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Category: Marital Home

Merrill v. Merrill – 2024 UT App 94 – Tax Rate, Expenses, Affect on Income Calculation

Merrill v. Merrill – 2024 UT App 94

THE UTAH COURT OF APPEALS

LUTISHA MERRILL, Appellee, v. JOHN RICHARD MERRILL, Appellant.

Opinion No. 20210785-CA Filed July 11, 2024

Third District Court, Silver Summit Department

The Honorable Teresa L. Welch No. 194500031

Luke A. Shaw and Jill L. Coil, Attorneys for Appellant, Julie J. Nelson, Attorney for Appellee

JUDGE JOHN D. LUTHY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and RYAN D. TENNEY concurred.

LUTHY, Judge:

¶1        John Richard Merrill appeals from the district court’s final order resolving issues related to his divorce from Lutisha Merrill. John[1] challenges several of the court’s decisions related to its calculation of the parties’ incomes, its determination of Lutisha’s reasonable expenses, its alimony award, and its valuation and division of the marital estate. We affirm most of the district court’s challenged decisions. On the issues of Lutisha’s tax rate and her claimed expense for property maintenance, however, we vacate the district court’s decisions and remand the case for additional proceedings consistent with this opinion.

BACKGROUND
The Marriage

¶2        Lutisha and John were married in 2001 and had twins together in 2007. Lutisha filed for divorce in 2019.

The Parties’ Employment and Incomes

¶3        During their marriage, the parties were able to sustain a comfortable standard of living through their substantial incomes. Lutisha has significant experience in advertising and radio advertising sales. From 2011 to 2014, she worked as the vice president of sales for a large media company, earning an average of $168,730.00 annually. In 2014, she left that position and formed her own business, 360 Touch LLC (360 Touch), a “full-service advertising agency.” As part of her business practice, Lutisha paid for expenses, including advertising for her clients, on a business credit card that earned frequent flyer miles, which resulted in her earning between 1.5 million and 1.8 million miles during both 2019 and 2020. In the years leading up to the COVID-19 pandemic, 360 Touch grew significantly; however, with the onset of the pandemic in 2020, the business “experienced a 37% decline in revenue,” and Lutisha’s income “declined 42%” from the prior year.

¶4        John was employed at the time of trial as the chief financial officer of a publicly traded software company. He had a base annual salary of $225,000.00, with quarterly bonuses of up to 50% of his salary. His contract at the time of trial also provided for nearly $100,000.00 worth of restricted stock shares, a third of which was set to vest in each of May 2020, May 2021, and May 2022.

The Family Homes

¶5        The parties owned two homes that were purchased during their marriage—their primary home in Park City (the Park City property) and a vacation home in Coalville (the Coalville property). Upon separation, Lutisha remained in and maintained the Park City property while John maintained the Coalville property, although he also rented an apartment in Park City to live closer to the children. According to Lutisha, at the time John moved out of the Park City property, the parties “knew that the home desperately needed a new roof . . . , new carpet . . . , [and] new interior paint . . . and that the exterior wood was rotted and needed to be replaced.” The court found that Lutisha paid for the roof to be replaced in May 2020 at a cost of $18,380.00.

The Parties’ Financial Declarations

¶6        As the parties prepared for trial, they provided various financial declarations. Lutisha’s final amended financial declaration listed current monthly expenses totaling $26,489.57 and marital monthly expenses of $27,183.89. Relevant to this appeal, these expenses included line items for minimum credit card payments ($1,322.50), additional credit card payments ($2,000.00), personal loan payments ($970.00), real estate maintenance ($1,792.84), food and household expenses ($4,580.70), clothing expenses ($229.83), entertainment/travel expenses ($696.84), health care expenses ($1,054.67), and divorce legal fees ($5,375.20). John’s final amended financial declaration listed his current monthly expenses at $21,518.85 and marital monthly expenses of $30,973.02. His declaration included a line item for monthly legal expenses of $3,233.66.

The Divorce Trial

¶7        Trial was held remotely in May and June of 2021.[2] The parties agreed to rely on prepared declarations from Lutisha and John in place of direct examination, while still allowing for a real-time opportunity for cross-examination of each party.

Lutisha’s Testimony

¶8        Lutisha’s testimony was presented first. As to her income, she testified regarding the pandemic’s negative impact on 360 Touch and some of the steps she had taken to try to mitigate that impact. She testified, “[A]ny time that’s not taken by a client with a specific project, I now spend cold-calling and working on the business.” She estimated that at the time of trial she was “cold-calling 30 minutes to an hour every day.” She also explained that shortly before the pandemic, her full-time assistant reduced her hours to part time and that although Lutisha had intended to hire a second part-time assistant, she did not do so. Additionally, she identified the following actions she took to mitigate the impact of the pandemic on her business: “I also closed my office, which was very difficult for me. I enjoyed having an office. And I worked with my different vendors to decrease what I was paying them as far as subscription services, those types of things. I’ve done everything possible to create revenue while managing my expenses.” As to the possibility of returning to a radio sales manager position similar to the position she had before forming 360 Touch, Lutisha said that such jobs “don’t exist anymore.” She explained, “I have spoken to all of the general managers of the different radio companies in town, and their current situation is they’re actually getting rid of sales managers. They are terminating people because of the situation their companies are in due to COVID.”

¶9        Lutisha testified that she had struggled to pay her expenses during the pandemic and that her economic situation had forced her to take out a personal loan of $100,000.00 to make ends meet. She testified, “That money went to pay my personal expenses. My mortgage, my car, my food, utilities. It went to pay for everything.”

John’s Testimony

¶10 John’s testimony was presented next. Regarding his income, John testified about his employment agreement. He acknowledged his $225,000.00 base annual compensation as well as the potential for quarterly bonuses. And he said that although he considered the stock shares to be part of his compensation package, he did not “rely on those numbers in planning [his] life,” explaining, “I know that . . . whether it’s stock options or restricted shares, there is a vesting period and a holding period and you can’t sell those shares until sometime in the future.”

Lutisha’s Expert Evidence

¶11      Each party also presented the testimony of a financial expert, along with prepared financial expert reports, to help establish income amounts for the parties. Lutisha’s expert had determined Lutisha’s income from 360 Touch by calculating her average monthly incomes for both 2019 and 2020, “presenting the two calculations . . . to show the impact of the COVID-19 pandemic on [Lutisha’s] earnings.” Those calculations showed an average monthly income in 2019 of $19,555.00 and an average monthly income in 2020 of $10,316.00. Lutisha’s expert concluded:

COVID-19 has had a significant negative impact on 360 Touch and the Advertising Agencies industry. 360 Touch’s sales in 2020 decreased by 37.43 percent compared to 2019. Our analysis of 360 Touch’s 2020 sales shows that many of the Company’s clients have significantly decreased their marketing spending compared to historical expenditures. [Lutisha] informed us that this decrease is caused by decreased demand caused by uncertainty from the impacts of COVID-19. [Lutisha’s] assertion is consistent with industry data . . . .

Lutisha’s expert then quoted from a nationwide report stating that “[r]evenue for the Advertising Agencies industry is anticipated to decline 10.2 percent in 2020 due to reductions in ad spending” and that “[h]igh levels of uncertainty tend to reduce consumer and business spending.” Lutisha’s expert’s report also included calculations showing growth projections for 360 Touch. The calculations showed a 25% loss in 2021, 20% growth in 2022, and 2.4% growth thereafter.

¶12 Lutisha’s expert also calculated an average monthly income for John in both 2019 and 2020. In addition to John’s wages, this calculation relied on various company-related benefits, such as 401(k) contributions, health savings account contributions, and vested common stock. Lutisha’s expert testified that it was important to include the vested stock in John’s income “[b]ecause it’s wealth that’s generated through his work effort.” The result was an average monthly income of $25,922.00 in 2019 and $27,708.00 in 2020.

¶13      Lutisha’s expert testified generally as to the type of stock issued to John, unregistered restricted common stock shares (RSUs):

They have additional limitations on trading when the shares are held by an affiliate or an insider like [John]. So in order to sell those shares, you have to hold them for a certain period of time, but you also have to submit forms that indicate your intent to sell, and then . . . depending on what the limitations are on selling shares of a particular company that you own shares in, you may have to hold those shares for additional periods.

However, when asked, Lutisha’s expert was not able to elaborate on the specific restrictions applicable to John’s stock, responding, “Well, it really varies significantly from one company to another and one stock program to another. And so . . . there aren’t general parameters that I could give you. But RSUs that I’ve seen vary dramatically as to how the insiders can trickle shares into the stock market.”

¶14 During cross-examination, Lutisha’s expert was questioned as to whether, “based upon standard practice in [his] profession,” he counts frequent flyer miles “as a monetary value when computing income.” Lutisha’s expert responded, “I don’t, no.”

John’s Expert Evidence

¶15      John also retained a financial expert. In March 2020, John’s expert had conducted a valuation analysis of 360 Touch. This analysis had projected that for 2020, 360 Touch “would have over $2,000,000 in revenue . . . and would generate $176,000 in salary to [Lutisha], plus another $37,000 in net income to [Lutisha].” However, John’s expert acknowledged at trial that by the 2021 trial dates, actual 2020 numbers were known and instead showed that the real “results for 360 Touch in 2020 were just under $1.6 million in revenue,” a “$121,000 payroll to [Lutisha],” and “a small net loss.” He conceded that “in hindsight,” it appeared that his projection for 2020 was probably “overstated by over 43 percent.”

¶16 John’s expert provided another report in March 2021, which specifically addressed Lutisha’s earning potential. This analysis relied on an industry research report[3] of advertising agencies in 2020—a report “related to the advertising industry as a whole”—to project a “monthly net income after taxes . . . of $13,774 for 2020, and $14,466 for 2021.” Upon cross-examination, John’s expert acknowledged that his information was “not specific to 360 Touch’s customer base,” that he was not “aware of the impact political advertising had on the advertising world in 2020” (a factor with potential to have had an outsized impact on such data in an election year, like 2020), and that he did not “have any data on single-person advertising agencies in Utah and the impacts the pandemic ha[d] had on those agencies.”

¶17      Unlike Lutisha’s expert, John’s expert did include Lutisha’s frequent flyer miles in his analysis of her earnings, explaining that although frequent flyer miles may not have “an actual cash value,” they “could be turned into . . . personal spending or business spending so they actually have a value.” He also considered the level of rewards in this case to not be “typical” because he had not previously “seen this level of rewards . . . where someone is able . . . to amass this amount of $1.5 million in spending on a credit card.” However, when questioned as to the standard in his profession, he conceded that monetizing frequent flyer miles as income was “typically . . . not done.” And on cross-examination he also conceded that he usually follows this standard and does not “typically include rewards points in the valuation of income.”

The Post-trial Proceedings

¶18      After the conclusion of the trial, the district court issued its Findings of Fact and Conclusions of Law and Order. Lutisha thereafter filed a motion to reconsider and amend the findings, requesting changes to the court’s order to address alleged inconsistencies therein and requesting additional findings regarding the court’s property division. John responded to that motion and also counter-requested “correction or reconsideration” of a number of items, highlighting various “other discrepancies” in the court’s order. After holding a clarification hearing, the court entered an Amended Findings of Fact and Conclusions of Law and Order. The court then entered its Decree of Divorce.

¶19 The district court’s amended order was forty-two pages long and addressed a multitude of issues. We confine our recitation here to only those issues relevant to this appeal.

The Court’s Determination of the Parties’ Incomes

¶20 First, the court determined the gross monthly income for each party. The court reviewed the testimony presented by both experts and then found that “[Lutisha’s expert’s] analysis and opinion regarding [Lutisha’s] income [was] more credible than [was John’s expert’s].” The court explained that this was because John’s expert had relied on national projections as opposed to more localized data, had made projections based on data from an election year without knowing the impact of political advertising on such data, had relied on financial information compiled by John as opposed to the actual financial records of Lutisha and 360 Touch, and had made extrapolations predicting Lutisha’s income that ultimately significantly overstated Lutisha’s actual income  for 2020. Thus, the court adopted Lutisha’s expert’s income calculation and set Lutisha’s monthly gross income at $10,316.00.

¶21 As to John’s argument that a higher income should be imputed to Lutisha based on her historical earnings, the court determined that John had not shown that Lutisha was voluntarily underemployed or that, with reasonable effort, she could be earning more. The court found that John did not present testimony regarding what jobs were locally available to an individual with Lutisha’s background, and the court found credible Lutisha’s assertions that the type of marketing positions she had held previous to starting her own business were no longer available and that she had made reasonable efforts to maintain her income in the face of pandemic-related challenges.

¶22      As to John’s gross income, the district court again relied on Lutisha’s expert’s testimony, “which was based on [John’s] wages, bonuses, 401(k) contributions, Section 125 Benefits,[4] Health Savings Account Contributions, Group Term Life Insurance Benefit and Vested Common Stock” to determine a monthly gross income amount of $27,708.00. Although John had argued that, at least for purposes of calculating child support, the stock should not be considered as part of his gross monthly income, the court disagreed. The court reasoned that John’s “employment contract and work/payment history indicate[d] that [John] regularly receives stock options and bonuses as part of his regular income/compensation” and that “including [John’s] bonuses and regularly received stock options as part of his income is consistent with the sources of income as outlined in Utah Code § 78B-12-203(1).” See generally Utah Code § 78B-12-203(1) (defining “gross income” for purposes of the Utah Child Support Act).

The Alimony Order

¶23 Next, the district court addressed alimony. The court initially recognized that the following facts were indicative of the parties’ standard of living during the marriage: “the family traveled regularly, they maintained a second home, they enjoyed outdoor activities (and had recreational vehicles to do so), they dined out regularly, they had a nanny to care for the children, they skied at Deer Valley and Park City Mountain Resort, and they contributed to retirement savings.” As a result, the court accepted John’s marital monthly expenses figure of $30,973.02. Based on these facts, the court determined that, with the exception of the line items for monthly legal expenses, the parties’ listed expenses were “reasonable in light of the marital standard of living and in light of [the other party’s] monthly needs.” With the removal of the attorney fees expenses (and an adjustment to John’s child support expense due to a change in the ordered child support amount), Lutisha was left with a total monthly expense amount of $21,114.80, and John was left with a total monthly expense amount of $19,118.19.

¶24 The court then determined that Lutisha’s net monthly income of $7,846.00—the amount left of her gross monthly income after considering her tax rate, “[b]ased upon [her] 2020 tax return” of “19% federal and 4.95% state”—was insufficient to meet her reasonable needs and left a monthly shortfall of $13,268.80. And the court determined that John’s net monthly income after taxes of $19,409.00 was sufficient to cover his expenses, leaving a surplus of $290.81. The court then applied that surplus to Lutisha’s shortfall and, thereafter, “[e]qualizing the poverty,” split the remaining shortfall between the two parties. This resulted in a monthly alimony amount of $5,529.31, which the court ordered John to pay for five years, allowing Lutisha “to maintain the marital standard of living until the [m]inor [c]hildren reach the age of majority, and . . . allow[ing] [Lutisha] sufficient time to rehabilitate her income.”

The Property Division

¶25 The district court then moved to the task of dividing the marital estate, valuing the estate as of the time of trial. As to real property, the court awarded the Park City property to Lutisha and the Coalville property to John. Regarding the furniture in the homes, the court stated that because “credible trial evidence” showed that the Park City property and the Coalville property had “comparable items that are comparable in value,” it was “reasonable and equitable” to award Lutisha the “furniture, personal property, and the like” at the Park City property and to award John the “furniture, personal property, and the like” at the Coalville property.

¶26      The district court then awarded certain accounts and other property to Lutisha and John respectively. Relevant to this appeal, the court awarded the following to John: (1) two sets of stock options received as compensation from his employer, one valued at $99,198.00 and another valued at $99,996.75; (2) his 2021 first quarter bonus of $28,125.00; (3) a “travel credit” of $15,426.57 for a canceled trip to Bora Bora, with the court noting that although John “received a refund for the travel, the refund is not reflected anywhere else and thus should be included in the division of property”; and (4) the furniture that John had somewhat recently purchased for his Park City apartment, at a value of $26,318.86.

¶27 In dividing the marital estate, the district court declined John’s request to award him reimbursement for half of the $62,304.63 that he contended he spent on maintaining marital property and paying related expenses. The court determined that John “did not provide credible evidence that these were in fact marital expenses,” and it identified examples of listed items that “[did] not appear to be marital expenses,” such as “clothing purchases, contact lenses, Weller Recreation, and Marine Products.”

¶28 The district court did, however, determine that the $100,000.00 personal loan obtained by Lutisha was part of the marital estate because the loan was used “to pay for legitimate marital expenses.” In making this determination, the court pointed to, among other things, Lutisha’s “financial condition at that time” (when her income “had dropped significantly” and John “was under-paying his child support obligations”) and the parties’ “historical spending practices.”

¶29 The district court then divided the remaining marital property and debts. Finally, the court ordered an additional $102,243.09 equalization payment from John to Lutisha.

ISSUES AND STANDARDS OF REVIEW

¶30      John now appeals. He first challenges several components of the district court’s calculation of the parties’ incomes. “Courts have broad discretion to select an appropriate method of assessing a spouse’s income, including determinations of income imputation.” Bond v. Bond, 2018 UT App 38, ¶ 6, 420 P.3d 53 (cleaned up). When challenging an income determination, “appellants bear a heavy burden, and we can properly find abuse [of discretion] only if no reasonable person would take the view adopted by the trial court.” Pankhurst v. Pankhurst, 2022 UT App 36, ¶ 13, 508 P.3d 612 (cleaned up).

¶31      John also challenges several of Lutisha’s expenses that the district court found to be reasonable, the court’s method of calculating alimony, and the court’s division of the marital property. “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.” Olsen v. Olsen, 2007 UT App 296, ¶ 8, 169 P.3d 765 (cleaned up). “Therefore, we review [property distribution and] alimony awards under an abuse of discretion standard.” Id.

ANALYSIS

I. The Parties’ Incomes

A.        Imputation of Income to Lutisha

¶32      John argues that the district court abused its discretion in determining Lutisha’s gross income. Specifically, he challenges the district court’s refusal to impute wages beyond the $10,316.00 monthly income calculated by Lutisha’s expert.

¶33      As an initial matter, we note that in determining Lutisha’s income, the district court referenced outdated law when it cited Busche v. Busche, 2012 UT App 16, 272 P.3d 748, cert. denied, 280 P.3d 421 (Utah 2012), for the proposition that “[t]he court must find that the spouse is voluntarily unemployed or underemployed” before it may impute income. Id. ¶ 24. While such a finding was a statutory prerequisite to imputing income prior to 2007, “the current version of the Utah Code requires only that the judge ‘enter[] findings of fact as to the evidentiary basis for the imputation.’” Pankhurst v. Pankhurst, 2022 UT App 36, ¶ 14, 508 P.3d 612 (alteration in original) (quoting Utah Code § 78B-12­203(8)(a)). “Thus, while voluntary unemployment or underemployment may be relevant when considering whether a party is concealing income or shirking in his or her efforts to earn income, a finding of voluntary unemployment or underemployment is not a prerequisite to imputing income.” Id. (cleaned up). Instead, “the focus of the imputation analysis is on the detailed findings of fact necessary to support a decision to impute income rather than the ultimate fact or legal conclusion of voluntary unemployment or underemployment.” Id. (cleaned up).

¶34 Notwithstanding the district court’s reference to the outdated rule cited in Busche, the court’s analysis was ultimately based on the correct concern—whether there was sufficient evidence to support imputation of a higher income to Lutisha. The court determined there was not because John presented no evidence “as to the current salaries or job availability in the prevailing market for persons with backgrounds similar to [Lutisha’s] or what [Lutisha’s] employment capacity and earnings potential would be in the prevailing markets in the community.”

¶35      Although John’s expert testified that Lutisha had a higher income potential than what Lutisha’s expert testified to, the court determined that John’s expert’s analysis was less credible than Lutisha’s expert’s analysis because John’s expert “relied on projections at the national level, but he had no data for single-person advertising agencies in Utah and the impacts of COVID-19 on a single-person agency.” The court also noted that the national numbers on which John’s expert relied were election-year numbers and that John’s expert “conceded that he had no knowledge of the impact of political advertising on the media industry numbers at the national level.” Additionally, the court observed that John’s expert “relied on [John’s] self-created spreadsheets for his financial analysis rather than on the actual billing and financial records for 360 Touch and [Lutisha] from 2020.” Indeed, the court found that the revenue projections John’s expert had made for 360 Touch for 2020 were “overstated by over 43% compared to the actual numbers” that were available for that year.

¶36      The court determined that the income analysis of Lutisha’s expert was more credible, as it was based on “income tax returns for [Lutisha] and 360 Touch, and on accounting records for 360 Touch.” After analyzing these records, Lutisha’s expert opined that “360 Touch has experienced a 37% decline in revenue since 2019, and that [Lutisha’s] income has declined by 42% from 2019.” The district court also found that Lutisha “credibly testified that marketing jobs (like the one she held prior to starting 360 Touch) are no longer available” and that she “provided credible testimony that she made reasonable efforts to maintain her income despite the negative impacts of the COVID-19 Pandemic on 360 Touch.”

¶37      John challenges the district court’s credibility assessments and evidentiary findings, specifically arguing that Lutisha’s testimony regarding the availability of marketing jobs “cannot be taken as credible or as a basis for an implication that no jobs exist,” that she “had not made good faith or reasonable efforts to mitigate the loss of her income,” and that she operates her business “without structure or good business practices.” But “[i]t is the province of the trier of fact to assess the credibility of witnesses, and we will not second-guess the trial court where there is a reasonable basis to support its findings.” Reed v. Reed, 806 P.2d 1182, 1184 (Utah 1991); see also Utah R. Civ. P. 52(a)(4) (“Findings of fact, whether based on oral or other evidence, must not be set aside unless clearly erroneous, and the reviewing court must give due regard to the trial court’s opportunity to judge the credibility of the witnesses.”); Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 27, 176 P.3d 476 (“The trial court considered conflicting evidence on this point and rejected [the husband’s] explanation in favor of [the wife’s]. We defer to the trial court’s assessment of the credibility of this testimony.”). “If there is evidence supporting a finding, absent a legal problem—a fatal flaw—with that evidence, the finding will stand, even though there is ample record evidence that would have supported contrary findings.” Lobendahn v. Lobendahn, 2023 UT App 137, ¶ 27, 540 P.3d 727 (cleaned up). John has shown no such fatal flaw. Instead, our review of the evidence reveals a reasonable evidentiary basis supporting the district court’s factual findings on this issue, and we therefore see no abuse of discretion in the court’s refusal to impute a higher income to Lutisha.

¶38 John also argues that the district court should have considered “expected growth” of 360 Touch. However, the district court was of the opinion that the expected growth asserted by John’s expert was not sufficiently supported, which is understandable given that John’s expert projected an increase in Lutisha’s income for 2020 that ended up being 43% higher than the actual growth in Lutisha’s income for that year. And although Lutisha’s expert testified that “[i]ndustry-wide the projection is for growth,” he emphasized that this projection was, indeed, an industry-wide projection and “not specific to [Lutisha’s] company.”

¶39      John counters that even Lutisha’s expert “projected growth of 20% starting in 2022” for 360 Touch and that such growth “means that [Lutisha will] regain all her lost income by 2024.” But the projection to which John refers first shows a 25% retraction in 2021. And although the projection does predict a 20% growth in 2022, it does not support John’s assumption that a 20% growth rate would continue each year thereafter. Indeed, that projection’s predicted growth rate for the following years was only 2.4%, not a continued 20%.

¶40      In light of all this, the district court did not abuse its discretion by declining to base its income calculations on such varying and uncertain projections and instead leaving it to the parties to seek modification of the court’s orders if either of their incomes were to substantially change in the future. See Johnson v. Johnson, 855 P.2d 250, 253–54 (Utah Ct. App. 1993) (reasoning that “if a trial court knows that a party will be receiving additional future income[,] it should make findings as to whether such additional income will affect the alimony award,” but recognizing that if future income is “too speculative at the time of trial,” the court may delay that determination and a party can “bring a modification proceeding at the appropriate time”). See generally Utah Code § 30-3-5(11)(a) (“The court has continuing jurisdiction to make substantive changes and new orders regarding alimony based on a substantial material change in circumstances not expressly stated in the divorce decree or in the findings that the court entered at the time of the divorce decree.”); id. § 78B-12­210(9) (“A parent, legal guardian, or the [Office of Recovery Services] may at any time petition the court to adjust the amount of a child support order if there has been a substantial change in circumstances. . . . [A] substantial change in circumstances may include . . . material changes of 30% or more in the income of a parent . . . .”).

B.        Calculation of Lutisha’s Tax Liability

¶41      John contends that the district court’s calculation of Lutisha’s tax liability was improper, resulting in a net income for her that was lower than it should have been. The district court found that “[b]ased upon [Lutisha’s] 2020 tax return, her tax rate is 19% federal and 4.95% state.” John correctly observes, however, that calculations based on Lutisha’s 2020 tax return show that she actually paid an overall federal tax rate of approximately 13% and an overall state tax rate of approximately 4.8% in 2020. Thus, John asks for a “correction of the numbers to appropriately reflect the underlying source” and a resulting correction to “the corresponding calculations for alimony.”

¶42      Lutisha, on the other hand, defends the tax rates the district court applied to her income. In doing so, she correctly observes that when the standard federal tax rates for 2020 are applied to her current gross monthly income as found by the district court, the result is an overall federal tax rate of 19%; that Utah’s single-person tax rate for 2020 was 4.95%; and that these rates match the rates that the district court applied to her income. She also asserts that although John is correct in his calculations based on numbers derived from her 2020 tax return, the income number on that return “included more than just her earnings”—“[i]t also included $70,000 she withdrew from an IRA that year.” For these reasons, Lutisha asks us to affirm the district court’s application of a 19% overall federal tax rate and a 4.95% state tax rate to her income.

¶43      In short, Lutisha presents a plausible basis for the tax rates the district court actually applied to her income, but it is squarely at odds with the stated basis for the rates the court said it would apply to her income. And we are without a reasoned basis upon which to resolve the inconsistency in the court’s ruling. Accordingly, we vacate the court’s ruling as to the tax rates to be applied to Lutisha’s gross income, and we remand the case for the district court to clarify its ruling on this point and, if necessary, to adjust its net income and alimony calculations accordingly. See generally Wight v. Wight, 2011 UT App 424, ¶¶ 29–30, 268 P.3d 861 (remanding “for clarification” where an aspect of the trial court’s ruling on division of the marital estate “appear[ed] to be internally inconsistent” and the court of appeals was “unable to determine which result the trial court intended”), cert. denied, 280 P.3d 421 (Utah 2012).

C.        Non-inclusion of Lutisha’s Frequent Flyer Miles

¶44      John argues that the district court abused its discretion in failing to account for the large number of frequent flyer miles that Lutisha accrues each year. He argues that the court should have included the value of the miles in her income or, at the very least, used that value to reduce her expenses. We see no abuse of discretion in the court’s treatment of the frequent flyer miles.

¶45 As for not including the frequent flyer miles in its calculation of Lutisha’s income, this was consistent with the testimony of each party’s financial expert. Lutisha’s expert testified that “based upon standard practice in [his] profession,” frequent flyer miles are not counted “as a monetary value when computing income.” And while John’s expert did include the frequent flyer miles in his earnings analysis, he conceded that he does not “typically include rewards points in the valuation of income.” Although John believes that the court should have treated Lutisha’s frequent flyer miles differently due to the unusually high number of them, we decline to classify as an abuse of discretion the court’s decision to adhere to the only generally accepted accounting approach for which evidence was received, even in this somewhat unusual situation.[5]

¶46 Moreover, even if the frequent flyer miles were to be classified as a source of income, Utah “caselaw directs district courts to consider all sources of income when determining alimony[;] it does not dictate that all sources of income be counted as income received by a spouse for that purpose.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 21, 449 P.3d 202. A district court retains “broad discretion to treat sources of income as the court sees fit under the circumstances.” Id. Here, as Lutisha points out, the frequent flyer miles were “not used to offset any of the expenses [she] reported on her financial declaration or that the court found to be her expenses.” The expense category for which frequent flyer miles would almost certainly have been used to offset expenses was Lutisha’s entertainment/travel expenses category, and her declared monthly expenses for that category amounted to $696.84. This amount was supported by financial statements showing that Lutisha spent $10,452.60 out of pocket over a fifteen-month period—for a monthly average of $696.84— in the entertainment/travel category. Because this expense amount accounted only for entertainment/vacation expenses that Lutisha paid for out of pocket, her frequent flyer miles were effectively used to reduce her expenses.

¶47 For both of the foregoing reasons, we determine that the district court did not abuse its discretion in its treatment of Lutisha’s frequent flyer miles.

D.        Inclusion of Stock Grants in John’s Income

¶48 John contends that the district court abused its discretion in calculating his gross income as well. The court determined John’s monthly gross income to be $27,708.00. The court again relied on Lutisha’s expert’s calculations in making this determination, which calculations included amounts for John’s vested RSUs. The court relied on Lutisha’s expert’s testimony that “even if the stock received by [John] is restricted stock, it becomes income in the year in which it vests.” The court also explained that it was including the stock in its income calculation because “[John’s] employment contract and work/payment history indicate that [he] regularly receives stock options and bonuses as part of his regular income/compensation.”

¶49 John contests the inclusion of the vested stock in the calculation of his income. He contends that this inclusion was an abuse of discretion because the example sources of “gross income” listed in Utah Code section 78B-12-203(1) all have values that “can be determined,” while the value of unliquidated stock “cannot be determined” until it is liquidated.[6] He also argues that the inclusion of the vested stock in the calculation of his income was an abuse of discretion because the stock “represents income not actually realized” since he “does not have free access to trade or liquidate the stock at the time of vesting.”

¶50      We first observe that “income” in this context is defined to include “all gain derived from . . . labor,” Utah Code § 78B-12­102(14)(b), and that “gross income” is defined to include “prospective income from any source,” id. § 78B-12-203(1). Under these definitions, the value of vested stock that a person is anticipated to receive in exchange for labor falls squarely within the statutory definition of gross income. John does not dispute this point, as he concedes that the value of vested but unliquidated stock “could fit in ‘prospective income from any source.’”

¶51      We next observe that John is mistaken in his assertion that the example sources of gross income listed in section 78B-12­203(1) all have values that can be determined, while the value of vested but unliquidated stock cannot be determined. One reason John’s assertion is not correct is that bonuses and gifts—two examples of gross income listed in section 78B-12-203(1)—might themselves take the form of vested stock. More importantly, “gross income” refers to “prospective income,” id. (emphasis added), in other words, income that a person is anticipated to receive in the future. Thus, as to every category of income— wages, commissions, bonuses, dividends, capital gains, vested stock, etc.—when a court calculates a person’s prospective income, it is making a prediction, based on current data, of the value the person will receive in the future. And as to every category, the actual future value may end up being different from the amount predicted. For this reason, the code allows for adjusted alimony orders and new child support orders when there is a substantial change between a party’s future income as anticipated and the party’s future income as it turns out to be. See id. §§ 30-3-5(11)(a), 78B-12-210(9). The fact that with stock there is uncertainty both as to what its value will be when it is received in the future and as to what its value will be when it is liquidated thereafter does not convince us to require exclusion of stock received in exchange for labor from gross income calculations.[7]

¶52 John’s other assertion is that the inclusion of the vested stock as part of his gross income was an abuse of discretion because of the stock’s nonliquidity at the time of its vesting. At one level, John’s point is well taken: because “the overarching aim of a . . . [divorce] decree . . . is to achieve a fair, just, and equitable result between the parties,” Dahl v. Dahl, 2015 UT 79, ¶ 25, 459 P.3d 276 (cleaned up), if the inclusion of a nonliquid asset as part of a party’s income makes it unduly difficult or impossible for that party to comply with a payment obligation calculated based on his or her income, equity may require the exclusion of that asset from the income calculation. But the burden of demonstrating that the inclusion of a particular form of income in the income calculation results in an inequity is on the party challenging the income calculation. See Lamb v. Lamb, 2024 UT App 16, ¶ 39, 545 P.3d 273 (stating that “the party challenging” an award “adjusting the financial and property interests of the parties” has the “heavy burden” to show “that such a serious inequity has resulted as to manifest a clear abuse of discretion” (cleaned up)). And here, John has made an insufficient showing of inequity resulting from inclusion of his RSUs as part of his gross income.

¶53      Although John points to Lutisha’s expert’s testimony that the RSUs are “restricted in trading” and that there are “additional limitations on trading when the shares are held by an affiliate or an insider like [John],” Lutisha’s expert testified only in general terms:

So in order to sell those shares, you have to hold them for a certain period of time, but you also have to submit forms that indicate your intent to sell, and then . . . depending on what the limitations are on selling shares of a particular company that you own shares in, you may have to hold those shares for additional periods.

Thus, his testimony was ultimately unhelpful to a determination of what restrictions were in place in this case. In fact, when questioned more specifically as to the restrictions generally in effect for individuals in John’s circumstances, Lutisha’s expert responded, “Well, it really varies significantly from one company to another and one stock program to another. And so . . . there aren’t general parameters that I could give you. But RSUs that I’ve seen vary dramatically as to how the insiders can trickle shares into the stock market.” To demonstrate a restriction on liquidity sufficient to render the district court’s inclusion of the RSUs in John’s income an abuse of discretion, John would need to direct us to evidence showing what particular restrictions were placed on the RSUs he received. It is not enough for John to argue, without more, that some restrictions apply. Accordingly, John has failed to show that the district court abused its discretion in relying on Lutisha’s expert’s calculation of John’s income, including the vested restricted stock.

II. Lutisha’s Expenses

¶54 John argues that several of Lutisha’s expenses “are unreasonably high, not actually incurred/or paid by other resources . . . , or not ongoing after the divorce.” We address each of the specifically challenged expenses in turn.

A.        Additional Credit Card Payments

¶55 John first challenges Lutisha’s “additional credit card payments” expense of $2,000.00. He argues that because Lutisha “inferred that all of her expenses are paid via credit card,” this “means additional payments on the card each month are going to pay for other stated monthly expenses that are charged to that card.” But that line item appears to address pre-existing credit card debt and therefore would not be duplicative of other listed expenses. John has pointed to no evidence to the contrary; therefore, he has not demonstrated an abuse of discretion in the court’s treatment of this expense.

B.        Lutisha’s Personal Loan

¶56 As we discuss more fully below, as part of its property division, the district court determined that Lutisha’s personal loan was part of the marital estate. See infra ¶ 83. John argues that because he was therefore “responsible for half the value of [Lutisha’s] personal loan,” the court should have halved Lutisha’s listed monthly expense for payment on this debt and shifted the other half to his monthly expenses. However, it appears that this issue was not preserved for our review. We do not see that the issue was raised in any of the portions of the record John cites as having preserved it—including his counter-request for reconsideration that asks for several other of Lutisha’s expenses to “be scrutinized.” See generally Utah R. App. P. 24(a)(5) (requiring an appellant to provide either “citation to the record showing that the issue was preserved for review” or “a statement of grounds for seeking review of an issue not preserved”). “Parties are required to raise and argue an issue in the district court in such a way that the court has an opportunity to rule on it.” Issertell v. Issertell, 2020 UT App 62, ¶ 21, 463 P.3d 698 (cleaned up). “When a party fails to raise and argue an issue in the district court, it has failed to preserve the issue, and an appellate court will not typically reach that issue absent a valid exception to preservation.” Id. (cleaned up). Because no such exception is argued here, we do not reach this issue.

C.        Maintenance of the Park City Property

¶57 John contests Lutisha’s monthly expense of $1,792.84 for “real estate maintenance.” He argues that this expense is “inflated” because it was calculated based, in large part, on $19,086.00 paid to a roofing company, $4,200.00 paid to a fabrication and welding company, and $2,443.61 paid to a plumbing company over a fifteen-month period—expenditures that John contends will not be “ongoing expenses that [Lutisha] will incur after the divorce.”

¶58 We agree that using expenditures for capital improvements, as opposed to costs for regularly recurring maintenance, as the basis of a monthly expense item is an abuse of discretion. “Capital improvements are betterments of a long lasting nature which add to the capital value of the property.” Bettinger v. Bettinger, 793 P.2d 389, 393 (Utah Ct. App. 1990) (cleaned up). Thus, when addressing capital improvements, the court should adjust the value of the improved property rather than use the cost of the improvement in the calculation of a party’s post-divorce expenses.

¶59      Accordingly, we vacate the district court’s ruling as to Lutisha’s expense line item for real estate maintenance and instruct the court on remand to make findings as to whether the payments to the roofing company, fabrication and welding company, and plumbing company were for capital improvements, regularly recurring maintenance, or some other purpose. The court should then adjust Lutisha’s expenses and the value of the Park City property as may be merited and, if necessary, also adjust any other calculations impacted by that change, including the alimony award and the asset equalization amount.

D.        Food, Household Expenses, Clothing, and Travel

¶60      John also contests Lutisha’s monthly expense of $4,580.70 for “food and household supplies.” He argues that the district court’s “adoption of [his] represented marital expenses doesn’t support the amounts represented by [Lutisha].” That is, he argues that because the court adopted his calculation for total monthly marital expenses, and because his calculated marital expense for this specific category was $2,945.00, Lutisha’s significantly higher asserted expense in this area is suspect and was not “properly reviewed and scrutinized by the court.”

¶61 As an initial matter, we observe that John provides no authority suggesting that one party’s listed expense for a given category is automatically suspect when it is not in line with another party’s calculated marital expense for that same category. Indeed, our case law instructs that a district court need not make a specific finding as to an overall marital expense amount, let alone precise marital expense amounts, for various expense categories. See Clarke v. Clarke, 2023 UT App 160, ¶ 57, 542 P.3d 935 (“There is usually no need for a trial court to make a separate specific finding regarding the overall ‘marital standard of living’ as measured by the total amount of money spent each month by the couple while they were married.” (cleaned up)). And although the court in this case accepted as “reasonable” John’s monthly marital expense amount of $30,973.02, the court made no such finding concerning the marital expenses listed for any of the specific expense categories. Moreover, we note that there is some variation between the expense categories that John and Lutisha employed and their decisions as to what expenditures belonged in which categories. In fact, one of the arguments John raises is precisely that—that certain amounts Lutisha categorized as household expenses should have instead been categorized as clothing and travel expenses.

¶62 Yet regardless of these variances between the parties’ financial declarations and how they categorized certain expenditures, we are ultimately presented with a case where (1) the court determined that the parties had enjoyed quite a comfortable standard of living during the marriage and ultimately adopted as “reasonable” the overall monthly marital expense of $30,973.02 provided by John and (2) Lutisha based her declared expenses on fifteen months of actual charges made to her accounts, and she provided the court with a document listing all those charges and how she had categorized them.[8] Against this backdrop, the court determined that after deducting the parties’ respective temporary legal expenses, their remaining expenses ($21,114.80 for Lutisha and $19,118.19 for John) were “reasonable in light of the marital standard of living.” See id. ¶ 59 (explaining that a court should “assess[] a party’s claimed line-item expenses in light of” the marital standard of living, and explaining that the “marital expenses” column on the parties’ financial declarations is “to assist with this process” (cleaned up)). All considered, we do not see a lack of supporting evidence for the district court’s decision that these challenged expenses were reasonable. Nor do we see any merit to John’s assertion that the court failed to “properly review[] and scrutinize[]” those expenses.

E.         Lutisha’s Medical Expenses

¶63      John argues that Lutisha’s “expense for health care should be scrutinized as she failed to distinguish between what amounts were for her and [what amounts were for] the children” and that this is problematic because John is already required to reimburse her for half of the children’s medical expenses. But again, similar to his objection to Lutisha’s personal loan, see supra ¶ 56, this particular objection to this line item is not referenced in his counter-request for reconsideration that addressed several expenses that he contended should “be scrutinized,” and John does not cite any other portion of the record where this argument was preserved. Accordingly, we do not reach this issue. See Issertell v. Issertell, 2020 UT App 62, ¶ 21, 463 P.3d 698.

III. Alimony Calculation

¶64      John challenges the district court’s overall alimony award as inequitable because the amounts of money left to each party after John’s alimony payment are not equal. He argues that “the court abused its discretion by awarding [Lutisha] any more than half of the disposable income of the parties on a monthly basis.” He points out that the total monthly amount available to Lutisha is $15,876.31 (including her net income of $7,846.00, the child support award of $2,501.00, and the alimony award of $5,529.31) and the amount available to him is $9,571.56 (his net income of $19,409.00 minus the amounts he must pay in child support and alimony). We do not agree that the district court abused its discretion as John contends.

¶65      A proper alimony assessment proceeds as follows:

First, the court should assess the needs of the parties, in light of their marital standard of living. . . . Next, the court should determine the extent to which the receiving spouse is able to meet [his or] her own needs with [his or] her own income. If the court determines that the receiving spouse is able to meet all [of his or] her needs with [his or] her own income, then it should not award alimony.

If the court finds, however, that the receiving spouse is not able to meet [his or] her own needs, it should then assess whether the payor spouse’s income, after meeting his [or her] needs, is sufficient to make up some or all of the shortfall between the receiving spouse’s needs and income.

Rule v. Rule, 2017 UT App 137, ¶¶ 19–20, 402 P.3d 153 (cleaned up). Should the court then encounter the common dilemma that “the parties’ combined resources do not stretch far enough to meet the legitimate needs of what are now two households rather than one,” the court must apply an “equalization of poverty” approach, ensuring “that when the parties are unable to maintain the standard of living to which they were accustomed during marriage, the shortfall is equitably shared.” Id. ¶ 20.

¶66 This is precisely the approach followed by the district court. It first addressed Lutisha’s financial condition and needs, determining that, after removing her temporary legal expenses, her remaining expenses of $21,224.80 were “reasonable in light of the marital standard of living and in light of [John’s] monthly needs.” The court then subtracted from this amount Lutisha’s net income and the ordered child support, arriving at a shortfall of $10,767.80. The court also addressed John’s financial condition, needs, and ability to pay. The court found, after also removing his temporary legal expenses, that John’s remaining expenses of $19,118.19 were “reasonable in light of the marital standard of living and in light of [Lutisha’s] monthly needs.” Then the court determined that John’s net income was sufficient to cover all his expenses with a surplus of $290.81 to go toward Lutisha’s shortfall. Finally, the court calculated the shortfall that would be remaining after applying John’s surplus of $290.81 and, “[e]qualizing the poverty,” divided that remaining shortfall by two. Thus, the court followed exactly the procedures required by Utah law and did not abuse its discretion in arriving at the resulting alimony amount.

¶67      John pushes back, arguing that “[u]nder no circumstances” can the district court’s alimony award “be viewed as equitable” because Lutisha will be left with a higher net income than he will be left with. John argues that the more equitable result would be “each party having 50% of the disposable income.” But “equalization [of the parties’ standards of living] does not require a court to award alimony so that each party is left with an equal monthly income. Rather, it requires a court to divide the shortfall of income equitably between the parties in light of each party’s demonstrated needs as well as the other relevant circumstances in the case.” Id. ¶ 21 (emphasis added) (cleaned up). Indeed, we have previously vacated alimony awards for doing exactly what John urges here—equalizing the money each party has at his or her disposal instead of equalizing the shortfall. See Vanderzon v. Vanderzon, 2017 UT App 150, ¶ 52, 402 P.3d 219 (“[B]ecause the court had already determined that the expenses of each party were reasonable, its decision to equalize income rather than shortfall—even though [the wife’s] needs were greater than [the husband’s]—appears to have left [the wife] to bear significantly more of the burden of insufficient resources than [the husband].”); Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 12, 80 P.3d 153 (“Here, the trial court never determined [the wife’s] needs based on the parties’ historical standard of living. Instead, the trial court engaged in an effort to simply equalize income. In attempting to equalize the parties’ income rather than going through the traditional needs analysis, the trial court abused its discretion.”). Thus, John’s argument on this point is unavailing.

IV. Property Division

¶68      Finally, John challenges the district court’s treatment of several pieces of marital property. We address each in turn.

A.        John’s Stock Grants

¶69 John argues that because the district court included in John’s income the value of the stock he received from his employer, the court’s inclusion of that stock in the marital estate as well amounted to “double-dipping.” We are unconvinced. While the court considered the value of one year’s worth of vested stock when it calculated John’s income, the purpose of that calculation was to provide a prospective income number to serve as a basis for determining alimony and child support awards going forward. In contrast, the court included stock in the marital estate because there was an existing accrual of stock that had previously been given to John by his employer. The court including one year’s worth of anticipated future stock receipts in John’s prospective income and separately considering already-accrued stock in its division of the marital estate is no different from a court including a party’s anticipated salary in that party’s prospective income and separately including in the marital estate the already-paid salary remaining in the parties’ bank accounts when it divides the marital estate. The court did not abuse its discretion by considering the stock in both contexts.

¶70 John also argues that if any amount of already-received stock is marital property, it should only be the vested portions of stock. Yet John cites no authority indicating that it would be an abuse of discretion for the court to treat granted but unvested stock as part of the marital estate when the evidence is that the stock will vest over a moderate term as a matter of course. “An appellate court is not a depository into which parties may dump the burden of their argument and research,” and John’s inadequate briefing on this point “is by definition insufficient to discharge [his] burden to demonstrate trial court error.” Andersen v. Andersen, 2015 UT App 260, ¶ 6, 361 P.3d 698 (per curiam) (cleaned up).

¶71 John next argues that the values assigned to the stock “were arbitrary and place [an] unreasonable risk on [John].” But the values placed on the stock are the “current balance” values given to the stock by John himself in his most recent financial declaration, making those values anything but arbitrary. John’s real point in this regard seems to be that because the value of the stock will almost certainly change in the future, the court abused its discretion by assigning it a present value for purposes of summing and dividing the marital estate. However, the court’s approach was no different from the one we routinely allow courts to take with other marital assets—such as homes and vehicles— that are valued as of the time of trial and then awarded to one party as part of the division of marital property, despite the fact that their value will almost certainly change. “The valuation of marital property is necessarily a snapshot in time, 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.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 97, 507 P.3d 385 (cleaned up), cert. denied, 525 P.3d 1259 (Utah 2022).

¶72 John also argues that the court did not “consider the tax consequences of the asset,” if it is ever sold, when valuing the stock and awarding it to John as part of the property division. Yet it is not clear that John will ever liquidate the stock, and “we do not generally expect courts to speculate about hypothetical future tax consequences.” Id. (cleaned up).

¶73 Finally, John argues that the court should have mitigated the future uncertainty of the stock values by “adopting a different form of distribution,” such as dividing the vested stocks or ordering John to liquidate the stock as it becomes available and provide half the proceeds to Lutisha. But such an approach goes against the district court’s responsibility to “equitably distribute [marital property] 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 (cleaned up); see also Gardner v. Gardner, 748 P.2d 1076, 1079 (Utah 1988) (“The purpose of divorce is to end marriage and allow the parties to make as much of a clean break from each other as is reasonably possible. An award of deferred compensation which ties a couple together long after divorce can frustrate that objective.”). We therefore cannot say that the court’s determination to not delay the division of the stock was an abuse of its discretion.

¶74      In sum, each of John’s arguments related to the stock grants is unavailing. We see no abuse of discretion in the court’s treatment of the stock.

B.        John’s 2021 Bonus

¶75 John next argues that the district court should not have included his bonus of $28,125.00 from the first quarter of 2021 as a separate item in the marital estate. He asserts that the bonus had already been deposited into his bank accounts that were subject to equitable division and, therefore, that the bonus was essentially counted twice. But as Lutisha points out, the total value of those other accounts combined (approximately $3,400.00) was far less than the bonus amount, suggesting that John had either spent the bonus or not deposited it into those accounts as claimed. And John has not shown that, if spent, the bonus was applied to marital costs. Thus, we cannot say that it was an abuse of discretion for the court to count the bonus as a separate item in the marital estate and award it to him.[9]

C.        John’s Travel Credit

¶76 In the fall of 2020, John booked travel to Bora Bora for himself and the parties’ children for April 2021. The trip later had to be canceled when Bora Bora was closed due to the COVID-19 pandemic. The court included the resulting travel credit of $15,426.57 as part of the marital estate and awarded it to John as part of the property division. The court’s reasoning was as follows: “The [c]ourt notes that while [John] provided updated bank statements at trial showing he received a refund for the travel, the refund is not reflected anywhere else and thus should be included in the division of property.”

¶77      John contests this award, arguing that the court’s reasoning “does not make sense on its face.” He asserts that “the evidence supports this credit being to an account [that] was subject to equitable division at the time of trial”; in other words, because the travel credit served to reduce the marital debt on the credit card, the travel credit was already accounted for when the reduced credit card debt was included in the equitable property division. We disagree that this is what happened.

¶78      Although the district court could have provided a clearer explanation, we understand the court to have recognized that although John had provided an updated credit card statement at the time of trial showing travel refunds, those refunds were not reflected on the prior statements before the court, which the court used to determine the assets and debts of the parties. Thus, it was not the case that these travel refunds reduced the marital debt that was before the court when it determined the assets and debts of the parties. The numbers support this interpretation: the marital debt on the credit card that was allocated to John was $44,484.00 on the statement that the court used when determining the assets and debts of the parties, and the balance on that card as reflected on the more recent statement, provided at trial, showed an outstanding debt of only $29,202.72—a difference quite close to the amount of the travel-related refund. Because the travel refund was not reflected in the documents on which the court based its property division, and because John received the refund after the date of those documents, the court did not abuse its discretion by separately including the amount of the travel-related refund as marital property and allocating it to John.

D.        John’s Furniture

¶79 John argues that the furniture at the Park City property was worth more than the furniture at the Coalville property and, therefore, that the district court abused its discretion in not treating the $26,318.86 that John spent on new furnishings for his primary residence (an apartment in Park City) as rectifying this imbalance. Instead, the court determined that because “credible trial evidence” showed that the Park City property and the Coalville property had “comparable items that are comparable in value,” it was “reasonable and equitable” to award Lutisha the “furniture, personal property, and the like” at the Park City property and to award John the “furniture, personal property, and the like” at the Coalville property. The court thus considered the $26,318.86 value of the newer furniture as a separate item of marital property subject to division. John argues, however, that “evidence presented to the court supports an equitable finding that the property in each [party’s] possession and residences awarded to them equally offset the other,” that is, that including the value of the new furniture in John’s apartment “would be sufficient to offset the difference in value” of the furniture located at the other two properties.

¶80      “Generally, district courts have considerable discretion concerning property distribution in a divorce proceeding and their determinations enjoy a presumption of validity.” Dahl v. Dahl, 2015 UT 79, ¶ 119, 459 P.3d 276 (cleaned up). “[A]n appellate court’s role is not to reweigh the evidence presented at trial but only to determine whether the court’s decision is supported by the evidence.” Barrani v. Barrani, 2014 UT App 204, ¶ 24, 334 P.3d 994. Here, John has provided no citation or argument showing how the court’s decision was not supported by the evidence. John’s briefing simply points out that the court was provided with photographs “of both properties and the furniture therein” and then asserts that “[t]he evidence presented to the court” was sufficient to support a different finding. This bald assertion does not convince us that the court’s decision was not supported by the evidence before it. Thus, we see no abuse of discretion on this point.

¶81      Additionally, John argues that even if the new furniture is subject to division as marital property, there was no evidence that the furniture “maintains the same value as it had at the time of purchase more than eighteen months prior to trial.” Given, however, that the court was presented with evidence that this furniture was only eighteen months old and slightly used, and given that John presented no evidence of its depreciated value, we see no abuse of discretion in the court’s reliance on the purchase price amounts to assess the value of the furniture.

E.         John’s Requested Reimbursement of Marital Expenses

¶82      The district court refused to award reimbursement to John for half of $62,304.63 that he claimed to have spent “maintaining the marital property and expenses,” explaining that John “did not provide credible evidence that these were in fact marital expenses” and citing a few examples of listed expenses that were non-marital, such as “clothing purchases, contact lenses, Weller Recreation, and Marine Products.” John contests this determination, arguing, among other things, that his documentation also showed payments toward maintenance of marital property such as the mortgage, HOA fee, and insurance on the Coalville property, as well as insurance on the parties’ boat and certain ATVs. But each of John’s arguments on this point asks us to reassess credibility and reweigh the evidence, something that, again, we will not do, see Burruni v. Burruni, 2014 UT App 204, ¶ 24, 334 P.3d 994. And John’s general assertions do not demonstrate that the court’s finding that the evidence John provided was not “credible evidence” of marital expenses was not supported by the evidence. We therefore see no abuse of discretion in the court’s refusal to award the requested reimbursement.

F.         Lutisha’s Personal Loan

¶83 John contests the inclusion in the marital estate of the $100,000.00 personal loan that Lutisha obtained to pay expenses while the parties were separated. He argues that because “the majority of the debt incurred and paid off with that loan were for [Lutisha’s] attorney fees,” including the loan in the marital estate is contrary to the district court’s requirement that the parties be responsible for their own attorney fees. Although John overstates Lutisha’s admission that her monthly expenses, including her legal fees, may have been paid, in part, by the loan, the real issue here is that John overstates the district court’s ruling on attorney fees. The court’s order was as follows: “[B]oth [Lutisha] and [John] are awarded financial and property assets in the division of the marital estate in this divorce action . . . . Thus, because both [p]arties have access to financial and property resources, the [c]ourt now orders that each [p]arty shall pay for their own attorney fees and costs.” (Emphasis added.) Thus, the court’s requirement that each party bear his or her own legal fees was in relation to those fees moving forward. We therefore see no conflict in the court’s actions with regard to Lutisha’s personal loan and, thus, no abuse of discretion.

CONCLUSION

¶84 The district court enjoys broad discretion in addressing issues of income, alimony, and property distribution. And, with just two exceptions, John has not shown an abuse of that discretion. Those exceptions are the uncertainty regarding the tax rates to be applied to Lutisha’s gross income and the possible inclusion of capital improvements to the Park City property in determining Lutisha’s monthly expenses. Thus, we generally affirm the order but vacate the district court’s determinations on those two issues. We remand those issues to the district court for clarification and, if necessary, adjustment, recognizing that any adjustments to these items may also necessitate adjustments to the ultimate alimony award, child support award, and property distribution.

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


[1] As is our practice, because the parties share the same last name, we refer to them by their first names, with no disrespect intended by the apparent informality.

[2] Prior to trial, in September 2020, the parties entered into a stipulation that “resolved the issues of child custody, parent time, number of overnights for purposes of calculating child support . . . , payment of the children’s expenses, the claiming of the children on taxes, and other more minor issues.” None of these issues are relevant to this appeal, and we therefore do not discuss them further.

[3] 3. This report was created by IBISWorld, which describes itself as a global company that “provides trusted industry research on thousands of industries worldwide.” IBISWorld’s Story, IBISWorld, https://www.ibisworld.com/company/our-story/ [https://perma.cc/N3PY-Z77A].

[4] Lutisha’s expert explained these benefits as follows: “They are generally the purchased cafeteria plan benefits. They’re just a selection of benefits that the IRS allows employers to offer to their employees on a pretax basis.”

[5] John suggests that the district court improperly “refused to allow [his expert to testify] on facts and circumstances of this case that would warrant deviating from the standard practice in [the expert’s] profession.” This statement mischaracterizes the court’s action. The court only refused to allow testimony as to other cases, not as to the circumstances of this case:

I don’t want [John’s expert] talking about other cases that are not this case. What I want him to talk about, though, is general principles that are applied in his profession, in his expertise in terms of how travel benefits would be incorporated, how they’re incorporated, and how he applied those principles to this case. So . . . I am permitting that. . . . But I’m not going to permit him to talk about other cases . . . because that is outside the scope.

Under this ruling, John’s expert was free to present general principles for the treatment of frequent flyer miles when the number of miles at issue is unusually high. Yet he provided no such principles.

[6] Specifically, section 78B-12-203(1) says that “‘gross income’ . . . may include salaries, wages, commissions, royalties, bonuses, rents, gifts from anyone, prizes, dividends, severance pay, pensions, interest, trust income, alimony from previous marriages, annuities, capital gains, Social Security benefits, workers’ compensation benefits, unemployment compensation, income replacement disability insurance benefits, and payments from ‘nonmeans-tested’ government programs.” Utah Code § 78B-12-203(1).

[7] John further argues that the stock grants in his case are only guaranteed in the current contract term and may not be included in future contracts with his employer. But here again, the fact that income (in all its sources) might change in the future does not impact the district court’s need to determine prospective income based on data available at the time of divorce, and if John’s compensation substantially changes in the future, modification may be sought to address the change.

[8] John suggests that the court erred when it did not require more evidence supporting Lutisha’s expenses and “did not find that [Lutisha] met her burden to prove the marital standard of living as required via Dahl v. Dahl, [2015 UT 79, 459 P.3d 276,] but instead used [John’s] financial declaration to find [Lutisha’s] request reasonable.” But Dahl does not “automatically require[] a court to deny a request for alimony in the absence of documentation.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 101, 507 P.3d 385, cert. denied, 525 P.3d 1259 (Utah 2022). “In fact, the [Dahl] 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. ¶ 102 (cleaned up). Therefore, we do not consider this argument further.

[9] John raises a separate plain error argument with regard to his bonus; however, “plain error review is not available in ordinary civil cases unless expressly authorized by rule.” Kelly v. Timber Lakes Prop. Owners Ass’n, 2022 UT App 23, ¶ 44, 507 P.3d 357; see also Duffin v. Duffin, 2022 UT App 60, ¶ 36 n.7, 511 P.3d 1240 (applying this rule in a divorce case), cert. denied, 525 P.3d 1262 (Utah 2022). We therefore do not address this argument—or any other plain error arguments—further.

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Thorup v. Thorup – 2024 UT App 93

Thorup v. Thorup – 2024 UT App 93
THE UTAH COURT OF APPEALS

MONA THORUP, Appellee, v. MARCUS THORUP, Appellant.

Opinion No. 20220583-CA Filed July 5, 2024

Third District Court, Salt Lake Department

The Honorable Amy J. Oliver

Commissioner Joanna Sagers

No. 204906416

Jonathan G. Winn, Attorney for Appellant, Jenna Hatch, Attorney for Appellee

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

HARRIS, Judge:

¶1        In this case, we are asked to consider whether the district court properly allocated—as between a divorcing couple—the equity in the house in which the couple lived during their marriage. In particular, Marcus Thorup challenges the court’s determination that substantial portions of the value of the house, which was originally his separate property, became commingled into the marital estate. We find merit in many of Marcus’s arguments, and therefore reverse the court’s equity allocation order and remand the case for further proceedings.

BACKGROUND

¶2        Marcus and Mona Thorup married in 1986.[1] Eleven years later, in 1997, they moved into a new house (the House) built—at the apparent cost of $445,000—by Marcus’s father’s construction company. For the next seven years, the House was titled in the name of Marcus’s father’s company, and Marcus and Mona lived there rent-free. During some of this time, Marcus and Mona obtained a homeowners insurance policy that listed both of them as “owners” of the House, even though that was not actually the case. And for a year or so around 1997, Mona’s mother lived in a separate apartment on the property, and she paid Marcus and Mona some $13,000 that went toward the costs associated with building the separate apartment.

¶3        In May 2004, Marcus’s father (through his company) “gifted” the House to Marcus “as an inheritance.” Thereafter, title to the House was in Marcus’s name; Mona was never placed on title. In December 2004, Marcus used the House as collateral for a $150,000 loan. Marcus later testified that the proceeds from the loan were not spent on the House but, instead, were spent on marital matters, such as medical bills, credit card bills, some other unspecified “investments,” and a payment on the couple’s “cabin lot.” Over the next ten years, the loan was fully repaid, entirely with marital funds.

¶4        Between 1997 and 2020, Marcus, Mona, and their children lived in and maintained the House. They also made some improvements to the House over that time. For purposes of this dispute, Marcus retained an expert who determined that the out-of-pocket cost of the family’s improvements had been $12,171, and that the family’s maintenance of and improvements to the House “contributed about $20,000 to its current value.”

¶5        In 2020, Mona filed this divorce action and asked (among other things) that the House and all its equity be awarded to her. Marcus responded by filing a counterclaim in which he contended that the House was an “inheritance from his father” and was his “separate property.” This dispute eventually worked its way to trial, and the parties agreed, by written stipulation, to resolve the issue by way of an “informal custody trial” before a domestic relations commissioner, a procedure usually limited to resolution of custody disputes and whose parameters are set forth in rule 4-904 of the Utah Code of Judicial Administration. Under this procedure, the parties agreed to “present[] their case[s]” to the commissioner, under oath, without questioning by attorneys. In addition to providing their own testimony, the parties agreed that they could each “present any documents they want[ed] the [c]ourt to consider” and that, “[a]fter the [c]ourt [had] heard from both parties,” only then would attorneys be allowed “to make legal argument.” In stipulating to this procedure, the parties agreed to “waive the normal question and answer manner of trial” and to “waive the rules of evidence,” and they agreed that “[t]he other party [could] tell the [c]ourt anything he or she feels is relevant.” The parties also waived their right to “challenge any of the documents or testimony that was considered” by the commissioner during the informal trial, and they agreed that “[t]he only issue on appeal [would] be whether the [c]ourt abused its discretion in reaching its findings and conclusions.”

¶6      During the course of the informal trial—which took place over parts of two trial days—the commissioner heard from Marcus and Mona, who testified (largely through proffer by counsel) about the events described above. In addition, the parties by stipulation submitted sworn declarations and other similar documents from other witnesses, which evidence the commissioner accepted and considered. And the parties’ attorneys made extensive arguments, both in written briefs filed prior to the trial and in oral arguments made during the trial.

¶7        Mona took the position that, even if the House was originally Marcus’s separate property, “the separate property converted into marital property during the marriage.” She made two specific arguments in this regard, asserting both (a) that she had contributed to the value of the House through maintenance and improvements, and had thereby acquired an equitable interest in it, and (b) that the House had been commingled into the marital estate. Marcus, on the other hand, took the position that the House was, and always had been, his separate property, and that it had not been commingled into the marital estate. He acknowledged that “Mona may have a contribution claim” regarding the House, but he pointed to evidence indicating that the family’s contributions had increased the value of the House by only $20,000, and he argued that, at most, Mona was therefore entitled to only $10,000 of the House’s total value.

¶8        At the conclusion of the trial, and after hearing the arguments, the commissioner made an oral ruling, determining that much of the House’s value—$150,000 of its original value, plus all of its appreciation—had been commingled into the marital estate. As support for this determination, the commissioner noted that the marital estate had repaid the $150,000 loan that used the House as collateral, and reasoned that the loan indicated “that the family in essence bought that mortgage and paid it back.” The commissioner also relied on the facts that, during the period before Marcus was gifted the House, the parties obtained homeowners insurance indicating that they were both owners of it and that Mona’s mother had paid $13,000 toward “the mother-in-law apartment being enhanced.” And the commissioner found relevant the fact that Mona had been “responsible for maintaining” the House and its “landscaping.” The commissioner also found—by averaging two appraisals—that the House was worth $312,500 in 2004 when it was gifted to Marcus and was worth $765,000 at the time of trial. The commissioner then concluded that Marcus should receive $162,500 ($312,500 minus $150,000) as his separate property, and that the parties would split the remaining $602,500 equally.

¶9        The commissioner’s oral ruling was later encapsulated in written findings of fact and conclusions of law and a decree of divorce, which documents were signed by the assigned district court judge.

ISSUES AND STANDARDS OF REVIEW

¶10 Marcus now appeals, and he challenges the specific portions of the commissioner’s ruling that concern allocation of the value of the House. In particular, he takes issue with the commissioner’s determination that much of the House’s value was commingled into the marital estate. And he challenges the finding that the House was worth $312,500 in 2004.

¶11      Mona asserts that, because this case comes to us from an “informal custody trial,” the applicable standard of review is deferential and the scope of appeal is “steep and constricted.” Mona is certainly correct that, when parties agree to resolve their issues through an informal trial, they waive their right to appeal certain evidentiary issues. See Utah R. Jud. Admin. 4-904(b)(7) (stating that parties may not appeal from an informal trial on “grounds that . . . rely upon the Utah Rules of Evidence”). In this case, Marcus and Mona agreed that they would “not be able to challenge any of the documents or testimony that was considered” during the proceeding, and neither party attempts to raise any evidentiary issues on appeal. But Mona is incorrect when she asserts that the appellate standards of review—on the issues that are appealable—are any different in appeals from informal trials than they are in other cases. The court’s ultimate ruling is appealable, see id. (stating that a “final order” from an informal trial “may be appealed on any grounds” other than grounds that “rely upon the Utah Rules of Evidence”), and will be reviewed under the same appellate standards of review that are applicable in appeals from formally tried cases.

¶12      Mona resists this conclusion by pointing to language in the parties’ stipulation stating that “[t]he only issue on appeal will be whether the [c]ourt abused its discretion in reaching its findings and conclusions.” She argues therefrom that all issues in this appeal—regardless of the usual standards of review—must be reviewed for abuse of discretion. We disagree. The form the parties used to encapsulate their stipulation is a form that—in keeping with the usual usage of the informal trial procedure—is designed for custody cases. We thus interpret the form’s reference to the “abuse of discretion” standard as simply indicating that the court’s ultimate ruling regarding custody will be reviewed as per usual: for abuse of discretion. See Lobendahn v. Lobendahn, 2023 UT App 137, ¶ 18, 540 P.3d 727 (“We review custody determinations under an abuse of discretion standard, giving the district court broad discretion to make custody awards.” (quotation simplified)). We do not interpret the form as indicating that—for issues that are appealable—the standards of appellate review are any different in cases coming to us after an informal trial than they are in cases coming to us in the usual manner.

¶13      Now that we have determined that the standards of review in this appeal will be the same as in an appeal from a formally tried case, we must determine what those standards of review are. Marcus contends that both of the court’s determinations that he is here challenging—regarding commingling and the House’s value in 2004—are conclusions of law properly reviewed for correctness. Mona, on the other hand, asserts that these determinations are factual and reviewed for abuse of discretion or clear error. We agree with Mona.

¶14      “[District] courts are in the best position to determine whether property is marital or separate, and we defer to their findings of fact [in this regard] unless clearly erroneous.” Thompson v. Thompson, 2009 UT App 101, ¶ 10, 208 P.3d 539; see also Lindsey v. Lindsey, 2017 UT App 38, ¶ 26, 392 P.3d 968 (“We generally defer to a [district] court’s categorization and equitable distribution of separate property and uphold its determinations in that regard unless a clear and prejudicial abuse of discretion is demonstrated.” (quotation simplified)). Thus, we review a district court’s factual findings in this regard for clear error, and we review for abuse of discretion its ultimate determination of whether a particular item is separate or marital property.

¶15      And this same standard of review also applies to the more specific question of whether the House was commingled into the marital estate. See Dahl v. Dahl, 2015 UT 79, ¶ 143, 459 P.3d 276 (reviewing a commingling ruling for abuse of discretion); Oliekan v. Oliekan, 2006 UT App 405, ¶¶ 18–19, 147 P.3d 464 (same). A court’s determination that a piece of originally separate property has been commingled into the marital estate is just a particular way of determining that the property is marital (rather than separate) property.

¶16      Finally, we also apply a deferential standard of review to Marcus’s challenge to the court’s finding regarding the value of the House in 2004. See Marroquin v. Marroquin, 2019 UT App 38, ¶ 10, 440 P.3d 757 (“We defer to [a] district court’s findings of fact related to property valuation and distribution unless they are clearly erroneous.” (quotation simplified)); see also Rothwell v. Rothwell, 2023 UT App 50, ¶ 33, 531 P.3d 225 (“A district court’s factual determinations are clearly erroneous only if they are in conflict with the clear weight of the evidence, or if this court has a definite and firm conviction that a mistake has been made.” (quotation simplified)), cert. denied, 537 P.3d 1011 (Utah 2023).

ANALYSIS

¶17 We first discuss Marcus’s challenge to the court’s ruling that much of the House’s value had been commingled into the marital estate. We then turn to Marcus’s challenge to the court’s finding that the House was worth $312,500 in 2004.

I. The House: Separate or Marital Property?

¶18      On the question of whether and to what extent the House constitutes marital property, we begin by discussing what is at issue in this appeal and—notably—what is not at issue in this appeal. Neither party challenges the court’s determination that the House was originally Marcus’s separate property when title was placed in his name in 2004. The court awarded Marcus $162,500, intended to represent the original value of the House in 2004, less the later loan amount. The basis for this award, as we understand it, was the commissioner’s (at least implicit) determinations that the House was Marcus’s separate property in 2004 and that Marcus is entitled to keep his separate property to the extent it was not commingled or subject to an equitable contribution made by Mona. No party challenges that portion of the commissioner’s ruling.

¶19 Marcus does challenge two other aspects of the commissioner’s ruling regarding the House’s status as separate or marital property. First, Marcus challenges the commissioner’s determination that $150,000 of the original value of the House— the amount of the December 2004 loan—had been commingled into the marital estate. Second, Marcus takes issue with the determination that the appreciation, over time, in the value of the House became commingled into the marital estate. We discuss these two challenges, in turn, after first setting forth applicable legal principles regarding separate property and commingling.

A. Background Legal Principles

¶20      One of the tasks courts often face in adjudicating divorce cases is making an equitable division of the marital estate between the divorcing spouses. Our supreme court has described this property-division process as follows:

Before a district court distributes marital assets, it must (1) identify the property in dispute and determine whether it is marital or separate property, (2) consider whether there are exceptional circumstances that overcome the general presumption that marital property be divided equally, (3) assign values to each item of marital property so that a distribution strategy can be implemented, and (4) distribute the marital assets consistent with the distribution strategy.

Dahl v. Dahl, 2015 UT 79, ¶ 121, 459 P.3d 276 (quotation simplified). Marcus’s first challenge concerns the first step in this process: assessing whether a particular piece of property—here, the House—is marital property that belongs to the marital estate or is instead separate property that belongs to him alone.

¶21 “Marital property ordinarily includes all property acquired during [the] marriage, whenever obtained and from whatever source derived.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 31, 392 P.3d 968 (quotation simplified). Separate property, on the other hand, includes each spouse’s “premarital property”— that is, property owned by one spouse prior to the marriage—as well as “gifts[] and inheritances” received by a spouse during the marriage. See id.see also Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988) (stating that courts should “generally award property acquired by one spouse by gift and inheritance during the marriage . . . to that spouse”).

¶22      Property determined to be part of the marital estate will be divided equitably—and presumptively equally—between the divorcing spouses. See Lindsey, 2017 UT App 38, ¶ 32 (“The presumption is that marital property will be divided equally . . . .”). But separate property “will not be divided at all,” id., and will “generally” be awarded, “together with any appreciation or enhancement of its value,” to the spouse whose separate property it is, see Mortensen, 760 P.2d at 308; see also Lindsey, 2017 UT App 38, ¶ 32 (“Equity generally requires that each party retain the separate property he or she brought into the marriage, including any appreciation thereof.” (quotation simplified)).

¶23      In some situations, however, property that begins as one spouse’s separate property can lose its separate identity and become part of the marital estate. See Mortensen, 760 P.2d at 308; see also Lindsey, 2017 UT App 38, ¶ 33 (stating that, sometimes, “circumstances warrant an equitable override of the separate-property retention rule”). Our case law has identified three such situations: (1) where “separate property has been commingled” into the marital estate, Lindsey, 2017 UT App 38, ¶ 33; (2) where “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,” Mortensen, 760 P.2d at 308; and (3) “in extraordinary situations when equity so demands,” Lindsey, 2017 UT App 38, ¶ 33.

¶24 First, with regard to commingling, one rather obvious situation in which commingling occurs is where “one spouse has contributed all or part of the property to the marital estate with the intent that it become joint property.” See Dahl, 2015 UT 79, ¶ 143. But even short of an outright intended contribution, property that started out as separate property may be considered commingled if it becomes inextricably and untraceably intertwined with marital assets. See id. (“[P]remarital property may lose its separate character where the parties have inextricably commingled it with the marital estate . . . .”). Quite important to any commingling analysis, then, is whether the property in question has retained “its separate character.” See id. And this inquiry often turns on whether the property’s separate identity can still be traced or accounted for. See Mortensen, 760 P.2d at 307 (stating that property is commingled when it “completely loses its identity and is not traceable”); see also Pusey v. Pusey, 728 P.2d 117, 119 (Utah 1986) (upholding a district court’s determination that property was commingled because “it could not trace any assets to any source”). Indeed, in one case we phrased the relevant question as whether the property at issue “became so commingled that [it] could not be segregated” from the marital estate, and we determined that it had not, because “the marital and premarital interests were reasonably capable of being determined” and “it was still possible to trace and separately identify” the separate property. Oliekan v. Oliekan, 2006 UT App 405, ¶¶ 20–23, 147 P.3d 464. Thus, separate property will be considered commingled when it has been mixed in with marital assets to such a degree that it is no longer reasonably possible to distinguish between the separate and marital property. On the other hand, if “the marital and premarital interests” are still “reasonably capable” of being traced and identified, then the separate property retains its separate nature and will not be considered commingled. See id.

¶25 Second, “under the contribution exception, a spouse’s separate property may be subject to equitable distribution when the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property, thereby acquiring an equitable interest in it.” Lindsey, 2017 UT App 38, ¶ 35 (quotation simplified). “This exception may be satisfied when one spouse brings assets into the marriage and the other spouse’s prudent investment of those assets substantially increases their value, or when marital funds are expended or marital debt is incurred for the benefit of one spouse’s separate property.” Id. (quotation simplified). “Under such circumstances, one spouse’s effort or investment may render the other spouse’s underlying asset, its appreciated value, or some portion thereof subject to equitable distribution.” Id.

¶26      Third, there exists a catch-all exception for situations—not covered by either of the first two exceptions—in which “extraordinary circumstances . . . warrant a departure from the presumptive rule.” Henshaw v. Henshaw, 2012 UT App 56, ¶ 15, 271 P.3d 837. This exception is rarely applied; we have stated that the “bar for establishing an extraordinary situation is high, traditionally requiring that invasion of a spouse’s separate property is the only way to achieve equity.” Lindsey, 2017 UT App 38, ¶ 46 (quotation simplified).

¶27 During the informal trial, Mona made arguments under the first two of these exceptions, arguing that—even if the House was Marcus’s separate property in 2004 when it was gifted to him—at least part of the House’s value became part of the marital estate due to commingling or due to the family’s equitable contribution. The commissioner accepted Mona’s commingling argument, and therefore opted not to consider whether, or to what extent, Mona had acquired an equitable interest in the House through contributions.

B. The $150,000 Loan

¶28      The first part of the commissioner’s commingling analysis with which Marcus takes issue is the ruling that $150,000 of the House’s original value became commingled into the marital estate. In December 2004, some seven months after the House was gifted to Marcus, he used the House as collateral for a $150,000 loan, and that loan was fully repaid, over the next ten years, with marital funds. The commissioner determined that, given these facts, “the marital estate paid for that portion of the [H]ouse directly by paying off the mortgage,” and ruled that the amount of the House’s original value collateralized by the loan ($150,000) was marital property rather than Marcus’s separate property.

¶29 We acknowledge the facial appeal of the commissioner’s ruling: the fact that the marital estate paid the loan back certainly makes it look like the estate might have acquired an interest in the House. But our supreme court has made clear that a separate asset does not necessarily become marital property simply because a marital estate pays back a loan drawn from that asset. See Dahl v. Dahl, 2015 UT 79, ¶¶ 142–145, 459 P.3d 276. At a minimum, more analysis is required in order to reach that conclusion.

¶30 In Dahl, a husband had possessed certain retirement accounts (IRAs) “prior to his marriage” that were his “separate property.” Id. ¶ 142. During the marriage, the husband “withdrew funds from the IRA[s] to pay off a home equity loan secured by the marital home and then replenished the funds using a marital bank account.” Id. The wife contended that, by this action, the husband had “commingled” the IRAs with marital assets and thereby “converted [them] to marital property.” Id. ¶¶ 142, 144.

¶31      Our supreme court rejected the wife’s argument, holding that the husband’s actions did not cause the IRAs to lose “their separate identity.” Id. ¶ 144. In the court’s view, the transaction was “best characterized as a loan from [the husband] to the marital estate, which was in turn repaid with marital funds.” Id. On the facts presented in Dahl, there was “nothing . . . suggesting that [the husband] intended to commingle his IRA funds with the marital estate.” Id. And the court held that the IRAs “did not become so inextricably commingled into the marital estate that the district court was incapable of tracing [them].” Id. (quotation simplified). In summary, the court noted that the IRAs did not lose their “separate identity simply because [the husband] made a loan from [the IRAs] to pay off a home equity loan.” Id. ¶ 145.

¶32 The lesson of Dahl, as relevant here, is that when one spouse uses his or her separate property to facilitate a loan to the marital estate, the proceeds from that loan are used to benefit the marital estate, and the marital estate pays the loan back with marital funds, the separate property used to facilitate the loan does not, simply by virtue of the loan, become commingled into the marital estate.

¶33 Marcus asserts that Dahl is materially indistinguishable from this case. As he sees it, he facilitated a loan to the marital estate using his own separate property—the House—as collateral, and the marital estate was obligated to pay that loan back just like it would have needed to pay off a loan collateralized in any other way. He asserts that—just like the transaction in Dahl—nothing about this transaction indicates any intent on his part to commingle the House with the marital estate. And he notes— correctly—that this loan did not render a factfinder incapable of tracing his separate property. We find Marcus’s arguments at least potentially persuasive, and we note that Mona (in her appellate brief) did not cite Dahl and made no effort to rebut Marcus’s argument that Dahl is controlling here.

¶34      We agree with Marcus that the commissioner’s analysis is at odds with Dahl.[2] The commissioner’s analysis on this point was quite brief, and simply assumed that, because the marital estate repaid the $150,000 loan amount, it had “paid for that portion of the [H]ouse directly.” As noted, it does not necessarily follow, simply from the fact that the marital estate repaid the loan, that the asset that facilitated the loan—here, the House—became commingled into the marital estate. See id. ¶ 144.

¶35 The question of whether repayment of the loan by the marital estate resulted in commingling turns on whether the proceeds of the loan were used for marital-estate purposes unrelated to the House or were, instead, used to increase the value of the House. If the proceeds were used—as they were in Dahl— entirely for marital-estate purposes unrelated to the asset leveraged for the loan, then Marcus is correct that the situation here would be materially indistinguishable from Dahl, and the transaction would be “best characterized as a loan . . . to the marital estate” facilitated by Marcus’s separate property. See id. On the other hand, if the loan proceeds were used to improve the House, the marital estate’s repayment of that loan might accurately be said to have resulted in the marital estate “[paying] for that portion of the [H]ouse directly,” a situation that might support a determination that commingling (or, alternatively, acquisition of an equitable interest) had occurred.

¶36      On the question of what the loan proceeds were used for, the commissioner made no findings. Marcus testified that the loan proceeds were spent not on the House (or on any other personal endeavors of Marcus) but on marital things, such as medical and credit card bills, other unspecified “investments,” and a payment on the couple’s “cabin lot.” But neither in the oral ruling made at the conclusion of the informal trial nor in the written ruling issued thereafter did the commissioner make any specific findings about either the credibility of Marcus’s testimony on this point or about whether any of the loan proceeds were spent on the House.[3]

¶37 In the end, we view the commissioner’s analysis as incomplete. Because the reason the commissioner gave for determining that the loan amount had been commingled does not necessarily support that conclusion, and because the commissioner did not make certain factual findings necessary to complete the analysis, we must reverse the commissioner’s determination that $150,000 of the House’s original value was commingled into the marital estate, and we remand the matter to the district court for further proceedings on this point.

C. The House’s Appreciation

¶38 The second part of the commissioner’s commingling analysis with which Marcus takes issue is the ruling that all of the House’s appreciation since 2004—an amount the commissioner determined to be $452,500 ($765,000 minus $312,500)—was no longer Marcus’s separate property because it had been commingled into the marital estate. As support for this ruling, the commissioner cited (a) the homeowners insurance policies acquired before Marcus owned the House that listed both Marcus and Mona as “owners,” (b) Mona’s testimony that she was responsible for maintaining the House and its landscaping, and (c) the fact that Mona’s mother had paid $13,000 toward “a mother-in-law apartment” in the late 1990s. Even applying a deferential standard of review, we agree with Marcus that the commissioner committed an abuse of discretion in so ruling.

¶39 We begin our analysis by repeating the long-established legal principle that, ordinarily, appreciation on separate property belongs not to the marital estate but, rather, to the spouse whose separate property it is. Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988) (stating that separate property, “together with any appreciation or enhancement of its value,” belongs to the separate spouse); Keyes v. Keyes, 2015 UT App 114, ¶ 28, 351 P.3d 90 (“In most cases, equity requires that each party retain the separate property that he or she brought into the marriage, including any appreciation of the separate property.” (quotation simplified)); Thompson v. Thompson, 2009 UT App 101, ¶ 12, 208 P.3d 539 (“An award of separate property includes its appreciation during the marriage.”); Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct. App. 1990) (“Inherited or donated property, as well as its appreciated value, is generally regarded as separate from the marital estate and hence is left with the receiving spouse in a property division incident to divorce.”).

¶40      This general rule—that a spouse should receive his or her separate property, together with any appreciation—may be varied on the basis of commingling, but only when it is clear that the spouse intended to contribute the property to the marital estate, or when it becomes functionally impossible to trace or account for the separateness of the spouse’s property. See Oliekan v. Oliekan, 2006 UT App 405, ¶¶ 20–23, 147 P.3d 464 (stating that the question in commingling cases is whether the property “became so commingled that [it] could not be segregated” from the marital estate, and determining that commingling was not present because “the marital and premarital interests were reasonably capable of being determined” and because “it was still possible to trace and separately identify” the separate property); see also Dahl, 2015 UT 79, ¶ 143 (“[P]remarital property may lose its separate character where the parties have inextricably commingled it with the marital estate, or where one spouse has contributed all or part of the property to the marital estate with the intent that it become joint property.”).

¶41 Commingling occurs most commonly with money, because dollars are fungible and, when separate money is deposited into the same account as marital money, it can become difficult to tell which dollar is which. See, e.g.Pusey v. Pusey, 728 P.2d 117, 119 (Utah 1986) (affirming a district court’s finding “that throughout the marriage [the husband] had commingled corporate and personal funds so that [the court] could not trace any assets to any source”). Yet even money will not be considered commingled if the separate property funds can be identified and traced. See, e.g.Oliekan, 2006 UT App 405, ¶ 23 (affirming a district court’s determination that no commingling had occurred because “it was still possible to trace and separately identify the funds” at issue); accord Arnason v. Arnason, 2002 UT App 243U, para. 2.

¶42 Real property is easier to trace than money, and it is therefore perhaps not as common for commingling to occur with regard to real property as it is with money. Cf. Dahl, 2015 UT 79, ¶ 146 (“A spouse can maintain the separate identity of premarital [real] property by utilizing section 1031 exchanges to avoid commingling separate property with marital property.”). But it is at least conceivable that separate real property—or at least the proceeds therefrom—can become commingled into a marital estate. For instance, in one case we concluded that, where proceeds from the sale of separate property (including real property) had been “deposit[ed] into the parties’ joint accounts” and thereby lost its separate identity, commingling had occurred. Dunn v. Dunn, 802 P.2d 1314, 1321 (Utah Ct. App. 1990). And in other cases, we have observed that, where significant or substantial marital assets are invested to support, maintain, or improve separate real property, commingling may have taken place. Keiter v. Keiter, 2010 UT App 169, ¶ 23, 235 P.3d 782 (stating that “expending marital funds toward otherwise separate real estate supports a determination of commingling that may convert separate property into marital property”); Schaumberg v. Schaumberg, 875 P.2d 598, 603 (Utah Ct. App. 1994) (affirming a district court’s determination that commingling of the “appreciated portion” of a husband’s separate real property had occurred where the parties had “used substantial marital funds to maintain and augment” the property).

¶43 In this case, however, the House was never sold, and therefore no proceeds from any sale were ever deposited into a marital account. And there was no evidence presented that the parties invested significant sums of marital money into supporting, maintaining, or otherwise improving the House. Here, tracing the separate nature of the House, including the appreciation in its value, is fairly obvious, and we see no evidence indicating that the House ever lost its separate identity.

¶44 In particular, we find the evidence upon which the commissioner relied unpersuasive and entirely unsupportive of a determination that all appreciation of the House after 2004 was commingled into the marital estate. Two of the three items upon which the commissioner relied—that both Marcus and Mona appeared as “owners” on homeowners insurance policies, and that Mona’s mother paid $13,000—occurred prior to 2004, before Marcus even owned the House. These items therefore have extremely limited value in the analysis, and they simply do not point to any commingling of post-2004 appreciation.

¶45      The other item upon which the commissioner relied—the fact that Mona had been involved in some of the maintenance of the House, especially the landscaping—is likewise insufficient to support a determination that the entirety of the House’s appreciation was commingled into the marital estate. As noted above, the investment of substantial marital assets into separate real property can support a determination that the separate property was commingled. See Keiter, 2010 UT App 169, ¶ 23; Schaumberg, 875 P.2d at 603. But here, no such evidence was presented; Mona did not offer evidence of any specific monetary contributions, nor did she attempt to provide many particulars about the nature of her landscaping and other contributions.[4] One spouse’s residence at, and assistance with the day-to-day maintenance of, the other spouse’s separate real property will not usually be enough to render the entirety of that property’s appreciation commingled into the marital estate. Under the circumstances presented here, we conclude that Mona’s rather non-specific contributions to maintenance and landscaping are insufficient to support a determination that the entirety of the House’s appreciation was commingled into the marital estate.

¶46      That is not to say that such contributions are irrelevant to the ultimate separate-or-marital-property analysis. As noted, Mona also made an argument, at the informal trial, that she had made an equitable contribution to the value of the House that should be recognized under the contribution exception to the general rule that separate property goes to the individual spouse. While Mona’s evidence is insufficient to support a determination that the entirety of the House’s appreciation was commingled into the marital estate, such evidence might be sufficient to support a determination that Mona made an equitable contribution to the House that ought to be quantified and recognized in the distribution of marital property.

¶47 Accordingly, we conclude that the commissioner committed an abuse of discretion in determining, on this record, that the entirety of the House’s appreciation had been commingled into the marital estate, and we therefore reverse that determination. We remand the matter, however, so that the district court might have an opportunity to consider Mona’s alternative argument—not reached by the commissioner—that she made an equitable contribution to the value of the House that should be considered in the distribution of the marital estate.

II. The House’s 2004 Value

¶48      Marcus also challenges the court’s finding that the value of the House, when it was gifted to him in 2004, was $312,500. Marcus argues that the House’s value was actually $445,000—the amount his father’s construction company spent to build it. On this record, however, we conclude that the court’s finding is supported by competent evidence and that the commissioner therefore did not commit clear error in making it.

¶49      When a court is asked to value real property, it may do so in any one of several ways, depending on the evidence presented. Certainly, one way to value a house is to assess how much it cost to build it. See Carter v. Sorenson, 2004 UT 33, ¶ 2, 90 P.3d 637 (referring to the “traditional appraisal methods” as “the cost approach, the income approach, and the sales comparison approach”). But more commonly, appraisers value residential real property using a “comparable sales” approach, in which they attempt to “locate and analyze sales of ‘comparable’ properties . . . between a willing buyer and a willing seller in which the sale price is determined by market forces.” See Utah Dep’t of Transp. v. Admiral Beverage Corp., 2011 UT 62, ¶ 40, 275 P.3d 208.

¶50      During the informal trial, Marcus presented evidence that his father’s construction company spent $445,000 to build the House in the 1990s. Had that been the only evidence presented at trial, Marcus may have a credible argument that the court committed clear error by not adopting that methodology in assessing the House’s 2004 value. But that was not the only evidence presented at trial. Marcus also presented an appraisal of the House, as of May 2004, that applied a comparable-sales methodology; the first draft of that appraisal valued the House at $285,000, and an “amended draft” valued it at $340,000. The court found, based on this evidence, that the best indication of the value of the House in 2004 was an “averag[e] of the two values proposed by” Marcus’s appraiser, which is $312,500.

¶51      This finding is amply supported by evidence in the record and is therefore not clearly erroneous. See Kimball v. Kimball, 2009 UT App 233, ¶ 20 n.5, 217 P.3d 733 (“The pill that is hard for many appellants to swallow is that if there is evidence supporting a finding, absent a legal problem—a fatal flaw—with that evidence, the finding will stand, even though there is ample record evidence that would have supported contrary findings.” (quotation simplified)). We therefore reject Marcus’s challenge to the court’s finding that the House was worth $312,500 when it was gifted to him in 2004.

CONCLUSION

¶52      We reject Marcus’s challenge to the court’s factual finding regarding the value of the House in 2004. But we sustain Marcus’s challenges to the court’s commingling determination, and specifically to its rulings that (a) $150,000 of the House’s original value was commingled and (b) the entirety of the House’s post-2004 appreciation was commingled. We therefore reverse the court’s equity allocation order, and we remand the case to the district court for further proceedings, consistent with this opinion, regarding the use to which the parties put the 2004 loan proceeds and regarding Mona’s claim to an equitable interest in the appreciation of the House under the contribution exception.

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


[1] Because the parties share the same last name, we use their first names for clarity, with no disrespect intended by the apparent informality.

[2] In fairness to the commissioner, Marcus did not cite Dahl during the informal trial. But this does not present a preservation problem, because litigants are permitted to cite new authority for the first time on appeal to support arguments regarding issues properly raised below. See Patterson v. Patterson, 2011 UT 68, ¶ 18, 266 P.3d 828 (“[W]e routinely consider new authority relevant to issues that have properly been preserved . . . .”). In this instance, the parties raised the relevant issue at the informal trial—whether $150,000 of the House’s original value was commingled into the marital estate—and are therefore entitled to bring new authority to our attention on appeal bearing on this preserved issue.

[3] At the conclusion of the informal trial, the commissioner stated that some of the loan proceeds were “used to pay some medical bills for” Mona. It is unclear from the record whether this statement constituted an oral factual finding or merely a musing on the part of the commissioner, and no such finding appears in the written ruling. In any event, we are unaware of any statements or findings, written or oral, made by the commissioner about whether any of the loan proceeds were used on the House.

[4] The best evidence of Mona’s contributions appears to be found in her answer to a written interrogatory from Marcus that asked her to “detail” all her contributions to the House. In that answer, she stated generally that she “maintained and upkept” the House and “was in charge of maintaining the yard.” She also described other remodeling and maintenance activities, such as helping to repaint, retile, and redecorate various rooms in the House. But she made no effort—whether in that interrogatory response or otherwise—to quantify her efforts in dollars, and she did not hire an appraisal expert to assess any increase in value to the House that her efforts might have brought about or to rebut Marcus’s appraisal expert’s conclusions in that regard.

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KSL.com News Article, Murder-Suicide in Sandy, Utah

Recently, Pat Reavy of KSL.com reported on the murder-suicide of Rebecca Siwale and Stanley Siwale. Rebecca and Stanley were found deceased in their Sandy, Utah home on Saturday, June 8, 2024. Rebecca was shot multiple time by her husband after he told their three children to leave the family home, Sandy police say. To read more about this tragedy, please follow this link.

https://www.ksl.com/article/51041312/sandy-couple-found-dead-in-murder-suicide-police-say

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

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Can My Spouse Take out a Loan Using Our House as Collateral After I File for a Divorce?

This is a good question and one that often comes up in divorce cases.

I cannot speak for the law in all jurisdictions, but as this question applies in the jurisdiction where I practice law (Utah), these are my observations (my discussion of a general question on Quora does not constitute legal advice, so anyone who has this particular question needs to consult with an attorney personally):

In Utah, can a spouse take out a loan using the marital home as collateral after the other spouse files for a divorce?

First, we need to know what “marital home” means in this context. Even if the house is in your spouse’s name alone, if the house was purchased by one spouse during the marriage, it is (unless the spouses contracted otherwise) still considered marital property because it was purchased by your spouse while he/she was married to you.

So, is it possible for your spouse to borrow against the marital home after a divorce action has been filed in Utah? Yes, but not likely, and even if the loan/credit was made, a Utah court would almost surely void the loan/credit contract.

Yes, if by “possible” we mean that your spouse was able to find a lender who is willing to contract with your spouse to borrow against the marital home’s value without your consent. This does not mean that the loan/credit contract is necessarily enforceable. This does not mean that the loan/credit contract could not be set aside by the divorce court as a fraudulent conveyance under the right circumstances (see below).

Not likely because 1) I don’t know of an institutional lender who would agree to accept as collateral all or a portion of a marital home without obtaining the consent of both spouses first; 2) such unilateral action on the part of your spouse to encumber marital property without your consent could be set aside as a fraudulent conveyance (See Bradford v. Bradford, 993 P.2d 887, 1999 UT App 37 (Court of Appeals of Utah 1999)); and 3) Utah Rules of Civil Procedure 109 provides, in pertinent part:

Rule 109. Injunction in certain domestic relations cases. Effective: 1/1/0021

(a) Actions in which a domestic injunction enters. Unless the court orders otherwise, in an action for divorce, annulment, temporary separation, custody, parent time, support, or paternity, the court will enter an injunction when the initial petition is filed. Only the injunction’s applicable provisions will govern the parties to the action.

(b) General provisions.

(1) If the action concerns the division of property then neither party may transfer, encumber, conceal, or dispose of any property of either party without the written consent of the other party or an order of the court, except in the usual course of business or to provide for the necessities of life.

And so, if your spouse attempted, after a divorce action was filed, to encumber marital property without your written consent, the court would likely void the transaction as fraudulent and/or penalize your spouse for violating the Rule 109(b) prohibition against a spouse encumbering marital property without his/her spouse’s written consent.

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

(61) Can my spouse take out a loan using our house as collateral after I file for a divorce? – Mother-in-Law Mysteries and Conflicts – Quora

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Elder v. Elder – 2024 UT App 68 – enforcement vs. modification

Elder v. Elder – 2024 UT App 68

THE UTAH COURT OF APPEALS

BRITTANY LEE ELDER, Appellee, v. MATT BLAKE ELDER, Appellant.

Opinion No. 20210902-CA Filed May 9, 2024

Second District Court, Farmington Department

The Honorable David M. Connors No. 154700355

Julie J. Nelson and Jaclyn Robertson, Attorneys for Appellant Steven C. Tycksen, Attorney for Appellee

JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES RYAN M. HARRIS and AMY J. OLIVER concurred.

TENNEY, Judge:

¶1 The district court issued an order requiring Matt Blake Elder to reimburse his ex-wife, Brittany Lee Elder, for the amount she had paid to satisfy a loan on a townhouse that she had been awarded in the divorce.[1] Matt challenges this ruling on appeal, arguing that it was a procedurally improper modification of the couple’s divorce decree. For the reasons set forth below, we affirm.

BACKGROUND

¶2 Brittany and Matt were married in 2008. In early 2015, Brittany filed a petition for divorce. Later that year, Brittany and Matt entered into a stipulated agreement that the district court subsequently adopted in a Decree of Divorce (the Decree). Under a “Division of Property” heading, the Decree divided the couple’s real property, vehicles, and other personal property. Matt received the “marital home along with any accompanying debts and/or equity.” Of note here, Brittany was awarded a townhouse “as an equalization of the distribution of the assets.” The Decree specified that “Matt will be responsible for any loans associated with the townhouse and have them paid off within 120 days of signing this Stipulation.”

¶3        A separate provision in the Decree was captioned “Remedies on Default.” It stated that in “the event that either party defaults in her or his obligations, or must seek relief from the Court in the enforcement of the Decree of Divorce, the nonprevailing party shall be liable to the other party for all reasonable expenses, including attorneys’ fees and court costs actually incurred.”

¶4        Matt failed to remove the loan on the townhouse within 120 days. After that 120-day period expired, Brittany filed a motion for an order to show cause. In this motion, Brittany asked the court to hold Matt in contempt for failing to comply with several terms of the Decree—including, of note here, his obligation to pay off the loan associated with the townhouse. The district court later issued an order in which it refused to find Matt in contempt on the townhouse issue, but it did order Matt to “remove all liens on the townhouse” within 30 days. Matt failed to comply with this order.

¶5        In 2017, Matt filed for bankruptcy. Later that year, Brittany sold the townhouse. “[P]ursuant to a short sale agreement she made with the bank,” she paid off a discounted loan balance of $143,165.

¶6        In April 2019, Brittany filed another motion for an order to show cause relating to the townhouse. In this motion, Brittany requested a judgment in excess of $180,000, a figure that included the final loan balance, realtor’s commissions, closing costs, and repairs that she alleged were necessary to make the townhouse habitable.

¶7        During a hearing in July 2020, the district court noted that a domestic relations commissioner had certified for hearing the issue of “the amount [Matt] should pay [Brittany] due to his failure to have the liens removed from the townhouse.” At that point, Brittany’s counsel expressed the desire to conduct discovery on the issue. In response, Matt’s counsel suggested that she wasn’t sure if discovery was warranted because there was “no petition to modify pending,” after which she asked the court to “clarif[y]” whether it would “allow[] there to be discovery between the parties.” The court responded that it was allowing “discovery” on “what amounts, if any,” it should order Matt to pay Brittany for his “failure to have the liens removed from the townhouse,” and the court specifically ruled that the parties could depose each other on this if they wished.

¶8        Brittany subsequently submitted interrogatories, a request for production of documents, and requests for admission to Matt. For his part, Matt issued several subpoenas duces tecum to financial institutions. At a pretrial hearing in November 2020, Brittany argued that Matt’s responses to her requests for admission had been inadequate. Over the protest of Matt’s counsel, the court agreed that Matt’s responses had been inadequate and ordered Matt to submit more detailed responses. In the course of that hearing, Matt never argued that he was being deprived of the opportunity to conduct discovery of his own.

¶9        A few weeks later, the court held an evidentiary hearing on the question of “potential damages connected with the failure to deliver the title” to the townhouse “free and clear of liens.” At that hearing, both parties presented extensive arguments about their positions.

¶10      After almost a year of additional litigation, the court issued a written ruling on Brittany’s motion for an order to show cause. There, the court first noted that the provision in the Decree that made Matt “responsible” for any loans associated with the townhouse had “never been modified.” The court also ruled that Matt’s bankruptcy had not discharged his obligations relating to the townhouse.

¶11      The court then found that Matt had “failed to satisfy, pay off or remove the liens related to the loans associated with” the townhouse and that Matt’s failure had “forced” Brittany to sell the townhouse in order to pay off the discounted loan balance. The court also found that the “actual amount paid by” Brittany to the bank “to remove the lien” on the townhouse “that was associated with the loan was $143,165.00.” And it further found that the “required payment of this amount” by Brittany “was a direct result of [Matt’s] failure to comply with the provisions of the Decree of Divorce.” The court accordingly awarded Brittany “the actual amount she paid the bank, $143,165,” plus post-judgment interest, though it then determined that she was not entitled to any additional amounts related to the renovation and sale of the townhouse. Finally, the court awarded Brittany her “reasonable expenses, including attorney fees and court costs actually incurred, related to the issue of [Matt’s] failure to comply with his obligations” under the Decree.

ISSUE AND STANDARD OF REVIEW

¶12 Matt challenges the district court’s ruling granting Brittany’s motion for an order to show cause. In Matt’s view, the ruling was not a valid enforcement of the Decree but instead improperly modified it. “We review procedural issues for correctness and afford no deference to the lower court’s ruling.” Berman v. Yarbrough, 2011 UT 79, ¶ 12, 267 P.3d 905.[2]

ANALYSIS

¶13 Matt argues that when the district court ordered him to reimburse Brittany for what she had paid to satisfy the loan on the townhouse, the court modified the Decree. In Matt’s view, because Brittany had only filed an enforcement action, not a modification action, this ruling was procedurally improper. We disagree with Matt’s assessment of the nature of the ruling.

¶14 District courts enjoy “inherent” authority, “when properly invoked,” to “enforce a final judgment.” Little Cottonwood Tanner Ditch Co. v. Sandy City, 2016 UT 45, ¶¶ 23–24, 387 P.3d 978 (quotation simplified); see also id. ¶ 33 (explaining that district courts may “make such orders as may be necessary to carry out and give effect to their decrees” (quotation simplified)). “If a party fails to comply with a specific directive of a judgment, another party to the judgment may move to enforce this directive.” Id. ¶ 24. However, a “court’s power to enforce a judgment is confined to the four corners of the judgment itself.” PacifiCorp v. Cardon, 2016 UT App 20, ¶ 6, 366 P.3d 1226 (quotation simplified). And a “motion to enforce cannot be used to take up matters beyond the contours of the judgment and thereby short-circuit the usual adjudicative processes.” Berman v. Yarbrough, 2011 UT 79, ¶ 15, 267 P.3d 905 (quotation simplified). A motion to enforce is thus “procedurally improper” where a judgment contains neither an “unequivocal mandate” nor a “clear directive” enjoining “the respondent to undertake some action.” Id. (quotation simplified). This is so because, “without a directive or unequivocal mandate, there is nothing for the court to enforce.” Id.[3]

¶15 Separate from the enforcement power, courts in some instances have power to modify a final judgment that has already been entered. And we’ve previously recognized that a key difference between the power to modify and the power to enforce is that the latter does “not generally extend to modifying the substantive rights of parties that have previously been agreed to or adjudicated.” Robertson v. Stevens, 2020 UT App 29, ¶ 8, 461 P.3d 323. In the family law context, “proceedings to modify a divorce decree . . . must be commenced by filing a petition to modify.” Utah R. Civ. P. 106(a). And a petition to modify allows courts to “revisit many of the provisions contained in a typical divorce decree, including provisions pertaining to child custody, child support, alimony, property distribution, and debts,” under the terms set forth by certain statutes. Robertson, 2020 UT App 29, ¶ 7.

¶16      Here, Brittany filed a motion for an order to show cause, which, as noted, was the procedural mechanism at the time for filing an enforcement action. But Brittany did not file a petition to modify the Decree. The question before us, then, is whether the district court moved beyond its enforcement powers when it ordered Matt to reimburse Brittany for what she had paid to satisfy the loan on the townhouse. Put differently, the question is whether this ruling was authorized from within “the four corners of the judgment,” Little Cottonwood, 2016 UT 45, ¶ 24 (quotation simplified), or whether it instead “modif[ied] the substantive rights of [the] parties,” Robertson, 2020 UT App 29, ¶ 8. In our view, this was indeed an enforcement ruling, as opposed to a modification, because it was grounded in the four corners of the Decree itself and did not alter the parties’ substantive rights.

¶17 “We interpret a divorce decree according to established rules of contract interpretation.” Osborne v. Osborne, 2011 UT App 150, ¶ 6, 260 P.3d 202 (quotation simplified). “When interpreting a contract, a court first looks to the contract’s four corners to determine the parties’ intentions, which are controlling.” Bakowski v. Mountain States Steel, Inc., 2002 UT 62, ¶ 16, 52 P.3d 1179. “If the language within the four corners of the contract is unambiguous, then a court does not resort to extrinsic evidence of the contract’s meaning, and a court determines the parties’ intentions from the plain meaning of the contractual language as a matter of law.” Id. Finally, in “interpreting a contract, we determine what the parties intended by examining the entire contract and all of its parts in relation to each other, giving an objective and reasonable construction to the contract as a whole.” G.G.A., Inc. v. Leventis, 773 P.2d 841, 845 (Utah Ct. App. 1989).

¶18 The Decree in question stated that “Matt [would] be responsible for any loans associated with the townhouse and have them paid off within 120 days of signing this Stipulation.” And it further explained that the townhouse was being awarded to Brittany “as an equalization of the distribution of the assets.” In this sense, the Decree plainly contemplated that Brittany would receive the townhouse free and clear. But she didn’t. As indicated, Matt failed to pay off the loan within 120 days. And when the court subsequently issued another order requiring Matt to remove the liens within an additional 30-day period, Matt failed to comply with that order too.

¶19 In the ruling at issue, the court found that Brittany was ultimately “forced to sell” the townhouse and “pay the discounted bank loan balance in the amount of $143,165,” and it further found that the “required payment of this amount” by Brittany “was a direct result of [Matt’s] failure to comply with the provisions of the Decree.” Matt has not challenged these findings on appeal.

¶20 In light of these findings, the order requiring Matt to reimburse Brittany was a proper exercise of the court’s enforcement power. The language of the Decree didn’t narrowly require Matt to pay a particular amount to a particular bank. Rather, the provision in question was worded more broadly, requiring Matt to “be responsible for any loans associated with the townhouse” and requiring him to “have them paid off within 120 days.” (Emphasis added.) As a result, when Brittany was subsequently “forced” to pay the loan off herself due to Matt’s failure to comply with his obligations, the court’s decision to place that financial burden back onto Matt’s shoulders did nothing more than “carry out and give effect” to the Decree’s own terms. Little Cottonwood, 2016 UT 45, ¶ 33 (quotation simplified).

¶21      Matt responds on several fronts, but we find none of them availing.

¶22      First, Matt argues that under the principles set forth in Gullickson v. Gullickson, 2013 UT App 83, 301 P.3d 1011, the court’s order could only have been accomplished through a modification action. We disagree. In Gullickson, the divorce decree had set forth a specific arrangement for how to deal with the marital home after the divorce: namely, the wife was permitted to live in it for a period of five years, during which period she was responsible for making the mortgage payments; at the end of the five years, the husband would be required to either buy out the wife’s share of the equity in the home or instead sell it and give her half of the proceeds. Id. ¶ 2. Of some note, the arrangement under which the wife could remain in the home for five years was “prompted at least in significant part” by the “ongoing special needs” of the parties’ son. Id. ¶ 22. When the wife subsequently faced a changed financial situation, however, she decided to move from the home earlier than planned. Id. ¶ 4. To facilitate this, she “filed a petition to modify the divorce decree,” asking the court to require the husband to either buy her out sooner than was required by the decree (thus changing the time-period set forth in that decree), or to instead agree that she could move from the home and rent it out in order to help her pay the mortgage. Id. ¶ 4. The district court granted the wife’s request and directed the husband to make that choice. Id. ¶¶ 6–7, 13.

¶23 On appeal, we considered various questions relating to whether the district court had properly followed the modification procedures. Id. ¶¶ 21–25. Drawing on aspects of that discussion, Matt now suggests that Brittany’s request in this case could only have been brought as a modification petition. But unlike the wife in Gullickson, Brittany did not file a petition to modify her divorce decree; rather, she filed a motion for an order to show cause, so she chose an entirely different procedural tack all along. Moreover, unlike the wife in Gullickson, Brittany did not ask the court to change any particular term of her divorce decree. Rather, when Brittany asked the court to order Matt to reimburse her for the pay-off amount on a loan that Matt was supposed to have paid from the beginning, Brittany was asking for Matt to be held “responsible” for that loan, which is what her divorce decree already required. Thus, Gullickson involved a modification because the order changed that divorce decree’s terms; by contrast, this case involved an enforcement action because it sought to effectuate the divorce decree’s terms. Gullickson therefore doesn’t mean that Brittany could only proceed through a modification action.

¶24      Second, Matt argues that because the Decree required him to pay off any loans within 120 days, and because the amount at issue had been paid by Brittany much later than those 120 days, the court’s order effectively changed the Decree’s essential terms, thus constituting a modification. If the Decree had only said that Matt was required to pay off a particular loan to a particular bank within 120 days, Matt’s argument might have a little more force (although we might still have some skepticism). But as noted, the Decree wasn’t worded that narrowly. In addition to the language Matt relies on, the Decree said that “Matt will be responsible for any loans associated with the townhouse,” and it further noted that Brittany was being awarded the townhouse “as an equalization of the distribution of the assets.” (Emphasis added.)

¶25 As indicated, when reading contracts or divorce decrees, we interpret surrounding provisions in harmony with each other. The unmistakable intent of the Decree was to require Matt to assume the financial obligations associated with the townhouse. When Matt repeatedly failed to do so in a timely manner, the court had authority to “make such orders as may be necessary to carry out and give effect” to these provisions. Little Cottonwood, 2016 UT 45, ¶ 33 (quotation simplified). Since it’s uncontested on appeal that Matt’s failure to timely pay off the loan “forced” Brittany to sell the townhouse, the order in question placed the financial cost of that sale back onto Matt, thereby making him “responsible” for the loan, which is what the Decree always required.

¶26 Third, Matt complains of the alleged unfairness that resulted from the court treating this as an enforcement action, as opposed to requiring Brittany to proceed through a petition to modify. According to Matt, if this had been filed as a modification petition, the rules would have provided him with delineated discovery powers. In Matt’s view, these discovery powers would have allowed him to obtain evidence to support various defenses, such as “whether Brittany could have (or even did) take mitigating action,” whether Brittany received any benefit from living in the townhouse between the time of the Decree and when Brittany sold it, and whether “the marital estate was smaller than the parties thought when they stipulated to its division.”

¶27      Matt’s concerns seem grounded in the fact that, both before and after the 2021 amendments, the rules don’t provide for formalized discovery relating to an enforcement action (whether filed as an old motion for an order to show cause or instead through a current motion to enforce). But the question of whether a party should automatically be entitled to discovery in an enforcement action is a question best left to those tasked with drafting the rules. Here, however, Brittany filed a motion for an order to show cause, and as explained above, that motion was warranted to enforce the terms of the Decree. We see no basis for overturning the district court’s ruling simply because the rule drafters have not provided for automatic discovery in such cases.

¶28    In any event, even if it’s possible that the absence of automatic discovery might result in some unfairness in some other enforcement action, Matt is not in a position to complain about any such unfairness here. As noted, the district court specifically allowed the parties to conduct discovery—including taking depositions, if the parties desired—on “what amounts, if any,” the court “should order [Matt] to pay [Brittany] due to the failure to have the liens removed from the townhouse.” In reliance on that, Matt issued several subpoenas duces tecum to financial institutions. And Matt never argued below that he was being deprived of the opportunity to conduct any additional discovery.

¶29      Moreover, Matt also has not persuaded us that any of the proposed evidence would have constituted a valid defense to Brittany’s request for relief. Under the Decree, Brittany was entitled to receive the townhouse without any loans as of 120 days after the stipulation was signed. Nothing in the Decree obligated her to take any mitigation efforts if Matt failed to comply with his obligations to pay off the loans, and any benefits that she received from living in the townhouse in the ensuing years were benefits that she was always entitled to receive. As for Matt’s claim that the parties underestimated the marital estate’s size, we note that Matt stipulated to the terms of the Decree. If he later thought that some error had infected that stipulation or the ensuing Decree, he could have made his own request to somehow alter or modify it. But what Matt wasn’t entitled to do was simply not comply with its terms. And in the meantime, Brittany was entitled to ask the court to enforce the Decree as written, which is what she did.

¶30      In short, we conclude that the district court’s order appropriately “carr[ied] out and [gave] effect to” the terms of the Decree. Little Cottonwood, 2016 UT 45, ¶ 33 (quotation simplified). Because of this, the district court did not err in granting Brittany’s motion for an order to show cause.

¶31 As a final matter, Brittany has requested an award of attorney fees and costs that she incurred in this appeal, and she has done so pursuant to the same provision from the Decree that authorized the fee award she received below. That provision stated that in “the event that either party defaults in her or his obligations, or must seek relief from the Court in the enforcement of the Decree of Divorce, the nonprevailing party shall be liable to the other party for all reasonable expenses, including attorneys’ fees and court costs actually incurred.”

¶32      “If the legal right to attorney fees is established by contract, Utah law clearly requires the court to apply the contractual attorney fee provision and to do so strictly in accordance with the contract’s terms.” Vierig v. Therriault, 2023 UT App 67, ¶ 13, 532 P.3d 568 (quotation simplified), cert. denied, 537 P.3d 1013 (Utah 2023). And as a general matter, “when a party who received attorney fees below prevails on appeal, the party is also entitled to fees reasonably incurred on appeal.” Tronson v. Eagar, 2019 UT App 212, ¶ 39, 457 P.3d 407 (quotation simplified). Because Brittany has prevailed on appeal, she is entitled to her fees reasonably incurred on appeal. We therefore remand this case to the district court for determination of those fees and an entry of that award.

CONCLUSION

¶33      The ruling in question was a valid exercise of the district court’s power to enforce the Decree. As a result, we affirm the court’s decision and remand for an award of attorney fees reasonably incurred on appeal.

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


[1] Because the parties share a last name, we’ll refer to them by their first names moving forward, with no disrespect intended by the apparent informality.

[2] In his opening brief, Matt surmised that the district court’s ruling might be read as a contempt ruling, and he then argued that the ruling was not justified under the court’s contempt powers. In her responsive brief, Brittany declined to defend the ruling on this basis, instead insisting that it was a valid enforcement action. We accordingly address the ruling solely on those terms.

[3] The rule in effect at the time that Brittany filed the motion at issue allowed her to file an order to show cause, and it further stated that such a motion could be granted for the “enforcement of an existing order.” Utah R. Civ. P. 7(q) (2019). The cases we’ve discussed above referred to a court’s enforcement power.

Under a rule that became effective in May 2021 and that remains in place, a motion for an order to show cause in a “domestic relations action[]” is now referred to as a “motion to enforce.” See Utah R. Civ. P. 7B(a), (i), (j) (2023). (The same is true in civil cases more generally under rule 7A of the Utah Rules of Civil Procedure.) Rule 7B further provides that its process “replaces and supersedes the prior order to show cause procedure.” Id. R. 7B(j). As with the old regime, however, the new one turns on the court’s enforcement power. See id. R. 7B(a) (allowing a party to file a motion to “enforce a court order or to obtain a sanctions order for violation of an order”).

Neither party in this case has argued that this new rule was intended to alter the substantive scope of a court’s enforcement power, much less that the new rule did so in a manner that would change the outcome of this case. Having surveyed the matter ourselves, we see no authority suggesting that such a change was intended.

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McFarland v. McFarland – 2024 UT App 31 – attorney’s fees awards

McFarland v. McFarland – 2024 UT App 31

THE UTAH COURT OF APPEALS

BRUCE RAY MCFARLAND, Appellee, v. NICOLE S. MCFARLAND, Appellant.

Opinion No. 20221044-CA, Filed March 14, 2024

Second District Court, Farmington Department

The Honorable David J. Williams No. 084701533

Angilee K. Dakic, Attorney for Appellant, Jacob K. Cowdin, Attorney for Appellee

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

HARRIS, Judge:

¶1 This domestic dispute between Bruce Ray McFarland (Bruce) and Nicole S. McFarland (Nicole) comes before us for a second time. This time, we are asked to assess the propriety of two aspects of the district court’s most recent set of orders: the court’s decision to modify the parties’ divorce decree and award the house in which the parties lived while they were married (the Home) to Bruce instead of to Nicole, and the court’s decision to require Nicole to pay Bruce’s attorney fees incurred in litigating the petition to modify. We see no reversible error in the court’s award of the Home to Bruce, and we therefore affirm on that issue. But we agree with Nicole that the court erred in awarding attorney fees to Bruce, and we therefore reverse that fee award.

BACKGROUND

¶2        In our previous opinion, we set forth many of the relevant facts underlying the parties’ dispute. See McFarland v. McFarland, 2021 UT App 58, ¶¶ 2–18, 493 P.3d 1146. In the interest of brevity, we recite in this opinion only those facts necessary to our decision.

¶3        Bruce and Nicole’s divorce decree (the Decree) was entered in 2009 following a negotiated settlement. As relevant here, the Decree required Bruce to pay Nicole $1,700 per month in alimony, and it awarded the Home to Nicole “subject to” her “assumption” of the mortgage, tax, and insurance obligations associated with the Home as well as “a judicial lien in the sum of $12,034.24 payable to” Bruce. According to the Decree, Nicole was to pay Bruce the lien amount on the occurrence of the first of these events: (1) when Nicole remarries or cohabits; (2) when the Home is sold or rented; (3) when Nicole “moves from” the Home or no longer uses it as her primary residence; or (4) when the parties’ youngest child graduates from high school. Several of those events have long since occurred; indeed, the district court later found that Nicole “abandoned” the Home in 2010. At no point did Nicole ever make any of the mortgage, tax, or insurance payments on the Home, nor did she ever pay Bruce the lien amount.

¶4        Instead, after a brief period in which he did not live in the Home, Bruce moved back into the Home in 2009 and has lived there at all times since. And after entry of the Decree, Bruce— rather than Nicole—has made all mortgage, tax, and insurance payments on the Home, and he has also maintained and made improvements to the Home. But other than one single payment in January 2009, Bruce paid no alimony to Nicole. Thus, soon after the Decree was entered, both parties began to ignore many of the Decree’s important provisions. But for the next seven years, neither party seemed bothered by the other’s noncompliance, and neither sought to modify or enforce the terms of the Decree.

¶5        In 2017—apparently motivated by a desire to refinance the Home—Bruce filed a petition to modify (Bruce’s Petition), asking the court to modify the Decree to (among other things) award him the Home. Nicole responded not only by resisting Bruce’s Petition, but also by filing two motions asking the court to hold Bruce in contempt for (among other things) failing to pay alimony and for “willfully occup[ying Nicole’s] property,” namely, the Home. Concerning the Home, Nicole asked that the court “immediately restore[]” her “to the use and possession of” the Home. Later, in 2019, the court found Bruce in contempt for failing to pay alimony, and it ordered Bruce to pay Nicole over $150,000 in unpaid alimony. But the court declined to find Bruce in contempt for occupying the Home. The court made no ruling on Bruce’s Petition, however, because that matter had apparently not yet been certified for trial. But the court allowed Bruce to continue living in the Home “on a temporary basis” until the matter was finally resolved.

¶6        Both parties appealed several aspects of the court’s 2019 rulings and, in this case’s first trip to this court, we affirmed the court’s alimony award to Nicole and remanded “the case for further proceedings” regarding (among other things) Bruce’s Petition. Id. ¶¶ 46–47.

¶7        Following remand, the district court held a hearing to consider matters regarding the Home. Bruce asserted that any claim Nicole might make regarding possession of the Home was barred by several equitable doctrines, including waiver and laches. In particular, Bruce claimed that Nicole had waived any claim to the Home by moving out in 2010 and taking no action in the intervening years to challenge Bruce’s possession of it, and that Nicole’s claim was barred by laches because her “delay in bringing her claim” was “unreasonable” and “prejudicial to Bruce.” Nicole resisted all of these arguments and, in addition, claimed that Bruce’s Petition was barred by res judicata.

¶8        At the conclusion of the hearing, the court made an oral ruling granting Bruce’s Petition and denying Nicole’s motion regarding the Home. The court later issued a written ruling setting forth its findings and conclusions. In that ruling, the court found that Nicole’s abandonment of the Home in 2010 constituted “a material and substantial change in circumstances.” The court also rejected Nicole’s claim that Bruce’s Petition was barred by res judicata. And the court determined that modification of the Decree to award Bruce the Home was appropriate; the court found merit in several of Bruce’s equitable arguments. Specifically, the court determined that Nicole had waived any claim to the Home by moving out and failing to make any payments related to the Home since the Decree was entered. And the court concluded that laches also barred Nicole’s claim to the Home because she had delayed bringing any such claim and her delay had prejudiced Bruce because Bruce had made payments and improvements on the Home in the intervening years. The court noted that Bruce had also delayed in bringing his petition, but it found that Nicole had not been prejudiced by Bruce’s delay.

¶9        Bruce asked the court to award him attorney fees incurred in litigating his petition. As the district court interpreted it, this request was grounded not in the attorney fees statute found in the family law code, see Utah Code § 30-3-3, but, instead, in Utah’s bad-faith attorney fees statute, see id. § 78B-5-825. The court granted Bruce’s request, but it made no specific finding that Nicole’s claims and defenses regarding the Home had been “without merit.” It did make an express finding that “Nicole’s effort to pursue an award of [the Home] roughly eight (8) years after abandoning [it] was an act of bad faith” that Nicole undertook with a “retaliatory” motive in reaction to the filing of Bruce’s Petition. And the court noted that, during the intervening years, Nicole “had not satisfied the conditions in the Decree that allowed her to take possession of” the Home. Based on these findings, the court concluded that “law and equity call for an award of attorney fees in Bruce’s favor as it relates to the issue of” the Home. The court later quantified that attorney fee award, ordering that Nicole pay Bruce $7,390.67 for attorney fees he incurred litigating issues related to the Home.

ISSUES AND STANDARDS OF REVIEW

¶10      Nicole appeals two aspects of the court’s rulings. First, she challenges the court’s order modifying the Decree to award the Home to Bruce. “In this context, we review the district court’s underlying findings of fact, if any, for clear error,” and we review “its ultimate determination regarding the petition to modify[] for an abuse of discretion.” Myers v. Myers, 2023 UT App 20, ¶ 19, 526 P.3d 1253. Whether the court chose and applied the correct legal standard is a question of law “that we review for correctness.” Peeples v. Peeples, 2019 UT App 207, ¶ 11, 456 P.3d 1159.

¶11      As discussed below, our analysis on this point focuses on the court’s application of the doctrine of laches and, in particular, on its determination that Bruce was prejudiced by Nicole’s delay in asserting a right to possession of the Home. “The application of laches to a particular set of facts and circumstances presents a mixed question of law and fact.” Peterson v. Pierce, 2019 UT App 48, ¶ 9, 440 P.3d 833 (quotation simplified). While “[l]aw-like mixed questions are reviewed de novo,” mixed questions that are more “fact-like” are “reviewed deferentially.” Sawyer v. Department of Workforce Services, 2015 UT 33, ¶ 11, 345 P.3d 1253. For the reasons discussed more fully later, see infra ¶¶ 18–21, we conclude that a district court’s prejudice determination made in the laches context is more fact-like than law-like and, therefore, calls for a more deferential standard of review.

¶12 Second, Nicole challenges the court’s award of attorney fees to Bruce under the bad faith statute. “We review a trial court’s grant of attorney fees under the bad faith statute as a mixed question of law and fact.” Outsource Receivables Mgmt., Inc. v. Bishop, 2015 UT App 41, ¶ 11, 344 P.3d 1167 (quotation simplified).

“A finding of bad faith is a question of fact and is reviewed by this court under the ‘clearly erroneous’ standard,” but a “‘without merit’ determination is a question of law” that we review “for correctness.” Id. (quotation simplified).

ANALYSIS

I

¶13      We first address Nicole’s challenge to the district court’s grant of Bruce’s Petition and its accompanying order modifying the Decree to award the Home to Bruce. The court based its ruling on several distinct legal doctrines, including waiver and laches. Nicole challenges the application of these doctrines, asserting that none of them apply to the facts at hand. For the reasons discussed, we conclude that the court did not abuse its discretion when it concluded that Bruce was prejudiced by Nicole’s delay in asserting her claim to the Home, and that therefore the doctrine of laches operates to bar Nicole’s claim. Because we affirm the court’s laches determination, we need not reach the question of whether the court erred in its application of waiver or any other legal or equitable doctrine.

¶14 “Laches” is an equitable doctrine “founded upon considerations of time and injury.” Insight Assets, Inc. v. Farias, 2013 UT 47, ¶ 17, 321 P.3d 1021 (quotation simplified). The thing that the doctrine is concerned about “is not mere delay, but delay that works a disadvantage to another.” Id. (quotation simplified). “In Utah, laches traditionally has two elements.” Fundamentalist Church of Jesus Christ of Latter-Day Saints v. Horne, 2012 UT 66, ¶ 29, 289 P.3d 502. First, the party claiming laches must demonstrate that the other party “unreasonably delayed in bringing” a claim. See Veysey v. Nelson, 2017 UT App 77, ¶ 8, 397 P.3d 846 (quotation simplified), cert. denied, 400 P.3d 1046 (Utah 2017). Second, the party claiming laches must demonstrate that it “was prejudiced by that delay.” Id. (quotation simplified); see also Laches, Black’s Law Dictionary (11th ed. 2019) (defining “laches” as “[t]he equitable doctrine by which a court denies relief to a claimant who has unreasonably delayed in asserting the claim, when that delay has prejudiced the party against whom relief is sought”).

¶15      Nicole concedes that the first element of the laches test— unreasonable delay—is met here, given her eight-year delay in objecting to Bruce’s possession of the Home. Because of this concession, we need concern ourselves only with the second element of the laches test: whether Bruce was prejudiced by Nicole’s unreasonable delay.

¶16      On that point, the district court made a specific finding that Bruce would suffer “clear prejudice” if Nicole were allowed to claim possession of the Home. The court observed that Bruce had raised the parties’ children in the Home, had made “improvements” to the Home, and had taken care of “all financial obligations related to” the Home since 2009. In light of these undisputed facts, the court determined that Bruce would be prejudiced if Nicole were allowed to assert, after all these years, a right to exclusively use and possess the Home.

¶17 Nicole challenges the court’s prejudice determination, asserting that her delay in asserting her rights to the Home was actually “a benefit to Bruce” because it gave him a place to live and because he was able to take “significant amounts of equity out of” the Home “on multiple occasions.” But before we can address Nicole’s challenge to the court’s prejudice determination, we must first determine the appropriate standard of review.

¶18      As previously mentioned, see supra ¶ 11, a district court’s “application of laches to a particular set of facts and circumstances presents a mixed question of law and fact.” Peterson v. Pierce, 2019 UT App 48, ¶ 9, 440 P.3d 833 (quotation simplified). “Mixed questions fall somewhere in the twilight between deferential review of findings of fact and searching reconsideration of conclusions of law.” In re adoption of Baby B., 2012 UT 35, ¶ 42, 308 P.3d 382. The level of deference afforded to district courts in such situations thus depends on whether the determination at issue is more law-like or fact-like. See Sawyer v. Department of Workforce Services, 2015 UT 33, ¶ 11, 345 P.3d 1253. We must therefore assess whether a determination regarding prejudice, in the laches context, is more fact-like than law-like. As far as we are aware, no Utah court has yet rendered a specific ruling on this question.

¶19      When considering whether a question “should be deemed law-like or fact-like, we evaluate the marginal costs and benefits of conducting either a searching de novo review or a deferential review of a lower tribunal’s resolution of the mixed question.” Id. ¶ 12 (quotation simplified). To that end, our supreme court has instructed us to consider three relevant factors:

(1) the degree of variety and complexity in the facts to which the legal rule is to be applied; (2) the degree to which a trial court’s application of the legal rule relies on facts observed by the trial judge, such as a witness’s appearance and demeanor, relevant to the application of the law that cannot be adequately reflected in the record available to appellate courts; and (3) other policy reasons that weigh for or against granting discretion to trial courts.

Id. (quotation simplified).

¶20      The first two factors compare “the relative competencies” of “a fact-finding tribunal” and that of “an appellate court.” Id. ¶ 13. District courts and other fact-finding tribunals “are in a superior position to weigh facts that depend upon credibility determinations, the direct observation of witness testimony, and other evidence not fully captured in a written appellate record.” Id. On the other hand, appellate courts are in a better position to fashion “broad rules that can create a greater degree of consistency and predictability to future cases involving a particular mixed question.” Id. An inquiry that is highly “fact-intensive” is not one that “lend[s] itself to consistent resolution by a uniform body of appellate precedent.” Carbon County v. Workforce Appeals Board, 2013 UT 41, ¶ 7, 308 P.3d 477 (quotation simplified). Thus, a district court is “entitled to deference” where its determinations are “fact-intensive” because an appellate court “would be in an inferior position to review the correctness” of such a decision. Id. (quotation simplified).

¶21 Assessing whether a litigant’s unreasonable delay in bringing a claim has caused another party to sustain prejudice is a case-specific, fact-bound inquiry that will depend on the particular circumstances at hand, as well as—at least in many cases, including this one—on the district court’s perception of the progression of the litigation. Indeed, for this very reason, Utah appellate courts have concluded, in a number of analogous contexts, that appellate review of a district court’s prejudice determination should be deferential. See State v. De La Rosa, 2019 UT App 110, ¶ 9, 445 P.3d 955 (reviewing deferentially a district court’s “substantial adverse effect” determination, made in the context of assessing whether a new trial was warranted, “due to [the district court’s] advantaged position to judge the impact of legal errors on the total proceedings” (quotation simplified)); see also State v. Maestas, 2012 UT 46, ¶ 325, 299 P.3d 892 (stating that district courts “have discretion in granting or denying a motion for a mistrial . . . because of the[ir] advantaged position . . . to determine the impact of events occurring in the courtroom on the total proceedings” (quotation simplified)); Butler v. Mediaport Ent. Inc., 2022 UT App 37, ¶¶ 32, 48, 508 P.3d 619 (stating that “we review a district court’s harmlessness determination,” made in the discovery and disclosure context, deferentially “for abuse of discretion” because “a district court will almost always have a better vantage point than we do to make such a call”). We also observe that laches is an equitable doctrine, see Insight Assets, 2013 UT 47, ¶ 17, and “equitable inquiries are designed to be flexible, taking into account all relevant factors in light of the particular circumstances,” Jones v. Layton/Okland, 2009 UT 39, ¶ 17, 214 P.3d 859. “Because of the fact-intensive nature of equitable doctrines,” we generally grant district courts “broader discretion in applying the law to the facts.” Volonte v. Domo, Inc., 2023 UT App 25, ¶ 28, 528 P.3d 327 (quotation simplified). For all of these reasons, we conclude that a district court’s determination that a litigant has (or has not) sustained prejudice as a result of another party’s unreasonable delay in bringing a claim is entitled to deference from appellate courts and is a determination that should be reviewed for abuse of discretion.

¶22 We discern no abuse of discretion in the district court’s determination that Bruce sustained prejudice as a result of Nicole’s eight-year delay in asserting her right to the Home. The court’s ruling was well-reasoned and supported by evidence in the record. As noted, the court relied on the fact that Bruce had lived in the Home the entire time, raised the parties’ children there, and—perhaps most importantly—had taken care of all financial obligations related to the Home, including all maintenance and improvements.

¶23      We acknowledge Nicole’s point that Bruce enjoyed certain advantages as a result of living in the Home. As Nicole points out, Bruce would have had to pay for housing whether he lived in the Home or elsewhere, and Bruce was apparently able to take advantage of the equity in the Home. These facts could have led the district court to make a different determination with regard to whether Bruce was prejudiced by Nicole’s delay. But the presence of conflicting evidence does not compel reversal here. Given the applicable standard of review, the relevant question is not whether we would have made the same determination had we been sitting as the assigned trial-level arbiters in this case; rather, the relevant question is whether we discern an abuse of discretion in the decision the assigned judge made. See Stichting Mayflower Mountain Fonds v. United Park City Mines Co., 2017 UT 42, ¶ 49, 424 P.3d 72 (stating that “[t]he question presented is not whether we would have granted” the motion in question, but instead “whether we find an abuse of discretion in the district judge’s decision to deny the motion”). Where the court’s decision is supported by evidence in the record and free from legal error, we will not disturb it. And that is the case here.

¶24      Nicole resists this conclusion on three additional grounds. First, she points out that Bruce also delayed in asserting a right to the Home, and she complains that the district court applied the principles of laches in an uneven manner. But on this point, the district court made a specific determination that, although Bruce delayed the invocation of his claim to the Home, Nicole did not sustain any prejudice as a result of Bruce’s delay. The court noted that, during the time between her “abandonment” of the Home and the filing of Bruce’s Petition, Nicole “did not have to satisfy any financial obligations related to” the Home, “including those required by the Decree.” The court’s determination was therefore supported by evidence in the record and, while a different judge might have reached a different conclusion on these facts, we cannot say that the court’s ruling was an abuse of its discretion.

¶25      Second, Nicole asserts that Bruce should not be able to take advantage of equitable doctrines such as laches because, in her view, Bruce had “unclean hands” due to his failure to pay alimony and child support, as required by the terms of the Decree, during the years he lived in the Home. See Goggin v. Goggin, 2013 UT 16, ¶ 60, 299 P.3d 1079 (“The doctrine of unclean hands expresses the principle that a party who comes into equity for relief must show that his conduct has been fair, equitable, and honest as to the particular controversy in issue.” (quotation simplified)). But while Nicole (successfully, as it turned out) asked the district court to award her back alimony and child support, she never asked the district court to apply the doctrine of unclean hands, and her arguments in this regard are therefore unpreserved for appellate review. See State v. Johnson, 2017 UT 76, ¶ 18, 416 P.3d 443 (“A failure to preserve an issue in the trial court generally precludes a party from arguing that issue in an appellate court, absent a valid exception.”).

¶26      Nicole does not explicitly ask us to utilize any of the exceptions to our preservation requirement, but she does assert that the district court erred by failing to “sua sponte” apply the unclean hands doctrine. Certainly, a court may invoke that doctrine without being asked to do so. See 30A C.J.S. Equity § 116 (2023) (“A defense of unclean hands need not be pleaded. The doctrine may be applied by the court sua sponte.”). But the fact that a court may invoke the doctrine in a sua sponte manner does not relieve a party of its otherwise-applicable obligation to preserve issues for appellate review. Indeed, construed liberally, Nicole’s argument—that the district court erred by failing to sua sponte invoke the unclean hands doctrine—is an assertion that the court plainly erred by not concluding that Bruce’s unclean hands barred him from accessing equitable doctrines like laches. But this assertion fails because plain error review no longer exists in civil cases like this one. Kelly v. Timber Lakes Prop. Owners Ass’n, 2022 UT App 23, ¶ 44, 507 P.3d 357. Because plain error review is unavailable, and because Nicole does not ask us to employ any other exception to our preservation requirement, the fact that her “unclean hands” argument is unpreserved requires us to reject her argument without reaching its merits.

¶27      Finally, Nicole asserts that Bruce’s Petition was barred by the doctrine of res judicata. Essentially, she asserts that, because the parties already litigated the issue of entitlement to the Home, and because the Decree awarded the Home to her, Bruce is barred from relitigating that issue now. Nicole correctly asserts that res judicata is not categorically inapplicable in divorce cases. See Throckmorton v. Throckmorton, 767 P.2d 121, 123 (Utah Ct. App. 1988) (“The doctrine of res judicata applies in divorce actions.”). But “Fi]n the family law context, our legislature has given district courts the authority to revisit many of the provisions contained in a typical divorce decree, including provisions pertaining to child custody, child support, alimony, property distribution, and debts.” See Robertson v. Stevens, 2020 UT App 29, ¶ 7, 461 P.3d 323 (emphasis added); see also Utah Code § 30-3-5(5). In this context, a party may seek post-judgment modification of the property distribution provisions of a divorce decree, but in order to succeed in that endeavor the party “must demonstrate that a substantial change in circumstances has occurred since the entry of the decree.” See Toone v. Toone, 952 P.2d 112, 114 (Utah Ct. App. 1998) (quotation simplified); see also Throckmorton, 767 P.2d at 123 (“[T]he application of res judicata is unique in divorce actions because of the equitable doctrine which allows courts to reopen alimony, support, or property distributions if the moving party can demonstrate a substantial change of circumstances since the matter was previously considered by the court.”).

¶28 Thus, modification of the Decree’s property distribution provisions is appropriate—even post-judgment and even taking into account principles of res judicata—so long as Bruce can demonstrate that, since entry of the Decree, there has been a substantial change of circumstances that would justify the court taking a second look at the terms of the distribution. And on that point, Nicole raises no challenge; indeed, in her reply brief on appeal she makes clear that she “is not arguing lack of changed circumstance,” and she affirmatively acknowledges that, in this case, “there have been changed circumstances.” Thus, the court had the authority to revisit the property distribution provisions of the Decree, and we reject Nicole’s argument to the contrary.

¶29    For these reasons, we perceive no abuse of discretion in the district court’s determination that Bruce was prejudiced by Nicole’s unreasonable delay in asserting her right to possess the Home. Because Nicole does not contest the other element of laches—unreasonable delay—both elements are met. We therefore affirm the district court’s determination that the equitable doctrine of laches barred Nicole’s claim to the Home, and on that basis we affirm the court’s grant of Bruce’s Petition and its accompanying order awarding the Home to Bruce.

II

¶30      Next, we address Nicole’s challenge to the court’s award of attorney fees to Bruce, incurred in connection with litigating issues related to the Home. On this point, we find merit in Nicole’s arguments, and we therefore reverse the court’s fee award.

¶31 Bruce’s fee request was grounded in Utah’s bad-faith attorney-fees statute, which empowers courts to “award reasonable attorney fees to a prevailing party if the court determines that the action or defense to the action was without merit and not brought or asserted in good faith.” See Utah Code § 78B-5-825(1). Before awarding fees under this section, a district court—in addition to determining that the requesting party is the “prevailing party”—must make specific findings that the opposing party’s claim is (1) “without merit” and (2) “not brought or asserted in good faith.” Rocky Ford Irrigation Co. v. Kents Lake Reservoir Co., 2020 UT 47, ¶ 76, 469 P.3d 1003 (quotation simplified). These two findings “must be made independently” from one another. Still Standing Stable, LLC v. Allen, 2005 UT 46, ¶ 12, 122 P.3d 556. Nicole asserts that the court failed to make a specific finding that her claims and defenses regarding the Home were without merit, and she maintains that the fee award was therefore improper. We agree with Nicole.

¶32      While the court made a specific finding that Nicole’s claims and defenses regarding the Home were asserted in “bad faith” and on a “retaliatory” basis, it made no specific finding that Nicole’s claims were without merit. Bruce acknowledges the lack of an express finding on this point, but he asserts that we can infer such a finding from (a) the fact that the court rejected Nicole’s claims on their merits (i.e., that she lost) and (b) the court’s specific bad-faith finding. We see the matter differently.

¶33      First, a determination that a party lost on the merits is not equivalent to a determination that the party’s claims were without merit for purposes of the bad-faith statute. “Without merit” in this context means something worse than just having a losing claim. Indeed, our supreme court has stated that the term “without merit,” as used in the bad-faith statute, “implies bordering on frivolity,” with the term “frivolous” meaning “of little weight or importance having no basis in law or fact.” Cady v. Johnson, 671 P.2d 149, 151 (Utah 1983) (quotation simplified); see also Migliore v. Livingston Fin. LLC, 2015 UT 9, ¶ 31, 347 P.3d 394 (“To determine whether a claim is without merit, we look to whether it was frivolous or of little weight or importance having no basis in law or fact.” (quotation simplified)). And on at least one occasion, our supreme court has concluded that a losing claim was not “without merit,” because the claim—even though it was not the prevailing claim—involved a question of “first impression” and “had a basis in law and fact.” See In re Olympus Constr. LC, 2009 UT 29, ¶ 31, 215 P.3d 129. We therefore may not infer, merely from the district court’s rejection of Nicole’s claims on their merits, that the court considered those claims to be so meritless as to be “bordering on frivolity.” See Cady, 671 P.2d at 151.

¶34 Nor may we draw that inference from the court’s “bad faith” finding. As noted already, the two separate findings— without merit and bad faith—“must be made independently” from one another. Still Standing Stable, 2005 UT 46, ¶ 12. And this makes sense, because the two elements of the statutory test are aimed at two different things. The first element (“without merit”) is concerned with the objective quality of the claim itself, see Migliore, 2015 UT 9, ¶ 31, while the second element (“bad faith”) is concerned with the party’s subjective motivation for bringing it, see Blum v. Dahl, 2012 UT App 198, ¶ 9, 283 P.3d 963 (“A finding of bad faith turns on a factual determination of a party’s subjective intent.” (quotation simplified)). Both elements must be met before a court may award attorney fees under the bad-faith statute. And the presence of one element does not necessarily imply the presence of the other.

¶35 For instance, a party may have a completely frivolous claim that lacks any basis in law or fact, but that party may not be aware of the claim’s lack of merit at the time it was filed. In that situation, the first element of the test is met but, depending on the circumstances, the second might not be. Conversely, a party may have a solid (albeit losing) claim that has a basis in both law and fact, but the party might be bringing that claim for abusive or improper reasons. In that situation, the second element might be met but the first one wouldn’t be. In the case at hand, our review of the record indicates that this might be the situation: Nicole had in her corner a provision in the Decree awarding her the Home, and Bruce had not taken any action to seek modification of that provision in eight years. Given these facts, it is certainly not obvious to us that Nicole’s claims and defenses regarding the Home were “bordering on frivolity,” see Cady, 671 P.2d at 151, even if we take at face value the court’s finding that Nicole brought the claims in a bad-faith effort to retaliate against Bruce.

¶36 Accordingly, we conclude that the absence of any specific finding that Nicole’s claims were without merit renders the district court’s attorney fees award improper.[1]

CONCLUSION

¶37 We discern no abuse of discretion in the district court’s determination that laches barred Nicole’s claims and defenses regarding the Home, and on that basis we affirm the district court’s grant of Bruce’s Petition and its accompanying order awarding the Home to Bruce. But due to the absence of any finding that Nicole’s claims and defenses were without merit, we reverse the court’s award of attorney fees to Bruce pursuant to the bad-faith statute, and we vacate the part of the court’s judgment that required Nicole to pay $7,390.67 in fees to Bruce.

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


[1] Again invoking the bad-faith statute, Bruce asks us to award him attorney fees he incurred on appeal. We must reject this request because we have reversed the award of attorney fees in the district court. Moreover, we do not consider Nicole’s appellate arguments to have been brought in bad faith.

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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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House Bill 140 (HB0140 (utah.gov)), “Amendments to Custody and Parent-Time”

Today’s post on proposed family law legislation under consideration during the 2024 Utah legislative session is House Bill 140 (HB0140 (utah.gov)), “Amendments to Custody and Parent-Time”.

This bill, according to its own description:

  • provides that a substantial and material change in circumstances for a custody order includes a parent residing with an individual, or providing the individual with access to the parent’s child, when the individual has been convicted of certain crimes;
  • amends the advisory guidelines for a custody and parent-time arrangement to allow for parental notification when a parent is residing with an individual, or providing the individual with access to the parent’s child, and the individual has been convicted of certain crimes;
  • amends the advisory guidelines for a custody and parent-time arrangement in regard to notification of a parent in the event of a medical emergency; and
  • makes technical and conforming changes.

It would amend the following code sections, if passed into law:

Utah Code § 30-3-10.4

Utah Code § 30-3-33

My thoughts on this bill:

If this bill passed, what effect would it have? A parent discovers that the person he/she resides with or to whom the parent has “provide access to his/her child(ren)” meets one or more of the child abuse/child sexual abuse factors and has to notify the other parent of this fact? So what? Unless the person is barred from contact with children, then unless that person has abused, attempted to abuse, or threatened to abuse the child(ren), what can legally be done? A child being in the presence of a child abuse ex-con is not itself a “substantial and material change of circumstances” justifying a modification of child custody or parent-time, in my view. We can’t keep punishing someone repeatedly for the same crime.

And the definition of “sex offender” gets broader all the time. You can get on the sex offender list for the silliest of things (I know a guy who went streaking in college and is on the sex offender list—it was stupid of him to go streaking, but a little kid saw him from a neighboring window and that’s what got him on the sex offender list).

Yes, living with a child abuse ex-con or providing a child abuse ex-con “access to the child(ren)” is poor judgment, but without the children being harmed or in danger of being harmed, there’s not enough to go on to do anything.

But I get it. If I were a divorced or single parent, I wouldn’t want the other parent living with a convicted sex offender either (assuming the offense was a serious one, and not one of those “he/she is on the sex offender list for public urination” kind of convictions).

It’s not a matter of how I feel about sex offenders (real sex offenses are vile), it’s whether the proposed law would do any good. I don’t think it would. Especially not in the legal system we have now. What good one perceives such a law would do and what it would actually do are quite different, in my view.

I don’t know a great deal about the sex offender registry law and other post-conviction laws. Are convicted sex offenders required to notify prospective boyfriends/girlfriends or spouses that they are convicted sex offenders currently? It is my understanding that they do not. If they do, then H.B. 140 may have stronger rational footing than I believe. If not, then the bill doesn’t appear to make much legal sense to me (meaning: I don’t see what good it will actually do, no matter how good it may feel to propose such a law).

Even if the law were passed, it would not likely be the basis for a modification of a child custody or parent-time order. Living with someone who is a convicted sex offender alone is simply not proof of any harm or sufficient danger to a child (just as living with one convicted of a violent crime, drug use, drug dealing, or other crimes is not). I don’t know the real statistics about the rate of recidivism for sex offenders, but even if we assume for the sake of discussion that it’s very high, that alone would not, in my view, likely be seen by a court as a reason to change custody. Like it or not.

If a parent resided with a sex offender with a history of repeated offenses, that might qualify as too great a risk to a child, but if we’re talking one conviction (maybe even two, sadly), that may not be enough to establish the sex offender as a danger to the children. My opinion is not based upon sympathy for sex offenders but on what I believe the courts would do in the situation you describe. This is why you’ll notice that there has not been a bill proposed that prevents a single parent or divorced parent from marrying or living with a convicted sex offender. I believe it would be found unconstitutional, that it would be found to unduly punish those who don’t re-offend.

Besides, how would one ever prove that a parent who resides with a convicted sex offender or provides him/her with access to that parent’s knows that the individual is a sex offender or worse, “an offense that is substantially similar to” a sex offense (see lines 57 and 58 of the bill, emphasis mine).

No matter how good the intent behind H.B. 140 may be, I foresee far too many adverse unintended consequences and abuses of such a law.

AMENDMENTS TO CUSTODY AND PARENT-TIME

33     Be it enacted by the Legislature of the state of Utah:
34          Section 1. Section 30-3-10.4 is amended to read:
35          30-3-10.4. Modification or termination of order.
36          (1) The court has continuing jurisdiction to make subsequent changes to modify:
37          (a) custody of a child if there is a showing of a substantial and material change in
38     circumstances since the entry of the order; and
39          (b) parent-time for a child if there is a showing that there is a change in circumstances
40     since the entry of the order.
41          (2) A substantial and material change in circumstances under Subsection (1)(a)
42     includes a showing by a parent that the other parent:
43          (a) resides with an individual or provides an individual with access to the child; and
44          (b) knows that the individual:
45          (i) is required to register as a sex offender or a kidnap offender for an offense against a
46     child under Title 77, Chapter 41, Sex and Kidnap Offender Registry;
47          (ii) is required to register as a child abuse offender under Title 77, Chapter 43, Child
48     Abuse Offender Registry; or
49          (iii) has been convicted of:
50          (A) a child abuse offense under Section 76-5-10976-5-109.276-5-109.376-5-114,
51     or 76-5-208;
52          (B) a sexual offense against a child under Title 76, Chapter 5, Part 4, Sexual Offenses;
53          (C) an offense for kidnapping or human trafficking of a child under Title 76, Chapter 5,
54     Part 3, Kidnapping, Trafficking, and Smuggling;
55          (D) a sexual exploitation offense against a child under Title 76, Chapter 5b, Sexual
56     Exploitation Act; or

57          (E) an offense that is substantially similar to an offense under Subsections
58     (2)(b)(iii)(A) through (D).
59          [(1)(3) On the petition of one or both of the parents, or the joint legal or physical
60     custodians if they are not the parents, the court may, after a hearing, modify or terminate an
61     order that established joint legal custody or joint physical custody if:
62          (a) the verified petition or accompanying affidavit initially alleges that admissible
63     evidence will show that the circumstances of the child or one or both parents or joint legal or
64     physical custodians have materially and substantially changed since the entry of the order to be
65     modified;
66          (b) a modification of the terms and conditions of the order would be an improvement
67     for and in the best interest of the child; and
68          (c) (i) both parents have complied in good faith with the dispute resolution procedure
69     in accordance with Subsection 30-3-10.3(7); or
70          (ii) if no dispute resolution procedure is contained in the order that established joint
71     legal custody or joint physical custody, the court orders the parents to participate in a dispute
72     resolution procedure in accordance with Subsection 30-3-10.2(5) unless the parents certify that,
73     in good faith, they have used a dispute resolution procedure to resolve their dispute.
74          [(2)(4) (a) In determining whether the best interest of a child will be served by either
75     modifying or terminating the joint legal custody or joint physical custody order, the court shall,
76     in addition to other factors the court considers relevant, consider the factors outlined in Section
77     30-3-10 and Subsection 30-3-10.2(2).
78          (b) A court order modifying or terminating an existing joint legal custody or joint
79     physical custody order shall contain written findings that:
80          (i) a material and substantial change of circumstance has occurred; and
81          (ii) a modification of the terms and conditions of the order would be an improvement
82     for and in the best interest of the child.
83          (c) The court shall give substantial weight to the existing joint legal custody or joint
84     physical custody order when the child is thriving, happy, and well-adjusted.
85          [(3)(5) The court shall, in every case regarding a petition for termination of a joint
86     legal custody or joint physical custody order, consider reasonable alternatives to preserve the
87     existing order in accordance with Subsection 30-3-10(3). The court may modify the terms and

88     conditions of the existing order in accordance with Subsection 30-3-10(8) and may order the
89     parents to file a parenting plan in accordance with this chapter.
90          [(4)(6) A parent requesting a modification from sole custody to joint legal custody or
91     joint physical custody or both, or any other type of shared parenting arrangement, shall file and
92     serve a proposed parenting plan with the petition to modify in accordance with Section
93     30-3-10.8.
94          [(5)(7) If the court finds that an action under this section is filed or answered
95     frivolously and in a manner designed to harass the other party, the court shall assess attorney
96     fees as costs against the offending party.
97          [(6)(8) If an issue before the court involves custodial responsibility in the event of
98     deployment of one or both parents who are service members, and the service member has not
99     yet been notified of deployment, the court shall resolve the issue based on the standards in
100     Sections 78B-20-306 through 78B-20-309.
101          Section 2. Section 30-3-33 is amended to read:
102          30-3-33. Advisory guidelines for a custody and parent-time arrangement.
103          (1) In addition to the parent-time schedules provided in Sections 30-3-35 and
104     30-3-35.5, the following advisory guidelines are suggested to govern [all parent-time
105     arrangementsa custody and parent-time arrangement between parents.
106          [(1)(2) [Parent-time schedulesA parent-time schedule mutually agreed upon by both
107     parents [areis preferable to a court-imposed solution.
108          [(2)(3) [TheA parent-time schedule shall be used to maximize the continuity and
109     stability of the child’s life.
110          [(3)(4) [Special consideration shall be given by each parentEach parent shall give
111     special consideration to make the child available to attend family functions including funerals,
112     weddings, family reunions, religious holidays, important ceremonies, and other significant
113     events in the life of the child or in the life of either parent which may inadvertently conflict
114     with the parent-time schedule.
115          [(4)(5) (a) The court shall determine the responsibility for the pick up, delivery, and
116     return of the child [shall be determined by the court] when the parent-time order is entered[,
117     and may be changed].
118          (b) The court may change the responsibility described in Subsection (5)(a) at any time

119     a subsequent modification is made to the parent-time order.
120          [(5)(c) If the noncustodial parent will be providing transportation, the custodial parent
121     shall:
122          (i) have the child ready for parent-time at the time the child is to be picked up [and
123     shall]; and
124          (ii) be present at the custodial home or [shall] make reasonable alternate arrangements
125     to receive the child at the time the child is returned.
126          [(6)(d) If the custodial parent will be transporting the child, the noncustodial parent
127     shall:
128          (i) be at the appointed place at the time the noncustodial parent is to receive the child[,
129     and]; and
130          (ii) have the child ready to be picked up at the appointed time and place[,] or have
131     made reasonable alternate arrangements for the custodial parent to pick up the child.
132          [(7)(6) [RegularA parent may not interrupt regular school hours [may not be
133     interrupted] for a school-age child for the exercise of parent-time [by either parent].
134          [(8)(7) The court may:
135          (a) make alterations in the parent-time schedule to reasonably accommodate the work
136     schedule of both parents [and may]; and
137          (b) increase the parent-time allowed to the noncustodial parent but may not diminish
138     the standardized parent-time provided in Sections 30-3-35 and 30-3-35.5.
139          [(9)(8) The court may make alterations in the parent-time schedule to reasonably
140     accommodate the distance between the parties and the expense of exercising parent-time.
141          [(10)(9) [Neither parent-time nor child support is to be withheld due to eitherA
142     parent may not withhold parent-time or child support due to the other parent’s failure to comply
143     with a court-ordered parent-time schedule.
144          [(11)(10) (a) The custodial parent shall notify the noncustodial parent within 24 hours
145     of receiving notice of all significant school, social, sports, and community functions in which
146     the child is participating or being honored[, and the].
147          (b) The noncustodial parent [shall beis entitled to attend and participate fully in the
148     functions described in Subsection (10)(a).
149          [(12)(c) The noncustodial parent shall have access directly to all school reports

150     including preschool and daycare reports and medical records [and shall be notified immediately
151     by the custodial parent].
152          (d) A parent shall immediately notify the other parent in the event of a medical
153     emergency.
154          [(13)(11) Each parent shall provide the other with the parent’s current address and
155     telephone number, email address, and other virtual parent-time access information within 24
156     hours of any change.
157          [(14)(12) (a) Each parent shall permit and encourage, during reasonable hours,
158     reasonable and uncensored communications with the child, in the form of mail privileges and
159     virtual parent-time if the equipment is reasonably available[, provided that if the parties].
160          (b) If the parents cannot agree on whether the equipment is reasonably available, the
161     court shall decide whether the equipment for virtual parent-time is reasonably available[,by
162     taking into consideration:
163          [(a)(i) the best interests of the child;
164          [(b)(ii) each parent’s ability to handle any additional expenses for virtual parent-time;
165     and
166          [(c)(iii) any other factors the court considers material.
167          [(15)(13) (a) Parental care [shall beis presumed to be better care for the child than
168     surrogate care [and the].
169          (b) The court shall encourage the parties to cooperate in allowing the noncustodial
170     parent, if willing and able to transport the children, to provide the child care.
171          (c) Child care arrangements existing during the marriage are preferred as are child care
172     arrangements with nominal or no charge.
173          [(16)(14) Each parent shall:
174          (a) provide all surrogate care providers with the name, current address, and telephone
175     number of the other parent [and shall]; and
176          (b) provide the noncustodial parent with the name, current address, and telephone
177     number of all surrogate care providers unless the court for good cause orders otherwise.
178          [(17)(15) (a) Each parent [shall beis entitled to an equal division of major religious
179     holidays celebrated by the parents[, and the].
180          (b) The parent who celebrates a religious holiday that the other parent does not

181     celebrate shall have the right to be together with the child on the religious holiday.
182          [(18)(16) If the child is on a different parent-time schedule than a sibling, based on
183     Sections 30-3-35 and 30-3-35.5, the parents should consider if an upward deviation for
184     parent-time with all the minor children so that parent-time is uniform between school aged and
185     nonschool aged children, is appropriate.
186          [(19)(17) (a) When one or both parents are servicemembers or contemplating joining
187     a uniformed service, the parents should resolve issues of custodial responsibility in the event of
188     deployment as soon as practicable through reaching a voluntary agreement pursuant to Section
189     78B-20-201 or through court order obtained pursuant to Section 30-3-10.
190          (b) [ServicemembersService members shall ensure their family care plan reflects
191     orders and agreements entered and filed pursuant to Title 78B, Chapter 20, Uniform Deployed
192     Parents Custody, Parent-time, and Visitation Act.
193          (18) A parent shall immediately notify the other parent if:
194          (a) the parent resides with an individual or provides an individual with access to the
195     child; and
196          (b) the parent knows that the individual:
197          (i) is required to register as a sex offender or a kidnap offender for an offense against a
198     child under Title 77, Chapter 41, Sex and Kidnap Offender Registry;
199          (ii) is required to register as a child abuse offender under Title 77, Chapter 43, Child
200     Abuse Offender Registry; or
201          (iii) has been convicted of:
202          (A) a child abuse offense under Section 76-5-10976-5-109.276-5-109.376-5-114,
203     or 76-5-208;
204          (B) a sexual offense against a child under Title 76, Chapter 5, Part 4, Sexual Offenses;
205          (C) an offense for kidnapping or human trafficking of a child under Title 76, Chapter 5,
206     Part 3, Kidnapping, Trafficking, and Smuggling;
207          (D) a sexual exploitation offense against a child under Title 76, Chapter 5b, Sexual
208     Exploitation Act; or
209          (E) an offense that is substantially similar to an offense under Subsections
210     (18)(b)(iii)(A) through (D).

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

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Clark v. Clark – 2023 UT App 111 – divorce, exhibits, dissipation

Clark v. Clark – 2023 UT App 111

THE UTAH COURT OF APPEALS

SUSAN JEANNE CLARK,

Appellee,

v.

RICHARD LEE CLARK,

Appellant.

Opinion

No. 20210713-CA

Filed September 28, 2023

Fourth District Court, Heber Department

The Honorable Jennifer A. Brown

No. 184500153

Karra J. Porter and Kristen C. Kiburtz, Attorneys for Appellant

Julie J. Nelson, Attorney for Appellee

JUDGE AMY J. OLIVER authored this Opinion, in which JUDGES

MICHELE M. CHRISTIANSEN FORSTER and RYAN D. TENNEY

concurred.

OLIVER, Judge:

¶1        Richard Lee Clark appeals from the district court’s decision following a two-day divorce trial. Clark challenges several aspects of the court’s ruling, including a discovery sanction for his failure to timely disclose his trial exhibits under rule 26 of the Utah Rules of Civil Procedure; findings relating to his claim that his ex-wife, Susan Jeanne Clark, dissipated the marital estate; and the court’s division of the marital property. We affirm the district court’s ruling with the exception of one aspect of the district court’s marital property determination, which we vacate and remand for additional findings.

BACKGROUND

¶2        Richard and Susan[1] married in 2002, when Richard was in his sixties and Susan was in her fifties. Richard was retired from military service and from employment as an attorney with the Department of Justice. Susan owned a wallpaper business when she met Richard but quit working shortly after they married. For the next six years, Richard and Susan lived off Richard’s retirement income from both the Army and the Department of Justice.

¶3        In 2008, Richard came out of retirement to work for a government contractor in Afghanistan, where he lived for thirty-eight months. During that time, Richard’s retirement and employment income of $814,627 was deposited into a joint account that Susan controlled. Richard returned home to find “probably about $100,000 . . . had been saved” in the joint bank account—much less than he expected—yet he said nothing to Susan at that time.

¶4        Three years after his return, Richard moved into the basement of the marital home. The following year, in 2016, Susan transferred approximately $78,000 from their joint account into her personal account, prompting Richard to confront her about what he viewed as missing money from his time in Afghanistan. Two years later, in 2018, Susan filed for divorce. Shortly afterward, Richard purchased a Harley-Davidson motorcycle with financing, which he paid off in 2020.

¶5        At the time of their divorce, Richard and Susan owned two real properties—a condo in Norfolk, Virginia (Mooring Drive), and a home in Kamas, Utah (Ross Creek). Richard had purchased Mooring Drive before the marriage for approximately $205,000. In 2003, Richard added Susan to the title of Mooring Drive, which allowed her to vote at the condominium association’s meetings and to join the board. The following year, Richard and Susan used equity loans on Mooring Drive to finance the purchase and construction of Ross Creek. From 2009—when Susan moved to Utah and Richard was in Afghanistan—until June 2019, Richard rented Mooring Drive out to others and the revenues were deposited into his separate account that was designated to pay for the property’s expenses.

¶6        During their marriage, the parties took out an equity loan on Ross Creek that matured, along with one of the equity loans from Mooring Drive, in 2019. With the divorce still pending, Susan agreed to refinance Ross Creek’s mortgage to pay off the two equity loans that were due, but only if Richard would stipulate that Mooring Drive and Ross Creek were marital property and were subject to equitable division in their pending divorce. Richard agreed, and the parties stipulated that “the Ross Creek and Mooring Drive properties shall remain marital property and shall be subject to equitable division in the parties’ divorce notwithstanding that the Ross Creek home and Mooring Drive property will no longer be jointly titled.”

¶7        In April 2019, the Mooring Drive tenants’ lease expired. Richard decided he could only offer the tenants a month-to-month lease until his divorce was over. When the tenants declined to renew and moved out in June, Richard withdrew $30,000 from the joint bank account, claiming that he needed the funds to cover Mooring Drive’s expenses. After a hearing, the court entered temporary orders in December 2019, permitting Richard to access equity in Ross Creek to pay off debt on Mooring Drive but denying his “request for financial relief based on the loss of rental income because [Richard] ha[d] not made any attempt to secure new renters.”

¶8        Trial was originally scheduled for June 2020, but when the COVID-19 pandemic hit and courts were required to hold bench trials virtually, Richard declined to proceed with a virtual trial, and it was continued without a date. In February 2021, the court held a pretrial scheduling conference and rescheduled the trial for May 2021. The court’s pretrial order stated the parties must produce pretrial disclosures on or before April 26, 2021, pursuant to rule 26(a)(5)(B) of the Utah Rules of Civil Procedure.

¶9        Richard missed the deadline. A week after it passed, he requested a continuance to hire trial counsel. Richard had been representing himself as a pro se litigant despite being eighty-four years old and not having practiced law since 1988. According to Richard, health issues arose that made him “no longer physically and mentally capable of representing” himself. The court granted the motion, rescheduling the trial for June. The new deadline for pretrial disclosures became May 24, but Richard did not submit his pretrial disclosures until June 10—eleven days before trial.

¶10      The two-day trial began with Susan’s objection to Richard’s untimely pretrial disclosures. Susan contended that Richard had “ample opportunity” to produce his pretrial disclosures given the multiple continuances of the trial. In response, Richard claimed his failure to meet the disclosure deadline was harmless because he had previously produced as discovery responses the 339 pages of financial documents—including check registers, paystubs from 2008 to 2009, and bank account information from 2011 to 2012— that he sought to admit as exhibits 2 through 8. Yet Richard did not file certificates of service for those responses, and neither party’s counsel could confirm whether Richard had previously sent the documents in exhibits 2 through 8 to Susan, leaving the district court with only Richard’s testimony to support the claim that he had previously disclosed the exhibits. The district court sustained Susan’s objection as to exhibits 2 through 8, excluding them from trial.

¶11      Both Susan and Richard testified at trial. Susan testified Richard had transferred $30,000 from their joint account to his personal account in June 2019 and contended she was entitled to half of that amount. Susan also testified about her exhibits that provided recent balances in her bank and retirement accounts.

¶12      On cross-examination, Susan admitted she had not looked for work and was unemployed despite the court’s urging in 2020 for her to seek employment. Richard then peppered Susan about numerous expenditures during his time in Afghanistan, to which Susan replied that it “was a number of years ago” and she “ha[d] no recollection at all” of the transactions. Susan did state, however, that when Richard left for Afghanistan, she recalled they “had very large credit card balances” that Richard instructed her “to start paying off” while he was away.

¶13 First testifying as Susan’s witness, Richard answered questions about some of the marital property. He testified about a recent appraisal of Mooring Drive that valued it at $390,000, his three life insurance policies that all list Susan as the beneficiary, and his purchase of the Harley-Davidson in May 2019. Susan then introduced a pleading Richard had filed with the court in November 2019 that stated, in relevant part, he had “owned three motorcycles, selling the last one when [he] moved to Norfolk,” but he has “never ridden a Harley-Davidson.” Richard replied that he had “misstated the fact,” both in that pleading and at a hearing the same month when he told the court he did not own a Harley-Davidson. Richard testified he should receive three-fourths of the equity in Mooring Drive because he purchased it before the marriage. Unable to provide a figure for what the property was worth when he married Susan, Richard claimed that “the[] prices have gone up and gone down a great deal” since their marriage, but his best guess was that Mooring Drive appreciated from $205,000 to $350,000 between 2000 and 2002. Richard continued to do some impromptu math on the stand to clarify how much equity he felt he was owed, asserting that since Mooring Drive was recently appraised at $390,000 and had been worth $350,000 in 2002—by his best guess—there is $40,000 of equity for them to divide, but then he admitted such valuation “is something I’m just not knowledgeable about.”

¶14      As his own witness, Richard testified about Susan’s alleged dissipation during his time in Afghanistan. Richard’s excluded exhibits went to the issue of dissipation, so without the financial documents from that period, Richard sought to prove Susan “dissipated money while [he] was in Afghanistan” through his testimony about his earnings and typical expenses during that time frame. Using the excluded exhibits to refresh his recollection, Richard estimated their monthly expenses before he left were approximately $10,000 to $11,000. Richard also challenged Susan’s testimony about credit card balances, claiming that “there weren’t any large credit card balances before [he] left.”

¶15      At the conclusion of trial, the district court asked both parties to submit proposed findings of fact and conclusions of law in lieu of closing arguments. After issuing an oral ruling, the district court memorialized its decision in written findings of fact and conclusions of law. The court found that Richard’s “testimony was insufficient to establish his [dissipation] claim” and that Richard had “failed to meet his burden of demonstrating dissipation.” The court also found “problems with the credibility of both parties,” specifically finding that Susan’s “credibility was lacking with regards to the dissipation issue” and Richard’s “credibility was lacking with regards to his motorcycle purchase.” Susan was awarded Ross Creek’s equity, and Richard was awarded Mooring Drive’s. The court awarded Susan $2,500 per month in alimony and an offset of $43,474 (from Richard’s purchase of the Harley-Davidson and his $30,000 withdrawal from the joint account) “to achieve an equitable division of the estate.” The court found Richard “withdrew $30,000 from the joint account without [Susan’s] knowledge or consent and deposited it into his own personal account,” but it made no findings as to how Richard spent the $30,000.

ISSUES AND STANDARDS OF REVIEW

¶16      Richard raises three main issues for our review. First, Richard challenges the district court’s exclusion of his exhibits for his failure to comply with rule 26(a)(5) of the Utah Rules of Civil Procedure. A district court “has broad discretion regarding the imposition of discovery sanctions,” and when we apply “the abuse of discretion standard to the district court’s imposition of a particular sanction, we give the district court a great deal of latitude.” Bodell Constr. Co. v. Robbins, 2009 UT 52, ¶ 35, 215 P.3d 933 (cleaned up).

¶17 Second, Richard contends the district court erred in its application of the burden of proof on Richard’s dissipation claim. A district court’s “allocation of the burden of proof is . . . a question of law that we review for correctness.” Salt Lake City Corp. v. Jordan River Restoration Network, 2018 UT 62, ¶ 20, 435 P.3d 179.

¶18      Finally, Richard challenges the district court’s division of the property, including the court’s finding that the marital estate included Mooring Drive and the Harley-Davidson, and its decision to deduct from the marital estate the $30,000 Richard withdrew from the parties’ joint account. A district court “has considerable discretion considering property division in a divorce proceeding, thus its actions enjoy a presumption of validity,” and “we will disturb the district court’s division only if there is a misunderstanding or misapplication of the law indicating an abuse of discretion.” Beckham v. Beckham, 2022 UT App 65, ¶ 6, 511 P.3d 1253 (cleaned up).

ANALYSIS

I. Pretrial Disclosures

¶19      Richard asserts the district court abused its discretion in excluding his exhibits 2 through 8 for failure to comply with rule 26(a)(5) of the Utah Rules of Civil Procedure because he “produced the documents that comprised the exhibits” during discovery and any “technical non-compliance with that rule” was “harmless.” We disagree.

¶20      Rule 26 governs “disclosure and discovery” in civil matters and requires parties to provide “a copy of each exhibit, including charts, summaries, and demonstrative exhibits, unless solely for impeachment, separately identifying those which the party will offer and those which the party may offer . . . . at least 28 days before trial.” Utah R. Civ. P. 26(a)(5). A party who fails to timely disclose exhibits “may not use the undisclosed witness, document, or material at . . . trial unless the failure is harmless or the party shows good cause for the failure.” Id. R. 26(d)(4). A district court “has broad discretion in selecting and imposing sanctions for discovery violations under rule 26,” and “appellate courts may not interfere with such discretion unless there is either an erroneous conclusion of law or no evidentiary basis for the district court’s ruling.” Wallace v. Niels Fugal Sons Co., 2022 UT App 111, ¶ 26, 518 P.3d 184 (cleaned up), cert. denied, 525 P.3d 1267 (Utah 2023).

¶21      Richard does not dispute that he failed to timely disclose exhibits 2 through 8. Instead, Richard argues he produced the documents in those exhibits to Susan in earlier discovery responses, so his failure to timely file pretrial disclosures was harmless, and he further argues that it was Susan’s burden to prove she had not received them. In response, Susan asserts it was Richard’s burden, not hers, to prove that he produced the documents earlier in discovery, and the failure to file his pretrial disclosures pursuant to rule 26(a)(5) was not harmless. We agree with Susan on both fronts.

¶22 First, “the burden to demonstrate harmlessness or good cause is clearly on the party seeking relief from disclosure requirements.” Dierl v. Birkin, 2023 UT App 6, ¶ 32, 525 P.3d 127 (cleaned up), cert. denied, 527 P.3d 1107 (Utah 2023). Second, Richard failed to carry his burden of demonstrating harmlessness. Although Richard “assured [his counsel] that he [had] produced records related to this 2008-to-2012 timeframe,” he did not file the required certificates of service. See Utah R. Civ. P. 26(f) (requiring a party to file “the certificate of service stating that the disclosure, request for discovery, or response has been served on the other parties and the date of service”). Thus, Richard failed to prove that the documents had previously been produced.

¶23 But even if he had proved prior production, excusing pretrial disclosures if the documents were produced earlier in discovery would “eviscerate[] the rule that explicitly requires parties to” serve a copy of the documents they intend to use “in their case-in-chief at trial.” Johansen v. Johansen, 2021 UT App 130, ¶¶ 19, 26, 504 P.3d 152 (rejecting argument to follow the spirit of rule 26 rather than “the plain language of rule 26” regarding pretrial disclosures); see also Utah R. Civ. P. 26(a)(5)(A)(iv) (requiring pretrial disclosure of “each exhibit” the party will or may offer at trial). And expecting a party to sort through hundreds, if not thousands, of pages of documents that were produced earlier by the other side during discovery and then expecting the party to predict which ones the opposing party might seek to admit at trial would be harmful and would violate the intent of rule 26.

¶24 Ultimately, “a court’s determination with respect to harmlessness . . . . is a discretionary call,” and our review of it “is necessarily deferential.” Johansen, 2021 UT App 130, ¶ 11 (cleaned up). Thus, the district court was well within its “broad discretion” to exclude Richard’s exhibits 2 through 8 under these circumstances. See Wallace, 2022 UT App 111, ¶ 26 (cleaned up).

II. Dissipation

¶25 Richard claims the district court erred in finding that he failed to meet the burden of proof on his dissipation claim. We disagree.

¶26      “The marital estate is generally valued at the time of the divorce decree or trial.” Goggin v. Goggin, 2013 UT 16, ¶ 49, 299 P.3d 1079 (cleaned up). “But where one party has dissipated an asset,” the “trial court may, in the exercise of its equitable powers,” “hold one party accountable to the other for the dissipation.” Id. (cleaned up). A court’s inquiry into a dissipation claim may consider “a number of factors,” such as “(1) how the money was spent, including whether funds were used to pay legitimate marital expenses or individual expenses; (2) the parties’ historical practices; (3) the magnitude of any depletion; (4) the timing of the challenged actions in relation to the separation and divorce; and (5) any obstructive efforts that hinder the valuation of the assets.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 69, 507 P.3d 385 (cleaned up), cert. denied, 525 P.3d 1259 (Utah 2022).

¶27 The burden of proof for dissipation initially falls on the party alleging it. See Parker v. Parker, 2000 UT App 30, ¶ 15, 996 P.2d 565 (stating that a party seeking to assert dissipation must make an “initial showing of apparent dissipation”). The district court correctly concluded that Richard bore the “burden of demonstrating dissipation.” To meet the “initial showing of apparent dissipation,” the party alleging dissipation must first show evidence of dissipation. Id. ¶¶ 13, 15. Only after “present[ing] the trial court with evidence tending to show that [Susan] had dissipated marital assets” does the burden shift to Susan “to show that the funds were not dissipated, but were used for some legitimate marital purpose.” Id. ¶ 13.

¶28 Richard’s documentary evidence on this issue had been excluded by the court, so the only evidence he presented was his testimony in 2021 that his income while in Afghanistan from 2008 to 2012 exceeded the estimated historical marital expenses from before 2008, some thirteen years earlier. Richard asserts that his testimony alone should suffice for an initial showing of dissipation. In Parker v. Parker, 2000 UT App 30, ¶ 15, 996 P.2d 565, the husband “presented the trial court with evidence” that detailed how the wife had dissipated marital assets—exact beginning and ending balances for eight bank accounts, the marital expenses during the time in question, and specific checks the wife wrote to herself—thus shifting the burden to the wife. Id. ¶ 13. But Richard, like the wife in Parker, only “testified in conclusory and cryptic terms,” and thus “wholly failed to meet [his] burden.” Id. ¶ 14.

¶29      Therefore, the district court was well within its discretion to decide that Richard’s uncorroborated testimony about Susan’s spending that occurred many years before either party contemplated divorce[2] was insufficient evidence to meet his initial burden of proving dissipation. Accordingly, the district court did not err in its finding that Richard failed to meet his burden of proof on the dissipation claim.

III. Marital Property

¶30      Richard presents three challenges to the district court’s division of the marital property. First, Richard asserts he is entitled to his premarital contribution to Mooring Drive. Second, he alleges the Harley-Davidson he purchased during the pendency of the divorce is his separate property. Third, Richard claims the court should not have deducted from the marital estate the $30,000 that he withdrew from the joint account in June 2019.

We affirm the district court’s decision on Richard’s first two challenges and vacate the decision on the third, remanding the matter for additional findings.

A.        Mooring Drive

¶31      Although the district court awarded Richard the equity in Mooring Drive when it divided the marital estate, it did not also award Richard any premarital equity in the property for three reasons. First, it found that Richard “formally stipulated that Ross Creek and Mooring Drive were marital property subject to division in this divorce action.” Second, it found that “through a series of refinances, [Richard] transferred equity from Ross Creek to Mooring Drive, and paid expenses associated with both properties with marital funds.” Third, it found that Richard “formally conveyed the property to himself and [Susan] in 2003” when he added Susan’s name to the title. Because we affirm the district court’s decision not to award Richard any premarital equity on the basis of the parties’ stipulation, we do not address the other two reasons the district court relied upon.

¶32 Richard and Susan stipulated that “the Ross Creek and Mooring Drive properties shall remain marital property and shall be subject to equitable division in the parties’ divorce, notwithstanding that the Ross Creek home and Mooring Drive property will no longer be jointly titled.” Richard now claims that despite the language of the stipulation, he “never agreed that he should not be compensated for his premarital and separate contributions to Mooring Drive before the property became marital.” Furthermore, Richard argues, “nowhere in the stipulation did he agree that he was waiving his premarital equity in that property.”

¶33 Richard’s argument is flawed. “Parties to a divorce are bound by the terms of their stipulated agreement.” McQuarrie v. McQuarrie, 2021 UT 22, ¶ 18, 496 P.3d 44. And according to the “ordinary contract principles” that govern “contracts between spouses,” see Ashby v. Ashby, 2010 UT 7, ¶ 21, 227 P.3d 246 (cleaned up), “if the language within the four corners of the contract is unambiguous, the parties’ intentions are determined from the plain meaning of the contractual language,” Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 17, 84 P.3d 1134 (cleaned up). See also Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 2016 UT 6, ¶ 24, 367 P.3d 994 (holding that “the best indication of the parties’ intent is the ordinary meaning of the contract’s terms”); Ocean 18 LLC v. Overage Refund Specialists LLC (In re Excess Proceeds from the Foreclosure of 1107 Snowberry St.), 2020 UT App 54, ¶ 22, 474 P.3d 481 (holding that where the “contract is facially unambiguous, the parties’ intentions are determined from the plain meaning of the contractual language . . . without resort to parol evidence” (cleaned up)).

¶34      Richard essentially argues that the district court erred when it refused to go beyond the stipulation’s language and infer his intention from what he omitted. But the district court was correct when it interpreted the parties’ intentions by what the plain language of the stipulation does say and not by what it does not. Therefore, the district court did not abuse its discretion when it abided by the parties’ stipulation and included Mooring Drive as marital property, “subject to equitable division.”

B.        The Harley-Davidson

¶35      “Prior to the entry of a divorce decree, all property acquired by parties to a marriage is marital property, owned equally by each party.” Dahl v. Dahl, 2015 UT 79, ¶ 126, 456 P.3d 276. Thus, the presumption is that property acquired during the pendency of a divorce is marital, not separate. Richard failed to rebut this presumption regarding the Harley-Davidson motorcycle he purchased because he failed to present evidence that he used separate funds.

¶36 Richard argued that he purchased the Harley-Davidson from separate, rather than marital, funds in his proposed findings of fact and conclusions of law.[3] To be clear, Richard does not assert that the Harley-Davidson is separate property because he purchased it after the parties separated or after Susan filed for divorce. Instead, he argues the only funds available to him to purchase the motorcycle came from his “separate premarital retirement income.” Richard’s argument fails for two reasons. First, Richard did not present evidence to support his argument that the funds he used to purchase the motorcycle came from separate, not marital, funds. Instead, Richard essentially places his burden on the district court by asserting, on appeal, that “[t]here was no marital account identified by the district court from which [Richard] could have made that purchase.” But Richard, not the court, bears the burden of identifying where the funds came from that he used to purchase the motorcycle.

¶37      Second, the district court found credibility problems with Richard’s testimony about the Harley-Davidson, concluding that Richard’s “credibility was lacking with regards to his motorcycle purchase.”[4] A district court “is in the best position to judge the credibility of witnesses and is free to disbelieve their testimony” or “disregard such testimony if it finds the evidence self-serving and not credible.” Ouk v. Ouk, 2015 UT App 104, ¶ 14, 348 P.3d 751 (cleaned up).

¶38      In sum, as “property acquired during [the] marriage,” the Harley-Davidson is presumptively “marital property subject to equitable distribution.” Dahl, 2015 UT 79, ¶ 26. Richard bore the burden of proof to rebut the presumption that the funds he used to purchase the Harley-Davidson were not marital, and he presented no credible evidence to the district court to support that position. Thus, the district court did not abuse its discretion by including the motorcycle in the marital estate.

C.        $30,000 Offset

¶39      Finally, Richard challenges the district court’s decision to include in the marital estate the $30,000 he withdrew from the joint account. The district court agreed with Susan that because Richard had made a unilateral withdrawal from the joint account during the pendency of the divorce, he should be held accountable for that withdrawal. Richard, on the other hand, claims he used the money for marital expenses, paying costs associated with Mooring Drive. Susan argues the money could also have been spent on personal items including travel and motorcycle payments and accessories. “How the money was spent, including whether [the] funds were used to pay legitimate marital expenses or individual expenses,” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 69, 507 P.3d 385 (cleaned up), cert. denied, 525 P.3d 1259 (Utah 2022), is a critical question that needs to be resolved.

¶40 Divorce cases often require district courts to make numerous findings of fact. And generally speaking, “for findings of fact to be adequate, they must show that the court’s judgment or decree follows logically from, and is supported by, the evidence” and such findings “should be sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate conclusion on each factual issue was reached.” Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 28, 70 P.3d 35 (cleaned up). Moreover, when it comes to the “unequal division of marital property,” a district court must “memorialize[] in . . . detailed findings the exceptional circumstances supporting the distribution.” Bradford v. Bradford, 1999 UT App 373, ¶ 27, 993 P.2d 887 (cleaned up). “Without adequate findings detailing why [one spouse] should be entitled to such an unequal split of the marital estate, we cannot affirm the court’s award.” Fischer v. Fischer, 2021 UT App 145, ¶ 29, 505 P.3d 56; see, e.g.Rothwell v. Rothwell, 2023 UT App 50, ¶ 57, 531 P.3d 225 (concluding that “we simply do not have enough information” to rule on whether the funds were marital or separate, “let alone to conclude that the district court

. . . erred”).

¶41      We face the same dilemma here. The district court made no findings as to how Richard spent the $30,000. The written ruling merely states, “In June 2019, [Richard] withdrew $30,000 from the joint account without [Susan’s] knowledge or consent and deposited it into his own personal account.” “We will not imply any missing finding where there is a matrix of possible factual findings and we cannot ascertain the trial court’s actual findings.” Hall v. Hall, 858 P.2d 1018, 1025–26 (Utah Ct. App. 1993). Without “adequate findings” on whether Richard used the funds for marital expenses or not, “we cannot affirm,” nor properly review, the court’s decision to offset the $30,000 against Richard in its division of the marital estate. See Fischer, 2021 UT App 145, ¶ 29. Therefore, we vacate this portion of the decision and remand the matter to the district court for it to enter findings on how the funds were spent.

CONCLUSION

¶42 The district court did not abuse its discretion when it excluded Richard’s exhibits for failure to comply with rule 26(a)(5) of the Utah Rules of Civil Procedure. The district court also did not err in its conclusion that Richard failed to meet the burden of proof for his dissipation claim nor did it abuse its discretion in how it divided the marital estate with respect to Mooring Drive and the Harley-Davidson. We vacate the district court’s decision to offset the $30,000 against Richard when it divided the marital estate and remand the matter for the district court to enter additional findings and to alter its conclusion as may be necessary.


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

[2] Susan invites us to join some other states in drawing a bright-line rule concerning the timing of a dissipation claim and limit pre-separation dissipation claims to those occurring (1) in contemplation of divorce or separation or (2) when the marriage is in serious jeopardy or undergoing an irretrievable breakdown. Under our caselaw, the district court is empowered to consider the “timing of the challenged actions in relation to the separation and divorce” as one of several factors when determining “whether a party should be held accountable for the dissipation of marital assets.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 33, 440 P.3d 757 (cleaned up). We see no need to alter this approach. Assessing timing as one factor among many provides the greatest flexibility to the district court to consider all the circumstances in a particular case, and we believe the district court is in the best position to evaluate the importance of such evidence on a case-by-case basis.

[3] Because the district court directed the parties to submit proposed findings of fact and conclusions of law in lieu of closing arguments, Richard’s argument was preserved for our review.

[4] Indeed, in its oral ruling, the court stated that Richard “lied to the Court about the purchase of the motorcycle.”

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Why Don’t All Divorced Wives Get Half of Their Husbands’ Property?

Because divorce is not about a spouse (man or woman) getting “half of everything”.

Depending upon whether a state is a “community property” state or an “equitable distribution” state, here is how property is divided between spouses in a divorce:

A community-property state is state in which spouses hold property that is acquired during marriage (other than property acquired by one spouse by inheritance, devise, or gift) as community property. Otherwise stated, all property that is acquired during the marriage by either spouse (other than property acquired by one spouse by inheritance, devise, or gift) or by both spouses together is jointly and equally owned and will be presumed to be divided in divorce equally between the divorcing spouses. Nine states are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

An equitable distribution state seeks to divide property in divorce in a fair, but not necessarily equal, manner. An equitable property state court can divide property between the spouses regardless of who holds title to the property. The courts consider many factors in awarding property, including (but not limited to) a spouse’s monetary contributions, nonmonetary assistance to a spouse’s career or earning potential, the efforts of each spouse during the marriage, the length of the marriage, whether the property was acquired before or after marriage, and whether the property acquired by one spouse by inheritance, devise, or gift. The court may take into account the relative earning capacity of the spouses and the fault of either spouse (See Black’s Law Dictionary, 11th ed.). Equitable distribution is applied in the non-community property states.

So, does a spouse “get half of everything” in divorce? Possibly, but not always, and now you know why.

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

Why don’t all divorced wives get half of their husbands’ property? – Husbands and wives – Quora

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Going Through a Divorce. She Moved Out. I Continued Mortgage Alone for a Year. I Move Out, She Moves in and Never Pays for 9 Months. I Pay to Get It Out. Does She Owe Me?

This is a great question. Thank you for asking it. It’s a question that arises frequently in divorce situations. And you’re likely not going to like the answer.

It could go either way.

There can be many other factors that the court might need to consider to ensure that its decision is a truly equitable one, but generally speaking:

  • It is certainly possible that the court would find fault with your wife for residing alone in the marital home without paying at least half of the mortgage payments during that period and order her to reimburse you for the 9 months you paid the mortgage when she refused to do so. Indeed, odds are that the court would take this position.
  • But it is possible for the court to rule that your wife owes you nothing, especially if she is unemployed due to being a full-time homemaker/mother or employed but earns substantially less than you do. In other words, the court can take a “who is in the best position financially to absorb this cost?” approach.

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

https://www.quora.com/Going-through-a-divorce-she-moved-out-I-continued-mortgage-alone-for-a-year-I-move-out-she-moves-in-and-never-pays-for-9-months-I-pay-to-get-it-out-Does-she-owe-me

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2023 UT App 62 – Cox v. Cox – Adequacy of Court Findings

2023 UT App 62 – Cox v. Cox

THE UTAH COURT OF APPEALS

BLANCHE COX,

Appellee,

v.

JAMES A. COX,

Appellant.

Opinion

No. 20210455-CA

Filed June 8, 2023

Fourth District Court, Provo Department

The Honorable Lynn W. Davis

The Honorable Robert C. Lunnen

No. 124402230

Brett D. Cragun, Attorney for Appellant

Jarrod H. Jennings, Attorney for Appellee

JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and JOHN D. LUTHY concurred.

TENNEY, Judge:

¶1 James and Blanche Cox were married for over 20 years, during which time they had 10 children and acquired a large number of marital assets. In September 2012, Blanche filed for divorce.[1] After 4 years of pretrial litigation and then 14 days of trial, the district court issued a 35-page divorce ruling that settled various issues relating to child custody, child support, alimony, and the division of the marital estate.

¶2        James now appeals, arguing that many of the court’s rulings were not supported by adequate findings. We agree with James with respect to each challenged ruling. We accordingly vacate those rulings and remand for further proceedings.

BACKGROUND

¶3        James and Blanche Cox were married in 1990. During their marriage, they had 10 children and acquired a large number of assets. In September 2012, Blanche filed for divorce. After 4 years of litigation, the case went to trial, and that trial occurred over the course of 14 days between December 2016 and May 2017. In January 2017 (while the trial was proceeding), the court issued a bifurcated divorce decree granting Blanche’s request for a divorce and reserving other issues for further hearings and determinations.

  1. The Ruling

¶4        In October 2017, the court issued a 35-page Ruling and Memorandum Decision (the Ruling) that entered findings of fact and legal determinations regarding many issues related to child custody, child support, alimony, and the valuation and division of the marital estate. This appeal implicates the court’s findings and determinations regarding essentially three groups of issues: the parties’ marital properties, alimony and child support, and marital debts.[2]

Marital Properties

¶5        The court found that James and Blanche “enjoyed the benefit or acquired” five properties during their marriage: (1) the Hildale Home, (2) the Henderson Home, (3) the Eagle Mountain Home, (4) the Rockville Property, and (5) the Cedar Highlands Lots. The court then entered findings and made rulings regarding how to divide the parties’ marital interest in each property.

¶6        The Hildale Home: The court found that James built this home (located, as our reference would suggest, in Hildale, Utah) before his marriage to Blanche. The court found that James, Blanche, and their children lived in this property until 2010, after which they moved to a different residence. The court heard testimony that title to the Hildale Home was held by the United Effort Plan Trust (the Trust). But the court then concluded that no evidence had been presented of the value of James’s interest in the Trust and that “establishing the value of a beneficial interest in property of the [Trust]” would be “practically and legally impossible.” The court acknowledged that Blanche had submitted an appraisal of the Hildale Home at trial (which, according to the record on appeal, estimated its value as being around $200,000), but the court concluded that the appraisal was deficient because it failed to account for costs and fees associated with the Trust ownership. From all this—and without any further explanation— the court then ruled that Blanche was “entitled to an award of $100,000” based on the home’s value.[3]

¶7        The Henderson Home: The court found that this home was purchased by James in 2004 for $420,000. It found that after the parties fell behind on mortgage payments, at which point they still owed around $288,000, the house was “lost in a short sale in 2013 for $225,000.” The court made a finding that the fair market value of the home at the time, according to Zillow, was $323,861.

¶8        But the court also heard competing testimony from the parties about whether the loss of the home could have been avoided. From Blanche, the court heard testimony that the home “could have been rented out” but that James refused to sign papers that would have modified the loan and, theoretically, allowed the parties to avoid losing it. From James, however, the court heard testimony that maintaining or leasing the home wasn’t actually possible for several different reasons.

¶9        From this, the court found that “[t]he parties would likely have had at least $100,000 in equity to split if they had kept” the Henderson Home and “rented it as suggested by [Blanche] numerous times.” The court then ruled that James “should be responsible to, and give [Blanche] credit for, $50,000 in equity representing her share of the lost asset dissipated by him.”

¶10 The Eagle Mountain Home: The court found that James and Blanche bought this home in 2009 and made a $120,000 down payment on it, $80,000 of which was borrowed from James’s mother. The court found that they moved into the home sometime in 2010 and began using it as their primary residence. James testified that he had at one point intended to sell the Eagle Mountain Home in an effort “to cover all the debts” on the parties’ credit cards but that Blanche refused to cooperate with him on the sale. Evidence presented at trial suggested that the home was sold in 2015 by a bankruptcy trustee for $520,000, with the parties still owing $292,000 at that time. Without citing any specific piece of evidence, the court found that if the Eagle Mountain Home had “not been lost to a forced sale, [Blanche] would have been able to receive at least another $25,000 today because of the current market value of $606,000,” and the court then ruled that she was “entitled to that sum.”

¶11      The Rockville Property: The court described this as a “7.5 acre parcel of farm property” located near Rockville, Utah. In its ruling on how to divide the marital interest in this property, the court referred to evidence it had received indicating that the parties were “forced to sell” the property for $270,000 after falling behind on the mortgage payments, as well as evidence showing that the parties still owed around $190,000 on the property when it was sold.

¶12      But the court then referred to several sources of evidence it had received that suggested that this property had a higher value and could have been sold for more. For example, it referred to evidence that a realtor had listed what the court thought was a similar 11.4 acre parcel for $1,195,000 (though the court then acknowledged that it was “debatable” whether this comparison provided an accurate valuation for the Rockville Property). The court also noted testimony that a realtor had valued the property at “approximately $900,000” due to “28 [shares of] water rights [that were] attached to it.” And the court referred to an “analysis from Zillow” that suggested the property’s value was $1,195,000.

¶13      From all this, the court then found that the forced sale of the property for $270,000 was a loss that “cost the parties at least $450,000 each,” and the court awarded Blanche “damages of $450,000 offset by monies she did receive in the amount of $42,000.”

¶14 The Cedar Highlands Lots: The Cedar Highlands Lots were “two lots down by Cedar City,” one of which was around 2 acres and the other around 2.5 acres. The court found that the lots were purchased for $40,000 each sometime in 2003 but that they were later “lost” through a forced sale because of the parties’ ongoing failure to pay various taxes and fees.

¶15 At trial, there was conflicting evidence and argument about the amount of the loss suffered by the parties because of the sale of these lots. James testified that the parties lost $60,000, while Blanche claimed that they lost somewhere between $153,000 and $280,000 (with her estimate being largely based on the lots’ appreciation in value since the time that the parties had purchased them—and, thus, the parties’ loss of potential equity by virtue of the forced sale). The court ultimately found that the parties’ inability to “pay the property taxes and Homeowners Association fees . . . resulted in [an] $80,000 loss to the parties.” The court did not explain how it had arrived at the $80,000 amount, nor did it explain how this loss was to be distributed between the parties.

Alimony and Child Support

¶16 Blanche’s Income: Under an initial subheading of the Ruling that was entitled “The Parties[’] Income,” the court found that Blanche is “an experienced bookkeeper with QuickBooks who has elected to be employed by About Faceology,” but that she was currently a “self employed Uber/Lift driver and has been so since 2015.” Under a subsequent subheading entitled “Income of the Parties,” however, the court then determined that “[f]or child support purposes [Blanche’s] income cannot be imputed at more than [the] minimum wage of $1,257 per month.” Elsewhere in the Ruling, and without explanation for the discrepancy, the court found that Blanche’s imputed minimum wage income was actually $1,260 per month (rather than $1,257). The court included no explanation for its conclusion that Blanche’s income could not be imputed at more than the minimum wage.

¶17 Child Support: At the time of the Ruling, the parties had five minor children. The court initially ordered James to pay $3,781 per month in child support. Elsewhere in the Ruling, however, and again without explanation, the court stated that it was ordering James to pay $3,336 per month in child support.

¶18      Alimony: Turning to alimony, the court noted that under the controlling statute, it should consider a number of factors. One of the factors it considered was Blanche’s “financial condition and needs.” With respect to this factor, the court opined that Blanche’s “needs have been overstated in her financial declarations,” but the court made no ruling about Blanche’s financial condition and what her needs actually were. With respect to Blanche’s earning capacity, the court again noted that Blanche “claim[ed] she earns just a little better than minimum [wage] even though she is an experienced and sophisticated bookkeeper with many years of experience having run, managed, overseen and monitored millions of dollars in income and expenses that ran through the parties[’] businesses.” But the court made no further findings about her particular earning capacity as it related to a potential alimony award. The court also noted that there were “minor children in the home,” five of whom were “younger than eighteen years of age or have not yet graduated from high school with their expected class.” But the court made no findings about how (or how much) these children impacted Blanche’s earning capacity. Finally, with respect to James’s ability to pay alimony, the court found that James was a “voluntarily under employed” electrician, and it then opined that “[t]here is no question that [Blanche] claims that her needs exceed hers and [James’s] monthly incomes.” Considering these factors together, the court then ordered James to pay $8,286 per month in alimony.

Marital Debts

¶19 Finally, the court made certain findings concerning the “business debt” that was “incurred” by the parties during the marriage. While the divorce proceedings were pending, James filed a Chapter 7 bankruptcy petition. In the Ruling, the court found that, after the bankruptcy proceedings had begun, James incurred $30,000 in debt while purchasing stock in his business and business-related property from the bankruptcy trustee. Since the court determined that Blanche was “entitled to 50% of [the] value” of the business, the court then concluded that she was entitled to an award of $15,000 as a result of this debt.

¶20      The court also noted that Blanche had “received financial compensation from the sale of assets and the conversion of assets into cash.” But the court opined that it was “difficult, if not impossible, to decipher whether each expenditure was personal, business related, or partially business-related.” From this, and without further explanation, the court awarded Blanche “judgment against [James] in the amount of $50,000.”

  1. Motions for Clarification

¶21      James and Blanche were both dissatisfied with the Ruling, and in January 2018, they each filed a motion requesting clarification. Each motion raised a host of issues regarding alleged errors.

¶22      Of note here, in her motion, Blanche asked for clarification “as to whether or not” she was entitled to $25,000 for the Eagle Mountain Home or, instead, “another amount.” She argued that an award of $25,000 “seem[ed] incorrect mathematically” because if the fair market value of the Eagle Mountain Home was $606,000, and the home sold for $520,000, the “resulting equity would have been $86,000, which if divided equally would result in [Blanche] receiving judgment for $43,000,” as opposed to $25,000. Blanche also requested clarification as to the court’s determination “that the loss to the parties” concerning the Cedar Highlands Lots was $80,000. She argued that, based on the evidence presented at trial, the loss was $280,000. Blanche also requested clarification regarding the court’s determination of marital debts, specifically, whether the $15,000 was “to be added to the $50,000 for a total of $65,000” or whether “there [was] another number the court considered.” Finally, Blanche requested clarification of the court’s order regarding child support, given that in one portion of its Ruling the court ordered James to pay child support in the amount of $3,781 per month, and in another portion it altered that amount to $3,336 per month.

¶23 In his motion, James likewise requested clarification of various aspects of the Ruling. Among other things, he asked the court to “enter supplemental, amended, and or additional findings” regarding its ruling that Blanche was “entitled to $100,000” concerning the Hildale Home, explaining that he was “unaware of any evidence upon which the [court] could have relied in finding the $100,000 in equity the [court] awarded” Blanche. James also asked for clarification on the court’s findings concerning the Henderson Home, Eagle Mountain Home, and Rockville Property, asserting that the court had not “identified the facts upon which it relied” in making its calculations. Regarding the Henderson Home, James alleged that the court’s finding that “the parties would likely have had at least $100,000 in equity if the home had been rented” for the years 2013 through 2017 “fail[ed] to account for the costs of managing a rental property from a long distance, the likelihood of vacancies, the cost of utilities, maintenance, repairs, property taxes” and other related fees. Regarding the Eagle Mountain Home, James argued that the Ruling did not “accurately account for the additional $25,000” that Blanche received from the bankruptcy trustee “in addition to the $102,486.28 she received” from the sale. Regarding the Rockville Property, James requested clarification as to what facts the court relied upon to conclude that “the parties owned 28 shares of water,” given that the evidence “actually showed,” in his view, that they owned only 19 shares of water. Additionally, James requested clarification as to the court’s comparison of the Rockville Property to a parcel of “11.4 acre[s] of land with Virgin River frontage that was listed for $1,195,000.” Finally, with respect to the marital debts, James asked the court to “enter supplemental, amended and or additional findings” that would “identify the facts upon which [the court] relied in awarding [Blanche] $15,000 representing [the business’s] hypothetical equity or value.”

¶24 In the meantime, the Office of Recovery Services (ORS) intervened in the case based on its obligation to provide child support enforcement services. ORS filed a memo in response to Blanche’s motion for clarification in which it likewise requested clarification of the child support amount. After recounting its view of the evidence, ORS recommended that if Blanche’s income was imputed at minimum wage, and if James’s income was imputed at $18,500 per month, James should be ordered to pay $3,236 per month for the five minor children.

¶25      In August 2018, the court issued a ruling on James’s and Blanche’s motions. With respect to the child support amount, the court now ordered that James’s monthly obligation be $3,236 per month, thus apparently adopting ORS’s recommendation. With respect to the properties, the court now ruled—without explanation—that Blanche was entitled to $25,000 in relation to the Eagle Mountain Home and $40,000 for the Cedar Highland Lots. And with respect to the marital debts, the court found— again without explanation—that “[t]he $15,000 amount awarded is to be added to the $50,000 amount awarded for a total of $65,000” to be awarded to Blanche.

¶26 The court ordered Blanche’s counsel to prepare the final findings of fact and conclusions of law. In a November 2018 filing, however, Blanche alleged that she was unable to do so without “additional findings” regarding, among others, the marital debts. In May 2019, the court heard additional oral arguments. After the parties filed additional objections and motions, the case was reassigned from Judge Lynn Davis—who had heard the trial testimony and had issued both the Ruling and the rulings on the motions for clarification—to Judge Robert Lunnen. Judge Lunnen then heard oral arguments on the parties’ objections and outstanding motions.

  1. The Supplemental Decree

¶27      In April 2021, the court (through Judge Lunnen) issued a “Supplemental Decree of Divorce” (the Supplemental Decree).[4]

¶28 The Supplemental Decree reiterated and incorporated many of the findings and determinations from the Ruling. As in the Ruling, for example, the court awarded Blanche $100,000 for the Hildale Home, $50,000 for the Henderson Home, and the (clarified) amount of $40,000 for the Cedar Highlands Lots. But without explanation, the court altered the order regarding the Eagle Mountain Home, awarding Blanche $43,000 as opposed to the $25,000 that was previously ordered. Also without explanation, the court altered the order regarding the Rockville Property, first concluding that Blanche’s offset should be $38,000, not $42,000, and now awarding Blanche $412,000 from this property as opposed to the $408,000 that had previously been awarded.

¶29      The court also determined that Blanche’s income should be imputed at minimum wage for a total of $1,260 per month. Based on its findings about the parties’ incomes, it then ordered James to pay $3,236 per month in child support, and it again ordered him to pay $8,286 per month in alimony.

¶30 Finally, the court awarded Blanche $65,000 relating to the marital debts. The court explained that $15,000 of that amount “represent[ed] her interest” in various purchases made by James from the bankruptcy trustee and that the remaining $50,000 represented “her interest in other assets, business and otherwise.”

¶31      James timely appealed.

ISSUE AND STANDARD OF REVIEW

¶32 James argues that the district court issued “inadequate” fact findings to explain its rulings regarding the marital properties, child support and alimony, and marital debts. “We review the legal adequacy of findings of fact for correctness as a question of law.” Lay v. Lay, 2018 UT App 137, ¶ 4, 427 P.3d 1221 (quotation simplified); see also Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262 (“We review the legal sufficiency of factual findings—that is, whether the trial court’s factual findings are sufficient to support its legal conclusions—under a correction-of-error standard, according no particular deference to the trial court.” (quotation simplified)).[5]

ANALYSIS

¶33 A district court’s “[f]indings of fact are adequate . . . only when they are sufficiently detailed to disclose the steps by which the district court reached its ultimate conclusion on each issue.” Oldroyd v. Oldroyd, 2017 UT App 45, ¶ 5, 397 P.3d 645. When assessing a challenge to the adequacy of a district court’s findings, we look to whether the court “adequately disclosed the analytic steps” it took in reaching its conclusions. Keiter v. Keiter, 2010 UT App 169, ¶ 21, 235 P.3d 782. In this sense, the court’s findings of fact must show that its “judgment or decree follows logically from, and is supported by, the evidence.” Id. ¶ 17 (quotation simplified). “This obligation facilitates meaningful appellate review and ensures the parties are informed of the trial court’s reasoning.” Shuman v. Shuman, 2017 UT App 192, ¶ 5, 406 P.3d 258; see also Fish v. Fish, 2016 UT App 125, ¶ 22, 379 P.3d 882 (explaining that findings “are adequate when they contain sufficient detail to permit appellate review to ensure that the district court’s discretionary determination was rationally based”). While “unstated findings can be implied if it is reasonable to assume that the trial court actually considered the controverted evidence and necessarily made a finding to resolve the controversy, but simply failed to record the factual determination it made,” Fish, 2016 UT App 125, ¶ 22 (quotation simplified), we “will not imply any missing finding where there is a matrix of possible factual findings and we cannot ascertain the trial court’s actual findings,” Hall v. Hall, 858 P.2d 1018, 1025–26 (Utah Ct. App. 1993) (quotation simplified).

¶34 James argues that a number of the court’s findings were inadequate. His arguments address three groups of findings— namely, findings regarding (I) marital properties, (II) child support and alimony, and (III) marital debts. We address each group in turn.[6]

  1. Marital Properties

¶35 James first challenges the adequacy of the findings that supported the rulings about how to value and distribute the parties’ marital properties. We recognize at the outset that district courts “have considerable discretion in determining property distribution in divorce cases.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 11, 440 P.3d 757 (quotation simplified). But while a district court “does not have to accept [a party’s] proposed valuation” of an item in the marital estate, the court “does have to make findings sufficient to allow us to review and determine whether an equitable property award has been made.” Taft v. Taft, 2016 UT App 135, ¶ 53, 379 P.3d 890. In ruling on such a claim, we will uphold a district court’s “valuation of marital assets” if “the value is within the range of values established by all the testimony, and as long as the court’s findings are sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate conclusion on each factual issue was reached.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 64, 507 P.3d 385 (quotation simplified), cert. denied, 525 P.3d 1259 (Utah 2022).

  1. The Hildale Home

¶36 James first argues that the court’s findings regarding the Hildale Home were inadequate. In James’s view, the court “simply concluded that $100,000 was an appropriate amount of an award without providing factual findings” supporting “the appropriateness” of that award. We agree.

¶37 The court’s discussion of the Hildale Home spans roughly two pages of the Ruling. Much of the discussion concerns the ownership of the home. The court found that the home’s title is held by the Trust, that James’s interest in the home is that “of a beneficiary” to the Trust, and that Blanche, by contrast, is “not a legal beneficiary” of the Trust. But the court then found that “[n]o evidence was presented to the court of the value [of] [James’s] beneficial interest” in the Trust and that “establishing the value of a beneficial interest in property of the [Trust] is practically and legally impossible[,]” in part, because “the Trust is not receptive to, nor responsive to, legal inquiries.” The court also recognized that Blanche submitted an appraisal of the home, but it then concluded that the appraisal was not an adequate mechanism for establishing the home’s value because the appraisal failed to account for “title to the home being in the [Trust], the costs of getting the [Hildale Home] conveyed from the [Trust], or the thousands of dollars owed to the [court] appointed Trustee of the [Trust] which the Trustee is owed for administering the [Trust’s] assets.” After discounting its ability to rely on either James’s interest in the Trust or Blanche’s appraisal, the court ruled that the property was “a marital asset” to some “narrow extent.” Without further explanation, it then ruled that while it couldn’t grant title to Blanche, she was “entitled to an award of $100,000.”

¶38      We recognize the difficulties that the court faced with this trial in general—as should be clear by now, this was a very complicated divorce with a lot of things to decide and divide. And as evidenced by the preceding paragraph, the nature of parties’ apparent interest in the Hildale Home made the question of how to divide that interest particularly complicated. But even so, we see nothing in the Ruling that “adequately disclosed the analytic steps” the court took, Keiter, 2010 UT App 169, ¶ 21, when deciding that Blanche was entitled to $100,000. The court clearly explained what it thought it couldn’t rely on, but it didn’t explain what it thought it could rely on or how it arrived at this particular amount. Without such an explanation, James has no meaningful way to challenge that $100,000 award, nor do we have any meaningful way to assess whether it was legally warranted in light of the “matrix of possible factual findings” on this issue that are apparent from the record. Hall, 858 P.2d at 1025 (quotation simplified). We accordingly vacate this determination.

  1. The Henderson Home

¶39 James next argues that the court “did not provide any analysis” as to how it determined there was $100,000 in equity in the Henderson Home and that, as a result, the $50,000 award to Blanche was based on inadequate findings. We agree.

¶40      The court found that the home was purchased by James in 2004 for $420,000. It explained that by August 2012, James and Blanche were “months behind in their [mortgage] payment” and that they owed $288,000 when the home was “lost in a short sale in 2013 for $225,000.” The court made a finding that the fair market value of the home at the time—according to Zillow—was $323,861.[7] The court found that James and Blanche “would likely have had at least $100,000 in equity to split if they had” managed to keep the home, but because James “ignored” Blanche’s suggestions to rent the home out, which in theory would have prevented them from losing it, it then ruled that James “should be responsible to, and give [Blanche] credit for, $50,000 in equity representing her share of the lost asset dissipated by him.” It appears the court thus based the $50,000 award on its finding that “the parties could likely have rented and made money as shown or just maintained [the Henderson Home] and sold it for profit presently.”

¶41      James’s initial argument here is that it’s unclear how the court arrived at the $100,000 in equity that it then divided. In response, Blanche suggests that this amount could have been derived from the court’s apparent acceptance of the home’s fair market value as being $323,861 (a value derived from Zillow— which, again, neither party has challenged on appeal as being improper), an amount that is approximately (though, we note, not precisely) $100,000 more than the parties received in the short sale. We have some concern that Blanche is asking us to do too much inferential work on our own, and we could vacate on this basis alone. But in any event, the court’s division of the apparent equity also seems to have been based on a dissipation (or, perhaps, a waste) determination stemming from James’s conduct. Assuming this was so, the court’s findings about James’s conduct, whether the home could actually have been rented out, what the parties could have received in rent, and whether this unspoken amount would actually have prevented them from losing the home were all either missing or decidedly cursory. We’ve previously held, however, held that when a court rules that a party “should be held accountable for the dissipation of marital assets,” the court must support the ruling with “sufficiently detailed findings of fact that explain the trial court’s basis” for that ruling, and we’ve also laid out a number of factors that “may be relevant to” and could support such a ruling. Rayner v. Rayner, 2013 UT App 269, ¶¶ 19–21, 316 P.3d 455 (quotation simplified). While that list is not mandatory or exhaustive, we still have an inadequate findings-based foundation here from which we could review what seems to have been an implicit dissipation determination. When coupled with the lack of explanatory findings about the basis for the equity determination, we conclude that the findings about this home are, as a whole, legally inadequate to support meaningful appellate review of this ruling. We accordingly vacate them.

  1. The Eagle Mountain Home

¶42      James argues that the court’s findings regarding the Eagle Mountain Home were legally inadequate. We agree.

¶43 In the Ruling, the court (through Judge Davis) initially awarded Blanche $25,000 for this home. But the court failed to explain the analytic steps it took to arrive at that amount. The court did enter a few findings about this home—namely, that the parties made a $120,000 down payment when they purchased the home in 2009 ($80,000 of which was borrowed from James’s mother), that they were forced to sell it in 2015 in conjunction with James’s bankruptcy, and that, as a result of that sale, Blanche received “one half” of its equity. But the court made no findings about the sale price or how much equity the parties had in the home at the time of the sale. And then, without any explanation, the court opined that “[h]ad it not been lost to a forced sale,” Blanche “would have been able to receive at least another $25,000 today” because of the home’s “current market value.” The court provided no basis for the $25,000 amount, and we see no reasonable basis in its findings for inferring one.

¶44      Of note, the court (through Judge Lunnen) then changed the awarded amount in the Supplemental Decree, now awarding Blanche $43,000 for it. But the court didn’t explain why it increased this award from the award that had previously been entered in the Ruling. And while Blanche suggests on appeal that the court had now accepted a new valuation of the home that she offered in her motion for clarification, the court never said that it was doing so, nor did it provide any other explanation for why it increased this award at all, let alone by this particular amount.

¶45      In light of this procedural history, it’s unclear to us what analytic steps led the court to first award Blanche $25,000 for this home and what caused the court to later change that award to $43,000. As a result, the findings with respect to this home are legally inadequate and are therefore vacated.

  1. The Rockville Property

¶46      James argues that the court’s findings about the Rockville Property are legally inadequate because it’s “not clear” how the court “reached its valuation of the Rockville Property” or how it divided that value as part of its division of the marital estate. We agree.

¶47 In the Ruling, the court explained that the Rockville Property was a “7.5 acre parcel of farm property” owned by James and Blanche near Rockville, Utah. As for its value and how to determine that value, the court pointed to three options: (1) it noted that a realtor had listed a similar 11.4 acre parcel for $1,195,000, though the court opined that this valuation was “debatable”; (2) the court noted that Blanche “discussed” its value with a realtor who “indicated back then” (which, though unsaid by the court, seems from context to have been in 2013) that the “lot was worth approximately $900,000, due to the 28 water rights attached to it”; and (3) the court pointed to a “[c]urrent market value analysis from Zillow” that “estimate[d]” the property’s value at $1,195,000. The court then found that the parties were “forced to sell” the property in December 2013 for $270,000 due to financial troubles. And the court apparently faulted James for this, determining that at the time of the forced sale, the parties “only owed approximately $190,000” on the property, that it could have been refinanced, and that it was James’s fault that they did not do so. From this, the court found that the forced sale “cost the parties at least $450,000 each,” and it accordingly awarded Blanche “damages of $450,000 offset by monies she did receive in the amount of $42,000.”

¶48 From an adequacy-of-the-findings perspective, the initial problem here is that the court never stated whether it was accepting $1,195,000 or $900,000 as the property’s value. Given that the property’s value would be the numerator for any division of it as a marital asset, this omission is, of course, significant. And while Blanche invites us to engage in some loose math that would account for both possibilities and arrive at the same endpoint, the difference between the two initial valuations might matter if James wished to mount a sufficiency of the evidence challenge. Moreover, to the extent that the court’s determination about how to divide the property’s value turned on an implicit dissipation determination, we again note that the court failed to support such a determination with adequate findings. And finally, while the court offset the award to Blanche by “monies she did receive in the amount of $42,000,” an amount that it later changed to $38,000 in the Supplemental Decree, the court didn’t explain the basis for either amount in either ruling.[8]

¶49 Given the unanswered questions about how the court valued both this property and the offset, we have no basis for conducting a meaningful review of this award. We accordingly vacate it.

  1. The Cedar Highlands Lots

¶50 James’s final property-related challenge is to the findings regarding the Cedar Highlands Lots. In James’s view, the court improperly failed to “indicate . . . how the $80,000 was calculated.” We again agree.

¶51      In the Ruling, the court found that James and a business partner had purchased the two lots for $40,000 each, that Blanche had “controlled the book-keeping for the marital businesses,” and that the lots “were lost when the parties were unable or could not pay the property taxes and Home Owners Association fees,” thus “result[ing] in [an] $80,000 loss to the parties.” In a subsequent ruling, the court determined that this loss should now result in an award of $40,000 to Blanche, and that award was later confirmed in the Supplemental Decree.

¶52 From the court’s findings, it’s unclear why the court determined that there was an $80,000 loss. The court seems to have assumed that the lots were completely lost with no return in value, but the court never said so. And more importantly, even assuming that this was the implicit finding, the court never explained why it concluded that Blanche should receive an award of $40,000 as the result of this particular loss to the marital estate of $80,000. Without such an explanation, we have no meaningful basis for reviewing the ruling. As a result, we vacate it.

  1. Child Support and Alimony

¶53 James challenges the adequacy of the findings relating to child support and alimony. James’s challenges here fall into two groups: first, he challenges the adequacy of the findings relating to Blanche’s income (which, as explained below, matter to both child support and alimony); and second, with respect to the alimony determination, he challenges the adequacy of the court’s findings relating to Blanche’s financial condition and needs.

  1. Blanche’s Income

¶54      James argues that the court’s findings regarding Blanche’s income were inadequate because they failed to “provide any reasoning for disregarding [Blanche’s] earning capacity.” We agree.

¶55      A party’s income matters to a determination of both child support and alimony. First, with respect to child support, a “noncustodial parent’s child support obligation is calculated using each parent’s adjusted gross income.” Twitchell v. Twitchell, 2022 UT App 49, ¶ 34, 509 P.3d 806 (quotation simplified); see also Utah Code §§ 78B-12-202, -301 (establishing guidelines for child support awards). Importantly, the court “is required to enter detailed and specific findings on all material issues which must be considered when making a child support award.” Breinholt v. Breinholt, 905 P.2d 877, 881 (Utah Ct. App. 1995) (quotation simplified). But “so long as the steps by which the ultimate conclusion on each factual issue was reached are apparent, a trial court may make findings, credibility determinations, or other assessments without detailing its justification for finding particular evidence more credible or persuasive than other evidence supporting a different outcome.” Shuman, 2017 UT App 192, ¶ 6 (quotation simplified). Second, with respect to alimony, a court must examine, among other factors, “the recipient’s earning capacity or ability to produce income.” Miner v. Miner, 2021 UT App 77, ¶ 16, 496 P.3d 242 (quotation simplified). And a court must in “all cases . . . support its alimony determinations with adequate findings . . . on all material issues,” and “failure to do so constitutes reversible error, unless pertinent facts in the record are clear, uncontroverted, and capable of supporting only a finding in favor of the judgment.” Id. ¶ 17 (quotation simplified).

¶56      Of note, when “there is insufficient evidence of one of the statutory alimony factors, courts may impute figures.” Gardner v. Gardner, 2019 UT 61, ¶ 98, 452 P.3d 1134 (quotation simplified). For example, a “court may impute income to a former spouse for purposes of calculating alimony after finding that the former spouse is voluntarily unemployed or voluntarily underemployed.” Fish, 2016 UT App 125, ¶ 15. And it “is not unusual for courts to impute income to a spouse who has not worked during the marriage (or who has not worked for a number of years preceding the divorce) but who is nevertheless capable of producing income.” Petrzelka v. Goodwin, 2020 UT App 34, ¶ 26, 461 P.3d 1134 (emphasis in original). But when a court imputes income, the “imputation cannot be premised upon mere conjecture; instead, it demands a careful and precise assessment requiring detailed findings.” Christensen v. Christensen, 2017 UT App 120, ¶ 22, 400 P.3d 1219 (quotation simplified); see also Reller v. Argenziano, 2015 UT App 241, ¶ 33, 360 P.3d 768 (“Before imputing income to a parent, the trial court must enter findings of fact as to the evidentiary basis for the imputation.” (quotation simplified)).

¶57      Income can likewise be imputed as part of a child support determination. See Utah Code § 78B-12-203(8). But, as with an alimony award, a court must support such an imputation with adequate findings. See id. § 78B-12-203(8)(a) (explaining that in contested cases, “[i]ncome may not be imputed to a parent unless,” after an evidentiary hearing on the matter, the court “enters findings of fact as to the evidentiary basis or the imputation”); id. § 78B-12-203(8)(b) (detailing the evidentiary bases upon which a court may impute income for child support purposes); see also Rayner, 2013 UT App 269, ¶ 10 (“Imputation cannot be premised upon mere conjecture; instead, it demands a careful and precise assessment requiring detailed findings.” (quotation simplified)).

¶58 Here, the court determined that although Blanche was currently working as a “self employed Uber/Lift driver,” her “income cannot be imputed at more than minimum wage of $1,257 per month.” In a different portion of the Ruling, however, the court found that Blanche’s “gross income” should actually be imputed at “$1,260 per month.”

¶59 On appeal, James doesn’t focus on this three-dollar discrepancy. Rather, James argues that the court erred by failing to explain why Blanche’s income should be imputed at minimum wage at all. As James points out, the court elsewhere found that Blanche is “an experienced bookkeeper with QuickBooks who has elected to be employed by About Faceology,” and it further found that she was “an experienced and sophisticated bookkeeper with many years of experience having run, managed, overseen and monitored millions of dollars in income and expenses that ran through the parties[’] businesses.”

¶60      Having reviewed the Ruling, we see no explanation for the court’s determination that, although Blanche is an experienced bookkeeper with the skill set to manage millions of dollars in income for a company, her income should still be imputed at minimum wage. In an attempt to justify this on appeal, Blanche points to a passing statement from the alimony portion of the ruling in which the court noted that the parties “have ten children, five of which are younger than eighteen years of age or have not yet graduated from high school with their expected class.” But as James points out in response, the parties had even more minor children at home during the years in which Blanche was working as a bookkeeper with responsibilities for “millions of dollars in income.” And while it’s possible that the court believed that something had now changed that would prevent Blanche from still doing this work (such as her new status as a post-divorce single parent), the court never said this or entered any findings to support such a determination, it never explained why it was implicitly determining that Blanche could work as an Uber/Lyft driver but not as a bookkeeper, and it entered no findings to explain why her current employment as an Uber/Lyft driver would result in an income imputation of minimum wage.

¶61      To be clear: as with the other issues in this appeal, we express no opinion about the proper resolution of any of these questions. But without an explanation from the district court, James has no basis for properly challenging the decision about Blanche’s income, nor do we have an adequate basis for reviewing it. Given the importance of Blanche’s income to both child support and alimony, we accordingly vacate those rulings.

  1. Blanche’s Financial Condition and Needs

¶62 As part of its alimony determination, the court was also required to consider Blanche’s “financial condition and needs.” Miner, 2021 UT App 77, ¶ 16 (quotation simplified). James argues that the court failed to enter adequate findings to support this assessment. We agree.

¶63 In the Ruling, the court noted that Blanche had claimed that she had “monthly needs of $18,565,” but it then concluded that these needs were “overstated.” And while Blanche had also suggested that she needed the alimony award to account for “over $200,000 in credit card and business debts,” the court suggested that this debt was either accounted for by other portions of its ruling or had “been discharged in the bankruptcy case.”

¶64 But even so, while the court then concluded that James “simply does not make sufficient money to satisfy all of [Blanche’s] claims” about what “she reasonably needs to support herself,” the court did not make any determination about what Blanche’s needs actually are. As James correctly points out, the absence of such an explanation prevents us from conducting a meaningful review of how this factor should weigh into the court’s alimony award, a problem that is compounded by the failure discussed above to adequately explain its determination about Blanche’s income.

¶65 We accordingly vacate the alimony award to allow the court to enter more detailed findings and, “if necessary, recalculat[e] . . . appropriate alimony.” Fitzgerald v. Fitzgerald, 2005 UT App 67U, para. 6 (quotation simplified); see also Eberhard v. Eberhard, 2019 UT App 114, ¶¶ 39–40, 449 P.3d 202 (faulting a district court for not “spelling out” “how much more [the petitioner] actually needs each month to pay down her debt and elevate herself to the marital standard of living,” thus leaving the appellate court “unable to discern whether the alimony award, in fact, exceeds her needs”).

III. Marital Debts

¶66 Finally, James challenges the adequacy of the court’s findings with respect to the parties’ marital debts. We agree that these findings are inadequate.

¶67      “In issuing a divorce decree, a trial court must include an order specifying which party is responsible for the payment of joint debts, obligations, or liabilities of the parties contracted or incurred during marriage.” Fox v. Fox, 2022 UT App 88, ¶ 32, 515 P.3d 481 (quotation simplified), cert. denied, 525 P.3d 1263 (Utah 2022); see also Utah Code § 30-3-5(3)(c)(i). Utah law “requires only a fair and equitable, not an equal, division of the marital debts.” Fox, 2022 UT App 88, ¶ 32 (quotation simplified). A district court is in the “best position to weigh the evidence, determine credibility and arrive at factual conclusions”; as a result, a district court’s division of marital debts is “entitled to a presumption of validity.” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified). But, again, the district court must enter findings of fact that are “sufficiently detailed to disclose the steps by which [it] reached its ultimate conclusion on each issue.” Oldroyd, 2017 UT App 45, ¶ 5.

¶68 Here, the court found that the “parties incurred business debt while married.” James challenges the adequacy of the findings with respect to two of those debts.

¶69      First, the court found that as a result of James’s bankruptcy, James took on $30,000 in debt to finance the purchase of his business’s stock and other business-related property. In the court’s view, Blanche was “entitled to 50% of [the] value” of the business, which meant, in its view, that she was also entitled to $15,000. But the court never explained why it concluded that Blanche was entitled to this amount. While it’s possible, as Blanche now suggests, that the court thought that James had drawn the $30,000 from marital assets—and, thus, that $15,000 of it belonged to Blanche—the court didn’t say this, and its reference to this as “$30,000” in “debt” that James had incurred is somewhat at odds with this inference. In the absence of any explanation, we vacate this ruling.

¶70      Second, at the close of the “Marital Debts” section of its ruling, the court found that Blanche had “received financial compensation from the sale of assets and the conversion of assets into cash.” But it then opined that it was “difficult, if not impossible, to decipher whether each expenditure was personal, business related, or partially business-related.” Without any further explanation, the court then held that Blanche

was “awarded judgment against [James] in the amount of $50,000.”

¶71                   It’s entirely unclear to us what the basis for this $50,000

award was. So far as we can tell, the court seems to have concluded that Blanche had already received some prior distributions from marital assets and that she should now receive $50,000 more. But there’s no explanation for how the court arrived at this particular amount, what the amount was linked to, or why it would be listed alongside an analysis of “Marital Debts.” Without any such explanation, we vacate this award.

CONCLUSION

¶72 We agree with James’s assertion that the challenged findings were not legally adequate and that these inadequacies impaired both his ability to challenge the court’s various rulings and our ability to review them. We accordingly vacate the above rulings and remand the case with instructions for the court to enter more detailed findings and then alter any of its rulings as may be necessary.

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

 

[1] Because the parties share the same last name, we’ll follow our normal practice and refer to them by their first names, with no disrespect intended by the apparent informality.

[2] In this Background, we’ll recount the main findings regarding each ruling at issue on appeal, but in some instances, additional relevant findings will be discussed in the Analysis below.

[3] With respect to some (though not all) of the dollar amounts included in the rulings at issue, the court added “.00” signifiers. For readability, those have been omitted throughout this opinion.

[4] As noted above, the court had previously entered a bifurcated divorce decree while the trial on the parties’ assets and the like was still ongoing.

[5] As evidenced by the passages quoted above, there’s something of a disconnect in how we’ve referred to this kind of argument in past cases. In some cases, we’ve described it as an argument about the “legal adequacy” of the district court’s findings, see, e.g.Lay v. Lay, 2018 UT App 137, ¶ 20, 427 P.3d 1221, but in others, we’ve described it as an argument about the “legal sufficiency” of the findings, see, e.g.Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262. For consistency’s sake, it might be better if bench and bar alike settled on a single usage. And on reflection, we suggest that such an argument should be described in adequacy terms.

The reason for this is to reduce the potential for confusing this kind of argument with the similar sounding but substantively distinct “sufficiency of the evidence” argument. At the risk of over-simplification: a sufficiency of the evidence argument asserts that there was insufficient evidentiary support for a particular factual finding. As detailed more fully below, however, the argument at issue here—a challenge to the adequacy of the findings—asserts that the court’s findings did not adequately explain the basis for the court’s rulings, thereby impairing our ability to review those rulings (for sufficiency of the evidence or anything else).

[6]Two notes are warranted at the outset—one about our usage patterns regarding the rulings at issue, and one about a threshold argument made by Blanche.

First, as discussed above, there are two decisions that largely drive the various arguments in this case: the Ruling and the Supplemental Decree. The Ruling was issued by Judge Davis, who heard the trial evidence, while the Supplemental Decree was issued by Judge Lunnen, who was assigned to the case after the Ruling was issued. At one of the hearings in the intervening period, Judge Lunnen responded to a party’s argument by stating that “[t]he findings, they’re set in stone. So all this is . . . a result of the findings.” As noted, however, Judge Lunnen did alter a few of the Ruling’s legal determinations in the Supplemental Decree. In consequence of how this all played out, the Supplemental Decree recites many of the findings that were issued in the Ruling, though not with the same level of detail. It instead essentially incorporates the bulk of the Ruling by implicit reference. For this reason, the parties’ arguments on appeal have largely focused on whether the findings from the Ruling were adequate, and we’ll follow suit. To avoid redundancy, we won’t repeatedly mention whether we think the findings from the Supplemental Decree were likewise inadequate (even if they were reiterated in the Supplemental Decree); instead, we’ll discuss the Supplemental Decree only in those instances where it differs in some meaningful way from the Ruling (usually because of an altered legal determination).

Second, in her opening brief, Blanche argues that James did “not comply with Utah’s marshaling requirement” in his briefing on appeal. But the marshaling requirement applies when a party “seeks to prevail in challenging the sufficiency of the evidence to support a factual finding or a verdict on appeal.” State v. Nielsen, 2014 UT 10, ¶ 40, 326 P.3d 645; see also State v. Wall, 2020 UT App 36, ¶ 53, 460 P.3d 1058; Wilson v. Sanders, 2019 UT App 126, ¶ 17, 447 P.3d 1240. As noted, however, James is not arguing that there was insufficient evidence to support any particular finding. Rather, James is arguing that the findings were inadequate to explain the court’s various rulings. As we’ve explained, an argument about the adequacy of the findings presents a legal question. Because of this, “marshaling is not required.” Jensen v. Jensen, 2009 UT App 1, ¶ 8 n.3, 203 P.3d 1020; see also Woodward v. Fazzio, 823 P.2d 474, 477–78 (Utah Ct. App. 1991) (“There is, in effect, no need for an appellant to marshal the evidence when the findings are so inadequate that they cannot be meaningfully challenged as factual determinations. . . . Rather, appellant can simply argue the legal insufficiency of the court’s findings as framed.”).

 

[7] While a topic at oral argument, neither party raised on appeal the issue of whether the district court could appropriately rely on Zillow for its valuation of the property, as opposed to evidence submitted at trial. For this reason, we do not address the issue here.

[8] It seems possible (if not probable) that this offset was intended to reflect a determination that the parties received $80,000 in equity when they sold the property for $270,000 while still owing $190,000 on it. But if this was the determination, (1) the court didn’t say so, and (2) it also didn’t explain the basis for initially deviating upward by $2,000 to arrive at $42,000, nor did it explain the basis for subsequently deviating downward by $2,000 to arrive at $38,000.

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Oldroyd v. Oldroyd – 2022 UT App 145 – Premarital Property

2022 UT App 145

THE UTAH COURT OF APPEALS

ROBBEN ANN OLDROYD,

Appellant,

v.

FARRELL LYNN OLDROYD, Appellee.

Opinion

No. 20210073-CA

Filed December 22, 2022

Second District Court, Morgan Department

The Honorable Noel S. Hyde No. 134500028

Brent D. Wride, Attorney for Appellant

Brian E. Arnold and Lauren Schultz, Attorneys for Appellee

JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.

CHRISTIANSEN FORSTER, Judge:

¶1 Prior to their marriage, Robben Ann Oldroyd (Ann) and Farrell Lynn Oldroyd (Farrell) built a home on property owned by Ann. Ann paid for the materials and contractors used in the construction of the home, and Farrell contributed his skills and labor to build the specialty log home. When the parties divorced many years later, a dispute arose regarding their relative interests in the home. This is the third time questions relating to their dispute have come before this court. In the current appeal, we are asked to consider whether the district court erred in awarding Farrell a share of Ann’s premarital equity in the home based on its application of the contribution and extraordinary situation exceptions to the separate-property presumption. We conclude that the contribution exception does not apply to premarital contributions and that the extraordinary situation exception does not apply because Farrell had other means of protecting his alleged interest in the home. Accordingly, we reverse the district court’s ruling and remand with instructions for the court to award the disputed equity to Ann.

BACKGROUND

¶2      This is the third time this matter has come before this court. See Oldroyd v. Oldroyd (Oldroyd I), 2017 UT App 45, 397 P.3d 645; Oldroyd v. Oldroyd (Oldroyd II), 2019 UT App 155, 474 P.3d 467. Each appeal has concerned the parties’ home. Ann purchased the land on which the home was built before the parties were married. Oldroyd I, 2017 UT App 45, ¶ 2. While Ann and Farrell were dating, Ann arranged to have the home built. Id. Ann paid for the costs of materials and construction, but Farrell contributed “supervision, labor, work, expertise, and conceptual direction” for the construction. Id. ¶¶ 2, 4 (quotation simplified). Subsequently, the parties married and lived together in the home, but the land and home remained in Ann’s name alone. Id. ¶ 2.

¶3 While both parties agree that Ann should receive a credit for what she spent on the land on which the home was built, the parties disagree about how the remaining equity in the home should be distributed. Farrell argues that all remaining equity should be shared equally between the parties. Ann, on the other hand, maintains that she should receive a credit for both the amount she spent on the land and the amount she spent on construction costs before the parties divide the remaining equity.[1]

¶4 In its original findings of fact and conclusions of law in the parties’ divorce, the district court found that Farrell’s nonmonetary contributions were “roughly equal” to Ann’s financial contributions and that he had therefore acquired “a separate premarital interest in the improvements on the property.” Id. ¶ 4

(quotation simplified). However, we overturned that determination on appeal because the court “did not explain what legal theory gave rise to that equitable interest.” Id. ¶ 8.

¶5 On remand, the district court again determined that Farrell had a premarital interest in the home but this time premised its ruling on a theory of unjust enrichment. Oldroyd II, 2019 UT App 155, ¶ 4. However, we once again reversed the court’s ruling, this time on the basis that Farrell had never asserted an unjust enrichment claim. Id. ¶¶ 7–9.

¶6 In Oldroyd II, we further explained that Farrell’s pleadings did not raise a claim that he had acquired a premarital interest in the home. Rather, Farrell asserted that because he had “exerted hours and money into the home, including trade work,” he “should be awarded a sum certain from [Ann’s] equity in the home for all the work he has completed on the home, and for value of his trade work that he has performed for investment on the marital home.” Id. ¶ 7 (quotation simplified). In other words, Farrell raised not an equitable claim “for a premarital interest in property,” but “a claim for an equitable award of a portion of [Ann’s] premarital asset.” Id. However, because the district court had not considered equitable bases on which Farrell might be entitled to a share of Ann’s premarital interest, we left open the possibility that the court might determine that such an award was appropriate. Id. ¶ 11 & n.3.

¶7 On remand, the district court, for the third time, awarded Farrell a share of equity in the home. This time, the court recognized that the property was Ann’s premarital asset but concluded that Farrell was entitled to a portion of Ann’s premarital equity based on the contribution exception and the extraordinary situation exception. Ann again appeals.

ISSUE AND STANDARD OF REVIEW

¶8 Ann asserts that the district court erred in awarding Farrell a share of her equity in the home because Farrell’s contributions occurred prior to the marriage and the extraordinary situation exception is not applicable. “We generally defer to a trial court’s categorization and equitable distribution of separate property,” Lindsey v. Lindsey, 2017 UT App 38, ¶ 26, 392 P.3d 968 (quotation simplified), so long as the court’s judgment “fall[s] within the spectrum of appropriate resolutions,” id. ¶ 29.

ANALYSIS

¶9 Historically, we have recognized three equitable exceptions that may justify an award of one spouse’s premarital property to the other spouse: (1) the commingling exception, (2) the contribution exception, and (3) the extraordinary situation exception. See Lindsey v. Lindsey, 2017 UT App 38, ¶ 33, 392 P.3d 968. Only the contribution exception and the extraordinary situation exception are at issue in this case.

¶10 As a threshold matter, we note that it is somewhat unclear from the district court’s discussion whether it was relying on the contribution exception, the extraordinary situation exception, or both exceptions in awarding the disputed funds. The parties’ arguments on appeal primarily concern the applicability of the extraordinary situation exception, and they appear to be operating under the assumption that the court’s decision rested on that exception. However, given that the court’s application of the extraordinary situation exception was based on its determination that Farrell’s premarital contributions made it equitable to award him a share of Ann’s premarital property, we think it appropriate to address both exceptions in our analysis.

I. Contribution Exception

¶11 “Under the contribution exception, a spouse’s separate property may be subject to equitable distribution [upon divorce] when the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property, thereby acquiring an equitable interest in it.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 35, 392 P.3d 968 (quotation simplified). Common examples include a spouse working for the other spouse’s premarital business without taking a salary, see, e.g., Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah Ct. App. 1993), or a couple using marital funds to make improvements to or pay a mortgage on a premarital property, see, e.g.Schaumberg v. Schaumberg, 875 P.2d 598, 601 (Utah Ct. App. 1994). However, as we noted in Oldroyd II, “[p]revious cases addressing equitable division of premarital assets have involved contributions made to those assets during the course of the marriage,” and “Utah courts have not had the opportunity to assess the extent to which one spouse’s premarital contributions to another spouse’s premarital assets may be considered in the context of a divorce court’s equitable division of property.”[2] 2019 UT App 155, ¶ 11 n.3, 474 P.3d 467.

¶12 Having now been presented with the opportunity to consider the applicability of the contribution exception to premarital contributions, we are convinced that it does not apply in this context. Unlike a married person, an unmarried person has no reasonable expectation of any benefit from or entitlement to separate property owned or acquired by their significant other. Here, Farrell chose to assist Ann in building her home without seeking compensation.[3] At that time, even though he may have expected to eventually marry Ann and live in the home with her, he had no guarantee that would happen. “As a general rule, . . . premarital property is viewed as separate property, and equity usually requires that each party retain the separate property he or she brought into the marriage.” Walters v. Walters, 812 P.2d 64, 67 (Utah Ct. App. 1991) (quotation simplified), superseded by statute on other grounds as stated in Whyte v. Blair, 885 P.2d 791 (Utah 1994). Only “where unique circumstances exist” may a trial court “reallocate premarital property as part of a property division incident to divorce.” Id. “Generally, trial courts are . . . required to award premarital property, and appreciation on that property, to the spouse who brought the property into the marriage.” Elman v. Elman, 2002 UT App 83, ¶ 18, 45 P.3d 176.

¶13 Farrell had several options for protecting his interests, which he chose not to take advantage of. First, he could have entered into a contract with Ann requiring her to pay him for his services. Second, he could have negotiated a prenuptial agreement acknowledging his premarital contributions and granting him an interest in the home in case of divorce. Third— though likely an undesirable option given his relationship to Ann—Farrell could have filed a lawsuit bringing a quasi-contract claim, such as unjust enrichment, to obtain compensation for his services. However, the contribution exception is simply not one of the options available where the contributions occurred prior to the parties’ marriage.

II. Extraordinary Situation Exception

¶14 Just as Farrell’s premarital contributions to Ann’s premarital asset cannot support an award to him of Ann’s separate property under the contribution exception, they also cannot support an award under the extraordinary situation exception.

¶15 “The bar for establishing an extraordinary situation is high, traditionally requiring that invasion of a spouse’s separate property is the only way to achieve equity.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 46, 392 P.3d 968 (quotation simplified). “A quintessential extraordinary situation arises when a spouse owns separate property but lacks income to provide alimony.” Id. In that circumstance, “an equitable distribution of the [separate property] would be well within the trial court’s discretion.” Kunzler v. Kunzler, 2008 UT App 263, ¶ 37, 190 P.3d 497 (Billings, J., concurring in part and dissenting in part); see also Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct. App. 1990) (“The court may award an interest in the inherited property to the non-heir spouse in lieu of alimony.”). The doctrine has also been applied in situations where a person did not contribute directly to their spouse’s premarital asset but their contributions to the marital estate allowed their spouse to enhance their own separate assets rather than the marital estate. See Henshaw v. Henshaw, 2012 UT App 56, ¶ 20 & n.7, 271 P.3d 837 (affirming an award of premarital ranch property to a wife, despite the fact that the value of the ranch had depreciated during the marriage, because the wife had borne “the financial burdens of the family in order to allow [the husband] to work almost exclusively on the ranch”); Elman v. Elman, 2002 UT App 83, ¶ 24, 45 P.3d 176 (affirming an award of stock in a premarital business to a wife whose income-earning activities allowed her husband to quit his job and devote time to managing and growing his premarital assets rather than contributing to marital assets). Taking on “domestic burdens” to make possible a spouse’s full-time participation in a premarital business may also be an extraordinary situation where the bulk of the business’s value is developed during the marriage. Savage v. Savage, 658 P.2d 1201, 1204 (Utah 1983).

¶16 But none of those examples reflect the situation we have here. Farrell seeks a portion of Ann’s premarital asset as payment for the work he did on the home prior to the couple’s marriage, not because Ann lacks the resources to pay alimony or enhanced her own separate asset during the marriage in lieu of contributing to the marital estate. And as we discussed above, Farrell had several options to protect his financial interests and to be compensated for his contributions to the home before marrying Ann. The fact that he chose not to employ any of these options does not give rise to the type of inequity that can be addressed only through the extraordinary situation exception. As a general matter, “equitable relief should not be used to assist one in extricating himself from circumstances which he has created.” Utah Coal & Lumber Rest., Inc. v. Outdoor Endeavors Unlimited, 2001 UT 100, ¶ 12, 40 P.3d 581 (quotation simplified). Thus, the district court exceeded its discretion in awarding Farrell a portion of Ann’s premarital asset based on the extraordinary situation exception.

CONCLUSION

¶17 Because we conclude that the contribution exception does not apply to premarital contributions to premarital property, that exception cannot be used to award Farrell a portion of Ann’s premarital interest in the home. Moreover, because Farrell had several options for seeking reimbursement for his premarital efforts, which he declined to exercise, awarding him an interest in the home at this stage of the proceedings is not justified under the extraordinary situation exception. Accordingly, we reverse the court’s award of the disputed portion of the home’s equity and remand with instructions to award the disputed equity to Ann.

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When are my ex’s things deemed abandoned?

I was awarded the house in the divorce. My ex’s things are still here and he/she won’t pick them up. When are they deemed abandoned? 

Utah Code § 67-4a-201 provides, in pertinent part that property is presumed abandoned if the property is unclaimed by the apparent owner “the earlier of three years after the owner first has a right to demand the property or the obligation to pay or distribute the property arises.” 

Utah Code § 67-4a-208 (Indication of apparent owner interest in property) provides, in pertinent part: 

(1) The period after which property is presumed abandoned is measured from the later of: 

(a) the date the property is presumed abandoned under this part; or 

(b) the latest indication of interest by the apparent owner in the property. 

(2) Under this chapter, an indication of an apparent owner’s interest in property includes: 

(a) a record communicated by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held; 

(b) an oral communication by the apparent owner to the holder or agent of the holder concerning the property or the account in which the property is held, if the holder or the holder’s agent contemporaneously makes and preserves a record of the fact of the apparent owner’s communication; 

(c) presentment of a check or other instrument of payment of a dividend, interest payment, or other distribution, or evidence of receipt of a distribution made by electronic or similar means, with respect to an account, underlying security, or interest in a business association; 

(d) activity directed by an apparent owner in the account in which the property is held, including accessing the account or information concerning the account, or a direction by the apparent owner to increase, decrease, or otherwise change the amount or type of property held in the account; 

(e) a deposit into or withdrawal from an account at a banking organization or financial organization, including an automatic deposit or withdrawal previously authorized by the apparent owner other than an automatic reinvestment of dividends or interest; 

(f) any other action by the apparent owner which reasonably demonstrates to the holder that the apparent owner knows that the account exists; and 

(g) subject to Subsection (5), payment of a premium on an insurance policy. 

(3) An action by an agent or other representative of an apparent owner, other than the holder acting as the apparent owner’s agent, is presumed to be an action on behalf of the apparent owner. 

(4) A communication with an apparent owner by a person other than the holder or the holder’s representative is not an indication of interest in the property by the apparent owner unless a record of the communication evidences the apparent owner’s knowledge of a right to the property. 

(5) If the insured dies or the insured or beneficiary of an insurance policy otherwise becomes entitled to the proceeds before depletion of the cash surrender value of the policy by operation of an automatic premium loan provision or other nonforfeiture provision contained in the policy, the operation does not prevent the policy from maturing or terminating. 

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Why is it so easy to get married, and so hard to get divorced?

Why is it so easy to get married, and so hard to get divorced? Shouldn’t it be the other way around? 

This is a perceptive question. 

It would not not be that hard to get divorced if you were to give up everything in the divorce. If you told your spouse, “I want a divorce so bad I’ll make this as easy for, and as advantageous to, you as possible by waiving any and all rights to the marital assets, spousal support, the kids, everything,” you could get divorced relatively quickly and without having to incur any attorney’s fees. Heck, your spouse might gleefully pay an attorney to draw the “my spouse is giving away the farm” divorce action and settlement agreement. Of course, while getting the divorce that way would be fast, easy, and cheap, you’d pay a dear personal price—in both the short and the long run—in almost every other aspect.  

When you think about it, there are many endeavors that are easy to enter but prove to be very difficult to finish or exit (or at least to finish or exit comfortably): 

  • college (easy to enroll, get loans), hard to finish, hard to pay off student loans, especially if you drop out and still have to pay the loans off 
  • business (easier to get into than to stay in, and brutal to experience a business failure) 

And marriage is another. The longer one is married, the harder a divorce usually is due to so much having been invested in a marriage of long duration. It’s easier for two single, childless people to marry than for two married people to divorce who acquired property/assets and incurred debt and who may have begotten minor children (to say nothing of the disruption divorce inflicts on the physical and emotional reliance upon each other that spouses develop over time). With this in mind, it’s hard to conceive a way by which we could reasonably and responsibly make easier than marrying the dividing the property/assets, apportioning responsibility for marital debts and obligations, and determining the custody of minor children in divorce.  

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When do courts value the marital estate?

When do courts value the marital estate? At time of separation, or at the time the court enters the Decree of Divorce? 

This is a question that often causes divorcing people’s heart to sink. I’ll tell you why, but first, let’s answer the question of whether courts value the marital estate in a divorce action: at time of separation, or at the time the court enters the Decree of Divorce? 

The first answer to this question is: the court can value the marital estate at any time, if it can articulate a good reason for doing so.  

“Generally, the marital estate is valued at the time of the divorce decree or trial.” Jacobsen v. Jacobsen, ¶ 39, 257 Pacific.3d 478 (cleaned up). However, as with alimony, the court has broad discretion to use a different date so long as its decision it supported by “sufficiently detailed findings of fact explaining its deviation from the general rule.” Id.; see also Rayner, 2013 UT App 269, ¶ 19, 316 P.3d 455 (“A trial court has broad discretion to deviate from [the] general rule when circumstances warrant.” (cleaned up)). “As a general rule, the marital estate is valued at the time of the divorce decree,” Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct.App.1993); see also Berger v. Berger, 713 P.2d 695, 697 (Utah 1985), and that “any deviation from the general rule must be supported by sufficiently detailed findings of fact that explain the trial court’s basis for such deviation,” Rappleye, 855 P.2d at 262. 

Utah case law suggests a number of factors that may be relevant to determining whether a party should be held accountable for the dissipation of marital assets: how the money was spent, including whether funds were used to pay legitimate marital expenses or individual expenses, Parker, 2000 UT App 30, ¶¶ 13, 15, 996 P.2d 565; Thomas, 1999 UT App 239, ¶ 20, 987 P.2d 603; Shepherd v. Shepherd, 876 P.2d 429, 433 (Utah Ct.App.1994); Andersen v. Andersen, 757 P.2d 476, 480 (Utah Ct.App.1988); the parties’ historical practices, Thomas, 1999 UT App 239, ¶ 20, 987 P.2d 603; the magnitude of any depletion, Shepherd, 876 P.2d at 433; the timing of the challenged actions in relation to the separation and divorce, id.; and any obstructive efforts that hinder the valuation of the assets, Goggin, 2013 UT 16, ¶¶ 49, 53, 299 P.3d 1079; Andrus v. Andrus, 2007 UT App 291, ¶ 13, 169 P.3d 754. After an “initial showing of apparent dissipation” by one party, the burden shifts to the other party “to show that the funds were not dissipated, but were used for some legitimate marital purpose.” Parker, 2000 UT App 30, ¶¶ 13, 15, 996 P.2d 565. 

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How do you protect your assets from divorce, lawsuits, etc.?

How do you protect your assets from divorce, government confiscation, lawsuits, garnishments, or seizure? 

Best way: own nothing. The government (in all its forms) cannot seize from you that which you do not own. 

Downside: when you own nothing, you control nothing. If your wife, for example, owns the car you drive and the house in which you live, there’s no guarantee she and the car and the house will always be around for you. 

You may have heard about creating an irrevocable trust or family partnership as a means of protecting your assets from creditors, and depending upon your situation and the laws of the jurisdiction that governs you and your assets, that may be a viable option. To know that, however, you would need to inquire with an attorney who knows and understands the laws of your jurisdiction. 

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If you get a divorce but everything is in your name, do you have to split it?

If you get a divorce but everything is in your name, do you get to keep everything or do you have to split it? 

I will answer your question in the context of the law of the jurisdiction where I practice divorce law (Utah): 

First, a short answer to your question: whether property acquired in the individual name of a spouse during a marriage (other than by gift or inheritance) does not somehow shield that property from being awarded in whole or in part to the other spouse in divorce. 

Second, it will be helpful to understand a few terms that are key to understanding property in divorce (See Black’s Law Dictionary (11th ed. 2019)): 

– marital property. Property that is acquired during marriage and that is subject to distribution or division at the time of marital dissolution. • Generally, it is property acquired after the date of the marriage and before a spouse files for separation or divorce. The phrase marital property is used in equitable-distribution states and is roughly equivalent to community property. — Also termed marital estate; matrimonial property. 

– separate property. 1. Property that a spouse owned before marriage or acquired during marriage by inheritance or by gift from a third party, and in some states property acquired during marriage but after the spouses have entered into a separation agreement and have begun living apart or after one spouse has commenced a divorce action. — Also termed individual property. 

– community property. Assets owned in common by husband and wife as a result of their having been acquired during the marriage by means other than an inheritance by, or a gift or devise to, one spouse, each spouse generally holding a one-half interest in the property. • Only nine states have community-property systems: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. A community-property regime is elective in Alaska. 

– quasi-community property. Personal property that, having been acquired in a non-community-property state, would have been community property if acquired in a community-property state. • If a community-property state is the forum for a divorce or administration of a decedent’s estate, state law may allow the court to treat quasi-community property as if it were community property when it determines the spouses’ interests. 

– equitable distribution (1893) Family law. The division of marital property by a court in a divorce proceeding, under statutory guidelines that provide for a fair, but not necessarily equal, allocation of the property between the spouses. • With equitable distribution, when a marriage ends in divorce, property acquired during the marriage is divided equitably between the spouses regardless of who holds title to the property. The courts consider many factors in awarding property, including a spouse’s monetary contributions, nonmonetary assistance to a spouse’s career or earning potential, the efforts of each spouse during the marriage, and the length of the marriage. The court may take into account the relative earning capacity of the spouses and the fault of either spouse. Equitable distribution is applied in 47 states (i.e., all the states except California, Louisiana, and New Mexico, which are “equal division” community-property states). — Also termed equitable division; assignment of property. 

Utah is an equitable distribution state in the context of divorce. Here is how Utah defines the difference between separate and marital property, and what a divorce court is empowered to do with separate and marital property. See Lindsey v. Lindsey, 392 P.3d 968 (Utah Ct.App. 2017), 2017 UT App 38: 

When distributing “marital property in a divorce proceeding, the overriding consideration is that the ultimate division be equitable—that property be fairly divided between the parties.” Granger v. Granger, 2016 UT App 117, ¶ 15, 374 P.3d 1043 (brackets, citation, and internal quotation marks omitted). To that end, a trial court must first “identify the property in dispute and determine whether it is marital or separate.” Dahl v. Dahl, 2015 UT 79, ¶ 121, ––– P.3d –––– (brackets, citation, and internal quotation marks omitted). Marital property ordinarily includes “all property acquired during marriage,” “whenever obtained and from whatever source derived.” Dunn v. Dunn, 802 P.2d 1314, 1317–18 (Utah Ct. App. 1990) (citation and internal quotation marks omitted). Separate property ordinarily includes premarital property, gifts, and inheritances, including any appreciation that may accrue during the marriage. SeeDahl, 2015 UT 79, ¶ 143, ––– P.3d ––––; Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988). 

¶ 32 The presumption is that marital property will be divided equally while separate property will not be divided at all. See Dahl, 2015 UT 79, ¶ 121, ––– P.3d ––––; Dunn v. Dunn, 802 P.2d at 1323. Married persons have a right to separately own and enjoy property, and that right does not dissipate upon divorce. SeeMortensen, 760 P.2d at 308. Thus, equity generally requires that “each party retain the separate property he or she brought into the marriage, including any appreciation” thereof. Dunn, 802 P.2d at 1320, 1323; accordDahl, 2015 UT 79, ¶ 143, ––– P.3d ––––; Mortensen, 760 P.2d at 308. 

¶ 33 But separate property “is not totally beyond a court’s reach.” Elman v. Elman, 2002 UT App 83, ¶ 19, 45 P.3d 176 (brackets, citation, and internal quotation marks omitted). Before carving property out of the marital estate, a trial court must consider whether circumstances warrant an equitable override of the separate-property retention rule. See Henshaw v. Henshaw, 2012 UT App 56, ¶ 15, 271 P.3d 837. Three circumstances have been identified under Utah law as supporting an award of separate property at the time of divorce. These exceptions are when separate property has been commingled; when the other spouse has augmented, maintained, or protected the separate property; and in extraordinary situations when equity so demands. SeeMortensen, 760 P.2d at 308; Dunn, 802 P.2d at 1320. 

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Duffin v. Duffin – 2022 UT App 60

2022 UT App 60

THE UTAH COURT OF APPEALS

JAMES M. DUFFIN III,
Appellee and Cross-appellant,
v.
BRANDY E. DUFFIN,
Appellant and Cross-appellee.

Opinion

No. 20200361-CA

Filed May 12, 2022

Third District Court, West Jordan Department

The Honorable Matthew Bates

No. 184400962

T. Jake Hinkins and Kurt W. Laird, Attorneys for Appellant and Cross-appellee

Martin N. Olsen and Beau J. Olsen, Attorneys for Appellee and Cross-appellant

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

MORTENSEN, Judge:

¶1        In prototypical fashion, a young married couple—James and Brandy Duffin[1]—set about building a new house. They prequalified for a loan, hired a real estate agent, paid a deposit of $1,000 with marital funds, entered into a contract with a builder, went to a design center to pick out finishes, and attended the closing together. However, in atypical fashion, James’s father and grandfather reimbursed the $1,000 deposit, paid an additional $18,000 as a preconstruction deposit, and at closing paid the balance of the purchase price of $410,875 in cash. Only James’s name was placed on the deed. Months later, as James and Brandy’s marriage relationship deteriorated, James deeded the property to himself and his father. A divorce action was filed, and at trial, the district court concluded, among other things, that any interest James and Brandy had in the house was not marital property and that Brandy should be awarded attorney fees. Brandy appeals, claiming that any interest she and James have in the house is a marital interest. James cross-appeals, challenging the determination on fees. We reverse the district court’s determination regarding the house, but we affirm the decision regarding attorney fees.

BACKGROUND

¶2        Brandy and James were married in March 2015. They had two children during their union.

¶3        In April 2016, Brandy and James, having been approved for a loan of up to $360,000, entered into a real estate purchase agreement to purchase a house in West Jordan, Utah. Using a cashier’s check from an account in his name, James paid a security deposit of $1,000 on the contract.[2] James testified that his father (Father) reimbursed him for the $1,000, though he could not remember how that reimbursement occurred.

¶4        In June 2016, James’s grandfather (Grandfather) paid $18,000 for the preconstruction deposit, but James asserted that the money was actually an advance on Father’s inheritance from Grandfather. At closing, Father paid the outstanding balance on the home, again with money allegedly received as an advance on his own inheritance.

¶5        On February 8, 2017—the day before closing—James sent an email, titled “Loan Contract,” to Father stating that Father “is dispensing a loan of $429,875.42 to purchase a home,” which was identified as the house for which James and Brandy had signed the real estate purchase agreement. In that document, James identified himself as the party responsible for repayment of the loan. Notably, the Loan Contract did not mention interest or a payment schedule; rather, it provided that Father could “demand payment of this loan at anytime.”

¶6        Brandy and James moved into the completed house. A warranty deed conveying title of the house from the seller to James—Brandy’s name does not appear on the deed—was recorded on February 9, 2017.

¶7        About a year later, in February 2018, James added Father to the title of the house by executing and recording a new warranty deed. Brandy contended that the “marriage was struggling and divorce was a very real possibility” at the time James added Father to the title of the property.

¶8        As it turns out, Brandy and James separated in July 2018, and James petitioned for divorce in August 2018. James further asked that the assets and liabilities of the marital estate be divided equitably and that the parties bear their own attorney fees and costs.

¶9        As relevant here, in his financial declaration, submitted in October 2018, James listed the house as an asset with no amount owing, noting that it was a “[c]ash purchase” by Father and that it was acquired in his and Father’s names.

¶10      In her counter-petition, in addition to addressing custody and parent-time issues, Brandy requested that the house be sold and the equity split equally. Brandy also asked for attorney fees.

¶11 James later asserted—during the divorce proceedings— that he purchased the house on behalf of Father, who lived in California, and that he was just doing the “leg work” for Father. He also asserted that he and Brandy “weren’t prequalified on [their] own merits” but had used Father’s bank statements in the application.[3] However, James admitted that he never informed anyone that he was acting as the agent of Father. And James conceded that he was not aware of “written documentary evidence” indicating an agency relationship but that there were “certainly conversations” between him and Father to that effect.[4] James also contended that an agreement between him and Father gave James the option to purchase the house from Father.

¶12 Father echoed much the same in his deposition on the matter, saying that he had “been talking to [James] about purchasing a home for [him] in Utah for quite some time” and that James acted on his behalf in purchasing the house. Father explicitly stated that he “[a]bsolutely” never intended the house to be a gift to James. Father clarified, “I provided all the money. My son worked as my agent in obtaining that house. And it was always understood between my son and me that that was my house.” But Father admitted that there was no document that would evidence any sort of an agency relationship between them.

¶13      Father explained that his name was not on the deed to the house because he “wanted to empower” James by having him “go through the process” of purchasing a house. Father asserted that he was involved in the design of the house and “oversaw the whole thing.” But he admitted there were “no writings, no emails or text messages between the two of [them] about the house plans.” Rather, Father explained, “[I]t was just a . . . casual, loving, walking down the street, arm around my son,” asking, “What do you think, Jim?”

¶14 Father indicated that he needed to “subsidize the relationship [between James and Brandy] until it really got off . . . on a good start.” However, Father indicated that Brandy was never involved in the conversations about the help he was extending to them: “The whole . . . financial situation, . . . my support, my allowing them to live in that house, all of that was between me and my son.”

¶15 For her part, Brandy testified that there was never any discussion that the house would belong to anyone other than her and James. Specifically, she said there was never any mention made to her that the house was being built for Father or that Father had any input on the construction. She clarified that she and James “picked out all of the finishings” and the floor plan of the house. Brandy testified that at no time during construction did James ever indicate that he needed to check with Father to verify that he was “okay” with their design selections because it was going to be Father’s house. In terms of paying for the house, Brandy stated that she and James were prequalified for a loan on the house, that the $1,000 deposit was paid with a cashier’s check funded with money from their commingled accounts, and that she and James were present together at the closing. Brandy further testified that she and James completed the landscaping and added, among other features, a fence, basketball standard, and cement pad.

¶16      With regard to the house, the court found that it was not marital property. The court reasoned,

The parties went into this home with the expectation that they would purchase it together. They picked the lot, they picked the design of the home, they selected trim and other finishings in the home, and they entered into a [real estate purchase agreement] with [the seller], and the parties expected that they would have a mortgage and that they would pay for this home using their respective incomes. But when it came time to actually close on this transaction, that is not what happened. Instead, [Father] paid for the home in its entirety, and James was the only one who was put on the deed.

¶17      The court went on to note that James and Brandy “lived in the home for what is a relatively short duration. They did not pay rent, they did not pay any sort of mortgage or loan, they did not pay utilities or property taxes. Those were all paid by income from [Father] towards the home.” And even though James and Brandy did “contribute somewhat to the home by putting in some shrubberies, a basketball standard, putting down a concrete pad, [and] installing a small fence,” the court concluded that “given the large amount of equity in this home, upwards of $450,000, those small contributions . . . [did] not convert [the house] into a marital asset.”

¶18      The court concluded,

[The house] was an asset that was titled only in James’s name. It was paid for by [Father]. . . . To determine that it was a marital interest would essentially be to give to Brandy a tremendous windfall of something that was not acquired in any rational sense of the word by the efforts of the marriage or the work or efforts of the marriage. So to the extent that there is any interest in the home, it is not a marital interest and to the extent that James has an interest in the home, it is not a marital interest.[5]

¶19      Lastly, the court awarded attorney fees to Brandy, at least in part:

Given the parties’ respective incomes, particularly that James has income a little bit more than four times the income that Brandy has, Brandy has a need for assistance in paying her attorney’s fees [and] those fees were necessary for her to be able to defend herself in this divorce action. However, she did not prevail 100 percent on all of her claims[6] and everything she was seeking, so the Court hereby awards her 60 percent of her attorney’s fees.

¶20 Both parties appeal, Brandy with respect to the determination that any interest she and James had in the house was not marital property, and James with respect to the award of attorney fees.

ISSUES AND STANDARDS OF REVIEW

¶21      Brandy contends that the district court erred in concluding that any interest she and James had in the house acquired during the course of the marriage was not marital property and thus not subject to distribution. “We will not disturb a property award unless we determine that there has been a misunderstanding or misapplication of the law resulting in substantial and prejudicial error, the evidence clearly preponderates against the findings, or such a serious inequity has resulted as to manifest a clear abuse of discretion.” Nakkina v. Mahanthi, 2021 UT App 111, ¶ 16, 496 P.3d 1173 (cleaned up).

¶22      In his cross-appeal, James contends that the district court erred in ordering him to pay 60% of Brandy’s attorney fees pursuant to Utah Code section 30-3-3(1). “We review the district court’s award of attorney fees under Utah Code section 30-3-3, including the amount of the award, for abuse of discretion.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 6, 449 P.3d 202.

ANALYSIS

I. The Status of the Parties’ Putative Interest in the House as Marital Property

¶23 “Marital property is ordinarily all property acquired during marriage and it encompasses all of the assets of every nature possessed by the parties, whenever obtained and from whatever source derived.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 14, 440 P.3d 757 (cleaned up). “Separate property, in contrast, is typically a spouse’s premarital property or property received by gift or inheritance during the marriage.” DeAvila v. DeAvila, 2017 UT App 146, ¶ 15, 402 P.3d 184.

¶24 “In Utah, marital property is ordinarily divided equally between the divorcing spouses and separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse.” Olsen v. Olsen, 2007 UT App 296, ¶ 23, 169 P.3d 765. Specifically,

When dividing property in a divorce, the court should first properly categorize the parties’ property as part of the marital estate or as the separate property of one or the other. Then, the court should presume that each party is entitled to all of that party’s separate property and one-half of the marital property, regardless of which spouse’s name appears on the title to the marital property.

Allen v. Ciokewicz, 2012 UT App 162, ¶ 46, 280 P.3d 425 (cleaned up); see also Bradford v. Bradford, 1999 UT App 373, ¶ 26, 993 P.2d 887 (stating that marital property may be distributed equitably “regardless of who holds title”).

¶25 Here, the district court erred in its determination that insofar as James or Brandy had a property interest in the house, that interest was not marital.

¶26 Throughout the pendency of the divorce proceedings, James explicitly rejected the notion that the house was a gift. And there is no indication in the record that James received the house as part of his inheritance. Nor was the house James’s premarital asset—it was indisputably acquired during the marriage. Thus, there is no evidence to suggest that any interest James might have in the house qualifies as James’s separate property. See Keiter v. Keiter, 2010 UT App 169, ¶ 22, 235 P.3d 782 (“Generally, premarital property, gifts, and inheritances may be viewed as separate property, and the spouse bringing such separate property into the marriage may retain it following the marriage.” (cleaned up)).

¶27 But there is ample evidence that any interest James and Brandy had in the house was marital property. Brandy and James both signed the real estate purchase agreement. As the district court explicitly noted, they both entered into the agreement with the expectation that they were purchasing the house together and that they would have a mortgage together. They picked the lot, they paid a $1,000 deposit, they selected the design, and they chose the finishings. The two factors that the district court pointed to as indicating that the house was not marital property were that James was the only one on the deed and that Father paid for the house in its entirety. But neither of these circumstances is sufficient to transform whatever interest James and Brandy have in the house from marital property to separate property.

¶28      First, that Brandy was never on the deed to the house in no way indicates that any interest James and Brandy might have in the house was somehow not marital property. In fact, just the opposite is true. “[A] marital asset is defined functionally as any right that has accrued during the marriage to a present or future benefit.” Jefferies v. Jefferies, 895 P.2d 835, 837 (Utah Ct. App. 1995). By having his name entered into the warranty deed and having his name placed on the title, James obtained the house in fee simple. See Utah Code Ann. § 57-1-12(2) (LexisNexis 2020). And because he obtained title during the marriage—and because the house was not a gift or inherited—whatever interest he had in the house became marital property. See Marroquin, 2019 UT App 38, ¶ 14 (defining marital property as “all property acquired during marriage” (cleaned up)). In other words, once James acquired title, Brandy acquired title because the acquisition took place during the marriage, and there was no exception (i.e., gift or inheritance) indicating otherwise.

¶29      Second, that Father paid for the house also fails to render “nonmarital” any interest James and Brandy might have in it. As our case law makes abundantly clear, “marital property ordinarily includes all property acquired during marriage, whenever obtained and from whatever source derived.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 31, 392 P.3d 968 (cleaned up); accord Marroquin, 2019 UT App 38, ¶ 14; DeAvila, 2017 UT App 146, ¶ 15; Dunn v. Dunn, 802 P.2d 1314, 1317–18 (Utah Ct. App. 1990). That James and Brandy used someone else’s money to purchase the house does not—standing alone—make their interest in the house nonmarital property. Most people, when they purchase a home, use someone else’s money (usually a lender’s) to do it—indeed, Father providing the money to purchase the house looks somewhat like just such a loan. And granted, the source of money by which the house was acquired would potentially render James’s interest in the house nonmarital if Father had gifted the money to James alone or if it represented James’s inheritance. But that’s not what happened here. As already noted, the record does not support a conclusion that the money was a gift to James or part of his inheritance, and the district court did not conclude otherwise.

¶30 On this note (i.e., that Father paid for the house while James and Brandy made a minimal contribution), the district court, citing Jefferies v. Jefferies, 895 P.2d 835 (Utah Ct. App. 1995), and Dunn v. Dunn, 802 P.2d 1314 (Utah Ct. App. 1990), concluded, “These cases suggest that marital property is not just any property obtained, but property that is obtained through the efforts of the marriage, and suggests that a windfall to one party or the other may not necessarily be marital property.” From this “suggestion” that it perceived in these two cases, the district court concluded that James and Brandy did not contribute sufficiently to the house to make any interest they might have in it marital property.

¶31 But obtaining property “through the efforts of the marriage” is not the defining condition that makes property marital; rather, it is the mere acquisition of property during marriage. As this court has often repeated, “marital property ordinarily includes all property acquired during marriage, whenever obtained and from whatever source derived.” Lindsey, 2017 UT App 38, ¶ 31 (cleaned up). Our case law nowhere mentions “the efforts of the marriage” as being necessary to making property so acquired marital. Thus, acquisition—from whatever source—during the marriage is the hallmark condition that renders property marital, not the maintenance or growth of that property by the efforts of the parties. To be clear, our case law employs the modifier “ordinarily” to account for the situation where property acquired by “gift or inheritance during the marriage,” see DeAvila, 2017 UT App 146, ¶ 15, remains separate property unless it has been transformed to marital property by commingling or the contribution of the non-receiving spouse, see Keyes v. Keyes, 2015 UT App 114, ¶ 28, 351 P.3d 90 (stating that “separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse” unless it loses “its separate character . . . through commingling or if the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property” (cleaned up)). Thus, the district court’s misstep here was in applying the concept of “the efforts of the marriage” as a condition for all property acquired during the course of a marriage to become marital, when our case law has limited that concept to the efforts of the non-receiving spouse in transforming separate property into marital property.

¶32      In sum, we reverse the district court’s determination that the couple’s property interest in the house, insofar as they had an interest, was not marital. The extent to which Brandy and James even have an interest in the property is an issue that will be decided in the separate lawsuit. See supra note 5. But to the extent they are adjudicated to have an interest in the house, that interest is marital property subject to equitable distribution between them.

II. The Award of Attorney Fees

¶33 On appeal, James asserts that the district court erred in awarding Brandy attorney fees because it did not make a detailed factual analysis of either Brandy’s financial need for assistance or James’s ability to pay and because the district court took into account whether Brandy prevailed on her claims. These challenges raise different legal theories from the ones James raised below with regard to Brandy’s attorney fees request.

¶34 “Parties are required to raise and argue an issue in the [district] court in such a way that the court has an opportunity to rule on it.” State v. Johnson, 2017 UT 76, ¶ 18, 416 P.3d 443 (cleaned up). “When a party fails to raise and argue an issue in the district court, it has failed to preserve the issue, and an appellate court will not typically reach that issue absent a valid exception to preservation.” Issertell v. Issertell, 2020 UT App 62, ¶ 21, 463 P.3d 698 (cleaned up). “As to preservation, our case law draws a distinction between new ‘issues’ (like distinct claims or legal theories) and new ‘arguments’ in support of preserved issues (such as the citation of new legal authority).” Hand v. State, 2020 UT 8, ¶ 6, 459 P.3d 1014.

¶35 Here, James is clearly trying to raise new issues. Below, James did not challenge the court’s analysis regarding Brandy’s financial need or his ability to pay. In fact, James explicitly challenged only the inclusion of fees associated with a protective order, the exclusion of certain reimbursements Brandy had received, the court’s handling of rule 54(d) of the Utah Rules of Civil Procedure as it applies to costs, and the exclusion of the costs James had paid for a custody evaluation. Nowhere did he assert that the court should not award Brandy attorney fees due to his or Brandy’s financial situation. In short, the legal theories he raised below in challenging Brandy’s attorney fee request were entirely different from the legal theories he attempts to raise now. He simply never gave the district court an opportunity to rule on the theories he now advances.

¶36 Because James failed to raise the same challenges to Brandy’s request for attorney fees that he is attempting to raise on appeal, his current challenges are unpreserved, and James does not ask us to apply any of the traditional exceptions to our preservation requirement.[7] On that basis, we decline to review the merits of James’s unpreserved challenges to the award of attorney fees.

CONCLUSION

¶37 Having concluded that to the extent the couple had a property interest in the house, the interest was marital, we reverse and remand for further proceedings consistent with this opinion. And we uphold the award of attorney fees to Brandy because the legal theories advanced on appeal were not preserved.


[1] Because the parties share the same last name, we refer to them by their given names.

[2] Brandy asserted that the cashier’s check was funded with commingled monies from her and James. See infra ¶ 15. James admitted that money from Brandy’s income may have gone into the account from which the cashier’s check was drawn.

[3] James’s name is identical to Father’s, with the exception of the suffix.

[4] James acted as agent for Father for the purchase of a different “property six houses away.” Indeed, the record contains another real estate purchase contract under Father’s name and address (as opposed to James and Brandy’s) that was signed by James. The record contains at least one piece of correspondence addressed to Father at this address.

[5] The court spoke in conditional terms about the extent of interest in the house—as do we—because Father has filed a pending quiet title action asserting his interest in the property.

 

[6] Brandy prevailed on various claims related to custody and child support.

[7] James argues that the court plainly erred in awarding attorney fees. But after his brief was submitted, this court held “that plain error review is not available in ordinary civil cases.” See Kelly v. Timber Lakes Prop. Owners Ass’n, 2022 UT App 23, ¶ 44, 507 P.3d 357. Accordingly, the plain error exception to our preservation rule does not apply to this situation.

James also argues that “rare procedural anomalies . . . prevented [him] from fully providing the [district court] the legal arguments and evidence to support the denial of Brandy’s request for attorney fees.” The “rare procedural anomaly” James identifies is the court’s statement that it was “very familiar with the state of the law with respect to attorneys fees under 30-3-3” such that it did not need “further briefing on this matter.” James argues that precluding him “from putting forth evidence and appropriate briefing rises to the level of an anomaly in the proceedings.” But we see no procedural anomaly that would have prevented James from raising the issue in a post-judgment motion, just as he did with his other challenges to the award of attorney fees.

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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