expected.” The court rejected Candi’s argument that purchasing a depreciating asset should, as a rule, be considered dissipation. However, the court assigned the negative value on the yacht entirely to Guy, reasoning that he “unilaterally purchased this boat” and limited Candi’s access. 

¶25 The parties engaged in extensive litigation regarding the Trust, even going through a separate trial to address the validity of the transfers and to consider Candi’s attempt to revoke the Trust. However, the court ultimately determined that “the Trust was validly created,” that the parties intended for it to be irrevocable, that the creation and funding of the Trust was “in line with the parties’ history of gifting assets to the children as part of their wealth management and estate planning strategy,” that “there is no evidence that Guy was motivated by a desire to divest Candi of marital assets,” and that the transfers were completed before Candi filed for divorce so that the Trust property was not part of the marital estate or subject to division. Accordingly, the court rejected Candi’s argument that Guy’s transfer of assets into the Trust constituted dissipation. 

¶26 Candi also took issue with Guy’s investment in FDFM, an entity “created to develop land in [North] Dakota when the oil rush was booming.” Although Guy’s interest in FDFM by the time of trial was worth only $734,000, he had invested $1,129,000 into it. Candi asserted that the higher value should be used because Guy did not disclose the investment to her. The district court rejected this argument, explaining that Guy “never consulted with Candi on any business decisions that he made” throughout the marriage, so making business decisions without disclosing them to her was “well within the scope of his historical practices.” 

¶27 Candi also complained that Guy had used marital funds to pay his attorney fees and that his spending on fees had not been credited to the marital estate. In examining the funds each party had already received, the court recognized that Candi had received $1,277,500 in marital funds to pay her attorney and expert fees and costs. The court also estimated, based on Guy’s testimony, that Guy had spent approximately $800,000 in attorney and expert fees and costs. The court equalized these amounts in calculating the value of the marital estate. 

Division of the Estate and Equalization Payment 

¶28 The district court found that the total value of the marital estate was $43,886,329.85 and that each party should receive half of that value ($21,943,164.93). The court awarded Candi various liquid assets, real property, vehicles, retirement plans, investments, and other property totaling just over $4.7 million. It awarded the remainder of the marital property, including all interest in the parties’ various businesses, to Guy and ordered Guy to pay Candi $17,238,018.02 to compensate her for the value of her portion of the estate. The court explained that “because of the overlapping entities and the numerous assets placed in various entities, it would be more appropriate to award Candi a sum of money constituting her share of the marital estate.” The court found that “shared ownership of the companies” was not an option because “Candi does not have the business acumen necessary to know how to run these companies” and that it would be “a bad idea” for the parties to continue their relationship by operating the companies together, “especially given Candi’s distrust of Guy.” It also found that “[a] forced sale of marital business assets is not in the best interest of either party” because both parties benefit from “Guy’s continued work for WBC and other businesses.” 

¶29 Although Candi had argued to the district court that she should be given ownership of the two restaurants to help offset the portion of the estate owed to her, the court rejected that request because it found that “her limited business experience would not help her in increasing the value of the business.” In its May 2018 Order, the court further explained its refusal to award the restaurants to Candi by observing that the restaurants had only just begun to be profitable due to Guy’s careful management and that the restaurants were partially owned by a third party. 

¶30 In the initial 2017 Findings, the court did not outline a method for Candi to receive her share of the marital estate. Candi proposed several options, including appointing a special master to oversee the distribution, transferring some of the assets to her directly, sharing ownership of the companies, or forcing a sale of some of the assets. The court rejected each of these proposals. Instead, in the 2018 Supplemental Findings, the court ordered Guy to pay the amount owed to Candi “in such equal monthly installments as he shall determine.” Any remaining amount was to be paid in a balloon payment five years from the date of the entry of the Decree of Divorce, which made the final payment to Candi due December 31, 2023. The court also ordered that Guy pay 10% annual interest on the amount owed to Candi. Although Guy contested the high interest rate, the court justified it because the court had given him “substantial leeway in setting the payment schedule over the next five years.” Because Guy would have “exclusive and full access to the marital assets,” the court reasoned that the high interest rate would give him a necessary incentive to make the payments more quickly. 

¶31 In subsequent motions, the parties continued to dispute the court’s equalization order. Thus, in its 2019 Supplemental Findings, the court again modified the payment schedule. Guy was to pay Candi (1) $30,000 per month, to be applied first toward interest; (2) $500,000 per year, to be applied first toward interest; and (3) a balloon payment of the outstanding principal and interest by December 31, 2024.2 The court also modified the interest rate to 5% per year. The court explained that the 10% interest rate “was appropriate” when the court had “deferred to Guy to come up with an appropriate payment plan” but that it was excessive once the court “determined the payment plan.” Instead, the court set the interest rate at 5% and explained that rate was intended “to provide Guy with an incentive to pay the Equalizing Balance quickly.” 

¶32 After the court issued its ruling, Candi filed a motion asking the court to secure her unpaid share of the marital estate. She explained that security was necessary to “protect her from dissipation, economic uncertainties, or Guy’s death.” She also asked for an injunction ordering Guy “not to alienate, waste, dissipate, or diminish his share, ownership interest, or the value of the entities” without “Candi’s express, prior, written permission.” Candi proposed several methods for securing her interest, including attaching a UCC-1 lien to the assets of WBC or other marital entities or imposing other “conditions and covenants” on Guy and WBC. But she also explained that “there are a lot of different ways” to give her an effective security interest, including placing a lien on the restaurants, WBC’s equipment, or Guy’s interest in the businesses. 

¶33 The court refused to grant Candi any security, reasoning that it could not award a lien against the businesses because “[t]he businesses were not parties to this suit,” that the equalization payments were not subject to the Uniform Commercial Code because the division of the marital estate is not a commercial transaction, and that Guy was unable to obtain adequate life insurance to secure her interest due to his age and health. The court did not provide any further rationale for its determination that no security was warranted or explain why other options for securing Candi’s unpaid interest in the marital estate, such as a lien on Guy’s personal interest in the businesses, could not be employed. 

Alimony 

¶34 In its 2017 Findings, the district court found that Candi testified “she had more than $20,000 in reasonable monthly expenses.” However, the court found that Candi “could not testify as to specific details” and “did not prepare a financial declaration.” Nevertheless, the court examined standard financial declaration items, Guy’s financial declaration, a standard of living analysis of the parties’ pre-separation spending prepared by one of Candi’s experts, and Guy’s record of the expenses he paid on Candi’s behalf while the divorce was pending to reach a determination regarding Candi’s monthly need. The court included numerous categories of expenses in its needs calculation and determined Candi’s reasonable monthly expenses to be $27,693.90. However, the court did not include taxes in its assessment of Candi’s needs, because Candi “failed to provide evidence of her tax liability at trial.” The court imputed minimum wage income to Candi at $1,257 per month. The court subtracted the imputed income from Candi’s reasonable monthly expenses to determine that her monthly need is $26,436.90. 

¶35 The court found that Guy had a net income of $141,143 per month and reasonable monthly expenses of $50,138. Accordingly, it found that Guy easily had the ability to pay alimony in the amount of $26,436.90 per month to Candi. It ordered Guy to pay that amount of alimony for a length of time equal to the length of the marriage, effective as of the date of the 2017 Findings. Alimony was to terminate upon “the death of either party” or “remarriage or cohabitation by” Candi. The court also indicated that “Guy should provide a life insurance policy for Candi to cover alimony for a period of time sufficient to cover his obligation should he unexpectedly pass away.” 

¶36 While the parties’ various motions were pending following the entry of the 2017 Findings, Guy represented that he was unable to get life insurance due to a health condition and asked the court to remove that requirement. The court denied Guy’s request and found in the May 2018 Order, 

Although there was information regarding Guy’s health, there was no information whether or not he could or could not obtain a life insurance policy. The Court wants to ensure that Candi will receive the money awarded should he pass unexpectedly. The parties may also work toward a mutually agreeable solution that will protect Candi and her ability to receive said money. 

However, the 2018 Supplemental Findings, drafted by Guy, stated simply that “there was no information as to whether or not Guy could or could not obtain a life insurance policy for such purpose nor the cost thereof.” Candi urged the court to be more specific by making its life insurance order mandatory and requiring Guy to provide an alternative means of security if he could not get life insurance. However, the court declined to do so, stating that “[t]he Court’s ruling in the [May 2018 Order] is sufficient.” 

ISSUES AND STANDARDS OF REVIEW 

¶37 On appeal, Candi argues (1) that the operative dates of the Decree of Divorce should be adjusted or, alternatively, that the balloon payment should be due on December 31, 2023; (2) that she received unequal access to the marital estate while the divorce was pending and should be compensated for the inequality; (3) that the court erred in its valuation of the marital estate, namely, by failing to take into account the value of the notes receivable, undervaluing WBC’s backlog and equipment, and not crediting the estate for Guy’s alleged dissipation of assets; (4) that the court erred in setting the terms of the marital estate division and refusing to grant her a security; (5) that the court should have included her tax burden in its calculation of her need for alimony purposes and required Guy to secure his alimony obligation with life insurance or by some other means; and (6) that the court exceeded its discretion by not holding Guy in contempt for violating the Stipulation. 

¶38 For his part, Guy argues, on cross-appeal, (1) that the court set too high an interest rate on the balloon payment, (2) that the court should have required Candi to share in transaction costs that may be incurred if and when Guy liquidates assets to make the balloon payment, and (3) that the court should not have awarded any alimony to Candi at all. 

¶39 The court’s valuation of the marital property, the manner in which it distributed that property, and its alimony determination are all subject to the same standard of review. “In divorce actions, a district court is permitted considerable discretion in adjusting the financial and property interests of the parties, and its actions are entitled to a presumption of validity.” Gardner v. Gardner, 2019 UT 61, ¶ 18, 452 P.3d 1134 (quotation simplified). “We can properly find abuse [of the district court’s discretion] only if no reasonable person would take the view adopted by the [district] court.” Goggin v. Goggin, 2013 UT 16, ¶ 26, 299 P.3d 1079 (quotation simplified). 

Accordingly, we will reverse only if (1) there was a misunderstanding or misapplication of the law resulting in substantial and prejudicial error; (2) the factual findings upon which the award was based are clearly erroneous; or (3) the party challenging the award shows that such a serious inequity has resulted as to manifest a clear abuse of discretion. 

Gardner, 2019 UT 61, ¶ 18 (quotation simplified). 

¶40 The court’s decision whether to hold Guy in contempt is also entitled to deference. “The decision to hold a party in contempt of court rests within the sound discretion of the trial court and will not be disturbed on appeal unless the trial court’s action is so unreasonable as to be classified as capricious and arbitrary, or a clear abuse of discretion.” Barton v. Barton, 2001 UT App 199, ¶ 9, 29 P.3d 13 (quotation simplified). 

ANALYSIS 

  1. Operative Dates

¶41 Candi first argues that the court should make the entire divorce decree effective on October 30, 2019, rather than December 31, 2018, since that was the date the court entered the final Amended Decree of Divorce. Alternatively, she asserts that the balloon payment should be due on December 31, 2023, consistent with the terms of the initial Decree of Divorce. However, Candi has not presented us with any substantive arguments in support of this contention. Her argument is essentially that it was unfair to put the Decree of Divorce into effect before the tax laws changed and yet delay the equalization payments until after the Amended Decree of Divorce was entered because both results “favored Guy.” But the fact that a ruling favors one party or the other does not, by itself, make that ruling an abuse of the court’s discretion. In fact, we cannot see any meaningful link between these two rulings—one concerns the effective date of the entire Decree, whereas one concerns the commencement of the payment plan. 

¶42 Moreover, the district court had good reason for both decisions. As Guy pointed out in his Ex Parte Motion for Expedited Entry of Decree of Divorce, “[t]he trial of this matter, and the evidence submitted at trial and considered by the Court, were all predicated on the application of the existing divorce laws.” Thus, entering the Decree of Divorce after the first of the year would have, no doubt, spurred even more objections and additional hearings regarding alimony. Entering the Decree before the law changed was consistent with the parties’ expectations throughout the divorce proceedings. 

¶43 With respect to the equalization payments, the court’s 2019 Supplemental Findings were drastically different from its 2018 Supplemental Findings. The 2018 Supplemental Findings left the equalization payment schedule in Guy’s hands, whereas the 2019 Supplemental Findings required him to pay a specified monthly amount. Leaving the effective date for those payments on December 31, 2023, as outlined in the 2018 Supplemental Findings, would have required Guy to come up with the entire first year’s payments all at once, as he was not required to make monthly or yearly payments under the 2018 Supplemental Findings. The court found it appropriate for the equalization payments to commence at the same time it issued its 2019 Supplemental Findings because it could not “determine who has delayed the payment plan” and it “believe[d] that both parties share the responsibility for the delay in this matter.” Candi has not demonstrated that this was an abuse of the district court’s discretion. 

  1. Access to Marital Estate

¶44 Candi next asserts that the district court should have compensated her for “inequities [that] resulted from Guy’s use of the marital estate” while the divorce was pending. Candi raises three arguments concerning the allegedly unequal access to the marital estate: (1) that Guy was ordered to pay her only $20,000 per month in temporary alimony while he continued to spend around $60,000 per month, (2) that she did not have equal access to the parties’ tangible assets and funds while the divorce was pending, and (3) that Guy spent more on attorney fees out of the marital estate than the $800,000 found by the district court. 

  1. Monthly Spending

¶45 First, Candi contends that it was unfair for the district court to grant her only $20,000 in temporary alimony while Guy had an income of more than $141,000 per month and was spending over $60,000 per month. 

¶46 “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, 459 P.3d 276; accord Brown v. Brown, 2020 UT App 146, ¶ 23, 476 P.3d 554. “For this reason, it is improper to allow one spouse access to marital funds to pay for reasonable and ordinary living expenses while the divorce is pending, while denying the other spouse the same access.” Dahl, 2015 UT 79, ¶ 126. 

¶47 But this principle does not require that the parties account for every dollar spent out of the marital funds and reimburse one another for any disparity. Rather, it requires that each party have equal access to use marital funds and assets “to pay for reasonable and ordinary living expenses while the divorce is pending.” Id. For this reason, Dahl and Brown are distinguishable from the case at hand. In Dahl, the district court had ordered the wife to repay $162,000 she had received from the husband to pay for her living expenses while the divorce was pending without requiring the husband to repay the marital funds he spent during that time. Id. ¶ 125. The supreme court held that this was an abuse of discretion because it “had the effect of allowing one spouse to use marital funds to pay for living expenses during the pendency of the divorce, while denying such use to the other spouse.” Id. ¶ 129. In Brown, the district court ordered the husband to pay for the wife’s “expenses insofar as they exceeded the income she earned plus amounts [he] advanced while the divorce was pending.” Brown, 2020 UT App 146, ¶ 24. This court found that order to be appropriate because it gave the wife “the benefit of the marital estate to help cover [her] living expenses . . . up until the divorce decree was entered.” Id. ¶¶ 27– 28. 

¶48 Here, the district court ordered Guy to “reimburse” Candi for reasonable monthly expenses “beyond $20,000” unless they were “inappropriate or excessive.” And although Candi indicated that she voluntarily curtailed her spending to avoid fighting for reimbursement, she did not present any evidence that she incurred expenses in excess of the $20,000 Guy provided each month. Since the court ordered Guy to pay for reasonable expenses beyond $20,000, it established a mechanism for Candi to have continued access to the marital estate to pay for her living expenses. The fact that Candi found it too burdensome to request additional funds and was skeptical about Guy honoring her request does not mean she lacked meaningful access to the marital estate.3 And the fact that Guy spent more each month than Candi does not, by itself, indicate that Candi lacked equal access to marital funds while the divorce was pending. Access is not the same as use. And we are aware of no principle requiring that district courts equalize the parties’ use of marital assets during the pendency of a divorce as opposed to reimbursing a party for expenses they incurred as a result of unequal access. 

  1. Tangible Assets

¶49 Our analysis of Candi’s challenge to the unequal use of the parties’ tangible assets is similar to our analysis of her unequal use of funds: she has not demonstrated that she had unequal access to the assets, as opposed to unequal use. It was certainly easier for Guy to use the assets, since they were in his control. And it is undisputed that Guy told Candi she would have to pay the expensive costs associated with using the planes and boats. However, Candi never attempted to use the yacht or plane due to her concerns regarding the expense. Had she done so, she could have requested that Guy reimburse her for these costs in accordance with the court’s temporary alimony award. Since Guy was using the marital assets to pay for the costs of the yacht and plane in addition to meeting his monthly needs, such a request would not have been “inappropriate or excessive.” It is unfortunate that Candi was deterred from taking advantage of this option by the conditions Guy placed on the use of these assets. However, since she did not actually incur the expenses or seek reimbursement for extra expenses from Guy, Candi does not persuade us that the district court should have ordered an increase in her alimony or awarded her more of the marital estate under Dahl or Brown to make up for the disparity in access to the tangible assets. C. Attorney Fees  

¶50 Candi next contends that the district court improperly assessed the attorney fees Guy paid out of the marital estate at only $800,000. This number was taken from Guy’s testimony at trial that he had paid between $700,000 and $800,000 in attorney fees at that point. Candi argues that this estimate was made before Guy paid for the twelve days of trial and post-trial litigation and that “[t]he court should have ordered Guy to disclose all his attorney fees and attributed the full amount to his side.”  

¶51 However, although the Decree of Divorce did not go into effect until the end of 2018, the court valued the parties’ marital estate based on the information before it at trial in 2017. Because this was the “snapshot in time,” see Marroquin v. Marroquin, 2019 UT App 38, ¶ 24, 440 P.3d 757, on which the valuation of the marital estate was based, spending that occurred after that date could not have reduced the overall value of the estate. This means that any funds Guy expended on attorney fees following trial were necessarily post-division expenses. Even assuming that Guy spent more than $800,000 on attorney fees in total— which he likely did, given that the $800,000 accounted only for what he had incurred as of trial—that does not necessarily mean that he paid for those fees out of the marital estate as it existed at the time of trial. He was obligated to pay Candi her share of the estate’s value calculated based on the value proven at trial, regardless of any later spending.  

III. Valuation of the Marital Estate ¶52 Candi argues that the district court made several errors in assessing the overall value of the marital estate. Specifically, she asserts that it failed to account for the value of the notes receivable and that it used the wrong method to assess the value of WBC’s backlog and equipment. She also asserts that Guy dissipated assets and that the estate should have been credited for the dissipation. 

  1. Notes Receivable

¶53 The account ledgers for three of the parties’ entities included line items for loans owed to Guy, totaling $1,059,466. The district court deducted these amounts from the value of those entities in calculating the overall value of the marital estate. However, the notes receivable, owed to Guy, were not counted as an asset of the marital estate. When Candi brought the matter to the court’s attention, it found that “[t]he parties agree that the Court did not consider the three notes receivable” but rejected Candi’s argument on the ground that “[n]either party points to the record regarding this issue.” However, when the 2018 Supplemental Findings, drafted by Guy, addressed the matter, the court’s finding evolved to “all Notes Receivable were included in the valuation of the various marital entities by the parties’ experts.” 

¶54 Candi asserts that the court’s findings are clearly erroneous and that the court therefore erred in refusing to include the notes receivable in the valuation of the marital estate. We agree with Candi that the trial evidence memorializing the accounts payable to Guy constituted record evidence of Guy’s notes receivable with respect to those entities. Thus, the court erred in finding that Candi had not “point[ed] to the record regarding this issue.” Moreover, its finding in the 2018 Supplemental Findings that “all Notes Receivable were included in the valuation of the various marital entities by the parties’ experts” is not supported by the evidence.4 We are aware of nothing in the record indicating that any experts added the notes receivable to the valuation of the marital estate. 

¶55 It was unreasonable for the court to include the accounts payable in its calculation of the other entities’ liabilities without also crediting the notes receivable to Guy as an asset. The only evidence before the court concerning the notes receivable is that contained in the owing entities’ ledgers—that Guy was entitled to receive the funds. Thus, it is necessary for the district court to adjust the value of the marital estate to include the $1,059,466 owing to Guy from the other entities. 

  1. Backlog

¶56 Candi next asserts that the district court erred in assessing the value of WBC’s backlog. She asserts that because WBC is a “viable business,” the court should have recognized that it “has future work lined up and future work yet to come.” Specifically, Candi takes issue with two of the court’s findings relating to the backlog: (1) that “Candi did not provide counter-testimony to” Guy’s witnesses’ “statements of no value in the backlog” and (2) that one of Guy’s witness had “testified that any potential purchaser would not purchase the company based on a backlog.” 

¶57 Candi points to the testimony of her own expert that the backlog would generate a net profit of $3,441,733. She further argues that Guy’s expert’s assertion that the profit would be 

eaten up with administrative costs and capital expenditures relies on a misguided “assumption that WBC would obtain no new work.”5 She points out that such an assumption was faulty, as “WBC had only one negative year in the . . . five-and-a-half years” prior to trial. 

¶58 But Guy’s expert’s opinion that the backlog lacked value did not rely on the assumption that WBC would never get new work, as Candi asserts. Rather, it was based on his assessment that the backlog was not large enough to keep up with administrative expenses the company would need to incur, such as equipment costs, salaries, insurance, etc. Guy’s expert explained that in assessing the value of the backlog, he examined “the general and administrative expenses in the current environment that both a buyer and seller would look at when they’re examining whether or not this backlog has any value.” Based on this examination, he concluded that “the backlog in its current state would start to absorb cash flow from a negative performance during the next eleven months”—in other words, although WBC could expect to earn a gross profit from the backlog, it would have to dip into that profit to make up for its negative cash flow and would therefore not earn a net profit. This concept was further addressed by Guy in his testimony, where he explained that although WBC had a backlog, at the time of the evaluation it did not have as many contracts as it needed, had to lay off workers, and had to rely on capital to continue operating. 

¶59 While Candi’s expert testified that the backlog would generate a net profit of $3,441,733, he did not address the details about anticipated administrative costs or the state of the industry that Guy and his expert addressed in their testimonies, and this seems to be the absent “counter-testimony” to which the court was referring in its finding. Indeed, the court was clearly aware of and considered Candi’s expert’s testimony and valuation, as it included that information in its findings. But it nevertheless concluded that “Candi presented no other evidence or expert testimony in that industry regarding the backlog.” Thus, the court’s finding was not in error. And in any event, it was the court’s prerogative to credit the testimony of Guy’s expert over the testimony of Candi’s expert. See Henshaw v. Henshaw, 2012 UT App 56, ¶ 11, 271 P.3d 837 (“It is within the province of the trial court, as the finder of fact, to resolve issues of credibility.”); see also Barrani v. Barrani, 2014 UT App 204, ¶ 4, 334 P.3d 994 (“Courts are not bound to accept the testimony of an expert and are free to judge the expert testimony as to its credibility and its persuasive influence in light of all of the other evidence in the case.” (quotation simplified)). 

¶60 As to the court’s finding regarding Guy’s witness’s testimony about a potential buyer, while that finding could have been more precise—the witness actually testified that a buyer cares only about a “sustainable backlog” and that a buyer would rely on “the backlog in front” of the company rather than its historic backlog—the imprecision ultimately does not convince us that the court relied on an erroneous assumption. The witness did not testify specifically regarding WBC’s backlog, and his actual statement ultimately supports the district court’s finding regarding the value of the backlog. If the court applied the principle stated by the witness—that only the backlog in front of WBC was relevant—to the testimony it relied on that the backlog would not generate a net profit, the testimony was not inconsistent with the court’s finding that the backlog lacked value. 

¶61 Ultimately, it was within the court’s discretion to accord each party’s expert testimony the weight it deemed proper. And the testimonial evidence presented by Guy and his expert and witness supports the court’s conclusion that the backlog lacked value. Even assuming that WBC was a viable company that would continue to generate contracts, the evidence supported a determination that its current contracts were not sufficient for the company to expect to generate a net profit. 

  1. Equipment

¶62 Next, Candi challenges the district court’s valuation of WBC’s equipment. Her argument rests primarily on her assertion that the court erroneously used “liquidation value” to calculate the value of the equipment rather than valuing WBC as a “going concern.”6  

¶63 First, we agree with Guy that Utah law does not support Candi’s contention that the court was required to evaluate WBC as a going concern. In fact, our case law is clear that courts have broad discretion in determining the proper method for calculating the value of marital property. See DeAvila v. DeAvila, 2017 UT App 146, ¶ 12, 402 P.3d 184 (“District courts generally have considerable discretion concerning property distribution and valuation in a divorce proceeding and their determinations enjoy a presumption of validity.” (quotation simplified)); cf. Griffith v. Griffith, 1999 UT 78, ¶ 19, 985 P.2d 255 (“[T]rial courts have broad discretion in selecting an appropriate method of assessing a spouse’s income and will not be overturned absent an abuse of discretion.”). Moreover, courts may even reject all valuation methods presented by experts and elect to simply split the difference between multiple appraisals. See Newmeyer v. Newmeyer, 745 P.2d 1276, 1278–79 (Utah 1987) (upholding a court’s decision to fix the value of a marital home by splitting the difference between the values presented by two experts); Andrus v. Andrus, 2007 UT App 291, ¶¶ 12–13, 169 P.3d 754 (upholding a district court’s decision to average the value of stock on nine different relevant dates to reach the fair value of stock in the marital estate); Barber v. Barber, No. 961783-CA, 1998 WL 1758305, at *1 & n.1 (Utah Ct. App. Oct. 8, 1998) (holding that the district court acted within its discretion when it valuated a business by averaging four appraisals provided by expert witnesses). 

¶64 Generally, we will uphold a district court’s valuation of marital assets as long as 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.” Morgan v. Morgan, 795 P.2d 684, 691–92 (Utah Ct. App. 1990) (quotation simplified); see also Weston v. Weston, 773 P.2d 408, 410 (Utah Ct. App. 1989) (upholding a court’s election not to apply a marketability discount to the value of stock in a closely held corporation, despite several experts recommending that such a discount be applied, because the value the court found was “within the range of values established by all the testimony”).7  

¶65 Thus, even assuming that Guy’s expert’s valuation was “liquidation value,” it would have been within the court’s discretion to use that valuation, which was “within the range of values established by all the testimony,” so long as the court adequately supported its decision with factual findings explaining its decision. See Morgan, 795 P.2d at 691–92. Here, not only did the court support its determination with detailed factual findings, but those factual findings make clear that it considered the auction value to represent the fair market value of the equipment, not the liquidation value. 

¶66 In accepting Guy’s expert’s valuation over that of Candi’s expert, the court explained that Guy’s expert was more thorough because he examined each individual piece of equipment and took into account its condition, mileage, and hours. Additionally, the court found it relevant that 80% of Ritchie Brothers’ “sales are directly to end users” and credited the expert’s testimony that their appraisal was based on fair market value, specifically rejecting Candi’s assertion that auction value was equivalent to the value in a “fire sale.” The court also pointed out that even Candi’s expert had used some sales data from auction houses to assess values. Based on this evidence, the court found that “[t]here is no indication that [Guy’s expert’s] evaluation does not reflect the actual marketplace price the parties could expect to receive upon sale” and adopted the $13,890,300 value provided by Guy’s expert. We will not disturb the court’s well-supported decision on this issue.8  

  1. Dissipation

¶67 Candi next contends that “Guy dissipated assets at a time he understood that divorce was likely” and that the district court should have included the value of additional allegedly dissipated assets—over and above the money Guy spent on his girlfriend, which the court considered dissipation and accounted for as such—in its valuation of the marital estate. 

¶68 “Where one party has dissipated an asset, hidden its value or otherwise acted obstructively, the trial court may, in the exercise of its equitable powers, value a marital asset at some time other than the time the decree is entered . . . .” Goggin v. Goggin, 2013 UT 16, ¶ 49, 299 P.3d 1079 (quotation simplified). In other words, “when a court finds that a spouse has dissipated marital assets, the court should calculate the value of the marital property as though the assets remained” and give “the other spouse . . . a credit for his or her share of the assets that were dissipated.” Id. 

¶69 A number of factors may be relevant to this inquiry, including 

(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. 

Marroquin v. Marroquin, 2019 UT App 38, ¶ 33, 440 P.3d 757 (quotation simplified). Candi’s dissipation argument concerns three transactions: (1) Guy’s purchase of the yacht, (2) Guy’s investment in FDFM, and (3) Guy’s transfer of assets into the Trust. 

  1. Yacht

¶70 Candi first argues that the district court erred in concluding that the purchase of the yacht was not dissipation. Candi asserts that although the yacht itself remained in the estate, its rapid depreciation meant that it was “cash going out the door for no benefit.” She also argues that because Guy used the yacht and she did not, any benefit from the use of the yacht was individual to Guy rather than to the marital estate. 

¶71 Candi acknowledges that Utah law has not held that the purchase of a depreciating asset constitutes dissipation. But she nevertheless urges us to adopt such a rule, relying on case law from Illinois. However, even if we were inclined to find these cases persuasive, most of them appear to be distinguishable from the case at hand. For example, in In re Marriage of Thomas, 608 N.E.2d 585 (Ill. App. Ct. 1993), the court held that the devaluation of the parties’ business constituted dissipation not simply because it had decreased in value but because the husband had directly undermined the business through “inattention” and “his failure to solicit additional clients or through his outright stealing of clients for his new business.” Id. at 587. In In re Marriage of Schneeweis, 2016 IL App (2d) 140147, 55 N.E.3d 1280, the court upheld a finding of dissipation where the husband had begun making “secretive, risky and progressively more destructive” financial decisions that were “inconsistent with the parties’ prior practices.” Id. ¶ 28 (internal quotation marks omitted). And in In re Marriage of Block, 441 N.E.2d 1283 (Ill. App. Ct. 1982), where the husband had purchased a racing boat that was financially under water, the court held that it could be considered “a debt in dissipation” but clarified that “there would be no net effect on the marital estate” if “the value of the boat is approximately the same as the amount of indebtedness.” Id. at 1288–89.9  

¶72 Here, the court found that the purchase of the yacht was consistent with “Guy’s historical practice” of buying “planes and boats” and that there was no evidence “that Guy caused excessive diminution in value.” Additionally, the court assigned to Guy all responsibility for the outstanding debt on the yacht, so any “debt in dissipation” caused by the yacht’s purchase was resolved, see id. at 1288. While the yacht was used primarily by Guy, he did make it available to Candi, and he never transferred it out of the marital estate. We agree with Guy that the depreciated value of the yacht, alone, does not mandate a finding of dissipation, particularly where its purchase was consistent with purchases made during the marriage and there is no indication that Guy’s actions contributed to the depreciation.10  

  1. North Dakota Investment

¶73 Candi next claims that the district court should have valued FDFM based on the $1,129,000 Guy invested in it rather than its $734,000 value at the time of trial. She asserts that “had Guy not unilaterally made that poor investment, more money would have remained in the estate.” According to Candi, because Guy did not consult her regarding the investment, he “acted obstructively” and should therefore be held accountable for the diminished value of the asset. See Goggin v. Goggin, 2013 UT 16, ¶ 49, 299 P.3d 1079 (quotation simplified). 

¶76 While we agree with Candi that the court could have compensated her for the marital assets put into the Trust had it found dissipation, we do not agree that the court exceeded its discretion in finding that the transfers did not constitute dissipation. The court found that the transfers did not amount to dissipation because Candi had participated in creating the Trust, even though it had not initially been funded; transferring assets to their children was consistent with the parties’ practices during the marriage, beginning as early as 1993; and Candi had deferred to Guy to “run the parties’ finances and estate” throughout the marriage. The court found “no evidence that Guy attempted to withhold information or cut Candi out from the estate planning process.” And while the timing of the transfers could provide circumstantial evidence of dissipation, the parties’ historical practices and the lack of additional evidence suggesting obstructive intent on Guy’s part support the court’s determination that the transfers were not dissipation. 

  1. Division of the Estate and Equalization Payments

¶77 The parties raise various challenges to the district court’s division of the estate and its order regarding the equalization payments. First, Candi asserts that the court erred by not awarding her a greater share of the marital estate directly. Second, she argues that the court erred by refusing to grant her security to help ensure that she actually receives her unpaid share of the estate. Third, both parties challenge the 5% interest rate set by the district court. Finally, Guy argues that the court should have ordered Candi to share in any transaction costs that may be incurred should he be required to liquidate assets to make the equalization payment. 

  1. Estate Division

¶78 Candi argues that the district court abused its discretion by—at least temporarily—awarding Guy the bulk of the estate and giving him five years to pay Candi her share. She argues that instead, the court should have done one or more of the following: (1) ordered Guy to pay Candi her share immediately; 

awarded her a greater share of cash and retirement accounts; 

awarded her the restaurants; (4) ordered Guy to liquidate investments, yachts, planes or spare equipment to pay Candi more cash up front; or (5) ordered larger annual payments in implementing the equalization payment schedule. 

¶79 “When the district court assigns a value to an item of marital property, the court must equitably distribute it with a view toward allowing each party to go forward with his or her separate life.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 27, 440 P.3d 757 (quotation simplified). In situations where the marital estate consists primarily of a single large asset, such as a business or stock, a common acceptable approach for the court to take is to award the asset to one party and make a cash award to the other party. See Taft v. Taft, 2016 UT App 135, ¶ 56, 379 P.3d 890; Argyle v. Argyle, 688 P.2d 468, 471 (Utah 1984). This avoids the necessity for the parties “to be in a close economic relationship which has every potential for further contention, friction, and litigation.” Argyle, 688 P.2d at 471 (quotation simplified). 

¶80 In fashioning this type of marital property division, “a court has the ability to make equitable provisions for deferred compensation”—the keyword being “equitable.” Taft, 2016 UT App 135, ¶ 60. One way to assess the equitability of the provisions is to examine whether the award affords one party “significantly more latitude to go forward with his [or her] separate life” than the other. Id. ¶ 61 (quotation simplified). It is also relevant whether the party required to pay the deferred compensation will be able to use the property to their unfair advantage at the expense of the person to whom the compensation is owed. Id. ¶¶ 59–60. 

¶81 We agree with Guy that the specific division scheme selected by the district court—Guy receiving, on a temporary basis, a larger share of the estate, but with the obligation to make equalization payments to Candi—is not inequitable, so long as adequate security for the unpaid equalization payments is included. See infra Part IV.B. While the court may have been within its discretion to employ one or more of the other methods recommended by Candi, its numerous factual findings support its ultimate determination, and the deferred payment provisions, coupled with security, are sufficiently equitable to fall within its discretion.11  

¶82 Candi asserts that the court’s distribution of marital assets and its use of the equalization payment plan impermissibly gives Guy disproportionate access to the estate. She compares the facts of this case to those in Taft v. Taft, 2016 UT App 135, 379 P.3d 890, in which this court determined that a deferred payment plan that gave the husband discretion to dictate the amount of monthly installments over ten years at a 2.13% interest rate was not equitable. See id. ¶¶ 59–60. Candi argues that just like in Taft, “the overall dynamics of the court’s award more readily allow [Guy], with his immediate ability to use and enjoy the property awarded to him[,] . . . significantly more latitude to go forward with his separate life than [Candi] is afforded.” See id. ¶ 61 (quotation simplified). 

¶83 But Taft is distinguishable from the case at hand. First, the husband in Taft was permitted to decide the amount of the monthly payments to his ex-wife over the course of ten years between the time of the divorce decree and the time the balloon payment was due. See id. ¶ 59. His discretion was so absolute that the court observed he “could conceivably make . . . equal monthly payments of $1 for nine years and eleven months before making the final balloon payment . . . , thereby forcing [his wife] to wait ten years before realizing any real benefit from her property award.” Id. Here, on the other hand, the district court set the terms of the payment plan, ultimately requiring Guy to pay Candi $30,000 per month plus an additional $500,000 per year. Although the court certainly could have ordered Guy to pay more, we are not convinced that the amount ordered was so inequitable as to fall outside the bounds of the court’s discretion. Unlike the wife in Taft, Candi will not have to wait until the balloon payment is due to realize any benefit from her property award. Rather, she will receive $860,000 each year in addition to the $4.7 million she has already received. While this leaves Guy in control of a substantial portion of Candi’s property, she is at least able to benefit from her property award in the meantime. 

¶84 Second, the interest applied to the property distribution in Taft was only 2.13%, an amount this court observed “provides very little incentive for [the husband] to substantially pay it prior to the expiration of the ten-year period, much less for him to pay [the wife] sizeable monthly installments.” Id. ¶ 60. In fact, the low interest rate “would almost certainly allow [the husband] to invest [the wife’s] money elsewhere and reap the benefit of any additional increment of interest—a benefit that in fairness should accrue to [the wife].” Id. In this case, on the other hand, the district court applied a 5% interest rate, which it acknowledged was higher than the statutory postjudgment interest rate, to incentivize Guy to pay Candi sooner. See supra ¶ 31; see also infra Part IV.C. By setting interest at a rate calculated to discourage any delays in paying Candi, the court avoided the type of inequitable deferred payment plan at issue in Taft. 

¶85 We acknowledge that granting Guy a five-year period in which to continue using the bulk of Candi’s property award to grow his business does afford him a benefit that may, to some degree, come at Candi’s expense. But we are convinced that it is not inequitable in light of the entire landscape of the marital estate and property division. First, the size of the parties’ estate and the fact that the bulk of it is wrapped up in WBC means that gathering the liquid funds to pay Candi’s property award is not something that can be accomplished overnight, at least not without substantially decreasing the overall value of the marital estate. Thus, it was reasonable for the court to allow Guy some period of time to gather the funds necessary to pay Candi. Second, this time period may allow Guy to keep his larger businesses intact and find other ways to pay Candi. Keeping the businesses intact will ultimately benefit both parties, as it will allow Guy to maintain his income and continue paying alimony to Candi. Finally, we take Guy’s point that he may incur substantial transaction costs if he ultimately does need to liquidate assets to pay Candi. See infra Part IV.D. Thus, it seems to us that the hypothetical benefit Guy may incur by using Candi’s share of the property to increase the value of the estate will be offset by the hypothetical detriment he could incur if he has to liquidate the assets. Since the court did not order Candi to share in any of these transaction costs, the court’s decision to give Guy the use of Candi’s portion of the property during the five-year forbearance period does not strike us as inequitable, at least so long as adequate security is afforded to Candi.12  

  1. Security

¶86 And this brings us to Candi’s next argument: that the district court abused its discretion by imposing this specific deferred-payment arrangement without requiring Guy to provide adequate security. Candi asserts that the court’s arrangement put her in the position—involuntarily—of an unsecured creditor and posits that no lender would agree to make a $15 million loan without some sort of security interest. Without any type of security, Candi argues, she stands to lose her ability to collect her share of the marital estate in the event Guy passes away before the balloon payment is due or he moves his assets into irrevocable trusts. We agree with Candi and emphasize that the district court’s chosen arrangement passes discretionary muster only if it comes accompanied by an adequate security mechanism. 

¶87 The court’s only justification for declining to grant Candi any type of security was its determination that it could not award a lien against the businesses, that the Uniform Commercial Code did not apply, and that life insurance was not an option due to Guy’s health. But the court did not explain why these limitations prevented it from granting Candi any type of security. Candi’s request was broad: she asserted that “there needs to be some kind of order or security or lien or whatever form it takes . . . that will ensure that those former marital assets are there at the time that . . . the balloon payment needs to be made.” “So all we’re asking for is some kind of order to ensure that there’s going to be payment down the road.” 

¶88 Guy maintains that no security is necessary because he has shown himself to be reliable in making payments and does not have a history of hiding assets. But we agree with Candi that, regardless of Guy’s history, character, or intentions, she should not be required to rely solely on Guy’s continued health and goodwill to ensure her ability to collect what she is owed. Whether Candi’s mistrust of Guy is warranted or not, it was unreasonable for the court not to grant her any type of security in her half of the marital estate. 

¶89 Moreover, Candi has even greater cause for concern in light of Guy’s age and poor health. In fact, Guy expressed concern that he might pass away before the divorce decree was finalized and relied on that possibility to argue that the divorce action should be bifurcated. Should Guy pass away before the balloon payment is due, Candi would no longer have even the benefit of Guy’s goodwill. Instead, she would have to further litigate with his heirs (including her own children) to fight for her share of the marital estate. It is hard to reconcile why the district court considered this to be an adequate legal remedy. Candi should not have to take her chances as an unsecured creditor should Guy pass away before she can receive her share of the marital estate. No reasonable creditor would agree to a forbearance on such terms, and it was therefore inequitable to impose such terms on Candi. 

¶90 Accordingly, we remand this case for the court to fashion an equitable security interest that will adequately protect Candi’s ability to collect her remaining share of the marital estate at the end of the five-year forbearance period. 

  1. Interest Rate

¶91 Both Guy and Candi take issue with the 5% interest rate the district court imposed on the equalization payments. Guy asserts that the interest rate should have been set at the statutory postjudgment interest rate, which was 4.58% at the time the court entered the 2019 Supplemental Findings. Candi argues that the court should have imposed the 10% interest rate originally set in its 2018 Supplemental Findings. We reject both parties’ arguments and affirm the district court’s imposition of the 5% interest rate. 

¶92 Guy asserts that the court was bound by the postjudgment interest rate established by section 15-1-4 of the Utah Code, which provides that “final civil . . . judgments of the district court . . . shall bear interest at the federal postjudgment interest rate as of January 1 of each year, plus 2%.” Utah Code Ann. § 15-1-4(3)(a) (LexisNexis Supp. 2021). Section 15-1-4 does apply to orders in a divorce case “in relation to the children, property and parties.” See Marchant v. Marchant, 743 P.2d 199, 207 (Utah Ct. App. 1987) (quoting Utah Code Ann. § 30-3-5(1) (1984) (current version at id. (LexisNexis Supp. 2021) (stating that the district court “may include in the decree of divorce equitable orders relating to the children, property, debts or obligations, and parties”))). However, section 15-1-4 provides the “minimum interest allowable.” Id. (emphasis added). The statute “does not preclude a District Court, under [section 30-3-5] from imposing an interest rate of more than [the statutory postjudgment rate] where, under the circumstances, that award is reasonable and equitable.” Stroud v. Stroud, 738 P.2d 649, 650 (Utah Ct. App. 1987) (quoting Pope v. Pope, 589 P.2d 752, 754 (Utah 1978)). And, in fact, setting equalization payments at the postjudgment interest rate, rather than a higher rate, may be an abuse of discretion if doing so is inequitable under the circumstances. See Taft v. Taft, 2016 UT App 135, ¶¶ 56, 60, 379 P.3d 890 (finding a 2.13% interest rate, which was the rate provided by Utah Code section 15-1-4 at the time, to be insufficient where the husband was granted discretion to determine the amount of payments over the course of ten years because it incentivized the husband to invest the wife’s money elsewhere rather than paying her sooner). Thus, we find no merit to Guy’s contention that the court was bound to apply the default postjudgment interest rate to the equalization payments. 

¶93 Candi argues that an interest rate higher than the 5% ordered by the court is necessary to “compensate Candi for her unwilling forbearance to Guy and incentivize Guy to pay quicker.” She argues that 10% is an appropriate interest rate because it is consistent with the Utah Code’s default interest rate for a “forbearance of any money, goods, or services.” Utah Code Ann. § 15-1-1(2) (LexisNexis Supp. 2021). However, Candi has not provided us with any authority suggesting that the court was required to impose this specific interest rate. 

¶94 The court’s decision to impose the 5% interest rate was reasoned and supported by sufficient factual findings. The court explained that it had considered the 10% interest rate to be “appropriate” when the court had “deferred to Guy to come up with an appropriate payment plan.” The court opined that had Guy been permitted to set the payment schedule, as the husband in Taft was, the 10% interest rate would have been needed to avoid giving Guy “an incentive to invest the money and reap the return instead of paying off” Candi. The court explained that once it set the payment plan, rather than leaving it to Guy’s discretion, it did not believe the 10% interest would be valid under Taft. Nevertheless, it also explained that the interest rate was not a postjudgment rate because the deferred payment was more akin to a forbearance, and it still wanted to give Guy “an incentive to pay the Equalizing Balance quickly.” 

¶95 Our case law is clear that as with other aspects of property division, equitability is the standard for evaluating the appropriateness of an interest rate set by the district court for deferred payments in a divorce. See Olsen v. Olsen, 2007 UT App 296, ¶ 25, 169 P.3d 765 (“The overriding consideration is that the ultimate division be equitable . . . .” (quotation simplified)). We are not convinced that the 5% interest rate fell outside the reasonable range of equitable interest rates the court could have selected. Moreover, the court clearly explained its reasoning. Thus, we will not disturb the 5% interest rate the court set. 

  1. Transaction Costs

¶96 Finally, Guy asserts that the district court should have required Candi to share in any transaction costs that he may incur in the event he needs to liquidate assets to pay off Candi’s share of the marital estate. He points out that taxes and other transaction costs associated with liquidating the businesses or any other large assets could be significant and that if the court does not require Candi to pay her portion of those transaction costs, it could substantially eat into his portion of the marital estate. 

¶97 We do not disagree with Guy that if he is forced to liquidate assets, doing so may result in significant taxes and transaction costs to him. But it is by no means certain that such costs will be incurred. We do not generally expect courts to “speculate about hypothetical future [tax] consequences.” See Alexander v. Alexander, 737 P.2d 221, 224 (Utah 1987) (refusing to reduce the value of a “stock-price-tied profit-sharing plan to account for tax liability” because the imposition of taxes was not certain); see also Sellers v. Sellers, 2010 UT App 393, ¶ 7, 246 P.3d 173 (holding that the district court was not required to consider potential tax obligations associated with a retirement account because the tax consequences were “speculative” and assumed “massive withdrawals” from the account); Howell v. Howell, 806 P.2d 1209, 1213–14 (Utah Ct. App. 1991) (holding that the district court “did not err in refusing to adjust property distribution because of . . . theoretical [tax] consequences” of selling a second home). The valuation of marital property “is necessarily a snapshot in time,” Marroquin v. Marroquin, 2019 UT App 38, ¶ 24, 440 P.3d 757, and such a moment does not consider “the myriad situations in which the value of [the parties’] property might be positively or negatively affected in the future,” Sellers, 2010 UT App 393, ¶ 7. 

¶98 Moreover, excessive transaction costs were the very thing the equalization payments were intended to prevent. The court acknowledged that forcing the parties to immediately liquidate assets would significantly cut into the pie that would be available to divide between both parties. That is why the court awarded the bulk of the estate to Guy and gave him five years to pay Candi her portion. The court gave him unfettered discretion to determine how to gather the funds necessary to pay Candi. In doing so, it gave Guy free rein over the bulk of Candi’s share of the estate, which he may use to continue building his businesses and wealth over the next five years. The benefit he may derive from using Candi’s share of the estate may very well amount to much more than the interest Candi will receive at the 5% rate, which is all she will have access to until the balloon payment is due, yet she will not share in that benefit any more than she will share in any transaction costs Guy may incur.13 See supra ¶ 85. The entire principal of Candi’s portion will remain in Guy’s control until he makes the balloon payment at the end of 2024. 

Furthermore, because the assets are in Guy’s control, Candi will have no role in deciding how to liquidate the assets or which transaction costs to incur.14  

¶99 Given the speculative nature of the potential taxes and transaction costs, as well as the full discretion Guy was given to determine whether and how to liquidate assets, it was not an abuse of discretion for the court not to order that Candi share in those costs. 

  1. Alimony

¶100 The next set of challenges the parties raise concerns the district court’s award of alimony to Candi. Guy asserts that the court exceeded its discretion in awarding any alimony whatsoever. Candi, on the other hand, asserts that the court should have increased the alimony award to account for her tax burden. She also argues that the court should have required Guy to either obtain life insurance or provide some other security to ensure that she would receive her alimony payments if he were to pass away. 

  1. Alimony Award

¶101 Guy argues that the district court should not have awarded alimony to Candi because (1) she did not provide the court with sufficient evidence from which it could calculate her monthly needs and (2) Candi’s property settlement was sufficient to allow her to support herself. In support of both arguments, Guy primarily relies on our supreme court’s holding in Dahl v. Dahl, 2015 UT 79, 459 P.3d 276. But Dahl neither automatically requires a court to deny a request for alimony in the absence of documentation nor prevents the court from awarding alimony to a spouse who receives a large property settlement. 

¶102 With respect to documentation of need, the Dahl court held only that the district court “acted within its discretion in denying” the wife’s alimony request when she failed to provide evidence supporting her claimed need, not that the district court was required to deny her request. Id. ¶ 117. In fact, the court explicitly acknowledged that “the district court could have . . . imputed a figure to determine [the wife’s] financial need based either on [the husband’s] records of the parties’ predivorce expenses or a reasonable estimate of [the wife’s] needs.” Id. ¶ 116 (emphasis added). Furthermore, we have previously considered and rejected the “assertion that failure to file financial documentation automatically precludes an award of alimony.” Munoz-Madrid v. Carlos-Moran, 2018 UT App 95, ¶¶ 8–9, 427 P.3d 420. “[A]lthough [Candi’s] expenses may have been difficult to discern because she failed to provide supporting documentation . . . , there was not a complete lack of evidence to support their existence.” See id. ¶ 10. Indeed, the court explained that it relied on the list of items in the standard financial declaration, Guy’s financial declaration, evidence concerning the parties’ spending during the marriage, and evidence of Candi’s expenses during the pendency of the divorce to calculate Candi’s reasonable monthly needs. 

¶103 Dahl also does not stand for the proposition that alimony should never be awarded to those who receive a large property settlement. Rather, Dahl merely states that receiving “a sufficiently large property award to support a comfortable standard of living” prevented “any serious inequity” from arising due to the court’s decision not to impute the wife’s need in the face of her lack of evidence. See 2015 UT 79, ¶ 116 (quotation simplified). We acknowledge that if the payee spouse has income-producing property, the income from that property “may properly be considered as eliminating or reducing the need for alimony by that spouse.” Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988); see also Batty v. Batty, 2006 UT App 506, ¶ 5, 153 P.3d 827 (holding that the evaluation of a payee spouse’s ability to meet his or her own needs “properly takes into account the result of the property division, particularly any income-generating property [the payee spouse] is awarded”); Burt v. Burt, 799 P.2d 1166, 1170 n.3 (Utah Ct. App. 1990) (explaining that courts should distribute property before fashioning an alimony award, so they can take into account income generated from property interests). Nevertheless, the court in this case did not abuse its discretion by awarding alimony despite Candi’s large property settlement. 

¶104 Although Candi was entitled to receive a large settlement eventually, Guy continued to control the bulk of the parties’ marital estate and would do so for the next five years. The court noted this in its determination regarding alimony, observing that “alimony was needed” because “Guy was unable to pay Candi the full value of the marital estate at this time.” The court refused to take into account income Candi may derive from her portion of the marital assets in the future because that analysis was “too speculative for the Court to consider.”15 However, it observed that “at such time as . . . Candi . . . receives income or other assets from her share of the marital estate, or from other sources, the Court will evaluate the amount, if any, by which those amounts may reduce her unmet financial needs and thereby reduce or eliminate Guy’s alimony obligation.” Thus, the court did not abuse its discretion in awarding Candi alimony, and any income she derives from the property settlement may be considered when she actually has control of that property. 

  1. Taxes

¶105 On the other hand, Candi argues that the district court should have included her tax liability on alimony in its calculation of her needs. In calculating both a payor spouse’s ability to pay and a payee spouse’s needs, courts are generally expected to consider the person’s tax liability. See McPherson v. McPherson, 2011 UT App 382, ¶ 14, 265 P.3d 839; Andrus v. Andrus, 2007 UT App 291, ¶¶ 17–18, 169 P.3d 754. In particular, it is plain error for a court to consider the tax consequences for one party in assessing their income and expenses but not for the other party. Vanderzon v. Vanderzon, 2017 UT App 150, ¶¶ 45, 58, 402 P.3d 219. 

¶106 In its findings, the court used Guy’s net income to assess his ability to pay alimony. However, because Candi did not present evidence of her tax burden on any alimony award, the court did not consider her tax burden in assessing her need. We acknowledge that the court’s ability to estimate Candi’s taxes was hampered by Candi’s failure to provide evidence of her anticipated tax liability. Nevertheless, it is certain that she will incur some tax burden, particularly in light of the fact that she will be taxed on any alimony payments she receives.16 And we agree with Candi that it was inequitable for the court to consider Guy’s tax burden when calculating his ability to pay without considering Candi’s tax burden in assessing her needs. Thus, we remand the court’s alimony award for the limited purpose of having the court make findings as to Candi’s projected tax burden and adjust the alimony award accordingly. 

  1. Life Insurance

¶107 Next, Candi asserts that the district court should require Guy to either obtain life insurance or provide a substitute for life insurance to secure his alimony payments. She points out that the court initially stated in its 2017 Findings that “Guy should provide a life insurance policy for Candi to cover alimony for a period of time sufficient to cover his obligation should he unexpectedly pass away.” Although the court initially rejected Guy’s argument that he should be required only to “use his best efforts to obtain life insurance,” the court ultimately adopted Guy’s proposed language in its 2018 Supplemental Findings stating that “there was no information as to whether or not Guy could or could not obtain a life insurance policy for such purpose nor the cost thereof.” Candi asked the court to reconsider that finding and make the life insurance requirement mandatory. However, the court rejected that request and stated that its finding in the May 2018 Order was “sufficient.” But while that finding indicated the court’s intent “to ensure that Candi will receive the money awarded should [Guy] pass unexpectedly,” it did not definitively decide the issue of whether Guy was required to obtain life insurance to secure his alimony obligation or if he was able to demonstrate an inability to comply with the court’s direction. We are left wondering whether the court did, or did not, order Guy to obtain life insurance and are unable to ascertain the answer to this question from the court’s rulings. Accordingly, we remand this issue to the district court to clarify its order.17  

  1. Contempt

¶108 Finally, Candi argues that the district court erred in declining to hold Guy in contempt for violating the Stipulation, which the parties reached early on in the proceedings, that they would not “sell, gift, transfer, dissipate, encumber, secrete or dispose of marital assets” but that Guy could continue to manage WBC and conduct business “as he has in the past, which may include incurring debt, paying expenses and acquiring assets.” “As a general rule, in order to prove contempt for failure to comply with a court order it must be shown that the person cited for contempt knew what was required, had the ability to comply, and intentionally failed or refused to do so.” Von Hake v. Thomas, 759 P.2d 1162, 1172 (Utah 1988). In a civil contempt proceeding, these elements must be proven “by clear and convincing evidence.” Id. 

¶109 Candi asserts that the Stipulation’s language allowed Guy to engage in business transactions only insofar as those transactions related to WBC. She argues that the “business hereinabove identified” language in the Stipulation is limited to “the management and control of” WBC and that the court therefore misread the Stipulation by not holding Guy in contempt for any transactions that were not directly related to WBC. But as Guy observes, the Stipulation also allowed the parties to engage in transactions “in the course of their normal living expenditures, ordinary and necessary business expenses and to pay divorce attorneys and expert fees and costs.” 

¶110 “We interpret language in judicial documents in the same way we interpret contract language,” that is, “we look to the language of the [document] to determine its meaning.” Cook Martin Poulson PC v. Smith, 2020 UT App 57, ¶ 24, 464 P.3d 541 (quotation simplified). We consider Guy’s reading of the Stipulation to be more consistent with the plain language of that document. The provision giving Guy “the right to conduct the business hereinabove identified as he has in the past, which may include incurring debt, paying expenses and acquiring assets,” properly refers to both the operation of WBC and normal living and business expenses. 

¶111 Moreover, because contempt requires that the party knew what was required and intentionally refused to comply, see Von Hake, 759 P.2d at 1172, “for a violation of an order to justify sanctions, the order must be sufficiently specific and definite as to leave no reasonable basis for doubt regarding its meaning,” Cook, 2020 UT App 57, ¶ 26 (quotation simplified). Even were we inclined to agree with Candi’s more limited interpretation, we could not say that the language is so clearly limited to WBC that there could be “no reasonable basis for doubt regarding its meaning.” See id. (quotation simplified). 

¶112 The Stipulation allowed Guy to continue conducting normal transactions as he had in the past, and the district court found that “the transactions Candi complains of were consistent with Guy’s historical practice of transferring assets from one entity to another or from one form into another” and that there was “no indication that [they] . . . were out of the ordinary.” Candi does not challenge this finding. Thus, we conclude that the court did not exceed its discretion in declining to find Guy in contempt. 

CONCLUSION 

¶113 We conclude that the district court erred in failing to credit the value of the notes receivable to the marital estate. We also conclude that it erred in refusing to grant Candi a security interest to protect her right to receive her unpaid share of the marital estate. However, we affirm the district court’s property valuation and distribution in all other respects. 

¶114 As to the alimony award, we conclude that the district court erred in failing to account for Candi’s tax obligation in its calculation of her need and remand for clarification of whether the court intended to order Guy to obtain security on Candi’s alimony award. We affirm the alimony award in all other respects. 

¶115 We also affirm the remaining orders and findings challenged on appeal, including the operative date of the Decree of Divorce, the equalization payment schedule, the court’s finding that Guy did not dissipate marital assets apart from the money he spent on his girlfriend, and its decision not to hold him in contempt. 

¶116 Consistent with our discussion in this opinion, we remand to the district court to adjust the marital property valuation, to make findings regarding Candi’s tax liability and adjust the alimony award, to clarify whether Guy is must obtain security on Candi’s alimony award, and to enter orders necessary to adequately secure Candi’s interest in her unpaid share of the marital estate. 

_________ 

Utah Family Law, LC | divorceutah.com | 801-466-9277  

http://www.utcourts.gov/opinions/view.html?court=appopin&opinion=Wadsworth v. Wadsworth20220113_20190106_5.pdf 
 
http://www.utcourts.gov/opinions/view.html?court=appopin&opinion=Wadsworth v. Wadsworth20220113_20200430_5.pdf

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T.W. v. S.A. – 2021 UT App 132 – child custody

2021 UT App 132 

THE UTAH COURT OF APPEALS 

T.W.,
Appellant,
v.
S.A.,
Appellee. 

Opinion 

No. 20200397-CA 

Filed November 26, 2021 

Third District Court, West Jordan Department 

The Honorable Dianna Gibson 

No. 134401457 

David Pedrazas, Attorney for Appellant
Laja K. M. Thompson, Attorney for Appellee 

JUDGE DIANA HAGEN authored this Opinion, in which
JUDGE DAVID N. MORTENSEN and SENIOR JUDGE KATE APPLEBY concurred. [22]  

HAGEN, Judge: 

¶1 T. W. (Father) appeals the district court’s custody order awarding S. A. (Mother) primary physical custody of their son (Child). In so doing, the court rejected the custody evaluator’s recommendation that Father be awarded primary physical custody. The court also scheduled parent-time in accordance with the minimum parent-time schedule in Utah Code section 30-3-35, as opposed to the optional increased parent-time schedule in section 30-3-35.1. Father argues each of these rulings was made in error. Because the court sufficiently supported the parent-time schedule it ordered as well as its rejection of the custody evaluator’s recommendation, we affirm. 

BACKGROUND [23]  

¶2 Father and Mother ended their relationship before Child’s birth. The following year, Father petitioned for custody. Father later moved to Grantsville, Utah to live with his now-wife and her children, along with Father’s other child from a prior relationship. Grantsville is approximately fifty miles from Sandy, Utah where Mother resides. 

¶3 Shortly after his move, Father requested a custody evaluation. The court-appointed custody evaluator initially recommended Mother be awarded primary physical custody, but at a trial on that issue, the parties stipulated to joint legal and physical custody, with each parent enjoying alternating weeks of equal parent-time. The stipulated terms were then set forth by the court in its parentage decree. At the time, the logistics of complying with an alternating week schedule were relatively easy because Child was not yet attending school. 

¶4 Around the time Child was to begin kindergarten, a dispute arose over whether Child would attend school near Mother’s home in Sandy or near Father’s home in Grantsville. Father moved for a temporary restraining order that would specify where Child would attend school. After a telephonic hearing, the court commissioner recommended that, for the time being, Child would attend school in Sandy pending an evidentiary hearing. 

¶5 Child had been attending school for several months when the evidentiary hearing was held in December. After conferring with counsel off the record, the court expressed “some concerns about the workability of [Child] residing in Grantsville and going to school in Sandy or residing in Sandy and going to . . . school in Grantsville.” The court reasoned that the alternating week schedule was unworkable, and the parties agreed that now that Child was in school “continuing the commute [was] not in [his] best interest.” The court ultimately found that “the commute from Sandy to Grantsville is approximately 50 miles and can take approximately 50 minutes, and sometimes more, in the morning” and, “[f]or various reasons, including road/weather conditions, [Child had] been late to or missed school.” Because the long commute was unworkable, the court recognized that the issue before it was “a much larger issue than just determining where [Child] goes to school”—it would require “a change in the parent-time arrangement” as well. To resolve both the parent-time arrangement and where Child would attend school in the future, the court set the matter for trial. 

¶6 Before trial, the custody evaluator submitted an updated report. The evaluator recommended that Father and Mother be awarded joint legal custody but that Child’s primary physical residence be with Father. The evaluator made this recommendation based on two considerations. First, he opined that Father was “in a more stable physical situation” than Mother because he owned his house and was “not likely to move,” whereas Mother “rent[ed] an apartment and ha[d] a history that raise[d] concern about her ability to maintain a consistent residence.” Second, he noted that Child had developed “positive and reciprocal relationship[s] with his [half-sibling and step-]siblings,” who resided with Father, and Child would “attend school with them as well as receive guidance and support from them academically, socially and emotionally.” 

¶7 During trial, Father introduced a letter from Child’s therapist explaining that Child had been diagnosed with an adjustment disorder caused by “a stressor in [his] life.” That letter further stated that Child was experiencing “significant impairment in social, occupational or other areas of functioning.” 

¶8 Mother testified about Child’s emotional and social challenges as well. She explained that Child’s school counselor had been helping him to make and keep friends and to learn “what’s acceptable social behavior” and “how to control [his] emotions in school.” Mother testified that although Child was “struggling with focus and attention in school” as well as “emotional outbursts,” he had “improved.” She recounted that Child “struggled with making friends in the beginning,” but was “finally making more” and by that time had friends at the school. Because Child “knows the school now” and “knows the people,” Mother did not “feel that [it would be] right” to “rip [him] away from [the progress he had made] and have him start all over in a new school.” Given that Child was “in therapy for adjustment disorder,” she believed that “[h]aving him switch schools would just exacerbate that [condition]. He again would have to adjust to a huge change in his life.” 

¶9 Mother also testified about her work schedule. She described how she had started her own business so her schedule would be “flexible” for Child, that she “make[s her] own schedule,” and that the reason she did this was “to be available to [Child] and his school needs and his extracurricular needs . . . so that [she could] revolve [her] work around [her] son.” Mother testified that she and Child have a regular daily routine with a set schedule for school, homework, extracurricular activities, playtime, and sleep when Child is residing at her home in Sandy. Mother asserted that requiring Child to commute to school from Grantsville “probably has at least something to do with [Child’s] activity in school,” that “he hates [the commute],” and that he is sometimes late to school because of “the weather” or “accidents on the freeways.” 

¶10 After considering the original evaluation, the updated evaluation, and the other evidence presented at trial, the court issued its custody order. It found that because of Child’s “current emotional and behavioral issues which [had] been diagnosed as an Adjustment Disorder with disturbance of conduct,” his “psychological and emotional” needs were the deciding factor and those needs would benefit from residing primarily with one parent. In support, the court found that Child “struggles in social settings” and has “behavioral issues,” “emotional outbursts,” and “difficulty making friends.” Moreover, “the commute is hard on [Child]” as he was “tired in school,” had “been late on several occasions,” and had even “missed school” because of the long commute. 

¶11 Having decided that it was in Child’s best interest to reside primarily with one parent, the court ruled that it was in Child’s best interest for Mother to be the primary custodial parent because Mother’s testimony was “credible and persuasive” regarding the negative impact a change in school would have on Child. The court found changing schools would require Child to “start all over—start at a new school, make new friends and re-adjust,” negatively affecting the progress he had made establishing friends. Moreover, Mother had the ability to provide the “maximum amount of parent-time with the maximum amount of flexibility,” and Mother had “established routines in the morning, evening, and with regard to homework and playtime.” 

¶12 In keeping with its custody determination, the court also ruled that, “solely” because of “the 100-mile round-trip commute,” the parent-time schedule of “every other week for five days in a row, was not in [Child’s] best interest,” and that the parent-time schedule would be altered in accordance with Utah Code section 30-3-35—Utah’s minimum parent-time schedule. The court ruled that “on alternating weekends, [Father] shall have parent-time from the time [Child’s] school is regularly dismissed on Friday until Sunday at 7 p.m.” Additionally, Father was awarded a mid-week overnight during which Father “pick[s] up [Child] after school, and [Mother] pick[s] up [Child] the next morning.” The court explained, “The new parent-time schedule is in the best interest of [Child]” because “it allows [him] to maximize his time with [Father] while eliminating the constant, back-to-back days of commuting.” 

¶13 After the court filed its custody order, Father filed a motion for new trial as well as a motion to amend the court’s findings. The court denied both motions. Father now appeals. 

ISSUES AND STANDARDS OF REVIEW 

¶14 Father challenges the district court’s custody order on two grounds. First, he alleges the court failed to articulate sufficient reasons for rejecting the custody evaluator’s recommendation to award him primary physical custody and that the court based its custody determination on an erroneous fact. Second, he alleges the court failed to make sufficient findings about why it did not award increased parent-time pursuant to Utah Code section 303-35.1. 

¶15 On appeal, we review the district court’s custody and parent-time determination for abuse of discretion. LeFevre v. Mackelprang, 2019 UT App 42, ¶ 17, 440 P.3d 874. This discretion is broad; indeed, as long as the court exercises it “within the confines of the legal standards we have set, and the facts and reasons for the decision are set forth fully in appropriate findings and conclusions, we will not disturb the resulting award.” Davis v. Davis, 749 P.2d 647, 648 (Utah 1988) (cleaned up). We review the court’s “underlying factual findings for clear error.” LeFevre, 2019 UT App 42, ¶ 17. “A finding is clearly erroneous only if the finding is without adequate evidentiary support or induced by an erroneous view of the law.” Id. (cleaned up). 

ANALYSIS 

  1. The Rejection of the Evaluator’s Recommendation

¶16 Father first challenges the district court’s decision to award primary physical custody to Mother. When determining custody, the court considers many statutorily defined factors, including “the parent’s demonstrated understanding of, responsiveness to, and ability to meet the developmental needs of the child, including the child’s . . . physical needs; . . . emotional needs; . . . [and] any other factor the court finds relevant.” Utah Code Ann. § 30-3-10(2) (LexisNexis 2019).24 But the factors the court considers are “not on equal footing.” See Hudema v. Carpenter, 1999 UT App 290, ¶ 26, 989 P.2d 491. “Generally, it is within the trial court’s discretion to determine, based on the facts before it and within the confines set by the appellate courts, where a particular factor falls within the spectrum of relative importance and to accord each factor its appropriate weight.” Id. 

¶17 Although the district court has broad discretion to make custody determinations, it “must set forth written findings of fact and conclusions of law which specify the reasons for its custody decision.” Tucker v. Tucker, 910 P.2d 1209, 1215 (Utah 1996). The findings “must be sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate conclusion on each factual issue was reached.” K.P.S. v. E.J.P., 2018 UT App 5, ¶ 27, 414 P.3d 933 (cleaned up). The district court’s conclusions must demonstrate how the decree “follows logically from, and is supported by, the evidence,” Andrus v. Andrus, 2007 UT App 291, ¶ 17, 169 P.3d 754 (cleaned up), “link[ing] the evidence presented at trial to the child’s best interest and the ability of each parent to meet the child’s needs” whenever “custody is contested,” K.P.S., 2018 UT App 5, ¶ 27. 

¶18 Father contends that the court failed to “articulate sufficient reasons as to why it rejected [the custody evaluator’s] recommendation[]” that Child should primarily reside with Father. “[A] district court is not bound to accept a custody evaluator’s recommendation,” but if it rejects such a “recommendation, the court is expected to articulate some reason for” doing so. R.B. v. L.B., 2014 UT App 270, ¶ 18, 339 P.3d 137. 

¶19 Here, the court sufficiently supported its rejection of the custody evaluator’s recommendation. The custody evaluator recommended that the court award primary physical custody of Child to Father for two reasons: (1) Father was in “a more stable physical situation” and “not likely to move,” and (2) Child had a “positive and reciprocal relationship with his siblings and [would] be able to attend school with them as well as receive guidance and support from them academically, socially and emotionally.” The court found the evaluation “very helpful” but did “not agree with the ultimate recommendation.” 

¶20 The court based its rejection of the custody evaluator’s recommendation on several factors. First, the court disagreed that Mother’s rental apartment was less stable than Father’s living situation because both Mother and Father had relocated multiple times in the last few years and both testified that they intended to stay in their current homes. Second, although the court agreed that keeping the siblings together “would be beneficial” to Child, the court did not “give this factor quite the weight” that the custody evaluator did, because Child had never “lived exclusively with his siblings” and their relationship was not the same as a relationship “between siblings who have been reared together prior to the separation between the parents.” 

¶21 The court also detailed how physical custody with Mother would better serve Child’s “psychological and emotional needs.” It found that Mother had “established routines” with Child “in the morning, evening, and with regard to homework and playtime.” She “lived a one[-]child-centered life” and indeed had “built her life around her son”; whereas, Father’s attention was divided among several children. Mother also enjoyed “flexible” self-employment that allowed her to personally provide care for Child, whereas Father’s work schedule was “less flexible” and would require surrogate care. 

¶22 The court further determined that it was not in Child’s best interest to change schools, which would be required if Father were awarded primary physical custody. The court emphasized the need for “consistency” and “routine” for Child, as he was exhibiting signs of being “under stress,” “struggle[d] in social settings,” and had “behavioral issues,” “emotional outbursts,” and “difficulty making friends.” In light of these factors, the court determined that “making too many changes all at once” would not be in Child’s best interest. Most notably, the court found Mother’s “testimony credible and persuasive regarding the impact a change of school would have on [Child], given his current condition and the Adjustment Disorder diagnosis.” Because Child had made significant progress “adjusting” to his current school and establishing friendships, the court found that requiring Child to “start all over—start at a new school, make new friends and re-adjust”—would “impact the progress” he had made and would not be in his best interest. Consequently, granting Father primary physical custody, which in turn would require Child to transfer to a school in Grantsville, was not in Child’s best interest. 

¶23 Father contends that the court erred because it rejected the custody evaluator’s “recommendation solely based on [an] ‘Adjustment Disorder with disturbance of conduct’ diagnosis” even though “at no[] time was there any testimony as to how [the diagnosis] affected the Child, and/or how it related to the Child’s relationship with each parent.” But the court did not rest its decision solely on the fact that Child had been diagnosed with adjustment disorder. Instead, it considered evidence that the disorder was caused by stress, that it manifested as behavioral and social impairments, and that introducing a change such as transferring schools would exacerbate these problems. Specifically, Father introduced a letter from Child’s therapist explaining that Child had been diagnosed with adjustment disorder caused by “a stressor in [his] life” and that he experienced “significant impairment in social, occupational or other areas of functioning.” Mother also gave extensive testimony regarding Child’s struggles with “focus,” “emotional outbursts,” and “making friends,” and she detailed the improvements he had made in those areas. She further testified that, in light of Child’s adjustment disorder diagnosis, “having him switch schools would just exacerbate that” condition and undo the progress he had made because it would require him to “start all over.” 

¶24 In sum, the evidence presented at trial sufficiently supports the court’s ruling that Child’s best interests, i.e., his “psychological, physical, and emotional” needs, were best met by Mother being awarded primary physical custody, “outweigh[ing] the factors favoring” a custody award in favor of Father. And the court’s careful evaluation of that evidence certainly “articulate[s] some reason” for rejecting the custody evaluator’s recommendation. See R.B. v. L.B., 2014 UT App 270, ¶ 18, 339 P.3d 137. Thus, the court acted within its discretion in rejecting the custody evaluator’s recommendation and awarding Mother primary physical custody. 

  1. The Parent-Time Schedule under Utah Code Section 30-3-35

¶25 Father also contends that the district court erred because it did not adopt the optional increased parent time schedule set forth under Utah Code section 30-3-35.1 without making sufficient findings. We disagree. 

¶26 “[D]istrict courts are generally afforded broad discretion to establish parent-time.” Lay v. Lay, 2018 UT App 137, ¶ 16, 427 P.3d 1221 (cleaned up). When parents do not agree to a parent-time schedule, Utah Code section 30-3-35 prescribes a “default minimum amount” of “parent-time for the noncustodial parent,” unless “‘the court determines that Section 30-3-35.1 should apply’ or a parent can establish ‘that more or less parent-time should be awarded.’” Id. ¶¶ 5–6 (quoting Utah Code Ann. § 303-34(2) (LexisNexis Supp. 2017)); see also Utah Code Ann. § 30-335(2) (LexisNexis Supp. 2021)). Under that default minimum parent-time schedule, the noncustodial parent is entitled to time with the child on “one weekday evening and on alternating weekends, which include Friday and Saturday overnights.” Lay, 2018 UT App 137, ¶ 6. Thus, the noncustodial parent, at minimum, enjoys “two overnights in a typical two-week period.” LeFevre v. Mackelprang, 2019 UT App 42, ¶ 20, 440 P.3d 874. 

¶27 The court “may consider” an “optional parent-time schedule” set forth in Utah Code section 30-3-35.1(1)–(2), (6), which increases parent-time from two overnights to five overnights in every two-week period “by extending weekend overnights by one night, and affording one weeknight overnight each week.” See Id. ¶ 21; see also Utah Code Ann. § 30-3-35.1(6) (LexisNexis 2019). The court may adopt the optional parent-time schedule when either (a) “the parties agree” or (b) “the noncustodial parent can demonstrate the presence of at least four factual circumstances.” LeFevre, 2019 UT App 42, ¶ 22 (cleaned up); see also Utah Code Ann. § 30-3-35.1(2). 

¶28 But even if either of these two prerequisites is satisfied, the district court is not obligated to adopt the increased parent-time schedule.25 Under Utah Code section 30-3-35.1, the court “is authorized, but not required, to consider the optional increased parent-time schedule as described in the statute.” Lay, 2018 UT App 137, ¶ 13. The statute “provides legislatively established standards for the district court to apply in evaluating whether increased parent-time is warranted, and it eliminates the need for a district court to independently fashion an increased parent-time schedule by providing a detailed schedule for the court to modify or adopt.” Id. ¶ 16. But by providing “the district court with some guidance and tools for adopting increased parent-time schedules,” the legislature did not eliminate “the court’s discretion to apply those tools in the best interest of the child.” Id. To the contrary, the statutory language plainly indicates that the adoption of the increased schedule is permissive rather than mandatory. See id. 

29 Nonetheless, Father argues that once the court “considered” section 30-3-35.1, it was obligated to make findings articulating why it rejected the increased parent-time schedule suggested by the statute. In setting the parent-time schedule, the court largely adopted the minimum schedule set forth in section 30-3-35, except that it increased the weekday evening parent-time to a mid-week overnight. As a result, the only difference between the increased parent-time schedule under section 30-3-35.1 and the schedule actually ordered is an additional weekly Sunday overnight. Father contends that “the trial court should have addressed how it was in the best interest for [Child] to be returned home on Sunday as opposed to Monday morning for school.” 

¶30 But Father misunderstands the statutory scheme. When parents cannot agree to a parent-time schedule, section 30-3-35 provides a presumptive minimum, but the district court still retains discretion to award more time than the statute provides. See Utah Code Ann. § 30-3-34(1)–(2) (“[T]he court may . . . establish a parent-time schedule” but “the parent-time schedule as provided in Section[] 30-3-35 . . . shall be considered the minimum parent-time to which the noncustodial parent and the child shall be entitled.”). If the court orders more parent-time than the presumptive minimum, it may “independently fashion an increased parent-time schedule” under section 30-3-35, or it may adopt the “detailed schedule” set forth in section 30-3-35.1. See Lay, 2018 UT App 137, ¶ 16. In any event, in awarding parent-time, the court is simply required to “enter the reasons underlying [its] order.” See Utah Code Ann. § 30-3-34(3). The statute does not require the court to articulate specific reasons for rejecting all other alternatives, such as an additional Sunday overnight that would necessitate another long commute to school every other Monday. 

¶31 In keeping with the statutory requirements, the court entered sufficient findings to support its parent-time award under section 30-3-35. The court ordered that “[Father] shall have parent-time pursuant to the guidelines established in Utah Code Ann. § 30-3-35” and articulated its reasons for customizing that schedule to allow Father an additional mid-week overnight. The court explained that it was 

interested in maximizing [Father’s] time (along with his family) with [Child]. Section 30-3-35 permits a mid-week visit. It is in [Child’s] best interest to have a mid-week visit at [Father’s] home. [Child] will benefit from doing homework with [Father], [his stepmother,] and his siblings. And, because it is only one day a week, the impact of the commute will be minimized. The parties can determine which day works best for them and [Child]. 

The court concluded that “[t]he new parent-time schedule is in the best interest of [Child]—it allows [him] to maximize his time with [Father] while eliminating the constant, back-to-back days of commuting.” These findings adequately support the ordered parent-time schedule. 

CONCLUSION 

¶32 Custody and parent-time determinations “may frequently and of necessity require a choice between good and better.” Hogge v. Hogge, 649 P.2d 51, 55 (Utah 1982). The broad discretion we accord the district court “stems from the reality that in some cases the court must choose one custodian from two excellent parents.” Tucker v. Tucker, 910 P.2d 1209, 1214 (Utah 1996). That is precisely the situation the district court faced here. And “where analysis reveals that the best interests of the child would be served equally well with either parent,” we cannot say the “court has abused its discretion in awarding custody to one parent over another.” See id. at 1216. Because the district court sufficiently supported its rejection of the custody evaluator’s recommendation for primary custody and articulated the reasons for the parent-time schedule it adopted, we defer to the court’s sound judgment. Affirmed. 

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Fischer v. Fischer – 2021 UT App 145 – marital vs. separate property

THE UTAH COURT OF APPEALS 

GARY LEE FISCHER,
Appellant,
v.
MELISSA KAY FISCHER,
Appellee. 

Opinion 

No. 20200557-CA 

Filed December 30, 2021 

Seventh District Court, Moab Department 

The Honorable Don Torgerson 

No. 184700047 

Steve S. Christensen and Clinton R. Brimhall, Attorneys for Appellant 

  1. Andrew Fitzgerald, Attorney for Appellee

JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES JILL M. POHLMAN and RYAN M. HARRIS concurred. 

ORME, Judge: 

¶1 Gary Lee Fischer challenges the district court’s division of the marital estate in the parties’ divorce decree, which awarded Melissa Kay Fischer the marital home, a vehicle, and profits from a business that Gary operated.1 Gary also challenges the court’s denial of his post-trial motion for a new trial regarding the division of a savings account Melissa first disclosed at trial. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion. 

BACKGROUND2 

¶2 Following a nearly 29-year marriage, Gary and Melissa separated on April 8, 2018. Gary filed for divorce approximately two months later. The case proceeded to trial in June 2019. The main issues at trial involved the division of various bank accounts, personal property, vehicles, the marital home, and an insurance business Gary had started during the marriage with Melissa’s help. 

¶3 At trial, the parties testified regarding their assets. During cross-examination of Melissa, Gary learned for the first time that Melissa had an American Express bank account with a balance of $50,000. Melissa testified that she set up the account in “early” 2019, long after the parties had separated. She explained that the account was started with money from her share of various accounts she co-owned with Gary and that she was able to get the balance to $50,000 because she “worked so hard to save” money after they separated. Gary did not then inquire further regarding this account. 

¶4 After hearing all the relevant testimony, the court made an oral ruling from the bench, determining that Gary’s business was established using marital funds. It ruled, however, that because the business “is the equivalent of a professional degree, what you would expect to see with a solo practitioner, attorney or accountant, or a doctor in solo practice,” it had “to value this asset minus any goodwill component.”3 The court then explained that 

the balance of the [business] bank account as of today is $5,000. [Melissa] is entitled to one-half of that amount. Additionally, it is apparent from the tax returns that the business has made a profit in excess of its expenses and [Gary’s] salary. Net profit has been $2,144 per month consistently through 2017, and [Gary] testified that it’s been constant since then. Accordingly, that profit is a profit of this asset, and so 14 months worth of that profit, [Melissa’s] share is $15,008. 

So the asset is marital in the sense that it was established during the marriage and it was an asset to be considered in dividing, but the Court finds that there’s no future equity share that is divisible, and so other than those monetary amounts, the Court awards the interest in the LLC to [Gary] 100 percent, and I certainly understand that it’s frustrating. We help our spouses be successful, and they take our great ideas and they incorporate them into their business, and we give input to their endeavors, but in the end, I’m bound by the existing law, which says that this isn’t a marketable asset unless he’s running it, and . . . so that’s the basis for that finding. 

¶5 Regarding the tangible marital assets, the court found that there was $292,285 equity in the home, resulting in a share of $146,142.50 for each party. The court nevertheless awarded the home to Melissa, explaining that Gary’s share of the equity would be “used to offset the other property awards in this case.” The court also allocated a vehicle worth $25,000 to Melissa. The court awarded Gary four vehicles and a trailer. The first three vehicles were valued at $29,600, $17,833, $51,450. The fourth vehicle, which still had money owing on it, had $4,000 in equity. The trailer was valued at $8,000. The court additionally distributed to Gary jewelry, art, and other personal property having a combined value of $57,590. The court valued all these assets “as of the date of divorce.” 

¶6 With respect to the parties’ joint bank accounts, the court decided that it would be more appropriate to divide these accounts as they stood at the time of the parties’ separation rather than at the time of divorce. The court stated that it did this 

because it was the clearest picture of what the parties’ asset actually was. Since then, they’ve each gone on to either save money [or spend money]. She saved money. It appears he spent money. So that seemed to be the fairest division of the cash accounts . . . given how long the separation has been, over a year. 

¶7 The court also ordered that Melissa’s retirement accounts, valued as of the date of divorce, be split equally between the parties. The court determined that the American Express account was not divisible in the divorce because it was Melissa’s separate property. The court then concluded that “if my math is correct, that should leave a wash on all of the property.” 

¶8 In response to this ruling, Gary filed a post-trial motion, in which he argued that the court’s division of marital assets was “not equal.” He asserted that the court awarded a total of $396,793 in marital assets to Melissa, which included (1) the home at $292,285, (2) half the business account at $2,500, (3) half the profits from the business from the time of separation to the time of divorce at $15,008, (4) a vehicle at $25,000, (5) half the balance in two bank accounts existing at the time of separation at $12,000, and (7) the American Express account at $50,000.4 Gary then argued that the court awarded him only $197,981 in marital assets consisting, of (1) half the business account at $2,500, (2) half the profits from the business from the time of separation to the time of divorce at $15,008, (3) the four vehicles valued at a total of $102,883, (4) the trailer at $8,000, (5) the personal property items at $57,590, and (6) half of the two bank accounts at $12,000. Gary asserted that, as a result, Melissa received $198,812 more than he did—$148,812 once the $50,000 American Express Account is subtracted from Gary’s calculation. See supra note 4. In essence, Gary’s position was that the court’s math was in fact quite wrong when it mused that, “if my math is correct, that should leave a wash on all of the property.” 

¶9 The court subsequently issued a written order memorializing its findings and rulings at trial. In that order, regarding the award of the marital home to Melissa, the court conceded that 

[a]lthough the Court endeavored to equally divide the assets in the case, with [Gary] receiving the majority of high-value personal property to offset his share of equity in the home, the final division of property does not equally divide the value in the marital home. Nevertheless, the Court believes the division is equitable, based on all circumstances in the case. 

[Gary] would like the home sold, with the cash divided equally. But the costs of sale would likely deplete most of the difference in the equity division. Neither party would benefit from those lost funds and [Melissa] would be left without a home. Additionally, although the Court awards [the business to Gary], it is apparent that [Melissa] significantly contributed to making [the business] a success. Her contribution to the business is not quantifiable. But the overall division of property and assets in this case is equitable, when the business is considered. 

The court also determined that the American Express account would be awarded to Melissa as her separate property because it had been initially funded with her share of sums from marital accounts, then enhanced with post-separation deposits. The court also reiterated that it valued “the cash accounts as of the date of separation” because “[a]fter separation, [Gary] spent significant money and incurred substantial debt” and “[g]iven the length of separation, the value at the time of separation provides for the most equitable division of the cash accounts.” The court then reaffirmed its oral ruling regarding the remainder of its award. 

¶10 Gary subsequently filed another motion, this time requesting a new trial under rule 59(a) of the Utah Rules of Civil Procedure on the American Express account issue. He asserted that Melissa had “disclosed at trial and not before that she had a $50,000 American Express savings account” and that he “was genuinely surprised by this trial disclosure.” He claimed that he “should have had the opportunity to investigate this account and trace its origin to determine whether [Melissa’s] representations about it were accurate.” 

¶11 The district court denied Gary’s motion in another written order. It stated that “with reasonable diligence, [Gary] could have discovered the account before trial but did not utilize the discovery process to his advantage.” It additionally stated that “[Gary] did not object at trial to the introduction of the information related to the account and [Melissa] testified that the account was created after separation.” 

¶12 Gary appeals. 

ISSUES AND STANDARDS OF REVIEW 

¶13 Gary raises three issues on appeal. First, he asserts that the district court erred in determining that the American Express account was Melissa’s separate property and in denying his motion for a new trial on that issue. This issue implicates two standards of review. First, “whether property is marital or separate is a question of law, which we review for correctness.” See Brown v. Brown, 2020 UT App 146, ¶ 13, 476 P.3d 554 (quotation simplified). Second, “we review the decision to grant or deny a motion for a new trial only for an abuse of discretion.” State v. Loose, 2000 UT 11, ¶ 8, 994 P.2d 1237. 

¶14 Next, Gary challenges the court’s award to Melissa of $15,008 of the business’s profits accrued during the fourteen months from the time of the couple’s separation until trial. We review the district court’s ruling on this issue for an abuse of discretion. See Jones v. Jones, 700 P.2d 1072, 1074 (Utah 1985).5  

¶15 Finally, Gary asserts that the court abused its discretion when it awarded Melissa a disproportionate share of the marital estate without providing findings that justify the unequal division.6 “In a divorce proceeding, the trial court may make such orders concerning property distribution and alimony as are equitable. The trial court has broad latitude in such matters, and orders distributing property and setting alimony will not be lightly disturbed.” Id. (internal citation omitted). 

ANALYSIS 

  1. American Express Account

¶16 Gary asserts that the district court erred in determining the American Express account was Melissa’s separate property and in denying his motion for a new trial on that issue. Although the marital estate is generally valued “at the time of the divorce,” see Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct. App. 1993), a district court, in its discretion, may determine that property acquired post-separation, but before entry of a final divorce decree, is separate property so long as this decision is “supported by sufficiently detailed findings of fact that explain the trial court’s basis for such deviation,” see Donnelly v. Donnelly, 2013 UT App 84, ¶¶ 41, 45, 301 P.3d 6 (quotation simplified). See also Shepherd v. Shepherd, 876 P.2d 429, 432–33 (Utah Ct. App. 1994).7  

¶17 Here, the court’s decision to categorize the American Express account as Melissa’s separate property flowed logically from its ruling on the parties’ joint bank accounts. In that ruling, the court made specific findings supporting its decision to adjudicate the bank accounts as of the date of separation rather than at the time of divorce. It stated that it was doing so because it “seemed to be the fairest division” due to the fact that, “[a]fter separation, [Gary] spent significant money and incurred substantial debt,” while Melissa saved money. Moreover, the court relied on the length of the separation—some fourteen months—during which both parties lived independently of one another.8 Thus, given that the court decided to adjudicate the parties’ joint accounts as of the time of separation rather than at the time of divorce, the general rule that all assets obtained during the marriage are marital property did not apply, by extension of this same logic, to the American Express account. 

¶18 The district court therefore did not err when it determined that the American Express account was Melissa’s separate property.9 It follows, then, that the court likewise did not abuse its discretion in denying Gary’s motion for a new trial on this issue. See State v. Loose, 2000 UT 11, ¶ 8, 994 P.2d 1237. 

  1. Business Profits

¶19 Gary next contends that “the district court abused its discretion when it determined that Melissa should be awarded half of the ‘profits’ accrued by the business in the 14 months prior to trial.” “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. “The primary purpose of a property division . . . is to achieve a fair, just, and equitable result between the parties.” Riley v. Riley, 2006 UT App 214, ¶ 27, 138 P.3d 84 (quotation simplified). 

¶20 Gary essentially argues that there were no profits from the business because all the money earned was simply his income and any award to Melissa would therefore essentially be alimony, which the district court had already determined neither party needed. But Gary’s attempt to equate the profits with his salary, or with alimony, is unavailing because the court found that the net profits had “been $2,144 per month consistently through 2017, and [Gary] testified that it’s been constant since then.” The court also found, with our emphasis, that “[t]ax returns show that, since separation, the business has made a profit in addition to expenses and [Gary’s] salary.” And Gary has not shown on appeal how these findings underpinning the court’s ruling were erroneous. See State v. Thompson, 2020 UT App 148, ¶ 20, 476 P.3d 1017 (“To successfully challenge a district court’s factual findings on appeal, an appellant must establish a basis for overcoming the healthy dose of deference owed to factual findings, generally by identifying and dealing with supportive evidence through the process of marshaling.”) (quotation simplified). See also State v. Nielsen, 2014 UT 10, ¶ 40, 326 P.3d 645 (“[A] party who fails to identify and deal with supportive evidence will never persuade an appellate court to reverse[.]”). 

¶21 Therefore, because Gary has not meaningfully addressed the supportive evidence behind these findings, which findings adequately explain the court’s ruling, we hold that the court did not abuse its discretion in distributing the business profits as it did. 

III. Equitable Distribution of Assets 

¶22 Gary’s final argument is that the district court abused its discretion when it awarded nearly $150,000 more of the real and personal property comprising the marital estate to Melissa than it did to him. Specifically, Gary asserts that “the district court abused its discretion in two ways: it did not follow the guideline that marital assets are to be split equally and it did not provide adequate findings to support its departure from the equal division presumption.” We agree. 

¶23 In dividing the marital estate in a divorce proceeding, “[e]ach party is presumed to be entitled to . . . fifty percent of the marital property.” Burt v. Burt, 799 P.2d 1166, 1172 (Utah Ct. App. 1990). “But rather than simply enter such a decree, the court should then consider the existence of exceptional circumstances and, if any be shown, proceed to effect an equitable distribution in light of those circumstances[.]” Id. Thus, “once a court makes a finding that a specific item is marital property, the law presumes that it will be shared equally between the parties unless unusual circumstances, memorialized in adequate findings, require otherwise.” Hall v. Hall, 858 P.2d 1018, 1022 (Utah Ct. App. 1993) (emphasis added). See Bradford v. Bradford, 1999 UT App 373, ¶ 27, 993 P.2d 887 (“An unequal division of marital property . . . is only justified when the trial court memorializes in . . . detailed findings the exceptional circumstances supporting the distribution.”) (quotation simplified). 

¶24 On appeal, both parties expend significant effort in arguing how the court’s award of real and personal property was either equitable or inequitable. We need not endeavor to directly resolve this debate, however, because the court’s ruling lacked adequate findings to support the disparate distribution. Here, Melissa was awarded the entirety of the net value in the home, $292,285, and a car valued at $25,000. In total, Melissa was awarded $317,285. Gary, on the other hand, was awarded four vehicles with a total value of $102,883, the trailer at $8,000, and the other personal property items with a total value of $57,590. Gary was therefore awarded $168,473. This left a $148,812 discrepancy in favor of Melissa.10 

¶25 Although the district court “has broad latitude” in equitably distributing the marital estate, see Olsen v. Olsen, 2007 UT App 296, ¶ 8, 169 P.3d 765 (quotation simplified), it cannot unequally divide that estate unless it “memorializes in adequate findings” the “unusual circumstances” that justify doing so, Hall, 858 P.2d at 1022 (emphasis added) (quotation otherwise simplified). Here, the court unequally divided the marital estate but did not enter adequate findings detailing the unusual circumstances that justified such an award. The court’s justification for its disparate award is limited to three observations. 

¶26 First, the court opined, without pointing to any evidence, that the cost of selling the home would deplete any disparity that might exist between the parties and benefit neither. In the absence of evidence to this effect, this is purely speculative, and we are hard-pressed to see how the commissions and other fees in selling the home would be anywhere near large enough to overcome the substantial discrepancy in the value of the property awarded to each party. The court also rationalized the disparity by concluding that Melissa would otherwise be without a home, but presumably this would have been a momentary event given her assets, her employment, and her share of the sale proceeds. These are simply not the kind of exceptional circumstances that would justify such a disparity. Cf. Bradford, 1999 UT App 373, ¶ 27 (“In this case, the trial court’s only finding justifying the award of the [entire] home to Mr. Bradford was that ‘the house and property is in fact not partitionable as it contains a residence, road and river frontage. If an interest were to be conveyed the house would have to be refinanced or sold.’ This finding is insufficient, by itself, to support an award of the marital home entirely to Mr. Bradford.”) (footnote omitted). Indeed, district courts “often order a sale of marital property and equitably divide the proceeds between the parties” or “allow one spouse to ‘buy out’ the other spouse’s interest in marital property,” and the district court here “made no adequate finding explaining why either of these two remedies was not appropriate for the parties in this case.” See id. 

¶27 Second, the court stated that while “the final division of property does not equally divide the values in the marital home,” it was nonetheless “equitable, based on all circumstances in the case.” This is a conclusory statement and not a finding that justifies the unequal distribution of marital assets. General comments about the equitability of an award are simply not enough to overcome the presumption that marital property should be “shared equally.” Hall, 858 P.2d at 1022. 

¶28 Finally, the court noted that although it awarded the business to Gary, “it is apparent that [Melissa] significantly contributed to making [the business] a success. Her contribution to the business is not quantifiable. But the overall division of property and assets in this case is equitable, when the business is considered.” Once again, this is not a finding sufficient to explain such a large departure from the presumptively appropriate equal distribution of the marital estate. See Bradford, 1999 UT App 373, ¶ 27. The court found that the business had no marketable value, and thus it is unclear how it quantified Melissa’s contribution. Further, the court’s observations about Melissa’s contributions do not demonstrate “exceptional circumstances” that justify a nearly $150,000 difference in the property awards to each party. See Burt v. Burt, 799 P.2d 1166, 1172 (Utah Ct. App. 1990). 

¶29 Without adequate findings detailing why Melissa should be entitled to such an unequal split of the marital estate, we cannot affirm the court’s award. We therefore remand the case to the district court either (1) to make adequate findings specifically detailing (and quantifying) the exceptional circumstances that would justify the unequal distribution of the marital estate, or (2) if such findings are not appropriate on this record, then to equally distribute the marital estate.11  

CONCLUSION 

¶30 The district court did not err in determining that the American Express account was Melissa’s separate property or exceed its discretion in awarding to her half of the profits the business accrued from the time of separation until trial. The court did err, however, in unequally dividing the marital estate without entering adequate findings justifying that unequal distribution. We therefore affirm in part and reverse in part, and we remand to the district court for further proceedings consistent with this opinion. 

Utah Family Law, LC | divorceutah.com | 801-466-9277  

http://www.utcourts.gov/opinions/view.html?court=appopin&opinion=Fischer v. Fischer20211230_20200557_145.pdf 

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Law from a legal assistant’s point of view, week 18: Financial Declarations and Initial Disclosures

Law from a legal assistant’s point of view, week 18: Financial Declarations and Initial Disclosures

By Quinton Lister, legal assistant

My minimal exposure to the legal profession as a legal assistant to a divorce attorney has given me the opportunity to learn about financial declarations and initial disclosures. These forms are necessary for any party going through the process of litigation for a divorce, and they are straightforward as to what they require.

The financial declaration is a statement of income, expenses, debts, assets, and financial accounts for each party to a divorce action.

One’s initial disclosures form identifies people with information relevant to the case, the potential witnesses, and documents and other physical evidence a party asserts supports his/her case.

Completing the financial declaration and initial disclosures forms completely and correctly, along with gathering all the necessary supporting documentation, is a time-consuming process. With rare exception, divorce litigants do not want to prepare these forms. I know this because anyone I have tried to help through this process always fails to complete the forms and/or complains about the work that needs to be done on these forms. I get it, but what the clients often don’t seem to get is that your financial declaration and initial disclosures are not optional. Court rule require both you and your spouse to fill them out, fill them out correctly, and fill them out fully. Failing to do so can result in the court penalizing you and/or making erroneous rulings based upon incorrect and/or incomplete forms.

I am not a lawyer and thus cannot give any legal advice, but as someone who has taken part in the process of helping clients prepare their financial declarations and initial disclosures, I can see that preparing these forms completely, accurately, and on time greatly benefits you and your lawyer, saving you both time and frustration, as well as sparing you grief, on the back end.

Utah Family Law, LC | divorceutah.com | 801-466-9277

Financial Declaration (utcourts.gov)

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Will my husband be legally an owner of a company that I start just because he is my husband?

¶ 12 A succinct summary of contribution cases is provided in Kunzler v. Kunzler, 2008 UT App 263, 190 P.3d 497, where this court addressed the wife’s argument that she was entitled to part of her husband’s separate business property because, although “she was not his partner in the business [at issue,] she was his partner in the business of marriage.”5 Id. ¶ 19 n. 5. In his partially dissenting opinion, Judge Davis discussed Dunn v. Dunn, 802 P.2d 1314 (Utah Ct.App.1990), and Elman v. Elman, 2002 UT App 83, 45 P.3d 176. See Kunzler, 2008 UT App 263, ¶ 19 n. 5, 190 P.3d 497. In both of those cases, the nonowner spouse was awarded a portion of the other spouse’s separate property. See Dunn, 802 P.2d at 1318; Elman, 2002 UT App 83, ¶ 24, 45 P.3d 176. As stated in Kunzler, “the wife [in Dunn] ‘performed bookkeeping and secretarial services without pay’ for the husband’s medical practice, and therefore the business ‘was founded and operated through the joint efforts and joint sacrifices of the parties.’ ” 2008 UT App 263, ¶ 19 n. 5, 190 P.3d 497 (quoting Dunn, 802 P.2d at 1318). Judge Davis also discussed Elman, where

the wife “not only managed the household, but also grew the parties’ marital properties. She secured the land for and was in charge of building the parties’ Park City home.” … The Elman court awarded the wife half of the increase in value of the properties during the marriage “given the unusual responsibilities she assumed.”

Id. (emphasis in original) (quoting Elman, 2002 UT App 83, ¶ 24, 45 P.3d 176).

¶ 13 As noted in the parties’ briefs, there are cases predating Mortensen, Elman, and Dunn that appear to apply a more liberal standard in determining the appropriateness of awarding separate property to a nonowner spouse on the basis of contribution. In Lee v. Lee, 744 P.2d 1378 (Utah Ct.App.1987), this court reversed the trial court for failing to award the wife an equitable share of the husband’s corporation, acquired during the marriage, where “the wife assisted in the operation of the corporation by assuming clerical duties, including typing, answering the phones, and paying bills. Moreover, the wife also reared the parties’ two children and performed domestic duties, allowing the husband to participate full-time in the business.” Id. at 1380. In Savage v. Savage, 658 P.2d 1201 (Utah 1983), the Utah Supreme Court noted that the trial court’s property distribution—granting the wife forty percent of the value of the husband’s company—was within its allotted discretion, in part, “while it is true that the [wife] took no responsibility for the business, it was her assumption of the domestic burdens which made possible the [husband’s] full-time participation in the business.” Id. at 1204.

¶ 14 Mortensen, Dunn, and Elman appear to require more active participation and contribution by the nonowner spouse in order to qualify under the contribution category of Mortensen. As noted in Mortensen, the results are different where there is “effort made by the nondonee or nonheir spouse to preserve or augment the asset,” as compared to situations where there is a “lack of such efforts.” 760 P.2d at 306.

Child v. Child, 194 P.3d 205 (Utah Ct.App. 2008):

“The general rule is that equity requires that each party retain the separate property he or she brought into the marriage, including any appreciation of the separate property.” Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App.1990). Such separate property can, however, become part of the marital estate if

(1) 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, or (2) the property has been consumed or its identity lost through commingling or exchanges or where the acquiring spouse has made a gift of an interest therein to the other spouse.

(Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988) (citation omitted)).

Stonehocker v. Stonehocker, 176 P.3d 476 (Utah Ct.App. 2008):

Evidence in divorce action supported trial court’s finding that wife had only “token involvement” in business and that the business’s value was solely attributable to husband’s personal, professional reputation, such that husband was entitled to business.

Keyes v. Keyes, 351 P.3d 907 (Utah Ct.App. 2015):

Trial court’s findings in property distribution proceedings regarding division of inventory acquired during marriage, which was held by husband’s landscaping business, were inadequate to support determination that wife was entitled to marital percentage of that inventory; trial court failed to explain how wife had obtained an interest in the business inventory, especially in light of trial court’s other findings that landscaping business was husband’s separate property and that inventory was purchased using business resources.

Dunn v. Dunn, 802 P.2d 1314, 1317-1319 (Utah Ct.App 1990):

A. The Professional Corporation

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.” Gardner v. Gardner, 748 P.2d 1076, 1079 (Utah 1988) (quoting Englert v. Englert, 576 P.2d 1274, 1276 (Utah 1978)). In Sorensen v. Sorensen, 769 P.2d 820 (Utah Ct.App.1989), we affirmed the trial court’s conclusion that the accounts receivable, tangible assets, and goodwill of a professional practice were includable in the marital estate, to the extent they were accumulated during the marriage, in a situation where the husband began his dental practice six years before the marriage began. Id. at 832.

Mrs. Dunn’s position is more conservative than the prevailing view in Sorensen in that she does not assert an interest in her husband’s ongoing practice. Rather, Mrs. Dunn asserts an interest in the tangible assets of a corporation that was established during the marriage.

In Lee v. Lee, 744 P.2d 1378 (Utah Ct.App.1987), we considered a nine year marriage during which the husband established a corporation. The wife contributed some bookkeeping. More significant were her domestic contributions which freed her husband to participate full time in running the business. We held in Lee that the wife was entitled to her full equitable share of the corporation because of the parties’ joint efforts in establishing and maintaining the corporation. Id. at 1380–81.

Here, Mrs. Dunn argues, and we agree, that the trial court abused its discretion by characterizing Dr. Dunn’s professional corporation as a nonmarital asset. The corporation was founded and its assets accrued during the marriage and she performed bookkeeping and secretarial services without pay for the corporation. Thus, the corporation was founded and operated through the joint efforts and joint sacrifices of the parties. In addition, because Dr. Dunn chose to work sixty to seventy hours per week, he left Mrs. Dunn with the sole responsibility of running the household and managing the household accounts. Further, she was left without his companionship and domestic contributions during those hours. While she was not his partner in the business of orthopedic surgery, she was his partner in the “business” of marriage and her efforts were necessary contributions to the growth of his practice and the business. As such, she is entitled to her fair share in any marital assets derived from their joint efforts in that endeavor. Lee, 744 P.2d at 1380–81.

The lower court found that the “net tangible assets are not marital assets and are not subject to division in this action.” Other than this assertion, the court gave no reason for this finding and we can find no support for it in the record. We therefore reverse and remand for an equitable, which in this case means equal, distribution of the net tangible assets of the professional corporation.

B. Royalty Rights

This court recently affirmed that the right to future income is a marital asset where that right is derived from efforts or products produced during the marriage, even in cases where that right cannot be easily valued. Moon v. Moon, 790 P.2d 52, 56–57 (Utah Ct.App.1990) (right to use sculpture molds is a marital asset); see also Sorensen, 769 P.2d at 827; Woodward v. Woodward, 656 P.2d 431, 432–33 (Utah 1982).

Dr. Dunn argues that the development of the surgical instruments for implanting artificial knees came as a result of twenty-six years of education and training, most of which predated this marriage. He implies that since all of the necessary knowledge, skill and expertise was not acquired during the marriage, Mrs. Dunn should not share in the resulting profits. We find this argument without basis in law or in equity.

Mrs. Dunn asserts, and we agree, that the lower court abused its discretion in finding she had no marital interest in Dr. Dunn’s royalty rights for his invention of surgical instruments used for implanting artificial knees. She argues that the instruments were invented during the marriage, that nothing in the royalty contract conditions the payment of royalties upon Dr. Dunn’s personal services, and that Dr. Dunn himself characterized the income as “installment payments from the sale of property” on the parties’ joint 1987 income tax return. This contract, executed December 1, 1985, entitles Dr. Dunn to fixed quarterly payments totaling $375,000 between 1986 and 1990; $243,750 of the royalties earned during the marriage remained to be paid at the time of trial.

The lower court found that the contract would be “worthless” without his future personal services. However, although Dr. Dunn did spend time demonstrating the instruments, it was not specifically required by the contract. This contract, unlike the one pertaining to the artificial hip devices, is a royalty agreement and not a personal services agreement.

The record indicates that the knee contract is not conditioned upon Dr. Dunn’s personal services and that the primary benefit to Zimmer for the contract is the right to distribute the artificial knee instruments. Because the lower court found that Dr. Dunn traveled twenty-eight days per year doing business that related “equally to the hip agreement and the knee agreement,” and because Dr. Dunn is entitled to be recompensed for his time, we remand this issue to the lower court to deduct an amount equal to fourteen days of personal service from the value of the knee contract and to treat the remainder as a marital asset and to value it as of the date of the divorce and distribute to Mrs. Dunn her equitable share, which, in this case, would be one half.

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Marroquin v. Marroquin – 2019 UT App 38 – business valuation, findings

Marroquin v Marroquin – 2019 UT App 38

THE UTAH COURT OF APPEALS

HEATHER MARROQUIN,
Appellant,

v.

RENSON AMILICAR MARROQUIN,
Appellee.

Opinion No. 20170454-CA
Filed March 14, 2019

Third District Court, Salt Lake Department
The Honorable Robert P. Faust
No. 144903963

Steve S. Christensen and Clinton R. Brimhall,
Attorneys for Appellant

James H. Woodall and Deborah L. Bulkeley,
Attorneys for Appellee

JUDGE DIANA HAGEN authored this Opinion, in whichJUDGES KATE APPLEBY and JILL M. POHLMAN concurred.

HAGEN, Judge:

¶1        In 2005, Heather and Renson Marroquin were married. Prior to the marriage, Renson owned and operated a vending machine business.[1] After Heather filed for divorce in 2014, the value of that business became a central question in valuing the marital estate and distributing its assets. On appeal, Heather challenges the district court’s valuation of the business, its failure to impose a due date or interest rate for payment of her half of the marital assets, and its denial of her motion to amend its findings and for a new trial. Because we conclude the district court did not exceed its discretion with respect to any of the issues raised by Heather on appeal, we affirm.

BACKGROUND

¶2        Before marrying Heather in 2005, Renson founded Deluxe Vending LLC and now owns a 99% interest in that company.[2] Deluxe Vending operates eighty-seven vending machines and three “micro-markets”[3] in numerous locations throughout Salt Lake City, Utah. For the first year of their marriage, and two summers following that, Heather helped Renson stock the vending machines throughout the day and count the money collected. Once she completed her education, Heather obtained other employment, but she continued to “help [Deluxe Vending] sporadically as needed or as requested.”

¶3        Renson managed and conducted all of Deluxe Vending’s business operations and had no other employees. He established personal relationships with the property owners, which allowed him to continue to operate his vending machines and micro-markets at their respective locations. Most of Deluxe Vending’s contracts are on a month-to-month basis and can be replaced by other vendors at any time after the monthly contract ends.

¶4        In 2014, Heather filed for divorce. The primary issue at the parties’ divorce trial was the value of Deluxe Vending and division of its assets. Each party obtained his or her own expert to testify to the business’s value. Heather’s expert is a certified public accountant who had “no credentials in the area of business valuation.” Heather’s expert initially valued Deluxe Vending between $725,000 and $900,000 but increased “his estimate to a range of $1,229,317 to $1,530,803” just before trial by using an “income approach to value the business,” which includes “goodwill associated with the business.” At trial, Heather’s expert reduced his estimated value of Deluxe Vending to $700,000.

¶5        Renson’s expert is a certified public accountant, with accreditations in business valuation and as a senior appraiser. He “devotes approximately 75% of his practice to performing business valuations and testifying as an expert.” Following accepted industry practices of using the net asset approach, Renson’s expert valued Deluxe Vending at $152,937. The value was determined by subtracting the fair market value of liabilities from the fair market value of assets and then subtracting “between a 5 and 10 percent marketability discount.” In this case, Renson’s expert “went on the low end and took [a] 5 percent” discount. Renson’s expert opined that Deluxe Vending did not have any “institutional goodwill,” but only personal or professional goodwill attributed solely to Renson. The expert explained that, “without the relationships that exist for the places where the vending machines are located, there is no potential for goodwill. There’s no income earning capacity that would be in excess of the value of the assets.” At trial, Renson’s expert testified that Heather’s expert was unreliable and opined that he “failed to follow accepted industry practices, that he relied on inaccurate information, and that he made unreasonable assumptions.”

¶6        In its findings of fact, the court rejected Heather’s expert’s valuation and found Renson’s expert to be more credible. It found that the business was worth $152,937, awarded Deluxe Vending to Renson, and ordered him to pay Heather “one-half of the value, or $76,468.50.” The court also awarded alimony to Heather and divided the equity of certain personal property in half. The court entered the divorce decree consistent with those findings of fact.

¶7        Heather filed a motion to amend the court’s findings of fact or for a new trial (the post-judgment motion). In the post-judgment motion, Heather argued that the court erred in determining the value of Deluxe Vending because Renson testified at trial that some of the business’s liabilities had been paid off since Renson’s expert prepared the valuation report. Relatedly, she argued that the court should amend its findings to account for the institutional goodwill of the business rather than attribute the goodwill solely to Renson. Heather asked the court to set a date for Renson’s payment to Heather for one-half the value of Deluxe Vending and the personal property award. She also asked the court to make findings “regarding Renson’s dissipation of marital funds.” Finally, she requested a new trial “because the court’s method of ruling was irregular and surprising.”

¶8        The court found that the post-judgment motion was Heather’s “attempt[] to modify and add additional terms that were not presented as evidence at trial nor were they presented when [she] was given an additional opportunity to provide information to the Court due to lack of information and evidence at trial.” Based on her “failure to provide the information as directed within the time frames set, the Court was left with only the information provided at trial upon which to make a determination.” The court therefore denied the post-judgment motion.

¶9        Heather appeals.

ISSUES AND STANDARDS OF REVIEW

¶10 Heather raises three principal issues on appeal. First, Heather claims that the district court’s valuation of Deluxe Vending was clearly erroneous in two respects. She contends the court erroneously determined that any goodwill associated with Deluxe Vending was personal to Renson. Relatedly, she contends the court erred in accepting the appraisal value assigned by Renson’s expert to Deluxe Vending several months before trial given that Renson testified at trial that the liabilities had been reduced. A district court is “entitled to a presumption of validity in its assessment and evaluation of evidence,” and we defer to the district court’s “findings of fact related to property valuation and distribution unless they are clearly erroneous.” Taft v. Taft, 2016 UT App 135, ¶ 63, 379 P.3d 890 (quotation simplified). We “will not disturb a court’s distribution of marital property unless it is clearly unjust or a clear abuse of discretion.” Id. ¶ 32.

¶11 Second, Heather contends the court erred when it failed to set a due date or impose an interest rate on Renson’s payment to Heather for one-half the value of Deluxe Vending and the one-half interest award of personal property. District courts “have considerable discretion in determining property distribution in divorce cases,” Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 8, 176 P.3d 476 (quotation simplified), and we will not disturb the district court’s determination absent a clear abuse of discretion, Taft, 2016 UT App 135, ¶ 59.

¶12 Third, Heather contends the district court erred in denying the post-judgment motion because “the transcript showed that the district court had halted or interfered with [her] attempts to elicit testimony regarding dissipation of marital assets.”[4] We will reverse a district court’s denial of a motion for a new trial or to amend the findings and judgment for abuse of discretion. Bergmann v. Bergmann, 2018 UT App 130, ¶ 12, 428 P.3d 89. “To the extent that our review turns on facts presented at trial, we defer to the trial court’s underlying findings of fact, which shall not be set aside unless clearly erroneous.” Id. (quotation simplified).

ANALYSIS

I. The Value of Deluxe Vending

¶13      Heather contends the district court made two errors when

calculating the value of Deluxe Vending. First, she argues that the court should have included institutional goodwill in its calculation. Second, she argues the court’s calculations of the value of the company should have taken into consideration Renson’s testimony regarding the reduction in liabilities of Deluxe Vending. We address each argument in turn and conclude that the court did not err when calculating the value of Deluxe Vending.

A. Goodwill of Deluxe Vending

¶14      Heather contends the district court “should have included goodwill value in its calculations” of the value of Deluxe Vending. “In a divorce proceeding, determining and assigning values to marital property is a matter for the trial court and this court will not disturb those determinations absent a showing of clear abuse of discretion.” Dunn v. Dunn, 802 P.2d 1314, 1317 (Utah Ct. App. 1990) (quotation simplified). “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.” Id. at 1317–18 (quotation simplified). Here, Renson does not dispute that Deluxe Vending is marital property subject to division. See id.

¶15 When valuing a business in marriage dissolution cases, district courts must consider whether goodwill is institutional or personal to one spouse. See Sorensen v. Sorensen, 839 P.2d 774, 775 (Utah 1992) (agreeing with “jurisdictions that do not treat [personal] goodwill as a marital asset to be divided”). Institutional, or enterprise, goodwill “is 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.” See DeSalle v. Gentry, 818 N.E.2d 40, 47 (Ind. Ct. App. 2004). Personal goodwill is based on an individual’s “reputation for competency” and is not subject to distribution upon divorce. Sorensen, 839 P.2d at 775–76; see also Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 44, 176 P.3d 476 (“There can be no good will in a business that is dependent for its existence upon the individual who conducts the enterprise and would vanish were the individual to die, retire or quit work.” (quotation simplified)).

¶16 Here, the district court concluded that the only goodwill associated with Deluxe Vending was personal to Renson. The court found that Deluxe Vending was the type of sole proprietorship where the owner’s goodwill is not a marital asset subject to division. Accordingly, the court did not consider Renson’s personal goodwill in calculating the value of Deluxe Vending.

¶17 Heather argues that Deluxe Vending is distinguishable from the type of sole proprietorship where goodwill is not subject to division. For example, she cites Sorensen, in which the district court valued a sole-practitioner dental practice at $100,060 and determined that $62,560 of that value represented the personal “goodwill” of the husband. 839 P.2d at 775. The husband appealed the district court’s decision, arguing that it “should not have included [personal] goodwill and reputation in its valuation of his dental practice.” Id. Our supreme court determined that “the goodwill of a sole practitioner is nothing more than his or her reputation for competency.” Id. “It may well be that if the sole practitioner retires at the time of a divorce and his or her practice is actually sold and an amount is realized over and above the value of the tangible assets, the full amount should be viewed as marital property.” Id. But where no actual sale of the business takes place, personal goodwill “should not be treated differently from a professional degree or an advanced degree,” and requiring the sole practitioner to pay the spouse “part of the value ascribed to the [personal] goodwill” would be inequitable. Id. at 775–76.

¶18 Relying on Sorensen, Heather asserts the district court made “no findings about [Renson] having a reputation that matters to the business’s operation.” Both the district court’s oral and written findings of fact refute this assertion. The court specifically found that “the goodwill of Deluxe Vending is solely attributable to Renson’s work, his efforts, and his reputation for competency” based on Renson “being the face of the business” and the “personal relationships” he has made with the property owners that have allowed him to continue to conduct business, largely on a month-to-month basis.

¶19      Deluxe Vending is more akin to the car dealership at issue in Stonehocker. In that case, the district court determined that a used car dealership formed by the husband during the course of the marriage was “in reality a sole proprietorship” and the success of the used car dealership was “solely attributable to [the husband’s] personal, professional reputation.” Stonehocker, 2008 UT App 11, ¶¶ 6, 40, 43. This court agreed that the used car dealership was “essentially [the husband’s] sole proprietorship,” because the wife had “only token involvement” in the business, and its success was “the product of [the husband’s] reputation, goodwill, and sole efforts.” Id. ¶¶ 40–42 (quotation simplified). The district court therefore correctly concluded that the value of the used car dealership “did not include any amount for goodwill.” Id. ¶ 43.

¶20 Here Renson owns 99% of Deluxe Vending and is the only employee of the business. He remains in contact with the entities that continue to allow Deluxe Vending to operate vending machines and micro-markets on the properties on a month-to-month basis. Heather’s involvement in the business was minimal and limited to stocking the machines and counting the money at the beginning of the marriage. Thus, Renson is akin to the sole proprietor in Stonehocker and Heather had “only token involvement” in Deluxe Vending’s operations. See id. ¶¶ 40–41 (quotation simplified).

¶21 Heather asserts that “anybody could step into [Renson’s] shoes and carry on with the business under its name and with its assets,” but she has not marshaled any record evidence that would support that assertion. See id. ¶ 9 (explaining that when a party challenges the findings of fact, the party “must first marshal the evidence in support of the findings and then demonstrate that the findings are unsupported by substantial evidence” (quotation simplified)). We therefore conclude that the district court did not exceed its discretion when it did not include institutional goodwill in calculating the value of Deluxe Vending.

B. Decreased Liabilities of Deluxe Vending

¶22 Heather contends the district court erred by basing its valuation of Deluxe Vending on the expert reports created prior to trial. Heather argues that the court should have valued the business as of the exact date of the divorce by accounting for Renson’s trial testimony that he had further paid down the business’s liabilities in the intervening months.

¶23      “Determining and assigning values to marital property is a matter for the trial court, and [we] will not disturb those determinations absent a showing of clear abuse of discretion.” Ebbert v. Ebbert, 744 P.2d 1019, 1023 (Utah Ct. App. 1987). Because Heather did not argue at trial that the district court should adjust the appraised value of Deluxe Vending based on a reduction in its liabilities, she cannot show an abuse of discretion.

¶24      Here, both parties submitted expert reports regarding the value of Deluxe Vending several months before trial. A valuation is necessarily a snapshot in time and both parties relied on the experts’ valuations when preparing for trial. Similarly, the district court relied on those expert reports and determined that Renson’s expert’s valuation was more credible. In the post-judgment motion, Heather cited portions of Renson’s testimony, noting that some of Deluxe Vending’s loans had been paid off or reduced. Heather argued that the court “should amend its findings consistent with the evidence at trial” by increasing the value of Deluxe Vending to account for the decrease in liabilities. Raising this factual issue for the first time in a post-judgment motion to amend the court’s findings of fact did not give Renson the opportunity to present evidence as to whether there were other changes that affected the valuation of Deluxe Vending, such as a decrease in assets. And Heather has failed to demonstrate that she could not have requested the court consider evidence outside of the experts’ valuation reports at trial. Cf. Hudema v. Carpenter, 1999 UT App 290, ¶ 40, 989 P.2d 491 (affirming the district court’s denial of a post-judgment motion for a new trial because “the evidence offered [in the post-judgment motion] could have been produced at trial with reasonable diligence”). Indeed, Heather elicited the testimony from Renson, but never asked the court to consider it when calculating the value of Deluxe Vending.

¶25 Heather cannot establish that the district court erred by not reducing the appraised value of Deluxe Vending, sua sponte, based on trial testimony regarding decreased liabilities. Nor has she shown that the district court abused its discretion in denying her post-judgment motion to amend its findings on grounds not presented at trial.

II. Failure to Set Due Date or Interest Rate for Heather’s Award of Marital Assets

¶26      Heather contends the district court “should have included an interest rate or due date” for her award of marital assets. Heather asserts that the court’s failure to do so places her “at such a disadvantage” that it amounts to “an abuse of discretion.” We disagree.

¶27 When the district court assigns a value to an item of marital property, the court must equitably distribute it “with a view toward allowing each party to go forward with his or her separate life.” Stonehocker v. Stonehocker, 2008 UT App 11, ¶¶ 13, 15, 176 P.3d 476. We will not disturb the district court’s payment determination absent a clear abuse of discretion. Taft v. Taft, 2016 UT App 135, ¶ 59, 379 P.3d 890; see also Stonehocker, 2008 UT App 11, ¶ 8.

¶28 Heather relies exclusively on Taft to support her argument. In Taft, the district court granted the husband “discretion to pay [the] judgment all at once or in monthly installments for a period of time.” 2016 UT App 135, ¶ 57 (quotation simplified). The court did not order any minimum payment and provided that if the husband chose to make monthly payments, he “shall begin equal monthly payments, and the duration of such monthly installment payments shall not exceed a period of ten years, whereupon the balance shall be paid to [the wife] in one final balloon payment.” Id. (quotation simplified). On appeal, the wife argued that this payment strategy was inequitable because it allowed the husband “to receive full immediate enjoyment of the assets awarded to him as well as the full use of [the wife’s] share of the assets while [the wife was] deprived of meaningful access to her award.” Id. ¶ 58 (quotation simplified). This court agreed, determining that the husband was “given nearly complete discretion regarding the payment to [the wife] of her share of the marital property over a ten-year period” at a low interest rate and that the wife, who had “been granted a substantial judgment in token of her share of the marital real property,” had “no ability to collect, access, or substantially enjoy until ten years pass[ed], unless [the husband] decide[d] otherwise.” Id. ¶ 59. This court therefore concluded “that the terms of [the wife’s] property judgment [were] inequitable and that the trial court exceeded its discretion by structuring the terms of [the wife’s] property judgment as it did.” Id. ¶ 62.

¶29      This case is distinguishable from Taft. The district court in Taft gave the husband discretion to delay payment to the wife in an inequitable way. Unlike the spouse in Taft, Heather does not lack the “ability to collect, access, or substantially enjoy” her award of marital property. See id. ¶ 59. Instead, she can collect on the judgment just as any other judgment creditor. See Utah R. Civ. P. 62(a) (providing that “[n]o execution or other writ to enforce a judgment may issue until the expiration of 14 days after entry of judgment, unless the court in its discretion otherwise directs”). Heather acknowledges this ability in her brief on appeal, stating that Renson “can hold onto the assets and reap the benefits while [Heather] waits for payment or expends time, effort, and money to enforce the divorce decree.” (Emphasis added.) Because Heather has not yet attempted to enforce the divorce decree, she cannot show that she has been deprived of meaningful access to her award or prevented from going forward with her separate life. We therefore conclude the district court did not abuse its discretion when it did not impose a due date or interest rate for the payment of Heather’s award of marital assets.

III. Irregularity of Proceedings

¶30 Finally, Heather contends the district court erred in denying her motion for a new trial based on an irregularity of the proceedings. Heather argues that she attempted to establish a claim that Renson dissipated marital assets, but the court declined to address it and “cut off [Heather’s] attempts to elicit testimony on the subject.”

¶31 Following a bench trial, “a new trial may be granted to any party on any issue” if, among other circumstances, “there was an “irregularity in the proceedings . . . or abuse of discretion by which a party was prevented from having a fair trial.” Utah R. Civ. P. 59(a)(1). “Because the grant of a new trial is ordinarily left to the sound discretion of the trial court, we will review the court’s decision in this regard under an abuse of discretion standard.” Child v. Gonda, 972 P.2d 425, 429 (Utah 1998). And “absent a showing by the appellant that the trial outcome would have differed, every reasonable presumption as to the validity of the [judgment] below must be taken as true upon appeal.” Id.

¶32 Here, Heather asserts that the district court, “on several occasions . . . cut off [Heather’s counsel’s] questioning” of Renson regarding the claim of dissipation of marital assets. She claims that, on one occasion, Heather’s counsel was “attempting to elicit testimony related to [Renson’s] credibility and the finer details of the evidence,” but the court “cut off the questioning” and “asked [Renson] point blank if he was hiding money.” Heather argues that this was “uniquely harmful” because it “was an unfair boon to [Renson]” and that the effect was to “shield[]” Renson “from questions about his waste of marital assets.” We disagree.

¶33 When determining “whether a party should be held accountable for the dissipation of marital assets,” there are “a number of factors that may be relevant,” including (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.” Rayner v. Rayner, 2013 UT App 269, ¶ 19, 316 P.3d 455. “While marital assets are generally valued as of the date of the divorce decree, where one party has dissipated an asset, hidden its value or otherwise acted obstructively, the trial court may, in the exercise of its equitable powers, value a marital asset at some time other than the time the decree is entered, such as at separation.” Parker v. Parker, 2000 UT App 30, ¶ 13, 996 P.2d 565 (quotation simplified).

¶34 Our review of the record shows that Heather’s counsel asked questions about spending money, but never directly asked Renson whether the money came from either the company account or a joint checking account. See id. Instead, Heather’s counsel asked questions about where, when, and how much money Renson spent. The court interjected, stating, “Let’s just cut to the chase, do you have any other squirrel holes or nest eggs that you’ve been hiding or putting money in . . . that you didn’t report in your financial declarations and did not disclose to [c]ounsel?” Renson said he did not. Heather’s counsel then pursued a different line of questioning. When Heather’s counsel attempted to ask Renson again about where and when he spent his money, Renson’s counsel objected as to relevance, arguing that “unless [Heather] ties it to a business expense that’s been improperly claimed, he can spend his money on anything he wants.” See id. Heather’s counsel argued that it was relevant to the court’s consideration regarding attorney fees. The court sustained the objection and explained that “what people do with their income and how they spend it” is irrelevant. Cf. Rayner, 2013 UT App 269, ¶ 19.

¶35 Because Heather never asked the court to find that Renson’s personal spending decreased the value of the company or any other marital asset, the questions did not go to a material issue or fact in dispute. Heather had the opportunity at trial, on numerous occasions, to direct the court to specific assets that had been dissipated by Renson’s spending, but she did not. Heather therefore cannot show that she did not have the opportunity to present the issue to the district court or that she was denied a fair trial. See Utah R. Civ. P. 59(a)(1). Accordingly, the district court did not abuse its discretion when it denied her motion for a new trial based on an irregularity in the proceedings.

IV. Attorney Fees

¶36      Renson seeks attorney fees incurred on appeal under rule 33 of the Utah Rules of Appellate Procedure, arguing that Heather’s appeal was “frivolous or for delay.” Rule 33 allows for the sanction of “just damages, which may include . . . reasonable attorney fees” to the prevailing party if an appeal “is not grounded in fact, not warranted by existing law, . . . not based on a good faith argument . . . or [if taken] for the purpose of delay.” Utah R. App. P. 33(a),(b). “The sanction for bringing a frivolous appeal is applied only in egregious cases, lest there be an improper chilling of the right to appeal erroneous lower court decisions.” Maughan v. Maughan, 770 P.2d 156, 162 (Utah Ct. App. 1989) (quotation simplified). Although Heather has not been successful on appeal, her arguments were “worthy of consideration and should not be subject to the chilling effect” of rule 33 sanctions. See id.

CONCLUSION

¶37 We conclude the district court did not exceed its discretion when it calculated Deluxe Vending’s value without including institutional goodwill and when it did not recalculate the value of Deluxe Vending based on testimony elicited at trial regarding a reduction of liabilities. We further conclude the court did not exceed its discretion by not imposing a deadline on or interest rate for Renson’s payment to Heather where there are no limitations on her ability to enforce the judgment. And because Heather failed to show an irregularity in the proceedings, we conclude the court did not exceed its discretion when it denied the post-judgment motion for a new trial. Accordingly, we affirm.

Utah Family Law, LC | divorceutah.com | 801-466-9277

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[1] Because both parties share the same surname, we refer to them by their first names with no disrespect intended by the apparent informality.

[2] Heather is not the 1% interest owner of Deluxe Vending.

[3] Deluxe Vending’s micro-markets are “self-serve kiosks” that allow patrons to access food and beverage items from a cooler and then scan the item at the kiosk and pay with either a credit or debit card or with cash.

[4] Heather also contends the district court “abused or entirely failed to exercise its discretion when it declined to factor dissipation of marital assets into its division of the parties’ martial assets.” This argument is unpreserved. “[P]arties are required to raise and argue an issue in the trial 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 (quotation simplified). Failure to do so “precludes a party from arguing that issue in an appellate court, absent a valid exception,” such as plain error, ineffective assistance of counsel, or exceptional circumstances. Id. ¶¶ 18–19. Here, Heather never alleged at trial or in the post-judgment motion that the value of the marital assets should be adjusted to account for money Renson spent on non-marital assets. Nor did she identify Deluxe Vending’s bank account as the asset depleted or suggest that the money Renson spent on non-marital expenses was taken from the joint checking account. Instead, Heather asked the court to consider the alleged dissipation only with respect to attorney fees and alimony. Because Heather failed to raise this issue before the district court and she has failed to argue that an exception to preservation applies, see id., we decline to address it.

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