AMY R. MYERS, Appellee, v. JACOB W. MYERS, Appellant.
Opinion
No. 20220002-CA
Filed March 2, 2023
Sixth District Court, Richfield Department
The Honorable Brody L. Keisel
No. 184600056
Benjamin L. Wilson, Attorney for Appellant
Douglas L. Neeley, 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 After more than two decades of marriage, Jacob and Amy Myers divorced in 2018, and mutually agreed to the terms of their divorce. In particular, they agreed that Jacob[1] would pay Amy $916 per month in child support and $2,300 per month in alimony. Less than two years later, Jacob filed a petition to modify the divorce decree, asserting that both his and Amy’s income had changed since the divorce. The district court, after holding a trial, denied Jacob’s petition to modify, and Jacob appeals that denial, asserting that the court erred in determining that Amy’s ability to earn had not changed and in failing to make findings regarding Amy’s reasonable expenses. We find merit in Jacob’s positions, and therefore reverse and remand.
BACKGROUND
¶2 Jacob and Amy Myers married in 1995, but divorced in 2018 after some twenty-three years of marriage. When they divorced, one of their children (born in 2001) was still a minor, but all their children are now adults. Throughout most of their marriage, Jacob worked in oil production as a rig manager. His position paid relatively well—at the time of the divorce, he was earning $8,233 per month—but required him to work a nontraditional schedule (two weeks on, two weeks off), and in addition the job was sometimes dangerous and often involved the operation of heavy machinery.
¶3 While Jacob worked in the oil fields, the couple decided that Amy would—at least until the children were grown—forgo steady employment outside the home in order to care for the children. Amy did, however, run a small “foot zoning” business from which she earned approximately $250 per month.
¶4 In April 2018, Amy filed for divorce, citing irreconcilable differences. Jacob did not contest Amy’s petition; instead, the parties—neither of which were, at the time, represented by counsel—filed a joint stipulation, using forms provided by the court’s self-help center, agreeing to resolve all matters related to the divorce petition. As amended, the stipulation provided that Jacob would pay Amy $916 per month in child support—at least for another year or two until the parties’ youngest child reached the age of majority—and $2,300 per month in alimony. Jacob’s obligation to pay alimony was to last twenty-three years—until April 2041—unless Amy remarried or cohabited before that.
¶5 In the stipulation, the parties agreed that Jacob’s income was $8,233 per month, and that Amy’s income was $250 per month, and those figures were apparently used to calculate Jacob’s child support obligation according to applicable guidelines. But the stipulation contained no indication of how Jacob’s alimony obligation was calculated; in particular, the stipulation was silent as to what Amy’s reasonable monthly expenses might be.
¶6 Using court-approved forms, the parties incorporated the terms of their stipulation into proposed findings of fact and conclusions of law, as well as a proposed divorce decree, and the district court signed the documents, thus finalizing the parties’ divorce, in May 2018. The final documents, like the parties’ amended stipulation, provided that Jacob would pay $916 per month in child support and $2,300 per month in alimony, but contained no findings about Amy’s reasonable monthly expenses.
¶7 About eighteen months later, in November 2019, Jacob— now represented by an attorney—filed a petition to modify the alimony award contained in the decree. In the petition, Jacob alleged that “the income of both parties has significantly changed since their divorce was finalized.” With regard to his own income, Jacob alleged that he was “no longer working in the oil fields” because he was “no longer able to work the same work schedule and the same type of work because of how it was negatively affecting him.” He asserted that he was “going back to school” in an effort to begin a different career, and that he was “currently not working.” With regard to Amy’s income, Jacob alleged that Amy had become employed and earned $1,200 per month, and that her “self-employment income” had increased to $1,500 per month, such that Amy’s total monthly income was $2,700. Jacob alleged that the changes in the parties’ respective incomes constituted a “substantial change in circumstances that warrants a modification” of the alimony award.
¶8 Just a few weeks later, in January 2020, Amy—also now represented by an attorney—filed a motion for an order to show cause, asserting (among other things) that Jacob had failed to fully comply with his child support and alimony obligations. The court issued an order commanding Jacob to appear and show cause why he should not be held in contempt of court, and later held an evidentiary hearing to consider the matter. At that hearing, the court found that Jacob had “voluntarily quit his employment” in the oil fields and that, “if he hadn’t, he would have been able to pay what was ordered.” The court thus found Jacob in contempt and ordered him to pay Amy more than $22,000 in back child support and nearly $6,000 in unpaid alimony.
¶9 In the meantime, Jacob’s petition to modify remained pending, and the parties exchanged updated financial declarations in anticipation of an eventual trial. Amy’s first updated financial declaration, signed in December 2019, listed total annual income of nearly $11,000 (or about $889 per month) from three different sources: a new job, her foot zoning business, and teaching yoga classes. In this same declaration, Amy set forth monthly expenses of $4,084, with some of the expenses being at least partially attributable to her youngest child, who was still living in the home with Amy at that point. Then in August 2021, on the day of trial, Amy submitted a second updated financial declaration. According to this new declaration, Amy had recently obtained a different job, this one full-time, that paid her $45,000 per year ($3,750 per month). In addition, Amy stated that she earned $241 per month from her foot zoning business and $22 per week teaching yoga. She also asserted that her monthly expenses had increased to $4,795 (although the line-items listed in the declaration add to only $4,613), even though no children were living with her any longer. Among the changes from the 2019 declaration were a $500 increase in healthcare expenses, a $175 increase in real estate maintenance, a $100 increase in entertainment expenses, and an $88 increase in utilities.
¶10 In August 2021, the district court held a one-day bench trial to consider Jacob’s petition to modify. The only two witnesses to testify were Jacob and Amy. During his testimony, Jacob explained that he voluntarily left his position in the oil fields because he was no longer able to focus on his job duties to the degree he wanted, and he was worried that—due to the dangerous nature of the work—he would injure himself or someone else. However, he acknowledged, on cross-examination, that he was still physically able to perform the duties of the job; that his employer had not asked him to leave; that he had not received mental health counseling to address his concerns about the stress of his work; that he could have taken a leave of absence to address those issues and “gone back to” his job after that; and that if he had done so, he would still “be able to . . . pay the $2,300 a month in alimony.” He testified that, as of the time of trial, he was working at a home improvement warehouse earning $14 per hour, or $2,426 each month.
¶11 During her testimony, Amy testified that she had recently obtained full-time employment with the local chamber of commerce, in which she earned a salary of $3,750 per month. In response to direct questioning about this job, Amy conceded that she has “the ability to earn at least $3,750 a month,” and that she would be able to “do that moving forward.” In addition, she acknowledged that she earned additional income from her foot zoning business and her work as a yoga instructor. Amy testified that she earned some $100 per month from teaching yoga. With regard to her foot zoning business, she testified that she averaged ten treatments per month and charges $50 per treatment, and therefore earns $500 per month in revenue. But she testified that she must pay certain expenses associated with the business that eat up most of the revenue, resulting in her making only some $90 per year (or $7.50 per month) in profit. On cross-examination, she acknowledged that her total gross income from all sources, before expenses, was approximately $4,350 per month.
¶12 Amy testified that she was still living in the same house that the couple had been living in during the marriage, but that now—at the time of trial—she was living there alone because her children were grown and gone. With regard to expenses, she testified that her total monthly expenses were $4,084 in 2019 but had increased to $4,795 at the time of trial, despite the fact that, by the time of trial, she was living alone. She explained that new health insurance and home maintenance costs were largely responsible for the increase. But then, in response to a direct question about how her expenses at the time of the 2018 divorce compared to her expenses at the time of the 2021 modification trial, she testified that her expenses had “stayed the same.”
¶13 After trial, the parties (through counsel) submitted written closing arguments. Amy argued that, for purposes of the alimony computation, the court should impute to Jacob the same income he had made in the oil fields, find there to be no material and substantial change in circumstances, and on that basis dismiss the petition to modify. For his part, Jacob argued that the court should modify (or even terminate) his alimony obligation because Amy was now employed full-time and had the ability to provide for her own needs. In particular, Jacob argued that Amy’s reasonable expenses were in actuality less than the amounts reflected on her recent financial declaration and in her testimony, and that her increased income was sufficient to meet those needs.
¶14 A few weeks later, the district court issued a written ruling denying Jacob’s petition to modify. In its ruling, the court found that Jacob had voluntarily quit his job in the oil fields, and that his monthly income had decreased from $8,233 to $2,427. The court also found that Amy “currently works” for the local chamber of commerce “earning $45,000 annually,” and that Amy “also has side businesses doing foot treatments and teaching yoga.” But the court made no specific finding regarding Amy’s total income.
¶15 Building on these findings, the court concluded that Jacob’s change in income constituted “a substantial material change in circumstances that was not expressly stated in the decree.” The court did not separately analyze whether the change in Amy’s income also constituted such a change in circumstances.
¶16 Having concluded that there existed a substantial material change in circumstances, the court proceeded to “consider whether modification [of the alimony award] is appropriate.” The court began its analysis by examining Jacob’s income situation, and concluded that, because Jacob had left his job voluntarily and had not sustained any loss in earning capacity, Jacob “remains able to earn income at the level he was earning at the oil fields.” Accordingly, the court imputed to Jacob an income of $8,233 per month for purposes of the alimony calculation.
¶17 With regard to Amy’s expenses, the court found that her “financial needs . . . [have] not changed since” 2018, when “the stipulated decree was entered,” but made no specific finding as to the exact amount of those expenses.
¶18 And with respect to Amy’s earning capacity, the court offered its view that the “determinative factor[]” was not Amy’s income but, instead, her “ability to provide” for herself. On that score, the court found that “[n]o evidence was presented that [Amy] has obtained extra education or has otherwise increased her ability to earn since the time of the divorce,” and therefore concluded that—despite her increased income—her earning capacity had not changed. In so ruling, the court observed that it was Jacob’s “unilateral decision” to leave his job that compelled Amy to “obtain employment to provide for herself,” and stated that reducing Jacob’s alimony obligation where the precipitating event “was [Jacob’s] decision to leave his employment would set a precedent allowing parties who have stipulated to pay alimony to renege on that stipulation by taking a much lower paying job and forcing receiving parties to find additional employment by stopping alimony payments.”[2]
ISSUE AND STANDARDS OF REVIEW
¶19 Jacob now appeals the court’s denial of his petition to modify. In this context, “we review the district court’s underlying findings of fact, if any, for clear error,” Peeples v. Peeples, 2019 UT App 207, ¶ 11, 456 P.3d 1159, and we review its determination regarding the presence or absence of a substantial change of circumstances, as well as its ultimate determination regarding the petition to modify, for an abuse of discretion, see id.; see also Armendariz v. Armendariz, 2018 UT App 175, ¶ 6, 436 P.3d 294. The district court’s choice of, and application of, the appropriate legal standard, however, “presents an issue of law that we review for correctness.” Peeples, 2019 UT App 207, ¶ 11.
ANALYSIS
¶20 We begin our analysis with a general discussion of petitions to modify alimony awards and the process courts are to follow when adjudicating such petitions. We then address Jacob’s claim that the court failed to follow the correct process in this case.
I
¶21 After a district court has made an award of alimony, the court “retains continuing jurisdiction to” modify that award “when it finds that there has been a substantial material change in circumstances.” See Nicholson v. Nicholson, 2017 UT App 155, ¶ 7, 405 P.3d 749 (quotation simplified); see also Utah Code § 30-3-5(8)(i)(i) (2019).[3] If the court determines that no substantial material change in circumstances has occurred, then the court’s analysis ends, and the petition to modify the alimony award is properly denied. See Moon v. Moon, 1999 UT App 12, ¶ 27, 973 P.2d 431 (“As a threshold issue, before modifying an alimony award, the court must find a substantial material change in circumstances . . .” (quotation simplified)); see also Peeples v. Peeples, 2019 UT App 207, ¶ 32, 456 P.3d 1159 (affirming a district court’s denial of a petition to modify on the ground that there existed no substantial material change in circumstances).
¶22 If, however, the court finds that a substantial material change in circumstances has occurred, the court must conduct a complete analysis regarding whether the alimony award remains appropriate. See Nicholson, 2017 UT App 155, ¶ 7 (stating that, once a finding of changed circumstances “has been made, the court must then consider” the alimony factors (emphasis added) (quotation simplified)); accord Moon, 1999 UT App 12, ¶ 29. This analysis should include examination of the statutory alimony factors, see Utah Code § 30-3-5(8)(a) (2019), including the factors commonly referred to as “the Jones factors,” see Jones v. Jones, 700 P.2d 1072, 1075 (Utah 1985); see also Nicholson, 2017 UT App 155, ¶ 7 (stating that, after finding that circumstances have changed, “the court must then consider at least the following factors in determining a new alimony award: (i) the financial condition and needs of the recipient spouse; (ii) the recipient’s earning capacity or ability to produce income; (iii) the ability of the payor spouse to provide support; and (iv) the length of the marriage” (quotation simplified)). “These factors apply not only to an initial award of alimony, but also to a redetermination of alimony during a modification proceeding.” Williamson v. Williamson, 1999 UT App 219, ¶ 8, 983 P.2d 1103.
¶23 “Consideration of these factors is critical to achieving the purposes of alimony,” Paulsen v. Paulsen, 2018 UT App 22, ¶ 14, 414 P.3d 1023, which are “(1) to get the parties as close as possible to the same standard of living that existed during the marriage; (2) to equalize the standards of living of each party; and (3) to prevent the recipient spouse from becoming a public charge,” Miner v. Miner, 2021 UT App 77, ¶ 14, 496 P.3d 242 (quotation simplified). “The core function of alimony is therefore economic— it should not operate as a penalty against the payor nor a reward to the recipient.” Roberts v. Roberts, 2014 UT App 211, ¶ 14, 335 P.3d 378.
¶24 “Regardless of the payor spouse’s ability to pay more, the recipient spouse’s demonstrated need must constitute the maximum permissible alimony award.” Id. (quotation simplified); see also Barrani v. Barrani, 2014 UT App 204, ¶ 30, 334 P.3d 994 (“An alimony award in excess of the recipient’s need is a basis for remand”). Because a recipient spouse’s demonstrated need constitutes an effective “ceiling” on an alimony award, see Fox v. Fox, 2022 UT App 88, ¶ 19, 515 P.3d 481, courts often begin their analysis by assessing whether recipient spouses are able to meet their reasonable needs through their own income. See Vanderzon v. Vanderzon, 2017 UT App 150, ¶ 42, 402 P.3d 219 (stating that, in determining alimony, courts will generally “first assess the needs of the parties, in light of their marital standard of living” (quotation simplified)). If the recipient spouse is able to meet his or her own needs, then the analysis ends, and no award should be made, but if “the recipient spouse is not able to meet [his or] her own needs, then [the court] should 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 recipient spouse’s needs and income.” See id. (quotation simplified).
¶25 When considering the relevant alimony factors, courts are “required to make adequate factual findings on all material issues, unless the facts in the record are clear, uncontroverted, and capable of supporting only a finding in favor of the judgment.” Bukunowski v. Bukunowski, 2003 UT App 357, ¶ 9, 80 P.3d 153 (quotation simplified). When a district court fails to enter specific findings regarding “the needs and condition of the recipient spouse, making effective review of the alimony award impossible, that omission is an abuse of discretion.” Id. ¶ 10.
II
¶26 With these principles in mind, we turn our attention to Jacob’s assertion that the court failed to follow the correct process in adjudicating his petition to modify. In particular, Jacob asserts that the court—once it determined that there had been a substantial material change in circumstances—was required to conduct a complete analysis of all the alimony factors, and that it failed to properly do so.[4] We find merit in Jacob’s argument.
¶27 The district court started its analysis in the proper place, and assessed whether Jacob had demonstrated that there had been a substantial material change in circumstances that would justify reopening the alimony inquiry. Looking just at the change in Jacob’s own income, the court made a finding that there had been a “substantial change in circumstances.” And neither party takes issue with this finding on appeal; both appear to acknowledge the correctness of the court’s initial determination that circumstances affecting these parties had changed enough to justify a second look at the alimony situation.[5]
¶28 From there, though, the court’s analysis strayed from the proper path. After determining that the change in Jacob’s income constituted a substantial material change in circumstances, the court did not conduct a full analysis of the relevant alimony factors. With regard to Amy’s needs, the court’s analysis, in full, was simply this: “[Amyl testified that her monthly expenses have not increased from the time the parties were divorced in May 2018 until the time of trial in August of 2021.” The court made no finding that Amy’s testimony on that point was credible, see Rehn v. Rehn, 1999 UT App 41, ¶ 7, 974 P.2d 306 (“A trial court may not merely restate the recipient spouse’s testimony regarding her monthly expenses.” (quotation simplified)), and did not make any effort to assess what Amy’s reasonable monthly needs actually were; the court’s comparison to the 2018 divorce decree is especially unhelpful, in context, because that decree contained no specific determination regarding Amy’s expenses.
¶29 With regard to the parties’ earning capacity, the court acknowledged that Amy had obtained a full-time job that paid her $3,750 each month, and that Amy “earns additional income from a foot zoning business and teaching yoga.” But the court made no finding as to what Amy’s total income actually was, stating that “[n]o evidence was presented that [Amy] has obtained extra education or has otherwise increased her ability to earn since the time of the divorce, only that her actual income has increased.”
¶30 And with regard to Jacob, the court found that he had voluntarily left his job in the oil fields, and that he “remains able to earn income at the level he was earning” before. On that basis, the court imputed to Jacob income of $8,233 per month, despite the fact that Jacob was no longer earning that amount. Jacob takes no issue with this imputation determination on appeal.
¶31 The court then completed its analysis by stating as follows: “[Amy’s] financial needs and both parties’ ability to earn has not changed since the time the stipulated decree was entered. Therefore, [Jacob’s] Petition to Modify the alimony ordered in the decree is DENIED.”
¶32 In our view, the court was, at least to some extent, conflating the “changed circumstances” part of the analysis with the “Jones factors” part of the analysis. Its first mistake was failing to make a specific finding regarding Amy’s reasonable monthly needs. As noted, no such finding had been made in connection with the 2018 decree, and Amy had submitted two conflicting financial declarations since then. In order to complete the multi-factor alimony analysis mandated by the court’s unchallenged conclusion that circumstances had materially changed, the court needed to make an actual finding regarding Amy’s expenses.[6]
¶33 The next error the court made was in determining that Amy’s earning capacity had not changed, even though her income had. And here, it is important to differentiate between situations in which a spouse’s income goes down from situations in which a spouse’s income goes up. Certainly, where a spouse’s income goes down, it does not necessarily follow—indeed, it often does not follow—that the spouse’s earning capacity has also gone down; in such situations, courts retain the discretion to determine that, even though a spouse’s income has gone down, his or her earning capacity has not been diminished, and to impute to the spouse— for instance, on the basis of a finding of voluntary underemployment—an income in line with the unchanged earning capacity. See, e.g., Olson v. Olson, 704 P.2d 564, 566 (Utah 1985) (stating that where parties “experience[] a temporary decrease in income, [their] historical earnings must be taken into account in determining the amount of alimony to be paid”); Pankhurst v. Pankhurst, 2022 UT App 36, ¶¶ 14–15, 508 P.3d 612 (noting that “a finding of voluntary underemployment is not a prerequisite to imputing income,” and affirming a trial court’s determination to assess the payor spouse’s income at a higher level than his current income because the current lower income was “temporary” (quotation simplified)); Gerwe v. Gerwe, 2018 UT App 75, ¶ 31, 424 P.3d 1113 (crediting a trial court’s skepticism about a payor spouse’s sudden drop in income where the spouse “came into trial making a huge amount of money . . . and then all of a sudden is making no money because, you know, now it’s time to pay somebody” (quotation simplified)). Indeed, the district court made precisely such a finding with regard to Jacob, and no party takes issue with that finding here on appeal.
¶34 But the fact that a spouse’s income has gone up is very strong evidence that the spouse’s earning capacity has also risen. A party who is actually earning $45,000 per year will nearly always properly be deemed to have the capacity to earn at least that amount. There are, of course, exceptions: in some isolated instances, an increase in income is temporary and does not reflect an overall or long-term increase in earning capacity. See English v. English, 565 P.2d 409, 412 (Utah 1977) (stating that, when parties “experience[] unusual prosperity during one year,” that unusual income figure is not necessarily indicative of earning capacity); see also, e.g., Woskob v. Woskob, 2004 PA Super 37, ¶ 28, 843 A.2d 1247 (holding that a spouse’s earning capacity, moving forward, was not reflected by three “retroactive salary bonuses” that were not likely to occur in the future, and stating that, since the spouse’s “elevated salary during [the] period [in which he received those bonuses] is totally disproportionate to his actual earning capacity, his support obligation should reflect his earning capacity rather than his actual earnings”). But before concluding that a spouse’s earning capacity is less than the spouse’s actual income, a court should have evidence that the spouse’s higher income is truly ephemeral and not indicative of long-term earning capacity.
¶35 No such evidence is present here. Amy has obtained a full-time salaried position that pays her a steady income of $45,000 per year. There is no indication that this job is only temporarily available to her. The evidence was undisputed that Amy’s earning capacity, moving forward, has increased, as exemplified by her new job; indeed, she testified that she has “the ability to earn at least $3,750 a month” at that job, and that she would be able to “do that moving forward.” The district court’s observation that Amy had not “obtained extra education” in an effort to grow her earning capacity is true as far as it goes. But even in the absence of any extra education or training, a spouse’s earning capacity can rise, and a spouse’s ability to obtain and maintain a salaried job is an extremely strong piece of evidence so indicating.
¶36 We certainly take the court’s point that the reason Amy felt compelled to find additional employment was because Jacob made the decision to quit his job and pay her less in alimony. In the court’s view, Jacob’s decision “forc[ed]” Amy “to find additional employment.” We take no issue with the court’s observation that the law should not incentivize payor spouses to become voluntarily underemployed. But we do not think the law contains any such incentive; indeed, the customary (and presumably adequate) remedy for such behavior is for the court— where appropriate, and as the court did here—to find the payor spouse underemployed and impute to that spouse an income commensurate with the previous salary.[7]
¶37 Thus, we conclude that the district court erred in its analysis of Amy’s earning capacity. It erroneously determined that Amy’s earning capacity had not changed. And based on this determination, it stopped short of making a specific finding as to what Amy’s new earning capacity was, taking into account her new full-time job and, if appropriate, her part-time side endeavors. See Degao Xu v. Hongguang Zhao, 2018 UT App 189, ¶ 31, 437 P.3d 411 (“When determining an alimony award, it is appropriate and necessary for a trial court to consider all sources of income that were used by the parties during their marriage to meet their self-defined needs, including income from a second job.” (quotation simplified)). The court should remedy these errors on remand, and should complete the calculation regarding Amy’s expenses and earning capacity, thus answering the question Jacob raises, namely, whether Amy has the ability to take care of her own needs through her own income.
¶38 Finally, the court’s analysis regarding Jacob’s ability to provide support was also incomplete, and will require additional analysis in the event the court concludes that Amy is not completely able to pay for all of her reasonable monthly needs. See Vanderzon v. Vanderzon, 2017 UT App 150, ¶ 42, 402 P.3d 219 (“[I]f the court finds that the recipient spouse is not able to meet her own needs, then it should assess whether the payor spouse’s income, after meeting his needs, is sufficient to make up some or all of the shortfall between the recipient spouse’s needs and income.” (quotation simplified)). As already noted, the court imputed to Jacob a monthly income of $8,233, based on a finding of voluntary underemployment, and that determination is not challenged on appeal. But in order to compute Jacob’s ability to provide support to Amy to cover any determined shortfall, the court will need to compute Jacob’s reasonable monthly expenses, see Rehn, 1999 UT App 41, ¶ 10 (“To be sufficient, the findings should also address the obligor’s needs and expenditures, such as housing, payment of debts, and other living expenses.” (quotation simplified)), which the court did not endeavor to do in its order.
¶39 As to whether a shortfall exists, the parties take divergent positions on appeal. Jacob asserts that no shortfall exists, and that Amy is able to pay all of her own reasonable monthly expenses. Amy, for her part, contends that even with her newly increased income she still has “a shortfall of over $1,800.” But Jacob’s alimony obligation ($2,300) apparently exceeds even Amy’s current calculation of her shortfall; under Amy’s computation of expenses, then, Jacob would still be entitled to at least some modification of his alimony obligation. On remand, the district court should run this complete calculation, making specific findings on each of the relevant factors, and should determine the extent to which Jacob’s alimony obligation should be modified.
CONCLUSION
¶40 The district court did not apply the proper legal analysis to Jacob’s petition to modify, and erred when it concluded that Amy’s earning capacity had not changed. We reverse the court’s denial of Jacob’s petition to modify, and remand this case for further proceedings consistent with this opinion.
[1] Because the parties have the same last name, we refer to them by their first names for clarity, with no disrespect intended by the apparent informality.
[2] Amy does not argue that we should affirm the denial of Jacob’s petition to modify on the basis that the original award was derived from a stipulation, and therefore the district court’s comments about holding Jacob to his stipulation are not directly before this court. But we note, for clarity, that even stipulated alimony awards are subject to modification. See, e.g., Diener v. Diener, 2004 UT App 314, ¶ 5, 98 P.3d 1178 (noting that, while a court “is certainly empowered to consider the circumstances surrounding an existing stipulation when considering a petition to modify . . . , the law was intended to give the courts power to disregard the stipulations or agreements of the parties . . . and enter judgment for such alimony . . . as appears reasonable, and to thereafter modify such judgments when change of circumstances justifies it, regardless of attempts of the parties to control the matter by contract” (quotation simplified)); accord Sill v. Sill, 2007 UT App 173, ¶¶ 12–18, 164 P.3d 415.
[3] At the time Jacob filed his petition to modify, the relevant statute authorized modification of alimony awards when the movant could demonstrate that there had been “a substantial material change in circumstances not foreseeable at the time of the divorce.” Utah Code § 30-3-5(8)(i)(i) (2019) (emphasis added). In 2021, prior to the trial on Jacob’s petition to modify, our legislature amended that statutory provision; under current law, modification is authorized upon a showing that there has been “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. § 30-3-5(11)(a) (2022) (emphasis added). In this appeal, the parties have not briefed the question of which version of the statute applies to Jacob’s petition to modify, nor has either side suggested that the outcome of this case turns on these differences in statutory text. Operating on the assumption that Jacob is entitled to application of the version of the statute in effect when he filed his petition, see State v. Clark, 2011 UT 23, ¶ 13, 251 P.3d 829 (stating that “we apply the law as it exists at the time of the event regulated by the law in question,” and that when that event is a motion, “we apply the law as it exists at the time the motion is filed”), we apply the 2019 version of the statute in this appeal, but follow the parties’ lead in presuming this application to have no effect on the outcome of the case.
[4] Amy characterizes Jacob’s appellate claims as assertions that the district court’s findings were inadequate, and argues based on this characterization that Jacob—by not asking the court to make more detailed findings—failed to preserve his claims for appellate review. See In re K.F., 2009 UT 4, ¶ 60, 201 P.3d 985 (stating that a party “waives any argument regarding whether the district court’s findings of fact were sufficiently detailed when the [party] fails to challenge the detail, or adequacy, of the findings with the district court” (quotation simplified)). While we acknowledge— as discussed herein—that the court did not make findings on several of the alimony factors, that was due to the court’s error (discussed herein) regarding Amy’s earning capacity, and its concomitant failure to complete the proper legal analysis. Thus, we disagree with Amy’s characterization of Jacob’s claims on appeal, and note that Jacob certainly preserved for our review the general question of whether the district court applied the correct legal analysis to his petition to modify, as well as the more specific question of whether Amy can meet her needs through her own income. Thus, we reject Amy’s assertion that Jacob’s contentions on appeal were not properly preserved for our review.
[5] We note that the court made this determination by looking solely at the change in Jacob’s income. Arguably, the change in Amy’s income would constitute a second basis for a determination that circumstances had changed significantly enough to revisit the appropriateness of the alimony award. Ultimately, however, it does not matter, for purposes of this appeal, which change the district court relied on to determine that a substantial material change had taken place.
[6] Amy argues that the “facts concerning [her] financial needs and conditions are clear from the record,” and on that basis urges us to excuse the court’s failure to make a specific finding. We disagree with the premise of Amy’s argument. At trial, Amy testified that her expenses had stayed the same since May 2018, but there was no 2018 figure to which Amy’s testimony could be compared. Moreover, after 2018, Amy submitted two conflicting financial declarations and, at trial, Jacob’s attorney established that Amy was then living alone rather than with one or more of the parties’ children. We therefore agree with Jacob that the evidence in the record regarding Amy’s expenses was sufficiently conflicting as to be significantly less than “clear.”
[7] Moreover, we do not think it inappropriate, in the abstract, for payee spouses to make an effort to enter the workforce, and thereby pursue a higher standard of living and a greater degree of independence from the payor spouse. We recognize that many spouses who have long been out of the workforce may find it difficult to reenter it, with or without additional education or training; generally speaking, our law does not require payee spouses in that situation to attempt to reenter the workforce in ways incongruous with their employment history. But a spouse who, whether by chance or perseverance, manages to gain a foothold in the workforce after a long absence may very well benefit from the experience; as we see it, our law should encourage self-sustainability and independence. Accordingly, we do not necessarily view—as the district court seemed to—the outcome of Amy’s employment journey to be an unfortunate one.
(c) “Length of the marriage” means, for purposes of alimony, the number of years from the day on which the parties are legally married to the day on which the petition for divorce is filed with the court.
*****
11(e)
(i) Except as provided in Subsection (11)(e)(iii), the court may not order alimony for a period of time longer than the length of the marriage.
(ii) If a party is ordered to pay temporary alimony during the pendency of the divorce action, the period of time that the party pays temporary alimony shall be counted towards the period of time for which the party is ordered to pay alimony.
(iii) At any time before the termination of alimony, the court may find extenuating circumstances or good cause that justify the payment of alimony for a longer period of time than the length of the marriage.
Utah Family Law, LC | divorceutah.com | 801-466-9277
DUANE CROFT KNOWLES, Appellant, v. CELIA FERN KNOWLES, Appellee.
Opinion
No. 20200032
Filed April 7, 2022
Second District Court, Farmington Department
The Honorable David R. Hamilton
No. 174700123
Julie J. Nelson and Alexandra Mareschal, Attorneys for Appellant
Emily Adams and Sara Pfrommer, Attorneys for Appellee
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES RYAN M. HARRIS and DIANA HAGEN concurred.
CHRISTIANSEN FORSTER, Judge:
¶1In 2016, Duane Croft Knowles and Celia Fern Knowles separated after nearly thirty years of marriage. During their separation, the district court awarded Celia1 temporary alimony and, after a bench trial, entered a final alimony award. Duane now appeals those awards, arguing the court abused its discretion in (1) declining to award him credit for purported overages he paid in temporary alimony, (2) calculating the parties’ expenses in determining the final alimony award, and (3) selecting the date to value the retirement accounts. We affirm in part and reverse in part and remand.
BACKGROUND2
¶2Duane and Celia were married in December 1989. They remained married for twenty-nine years, during which time they had six children. For the duration of the marriage, Duane worked as an optometrist and supported the family financially.
¶3In 2016, Duane and Celia separated. At that time, only two of the children were minors.3 Upon the parties’ separation, Celia remained in the marital home, which was paid off. Each month Duane used his income to pay the family’s bills and any remaining funds were then divided between the parties; in the initial months following their separation, Celia received $200 more per month than Duane, after which the excess was split 50/50. After several months of this informal arrangement, both parties filed motions for temporary orders, supported by financial declarations.
¶4In Celia’s financial declaration, she reported a nominal monthly income of $103.52 from her massage therapist side business but requested the court impute the minimum wage for full-time employment to her in the amount of $1,257 per month. Celia also declared that her monthly financial needs were $8,476.91. This total included, among other things, orthodontic expenses for one of the parties’ minor children and a monthly donation for tithing to Celia’s church.
¶5In Duane’s financial declaration, he reported a net monthly income of $9,671.08 from his job as an optometrist. Duane calculated his monthly expenses as $5,054.70 and included in those expenses a line-item for a tithing donation to his church.
¶6 The competing motions for temporary orders were reviewed before a commissioner in September 2017. Duane was ordered to pay Celia $3,797 in alimony each month, beginning in July 2017. The commissioner noted that “the issue of retroactive alimony prior to July 1, 2017,” would be “reserve[d]” and that Duane “shall receive credit for amounts he has paid [Celia] or on behalf of [Celia] during this time.” In calculating temporary alimony, the commissioner adjusted the stated monthly expenses for both parties, including eliminating the claimed monthly expense for tithing. The commissioner did not exclude, however, Celia’s claimed orthodontic expenses for the parties’ minor children.
¶7 Duane objected to the commissioner’s alimony recommendations, arguing that the commissioner had improperly calculated the parties’ needs by failing to “equalize the parties[’] standards of living” and “by failing to consider the parties[’] historical standard of living.” In addition, he argued that the temporary award should cover only the actual expenses of the parties and not “projected expenses” such as possible orthodontics for the parties’ ten-year-old child who did not yet have braces.
¶8Following briefing and argument on Duane’s motion, the district court sustained the commissioner’s recommendations as to the parties’ temporary expenses and incomes. In particular, the court noted that including the orthodontic expenses in calculating Celia’s needs “was not erroneous” because “[e]ven if orthodonti[cs] is not presently involved, it could occur in the immediate future.” However, the court agreed with Duane that some of Celia’s expenses were inflated and that alimony should be adjusted accordingly. The court then reduced the temporary alimony award from $3,797 to $2,809, with payments set to begin on July 1, 2017, the same day set by the commissioner in his initial order.4
¶9In 2019, two years after Duane filed for divorce, the parties went to trial. During the course of the two-day bench trial on financial issues, both parties testified, along with their respective experts.
¶10 Duane first challenged the district court’s award of temporary alimony, arguing that Celia’s financial declarations were not adequately supported and that she had failed to prove the marital standard of living and her actual needs. In support of this argument, Duane called as an expert a forensic accountant to testify regarding the parties’ marital standard of living. The expert first testified that prior to the parties’ separation in 2016, the monthly marital expenses for both parties together were $9,338, or $4,669 each. He then explained that Celia had requested $8,476.91 in her financial declaration but had been spending only around $4,755.02 per month. He also opined that, based on the parties’ historical spending, tithing donations to their church were part of the marital standard of living.
¶11In addition to challenging the amount of alimony, Duane asked the court to credit him $64,000 for what he characterized as an “overage” he paid in temporary alimony. In essence, Duane argued that the temporary alimony figure he had paid for approximately two years had been too high and asked the court to adjust that figure retroactively and award him the difference between what he had paid and what he should have paid. He argued that Celia had “intentionally dissipated the marital estate by overspending,” “over-inflat[ing] her needs,” and “refusing to work” despite having “the ability to work full time.”
¶12 Following trial, the district court entered its findings of fact and conclusions of law. Based on its analysis of the parties’ income and needs, the court awarded Celia $2,770 in permanent alimony per month moving forward.
¶13 In reaching that amount, the court first analyzed each party’s income. It calculated Duane’s monthly net income at $9,368, after averaging the prior four years of his annual income as stated in his tax returns. The court also imputed a monthly net income of $1,874 to Celia, finding that “she is voluntarily underemployed” and “capable of employment.”
¶14 The court then analyzed the needs of each party. It first declined to “award any donations or tithing for either party.” It reasoned that the tithing payments were “a religious preference” and “not a necessary living expense.”
¶15 Next, after examining Celia’s multiple financial declarations and other relevant evidence, the district court found that her post-divorce living expenses would be $5,382 per month. To reach this amount, the court excluded some of Celia’s claims for expenses, finding the supporting evidence “lacking, remote in time[,] and remote in detail.” But the court also added additional expenses for a future mortgage and for health insurance, which had not been included in Celia’s financial declarations.
¶16Finally, the court examined Duane’s financial declarations and supporting evidence and determined that his monthly post-divorce living expenses, excluding child support, would be $5,833. In so doing, the court excluded only “the expense of donations,” finding Duane’s other expenses “to be appropriate.”
¶17 After setting the amount of permanent alimony, the district court addressed both parties’ claims regarding alimony arrears and overpayments. Without addressing the merits of the parties’ arguments, the court summarily concluded that both parties had failed “to provide or to carry the weight of the evidence in their respective favor” and declined to credit Duane for any overpayments of temporary alimony.
¶18With respect to the parties’ retirement accounts, the court awarded each party “one-half of the value of the marital portion of the retirement accounts, . . . with a valuation date of August 2, 2019,” the date on which the court announced its oral ruling.
¶19 Following the district court’s oral ruling, Duane filed a document requesting further clarification on a number of issues, including, as relevant here, his taxpayer filing status and the valuation date of the retirement accounts. As to his taxpayer filing status, Duane noted that his “ability to pay should be reduced by $224/month as his taxable income will be higher” because of the change in his filing status following the divorce. As to the valuation date of the retirement accounts, Duane noted that the division date “should be the date of separation” and not the date of divorce.
¶20 In response to Duane’s request, the district court issued an order rejecting both arguments. First, it declined to change Duane’s taxpayer filing status, reasoning that Duane had not provided sufficient evidence to rebut its previous ruling. Second, it declined to change the valuation date of the retirement accounts. It acknowledged that “typically the date of division of retirement accounts is the date of divorce” but, due to the “totality of the circumstances” presented in this case, determined to use August 2, 2019 as the “date of division,” noting that the parties had not made “sufficient argument about a different division date being used.”
ISSUES AND STANDARDS OF REVIEW
¶21 Duane now appeals and raises three issues for our consideration. First, he contends that the district court erred “by failing to correct for overage paid in temporary alimony.” “District courts have considerable discretion in determining alimony and determinations of alimony will be upheld on appeal unless a clear and prejudicial abuse of discretion is demonstrated.” Burggraaf v. Burggraaf, 2019 UT App 195, ¶ 26, 455 P.3d 1071 (quotation simplified).
¶22 Second, Duane contends that the district court erred in calculating the amount of the permanent alimony award. Specifically, he argues that the court miscalculated the parties’ expenses by failing to include the tithing contribution each paid to their church, by “including an ongoing expense for orthodonti[cs],” and by “miscalculating [Duane’s] tax obligation.” We review a district court’s alimony determination for an abuse of discretion. See id. In determining alimony, a court exceeds its discretion if its alimony award “lacks a reasonable basis.” Redden v. Redden, 2020 UT App 22, ¶ 15, 461 P.3d 314.
¶23 Third, Duane contends that the district court erred by “setting an arbitrary valuation date for the retirement accounts rather than the date of separation.” “The [district] court in a divorce action is permitted considerable discretion in adjusting the financial and property interests of the parties, and its actions are entitled to a presumption of validity.” Rayner v. Rayner, 2013 UT App 269, ¶ 4, 316 P.3d 455 (quotation simplified). “Thus, we will not disturb a court’s distribution of marital property unless it is clearly unjust or a clear abuse of discretion.” Goggin v. Goggin, 2013 UT 16, ¶ 44, 299 P.3d 1079 (quotation simplified).
ANALYSIS
I. Overpayment of Temporary Alimony
¶24 Duane first contends that the district court abused its discretion by failing to credit him for what he considers to have been excess payments made to Celia pursuant to the court’s temporary alimony order. Duane argued below, and argues now on appeal, that the temporary alimony award was erroneous because Celia obtained it by submitting inflated and unjustified need claims that the district court rejected after hearing the evidence at trial. Specifically, he argues that the temporary award underestimated the amount of income to be imputed to Celia, relied on an inflated estimate of Celia’s needs, and included a triple award for the children’s medical expenses.
¶25 Celia first responds that Duane failed to preserve this issue below, with the exception of his claim regarding the triple award of medical expenses. She then asserts that Duane’s argument fails on the merits because his comparison of the temporary and final awards fails to account for changes in her circumstances during the two-year period between separation and trial. We turn first to the preservation argument and then address the merits.
A. Preservation
¶26 Celia asserts that Duane’s overpayment argument regarding her expenses and income is unpreserved because the argument Duane raised in the district court is based on an “entirely distinct legal theory” from the argument he raises on appeal. (Quotation simplified.) In the district court, Duane argued that he paid too much in temporary alimony because Celia had “dissipated the marital estate by overspending” and had refused to work. Celia asserts these arguments are distinct from the argument Duane raises here, which is that the temporary alimony award was overinflated because of adjustments to Celia’s alimony award made by the district court at the time of trial. We disagree with Celia’s characterization of the arguments and conclude that the issue was properly preserved.
¶27“Our preservation requirement is well-settled: we require parties to have raised and argued before the district court the issue that they raise and argue before us on appeal, and if a party does not, it has failed to preserve the issue.” True v. Utah Dep’t of Transportation, 2018 UT App 86, ¶ 23, 427 P.3d 338 (quotation simplified). “An issue is preserved for appeal when it has been presented to the district court in such a way that the court has an opportunity to rule on it.” State v. Rogers, 2020 UT App 78, ¶ 20, 467 P.3d 880 (quotation simplified). A party asserting error on appeal must have raised the issue before the district court “specifically, in a timely manner, and with support by evidence and relevant legal authority.” True, 2018 UT App 86, ¶ 24. “New arguments, when brought under a properly preserved issue or theory,” may be properly considered on appeal. Id. ¶ 32 (quotation simplified). “Such arguments include citing new authority or cases supporting an issue that was properly preserved.” State v. Johnson, 2017 UT 76, ¶ 14 n.2, 416 P.3d 443.
¶28 The arguments Duane raised repeatedly in the district court are, in fact, based on the same facts and legal theories as those he raises here. In the proceedings on temporary orders, Celia filed a financial declaration stating that her monthly need was $8,476.91, which was only $1,000 short of Duane’s entire net income. At that time, Celia was working a de minimis amount and had no expenses for health insurance or housing since she was residing in the paid-off marital home and receiving health insurance through Duane’s employment. The commissioner reduced some of Celia’s claimed expenses and imputed income to her based on full-time work at a minimum wage income and then recommended that Duane pay temporary alimony in the amount of $3,797 per month.
¶29 Duane objected to the commissioner’s recommendation, arguing that Celia’s requested amount far exceeded the marital standard of living. Duane requested that the district court immediately correct the inflated temporary alimony because he was concerned that the court would decline to correct it retroactively. The court agreed that some of Celia’s expenses were inflated and reduced the temporary award to $2,809. Dissatisfied with the court’s resolution of the issue, Duane filed a petition for interlocutory appeal with this court, again making the argument that the temporary alimony award was excessive because Celia’s claimed expenses were excessive. His petition was denied.
¶30 Having been only partially successful in urging the district court to reduce the temporary award before trial, Duane again challenged the temporary award at trial. Indeed, Duane maintains that much of his motivation to take the case to trial— rather than to settle out of court—was to have the temporary alimony award corrected. Duane filed a trial brief in which he argued that he should be credited for any overage he had paid in temporary alimony and that temporary alimony should be “reduced retroactively as it was incorrectly applied.” Specifically, Duane argued that Celia had “over-inflated her needs” and “misled the [c]ourt with her financial declaration.” After the district court announced its preliminary oral ruling, Duane argued in post-trial briefing that the court should award him a judgment for “alimony that was over-paid during the temporary orders.” And at oral argument on the post-trial issues, Duane again argued that “[t]he temporary order created a substantial inequity between the parties” and that he should be given a judgment for the amounts he overpaid. The court noted Duane’s argument but declined to analyze the merits of his arguments or credit him for any overpayment.
¶31 In short, Duane repeatedly argued below that the temporary alimony award was wrong for two broad reasons. First, he claimed that it was wrong due to Celia’s allegedly overstated expenses. Second, he claimed that it was wrong due to Celia’s allegedly understated earning capacity. Duane sought credit for these overages based on his argument that the evidence presented at trial failed to support the temporary award. This is the same argument that Duane advances here. The fact that Duane now illustrates the issue by pointing to the discrepancies between the temporary alimony order and the final alimony award (and noting the adjustments made to the final award to account for Celia’s increased expenses for housing and health insurance) does not change the essence of Duane’s argument. We therefore conclude that Duane adequately preserved the issue for our consideration.
B. Temporary Awards
¶32 Utah Code section 30-3-3(3) authorizes an award of temporary alimony “to provide money, during the pendency of the action, for the separate support and maintenance of the other party and of any children in the custody of the other party.” Utah Code Ann. § 30-3-3(3) (LexisNexis Supp. 2021). Although orders providing for temporary support are operative during the pendency of the divorce proceeding, they are not final orders from which an appeal of right may be taken. Rather, as interlocutory orders, they are subject to continuing review and modification by the district court until the issuance of a final judgment. See IHC Health Services, Inc. v. D & K Mgmt., Inc., 2008 UT 73, ¶ 27, 196 P.3d 588 (recognizing the broad discretion of district courts to reconsider and modify interlocutory rulings before final judgment).
¶33 Although district courts have discretion in fashioning temporary orders, temporary alimony is subject to the same requirements as a regular alimony award. See Dahl v. Dahl, 2015 UT 79, ¶¶ 85–98, 459 P.3d 276 (describing factors applied to temporary alimony and concluding the district court did not abuse its discretion in denying temporary alimony when wife failed to provide documentation of her needs). As is the case with awards of permanent alimony, temporary alimony awards must “follow[] logically from, and [be] supported by, the evidence.” Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 13, 80 P.3d 153 (quotation simplified).
¶34 Because of their nature, however, temporary awards are often based on limited evidence. Typically recommended by a domestic relations commissioner after a brief proffer hearing based largely on the financial declarations submitted by the parties, see Utah R. Jud. Admin. 6-401(2)(H), such temporary orders may result in awards that are not supported by the more substantial evidence presented at a later trial. For this reason, district courts have the authority to revisit temporary orders and, if warranted, retroactively modify them in the final divorce decree. See Utah Code Ann. § 30-3-3(4); id. § 30-3-5(4); id. § 78B12-112(4) (2018); Miner v. Miner, 2021 UT App 77, ¶ 101, 496 P.3d 242; McPherson v. McPherson, 2011 UT App 382, ¶¶ 12, 17, 23, 265 P.3d 839.
¶35 This court’s opinion in McPherson illustrates this point and is instructive here. There, husband appealed the district court’s denial of his request for a retroactive modification of his temporary alimony obligation. McPherson, 2011 UT App 382, ¶ 10. The court had based its initial temporary award on the recommendation of the domestic relations commissioner who, in turn, had based it on husband’s salary at the time of the initial support hearing. Id. ¶¶ 3, 5. When the court entered the temporary award, it was unaware that husband had since been fired from his job. Id. ¶ 5. Husband thereafter moved to amend the temporary order to recalculate his child support and alimony obligations in accordance with his then-decreased salary. Id. ¶ 7. The court denied the motion, reasoning that husband’s decreased salary was likely the result of his voluntary underemployment. Id. Following a bench trial, however, the court reversed course, finding that husband was not voluntarily underemployed. Id. ¶ 19. It therefore reduced husband’s future support obligations. Id. But it nevertheless denied husband’s request for a retroactive modification of his temporary support obligations, reasoning there was “no basis in law, fact, or equity to retroactively reduce the amounts.” Id. (quotation simplified).
¶36 On appeal, this court reversed and remanded with instructions for the district court to modify the temporary alimony award retroactively. Id. ¶ 24. While recognizing the considerable discretion district courts possess in determining alimony, we emphasized that such awards must be supported by an explanation based on the evidence. Id. ¶ 23. Because the temporary alimony award was based on the erroneous assumption (later rejected by the district court) that husband was voluntarily underemployed, there was no justification for the higher award. Id. ¶ 21. This court held that the district court abused its discretion by failing to retroactively modify husband’s temporary support obligations, reasoning that “[e]ven if the commissioner’s recommendations seemed well founded at the time of the hearings, once the premise of that decision was proved inaccurate, there was no reasoned basis to impose temporary support obligations that were mathematically impossible for [h]usband to pay.” Id. ¶ 23.
¶37Like the husband in McPherson, Duane argues the district court abused its discretion when it failed to credit him for temporary alimony payments that were higher than the amount the court determined was appropriate after hearing the evidence at trial. We therefore consider whether the district court’s refusal to modify the temporary alimony award was supported by its factual findings and rulings at trial.
¶38Duane identifies $62,627 in alleged discrepancies between the district court’s award of permanent alimony based on the trial evidence and its award of temporary alimony based on the proceedings before the commissioner. These consist of discrepancies between (1) Celia’s imputed income ($16,255 in overage); (2) Celia’s needs ($38,250 in overage); and (3) the amount awarded for medical expenses ($8,152 in overage). While Celia argues that these discrepancies are readily explainable, the district court offered no such explanation. Despite Duane’s request for reimbursement of what he argued was excessive temporary alimony, the court summarily declined to reconcile the differences, stating only that “neither party submitted sufficient evidence for arrears or overages.” But the district court’s summary refusal to consider the merits of the issue on the basis of insufficient evidence does not suffice, because the evidence supporting Duane’s request for reimbursement of asserted overages was the very same evidence that supported the court’s award of permanent alimony.5 Indeed, the court’s explanation for its refusal to address the discrepancies between the temporary and final award is no more sufficient than the McPherson court’s conclusory statement that there was “no basis in law, fact, or equity to retroactively reduce the amounts.” See 2011 UT App 382, ¶ 19 (quotation simplified). We therefore turn to the alleged discrepancies Duane identifies.
Celia’s Imputed Income
¶39 An alimony award must account for the ability of the recipient spouse to support themselves. See Utah Code Ann. § 30-3-5(9)(a)(ii) (LexisNexis Supp. 2021). At the temporary stage, the court imputed $1,225 in net income to Celia. But at trial, the court agreed with Duane and found that Celia was “voluntarily underemployed” and “capable of employment.” Based on the testimony presented at trial, the court imputed to Celia $1,874 per month in net income, which represented an increase of $649 per month over the amount imputed in the temporary award. And the court made no finding suggesting that Celia could not have earned that amount during the pendency of the proceedings, or otherwise justifying the discrepancy between the temporary order and its findings at trial. The court should have considered whether Celia had the same earning capacity during the separation.
Celia’s Needs
¶40 An alimony award also must account for the financial condition and needs of the recipient spouse. See id. § 30-3-5(9)(a)(i). At the temporary stage, when Celia was residing in the paid-off marital home and receiving health insurance through Duane’s employment, the court found that Celia had monthly expenses (needs) of $5,370. After imputing a monthly net minimum wage of $1,225 to Celia and giving Duane credit for $1,336 in monthly child support payments, the court entered a temporary alimony award of $2,809 per month.
¶41 At trial, however, the court found that evidentiary support for Celia’s expenses was “lacking, remote in time,” “remote in detail,” and “artificial.” It therefore disallowed many of her claimed expenses. It then added a monthly mortgage expense of $1,015 to account for the fact that Celia would be required to refinance the marital home to cash out Duane’s equity. It also added a monthly health insurance expense of $503 because Celia would no longer be eligible for insurance through Duane’s employer after the divorce. Following these adjustments, the court made a finding that Celia’s monthly post-divorce expenses were $5,382. Excluding the post-divorce adjustments for housing and health insurance, the permanent award based on the trial evidence was $1,530 per month less than the temporary award or a total of $38,250 over the twenty-five months that Duane paid support pursuant to the temporary order. Duane argues that the district court erred in failing to award him this overage.
¶42 Celia argues that this court should reject Duane’s argument because he failed to marshal the evidence supporting the district court’s permanent award. She argues that Duane disregarded the evidence supporting her need for support after “the collapse of her 27-year marriage where she was largely a stay-at-home parent.” But marshalling is not required, because Duane has not raised a sufficiency argument or challenged the district court’s factual findings. And Celia has not explained why the length of the marriage or her status as a stay-at-home parent justifies the discrepancies in the amount of the temporary and final awards, since these issues are properly considered in determining the length of the alimony award and the level of income to impute to the receiving spouse. See id. § 30-3-5(9)(a)(ii), (iv).
¶43 Celia next argues that Duane is committing a logical fallacy of false equivalence by comparing the temporary and final alimony awards because there are significant differences between the two kinds of awards. She posits that a spouse’s needs, ability to produce income, and support of minor children may change from the time a court orders temporary alimony to the time of the final award and suggests that this is the explanation for the discrepancies here. She asserts that she was able to earn more income as time went on because her children were growing and their medical needs had decreased. She therefore suggests the district court determined she could earn more after the divorce was final than during its pendency. A court could conceivably find that a party is able to earn more at the time of trial than at the time of temporary orders. But the court made no such finding here, and we note that at no point during the temporary proceedings did Celia argue that the children’s medical needs prevented her from working. Indeed, the commissioner imputed her minimum wage for full-time work, and the district court found that Celia was voluntarily underemployed and flatly rejected her argument that she could not work because of the children’s medical needs.
¶44Finally, Celia argues that Duane’s line-by-line comparison
of the temporary and permanent awards is misleading because an alimony award is based on a more generalized determination of the amount necessary for both parties to maintain the standard of living that they enjoyed prior to the divorce. Because the temporary award ($2,809) was only $39 higher than the final award ($2,770), Celia maintains that the court’s failure to make an adjustment could not have been an abuse of discretion. But this argument ignores the adjustment made to the temporary award to account for mortgage and health insurance expenses.6 And more importantly, it is at odds with the district court’s express finding that evidentiary support for Celia’s claimed expenses was “lacking, remote in time,” “remote in detail,” and “artificial.” The court should have considered the merits of Duane’s arguments regarding these discrepancies to determine whether a modification of the temporary alimony award was in order.
Medical Expenses
¶45 Duane also argues that the temporary alimony award erroneously included a triple award of medical expenses. The temporary orders awarded Celia approximately $400 per month for medical expenses for the parties’ children, as well as half the funds in the parties’ health savings account (HSA). In addition, the temporary orders required that Duane pay for half the children’s medical costs. Duane reasons that Celia should not have been awarded the $400 per month for medical expenses and half of the HSA account, because he was already required to pay for half of the children’s medical costs. And he argues this inequity was exacerbated at trial when the court awarded Celia an additional lump sum for orthodontic expenses and miscellaneous out-of-pocket medical expenses. Duane seeks a credit in the total amount of $8,152.
¶46 Celia disputes Duane’s claim, arguing that Duane has failed to demonstrate that the money she was awarded for medical expenses exceeded the actual needs of the family. She also points to the district court’s finding that she had established the amount of the medical expenses with receipts and testimony not refuted by Duane, and that the award was to be paid from the HSA, not in addition to it.
¶47Duane responds that Celia is confusing the district court’s award for medical expense arrearages with the ongoing expenses included in calculating Celia’s need. He explains the court included approximately $400 per month in medical expenses in calculating Celia’s expenses, awarded Celia half the HSA account, and then duplicatively ordered Duane to pay for half the children’s medical expenses during the temporary orders period. After trial, Celia was awarded $150 per month in health care expenses and Duane was awarded the entire HSA amount. As was the case with Duane’s claim to recover overages associated with Celia’s allegedly inflated expenses and underemployment, the district court did not engage with Duane’s arguments that the temporary alimony award was $541 too high, stating only that it “had previously ruled that [Celia] is entitled to an award of medical expenses” and that it would “not modify its previous ruling.” There was no legal justification for the court’s refusal to examine the merits of Duane’s claim.
Remand
¶48Temporary support orders are interlocutory in nature and therefore subject to continuing modification by the district court through the date of the final decree. Because they are often based on proffers that may differ from the actual evidence presented at trial, such temporary orders may result in awards that are not supported by the evidence presented at a later trial. For this reason, district courts have not only the authority, but the obligation, to revisit temporary orders when requested and, if warranted, to “true-up” or retroactively modify them to comport with the evidence.
¶49While district courts retain broad discretion in fashioning support orders in divorce proceedings, they are obligated to analyze a timely claim by a party seeking to true-up a temporary support order with the evidence received at trial. This true-up process consists of a two-part exercise. If a true-up is timely requested, the court should first make factual findings relevant to the temporary award to determine whether it was supported by the evidence. If the court finds, after hearing all the evidence presented at trial, that the temporary order was inappropriate, then the court should proceed to the second step: determining whether a true-up is warranted in the case at hand. In many cases, a party who has demonstrated that a temporary order was inappropriate and unsupported by the more comprehensive evidence presented at trial will be entitled to a retroactive modification of that order. See McPherson v. McPherson, 2011 UT App 382, ¶¶ 21–24, 265 P.3d 839. But in some cases, a court may find that such retroactive modification is inappropriate or inequitable, notwithstanding an inaccuracy or error in the temporary order. In making the determination whether to order a true-up, a court should identify the considerations bearing on its decision and should enter careful findings explaining the basis for that determination.
¶50Here, Duane was entitled to have the district court engage on the merits in determining whether he was entitled to a true-up. As we have discussed, Duane repeatedly asked the district court to consider his contention that the temporary alimony award was too high and timely sought an offset based on the evidence presented at trial. At trial, the court concluded that Celia should be imputed more income than was included in calculating the temporary alimony. It also found that Celia’s claimed expenses were lacking in evidentiary support. But it failed to analyze, explain, or reconcile the discrepancies between the numbers used to calculate the temporary and final alimony orders. It similarly failed to engage in or analyze Duane’s claim that both the temporary and final alimony orders had duplicated the award for the children’s medical expenses. This was an abuse of its discretion. We therefore remand the matter to the district court to complete the first step of the true-up process by making appropriate factual findings relevant to the temporary award to determine whether it was supported by the evidence. If the court finds the temporary order was overinflated, it must then determine whether a true-up is warranted. And it should also consider Duane’s claim that both the temporary and final alimony awards included a triple award of the children’s medical expenses.
II. Calculation of the Final Alimony Award
¶51Duane next contends that the district court erred, in three ways, in calculating the final alimony award: (1) it did not consider tithing paid to the parties’ church as consistent with the marital standard of living, (2) it failed to consider Duane’s post-divorce tax bracket, and (3) it included orthodontics as a permanent expense. We address each argument in turn.
A. Tithing
¶52 Duane argues that the district court miscalculated his ability to pay alimony by excluding expenses that it deemed unnecessary. According to Duane, the court analyzed whether the parties’ claimed expenses were “necessary,” rather than whether they were consistent with the “marital standard of living.” (Quotation simplified.) After doing so, it determined that tithing paid to the parties’ church was not a necessary obligation and therefore excluded it from Duane’s list of expenses, thus inaccurately increasing his ability to pay.
¶53 When setting an alimony award, the district court must consider a number of statutory factors, including “the financial condition and needs of the recipient spouse,” “the recipient’s earning capacity or ability to produce income,” and “the ability of the payor spouse to provide support.” Utah Code Ann. § 30-35(9) (LexisNexis Supp. 2021). “Furthermore, the award should advance, as much as possible, the purposes of alimony by assisting the parties in achieving the same standard of living they enjoyed during the marriage, equalizing the parties’ respective standards of living, and preventing either spouse from becoming a public charge.” Hansen v. Hansen, 2014 UT App 96, ¶ 6, 325 P.3d 864 (quotation simplified).
¶54 In adhering to these principles, this court has described the proper process to be followed by courts when awarding alimony:
First, the court must assess the needs of the parties, in light of their marital standard of living. Next, the court must determine whether the receiving spouse is able to meet [their] own needs with [their] own income. If the court finds that the receiving spouse is unable to meet [their] own needs with [their] own income, the court must then assess whether the payor spouse’s income, after meeting [their own] needs, is sufficient to make up some or all of the shortfall between the receiving spouse’s needs and income.
Redden v. Redden, 2020 UT App 22, ¶ 21, 461 P.3d 314 (quotation simplified). If the court determines after conducting this analysis “that there are insufficient resources to meet the baseline needs established by the marital living standard, the court should then equitably allocate the burden of the shortfall between the parties.” Rule v. Rule, 2017 UT App 137, ¶ 22, 402 P.3d 153.
¶55As an initial matter, the court must assess the needs of the parties not by applying its own sense of which expenses are truly necessary but, instead, by examining whether their claimed expenses are consistent with the standard of living the parties established during the marriage. See id. ¶ 15. This assessment is fact-sensitive and individualized and must be limited to a determination of whether the claimed needs are “based on the parties’ historical standard of living.” See Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 12, 80 P.3d 153; see also Anderson v. Anderson, 2018 UT App 19, ¶ 31, 414 P.3d 1069 (defining “standard of living as a minimum of necessities, comforts, or luxuries that is essential to maintaining a person in customary or proper status or circumstances” and “disavow[ing] the notion that standard of living is determined by actual expenses alone” (quotation simplified)). Indeed, it is not the job of the district court to “appl[y] its own sense of what was reasonable under the circumstances.” See Dobson v. Dobson, 2012 UT App 373, ¶ 29, 294 P.3d 591.
¶56 In comporting with this principle, this court has upheld alimony awards that included unique expenses—even expenses some observers might deem frivolous or unnecessary—where such expenses were consistent with the marital standard of living. See, e.g., Miner v. Miner, 2021 UT App 77, ¶¶ 22, 26, 44, 496 P.3d 242 (awarding receiving spouse, among other things, $1,000 per month for “tennis-related expenses,” $625 per month for “entertainment,” and $5,000 per month for horse care and maintenance where each expense was a historical marital expense supported by the evidence). Moreover, courts may infer that “the parties’ current expenses were based on the marital standard of living when the majority of the expenses in the [payor spouse’s] current financial declaration are identical in amount to those identified as marital expenses in the [receiving spouse’s] current financial declaration.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 48, 449 P.3d 202 (quotation simplified); see id. (finding that receiving spouse’s request for $300 per month for donations and gifts was reasonable “[i]n light of the fact that the court allocated the same amount for each party to spend on donations and gifts”). Accordingly, as long as a party’s claimed expenses are consistent with the marital standard of living, are based on sufficient factual findings, and advance, as much as possible, the purposes of alimony, such expenses should be included in the “needs” calculation.
¶57 The district court did not follow this process here, however. In setting the alimony award, the court did not analyze whether the parties’ tithing payments were an expenditure consistent with the marital standard of living. Instead, the court declined to “award any donations or tithing for either party” based on its finding that “tithing is a donation and . . . not a necessary living expense.” We agree with Duane that in so doing, the court eliminated the expense based on a subjective needs judgment that ignored the requirement that it assess the expense based on how the parties chose to spend and allocate their money while married. See Bakanowski, 2003 UT App 357, ¶ 12. And here, the parties presented evidence that their historical standard of living consistently included paying tithing to their church.7 By failing to assess whether the parties’ expenditures were consistent with the marital standard of living, the court abused its discretion. Accordingly, we reverse the court’s determination on this point and remand for the court to reassess the tithing expense following the process detailed above. The court should make a finding as to whether tithing was included in the parties’ marital standard of living and, if it was, should account for that expense in calculating alimony.8 If inclusion of tithing in the calculation results in a shortfall, the shortfall should be equitably allocated between the parties.
B. Tax Status
¶58Duane next argues that the district court miscalculated his ability to pay because it failed to consider his post-divorce tax obligation. When awarding alimony, the district court must consider “the ability of the payor spouse to provide support,” Utah Code Ann. § 30-3-5(9)(a)(iii) (LexisNexis Supp. 2021), which “includes consideration of the payor spouse’s tax obligations,” McPherson v. McPherson, 2011 UT App 382, ¶ 13, 265 P.3d 839.
¶59The court calculated Duane’s ability to pay by averaging “the last four years” of his net income as listed in his historical tax returns. Based on those returns, the court determined that Duane’s tax obligation would be $24,335.77. In making this determination, the court failed to consider that during each of those years the parties’ filing status was married filing jointly, but that after the divorce Duane’s filing status would—at least for a time—be single or head of household, which would increase his tax obligation. Because the court failed to properly consider Duane’s tax obligation, we reverse and remand for it to recalculate Duane’s post-divorce tax obligations.
C. Orthodontics
¶60 Duane next argues that the district court “mistakenly included $112 per month for orthodonti[cs] in the alimony award.” He contends that this award is improper because (1) no evidence supported an orthodontics expense “that will endure for the entire . . . length of the alimony,” (2) he already pre-paid orthodontics as part of temporary alimony, and (3) he was already ordered to pay half the children’s medical expenses. As previously discussed, the temporary alimony award included $167 per month for orthodontic expenses for the parties’ ten-year-old child who was not yet wearing braces. Duane sought an offset for this amount against the final alimony award and further argued that the alimony award for orthodontic expenses was duplicative in light of the court’s separate order that Duane pay half of the children’s medical expenses. But the district court declined to address Duane’s arguments. Because we have remanded these issues for further consideration, we need not resolve at this juncture Duane’s claims regarding the orthodontics expenses. Rather, we direct the district court to reexamine the issue and articulate the factual and legal basis for its decision.9
III. Valuation Date for the Retirement Accounts
¶61 Finally, Duane argues that the district court abused its discretion by assigning a valuation date to the parties’ retirement accounts that was “long after the date of separation, yet not the date of divorce.”
¶62“Generally, the marital estate is valued at the time of the
divorce decree or trial.” Jacobsen v. Jacobsen, 2011 UT App 161, ¶ 39, 257 P.3d 478 (quotation simplified). However, “a court has broad discretion to value the parties’ marital assets at a different time, such as that of separation, if it determines that the circumstances so warrant.” Petrzelka v. Goodwin, 2020 UT App 34, ¶ 47, 461 P.3d 1134. “[A]ny deviation from the general rule must be supported by sufficiently detailed findings of fact that explain the [district] court’s basis for such deviation.” Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct. App. 1993).
¶63 In this case, the parties separated on May 24, 2016. In 2019, the matter proceeded to a multi-day bench trial that took place between January and April. The court delivered its oral ruling on August 2, 2019. In that ruling, the court addressed the division of the parties’ retirement accounts, ordering that they “be divided . . . 50/50 to each party, effective . . . today, . . . August the 2nd.” Approximately four months later, on December 11, 2019, the court reduced its oral ruling to writing.
¶64Duane contends that the valuation date set by the district court is “arbitrary” and not supported by sufficient findings. He maintains that the court should have set the valuation date as the date of separation. We disagree.
¶65 The valuation date was not arbitrary; it was in fact consistent with the general rule that “the marital estate is valued at the time of the divorce decree or trial.” See Jacobsen, 2011 UT App 161, ¶ 39 (quotation simplified). Here, the court set the valuation date as August 2, 2019—the same date on which it delivered its oral ruling at the close of trial. Because the court followed the general rule of setting the valuation date at the time of trial, it was not required to articulate any additional findings of fact explaining its decision. See id.
¶66 Moreover, the district court was not presented with sufficient evidence to justify a departure from the general rule. After the court’s oral ruling, Duane filed a motion to alter or amend arguing, among other things, that the date of separation should be used as the valuation date because Celia did not contribute to the retirement accounts during the period between the separation and the date of the divorce and therefore should not benefit from the increase in its value.
¶67The court considered Duane’s motion and issued an order upholding its choice of valuation date. It explained that “due to the totality of the circumstances a firm date of August 2nd, 2019 is the date of division of the retirement assets. The Court finds that there was not sufficient argument about a different division date being used.” Given the lack of argument as to an alternative valuation date, the court had no option other than to set the date as the date “of the divorce decree or trial.” See id. (quotation simplified). Duane does not persuade us that the district court acted outside the bounds of its discretion in setting the valuation date for the retirement accounts.
CONCLUSION
¶68 The district court abused its discretion by failing to meaningfully address Duane’s argument that based upon the court’s own post-trial findings, he was entitled to an offset for overages paid in temporary alimony, including offsets arising from the amount of Celia’s imputed income and inflated expenses. The district court similarly erred in failing to consider Duane’s arguments regarding the award of medical expenses, including orthodontics. The district court also abused its discretion when calculating Duane’s ability to pay permanent alimony by excluding tithing as part of the marital standard of living and by underestimating Duane’s post-divorce tax obligation. But we affirm the court’s valuation date for the parties’ retirement accounts. We therefore reverse the district court’s alimony award and remand the matter to the court for reconsideration of the alimony award in accordance with this opinion.
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. TENNEYconcurred.
CHRISTIANSEN FORSTER, Judge:
¶1This 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.
¶2We 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
¶3Candi 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.
¶4In 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
¶5During 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.
¶6Without 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.
¶7While 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:
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.
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.
¶8During 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.”
¶9In 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
¶16The 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.
¶17The 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.
¶18Subsequently, 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
¶24Candi 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.
¶26Candi 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
¶28The 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.”
¶29Although 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.
¶39The 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).
¶40The 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
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.
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.
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.
¶47But 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.
¶48Here, 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.
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 maritalestate 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.
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.
¶55It 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.
Backlog
¶56Candi 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.”
¶57Candi 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.
¶58But 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.
¶61Ultimately, 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.
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
¶63First, 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.
¶66In 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
Dissipation
¶67Candi 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.
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.
¶71Candi 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
¶72Here, 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
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.
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.
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
¶82Candi 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).
¶83But 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.
¶84Second, 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
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.
¶87The 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.
¶90Accordingly, 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.
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.
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.
¶98Moreover, 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.
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.
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.
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.
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
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
Charles R. Ahlstrom, Attorney for Appellant Jason B. Richards, Attorney for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES MICHELE M. CHRISTIANSEN FORSTER and DAVID N. MORTENSEN
concurred.
ORME, Judge:
¶1Kathy Johansen challenges the district court’s denial of her motion to dismiss Colten Johansen’s petition to terminate alimony. She argues that the court erred in finding that Colten’s failure to provide initial disclosures was harmless.12 We agree and reverse.
BACKGROUND13
¶2In 2011, Kathy and Colten divorced. The divorce decree required Colten to pay Kathy alimony that was to terminate after 15 years or upon Kathy’s remarriage or cohabitation. On October 30, 2018, Colten filed a petition to terminate alimony, alleging that Kathy had been cohabitating with another man (Boyfriend) since at least January 2018. Acting pro se, Kathy filed her answer on November 8, 2018, denying the allegation. A pretrial conference was held the following March, during which the district court set the case for a three-day bench trial to begin in late August 2019. On July 29, Colten, having never filed his initial disclosures, provided pretrial disclosures that included his witness list and his exhibits. The witness list named Kathy, Colten, a private investigator, and Kathy and Colten’s daughter (Daughter). On August 6, Kathy moved to dismiss the petition to terminate alimony, alleging that Colten never served initial disclosures as required by rule 26 of the Utah Rules of Civil Procedure. Pursuant to rule 26, Colten was required to provide these disclosures way back in November 2018, 14 days after Kathy filed her answer to his petition. See Utah R. Civ. P. 26(a)(2)(A).
¶3Just before the trial began, the district court addressed Kathy’s motion to dismiss. Although the court stated that Colten appeared to have violated rule 26’s disclosure requirements, it declined to exclude Colten’s witnesses and exhibits because it found that the apparent violation of the rule was harmless. Specifically, while addressing Kathy, the court ruled:
[Colten’s] responsibility exists in and of itself to provide those initial disclosures to you. However, there is an exception. If . . . they can show that the failure is harmless or there is good cause, . . . they can overcome that requirement.
There’s one other requirement, and that is they don’t have to disclose anything to you that would be used for impeachment purposes. And so what they would do is they would simply call you to testify in their case in chief, allow you to testify.
Once you testify in a certain way, then [Colten] is going to say, “Well, we have witnesses.”
You’ll say, “Wait, those witnesses weren’t disclosed to me.”
And then he’ll say, “These are for rebuttal purposes or impeachment purposes only. We didn’t have to disclose impeachment evidence,” and so, really, it turns out to be harmless. It’s just a matter of the order in which they call their witnesses.
And in calling you first and having you testify first, then they bring in people [such as] a private investigator, your daughter or whoever that would be in the nature of impeachment evidence, which they are not required to disclose under Rule 26.
So the Court finds that while this does appear to be a violation of . . . or I’ll say could be aviolation of Rule 26(a)(2) and Rule 26.1(b), the violation would be harmless in that they’re not required under Rule 26 or 26.1(b) to disclose impeachment evidence that was retained for impeachment purposes only.
¶4And a few months after trial, at a hearing on Kathy’s motion to amend the court’s findings, the court added to its harmlessness finding:
As a party and as a person involved in a case, to . . . disclose [Kathy] as a potential witness certainly is helpful, but what is she going to do to then go find out from herself what her testimony will be and to find out from herself what her documents may be? She’s already got those. She should have that knowledge. That . . . is harmless. . . . I think this a prime and premium example of harmlessness, because her attempts to depose herself or subpoena her own documents or anything like that, that . . . just doesn’t make sense at all why that is necessary.
. . . . She had . . . at least 28 days to prepare for the fact that she was going to be a witness.
I believe . . . the [pretrial disclosures filed on July 29, 2019,] also disclosed the impeachment witnesses that were going to testify. So it’s not like she didn’t know that either.
So all of the purposes of Rule 26 were served under these circumstances[.]
¶5At trial, Colten first called Kathy to testify. She testified that during the time in question, Daughter and other family members lived with her. She stated that she and Boyfriend had been dating for approximately two years. Although she did affirm that Boyfriend kept a few dress shirts and a pair of running shoes at her house, and that he occasionally spent the night there, she denied that he had ever lived in the home with her. Colten then presented Kathy with photographs taken from inside her home. One photograph showed a carburetor that Boyfriend had designed and a plaque that he had received as an award for it. Kathy explained that Boyfriend had gifted both to her. The second photograph depicted a laptop and a pair of glasses. Kathy claimed that the laptop was Boyfriend’s that he let her borrow and that the glasses belonged to her. The next photograph was taken in her bathroom and showed shaving cream, a razor, and a bag. Kathy claimed that the shaving cream and razor were hers but the bag belonged to Boyfriend, which contained “his stuff to stay overnight.” Colten then showed Kathy multiple photos of a computer, her bedroom, and a spare bedroom. Kathy claimed that most of the items depicted in the photographs belonged to her or her children, with the exception of the dress shirts and running shoes that belonged to Boyfriend. Throughout Kathy’s testimony, she continued to aver that, while Boyfriend obviously spent time at the house, he did not live there.
¶6Colten next called himself as a witness. He testified that when he went to pick up his children from Kathy’s home, they “would tell me that [Boyfriend] was there the whole time that they would stay there.” Colten also testified that Boyfriend’s car would be at Kathy’s house a majority of the time he came by to pick them up. Colten then offered into evidence a mailed envelope, addressed to Boyfriend at Kathy’s address, that he found in a garbage can in front of Kathy’s house. Kathy objected to this evidence, claiming that she was not made aware of the envelope when Colten identified exhibits in his pretrial disclosures. The court overruled her objection, stating, “For impeachment purposes those things are not required to be disclosed.”
¶7Colten next called Daughter to testify. She stated that Boyfriend was living with Kathy in the home, that he kept his personal belongings in the home, that he had a key to the home, and that he had complete access to the home at all times. She also claimed that Boyfriend slept in the same room as Kathy, gave Kathy money, and bought groceries. Daughter stated that she had taken the photographs that were shown to Kathy during Kathy’s testimony, and that the computer, clothes, and other items mostly belonged to Boyfriend and not to Kathy or to Kathy’s children, as Kathy had claimed. Finally, Daughter testified that Boyfriend spent approximately 95% of his nights at the home.
¶8Colten’s final witness was a private investigator. He testified that over the course of the five days he spent surveilling the home, he witnessed Boyfriend carry groceries from his vehicle into the home, take tools from the garage and put them in his truck, have conversations with neighbors in which he presented himself as Kathy’s husband, enter the home in the evening and leave the next morning in different clothes, and undertake other actions indicative of Boyfriend living in the home. Colten then offered into evidence the investigator’s written report, which the court accepted.
¶9Kathy called no witnesses of her own. The district court subsequently found that Kathy and Boyfriend had cohabitated from January 2018 until at least November 2018, when Colten served Kathy with the petition to terminate alimony. Accordingly, the court terminated Colten’s alimony obligations retroactive to January 2018 and entered judgment against Kathy in the amount of the excess alimony Colten had paid since that time.
¶10Kathy appeals.
ISSUE AND STANDARD OF REVIEW
¶11 Kathy contends that the district court erred in denying her motion to dismiss Colten’s petition to terminate alimony and bar all his witnesses as a sanction pursuant to rule 26(d)(4) of the Utah Rules of Civil Procedure.14 “We review a district court’s interpretation of our rules of civil procedure, precedent, and common law for correctness.” Keystone Ins. Agency v. Inside Ins., 2019 UT 20, ¶ 12, 445 P.3d 434. But in reviewing a court’s determination with respect to harmlessness and good cause, our review is necessarily deferential. This is because “a court’s decision in discovery matters is a discretionary call, and . . . we will affirm such decisions when the court’s discretion was not abused, even if we or another court might have made a different decision in the first instance.” Segota v. Young 180 Co., 2020 UT App 105, ¶ 22, 470 P.3d 479 (quotation simplified). Accordingly, we will reverse a court’s harmlessness determination “only if there is no reasonable basis for the district court’s decision.” See Berger v. Ogden Reg’l Med. Center, 2020 UT App 85, ¶ 15, 469 P.3d 1127 (quotation simplified).
ANALYSIS
¶12 In relevant part, rule 26 of the Utah Rules of Civil Procedure requires parties to serve initial disclosures “without waiting for a discovery request.” Utah R. Civ. P. 26(a)(1). These disclosures must include “the name and, if known, the address and telephone number of . . . each individual likely to have discoverable information supporting its claims or defenses, unless solely for impeachment . . . ; and . . . each fact witness the party may call in its case-in-chief and, except for an adverse party, a summary of the expected testimony.” Id. R. 26(a)(1)(A). A party is further required to serve on the opposing party “a copy of all documents, data compilations, electronically stored information, and tangible things in the possession or control of the party that the party may offer in its case-in-chief.” Id. R. 26(a)(1)(B).
¶13 A plaintiff is required to make initial disclosures “within 14 days after filing of the first answer to the complaint.” Id. R. 26(a)(2)(A). If a party fails to serve these disclosures, “that party may not use the undisclosed witness, document or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.” Id. R. 26(d)(4). In cases like the one now before us, “where initial disclosures were not provided at all,” a party faces an uphill battle to show harmlessness because otherwise it would shift “an unacceptable burden on the opposing party to closely parse the pleadings and discovery exchanged (if any) to decrypt which individuals even have discoverable information.” Hansen v. Kurry Jensen Props., 2021 UT App 54, ¶ 44 n.12, 493 P.3d 1131 (Mortensen, J., and Pohlman, J., concurring). See also Ollier v. Sweetwater Union High School Dist., 768 F.3d 843, 863 (9th Cir. 2014) (“An adverse party should not have to guess which undisclosed witnesses may be called to testify.”), cited with approval in Hansen, 2021 UT App 54, ¶ 44 n.12.
And even in cases that do not involve “complicated” factual disputes, this burden may still be significant. As just one example, witnesses known to the opposing party may nevertheless speak to other individuals (unknown to the opposing party) about the operative facts of the case. These individuals would thus, unbeknownst to the opposing party, have discoverable information and might even be crucial witnesses.
Hansen, 2021 UT App 54, ¶ 44 n.12 (internal citation omitted). Thus, “a disclosing party who endeavors, by stratagem or otherwise, to disclose as little as possible faces a significant risk that the disclosure will be found insufficient and the evidence or the witness may not be allowed. To minimize this risk, disclosing parties should be liberally forthcoming rather than minimally compliant and risk the possible consequences of testimony exclusion.” RJW Media Inc. v. Heath, 2017 UT App 34, ¶ 30, 392 P.3d 956 (quotation simplified).
¶14Here, it is undisputed that Colten completely failed to file his rule 26 initial disclosures detailing the witnesses or the material supporting his claim, insofar as then in his possession, either when initially due or at any time thereafter. Thus, the presumptive sanction was for his evidence to be barred from trial. See Utah R. Civ. P. 26(d)(4). But because the district court found this failure to be harmless, Colten was ultimately allowed to present all his evidence at trial. To come to this conclusion, the court made what is in essence a two-part ruling. First, it found that Colten’s failure to disclose Kathy as a case-in-chief witness was harmless because she presumably knew what her testimony would be. Second, having found that this was harmless, it essentially piggybacked on that ruling and determined Colten did not have to disclose the remaining witnesses and evidence under rule 26’s impeachment exception. We disagree on both counts.
Kathy’s Testimony
¶15Colten argues that the district court’s harmlessness ruling in regard to his calling Kathy as a witness was correct because “it is nonsensical to think that Kathy would need to depose or seek document production from herself” and because “[t]here were many times throughout the history of the case where Kathy was put on notice that her alleged cohabitation was the only issue for trial.” All this, Colten argues, put Kathy “at absolutely no disadvantage by her not being listed on Colten’s initial disclosures.” We disagree.
¶16Colten and the district court both focus unduly on the fact that Kathy would know what her testimony would be. But both fail to recognize that if Colten had actually served his initial disclosures informing Kathy that she was the only witness on whom his case was based—and the court’s order assumes he had to disclose only Kathy—that disclosure could have completely altered Kathy’s legal strategy, including her decision on whether she should retain counsel.
¶17Knowing that Colten was going to make his case based on her testimony would be quite instructive concerning Colten’s trial strategy or lack thereof. Having knowledge of this important fact early on, Kathy likely would have deposed Colten or at least sent him interrogatories to ferret out how he believed her testimony would help him prove his case-in-chief, given the denial in her answer that she was cohabitating. See Saudi v. Valmet-Appleton, Inc., 219 F.R.D. 128, 134 (E.D. Wis. 2003) (“The importance of . . . witness disclosures and the harms resulting from a failure to disclose need little elaboration. When one party does not disclose, the responding party cannot conduct necessary discovery, or prepare to respond to witnesses that have not been disclosed[.]”), cited with approval in Hansen v. Kurry Jensen Props., 2021 UT App 54, ¶ 44 n.12, 493 P.3d 1131 (Mortensen, J., and Pohlman, J., concurring). Early disclosure of Kathy’s pivotal role in Colten’s case-in-chief would have led Kathy to discover the “impeachment” witnesses and materials Colten had in reserve and through which he actually intended to prove his case under the guise of impeaching Kathy’s testimony, long before he made Kathy aware of this information in his pretrial disclosures just 28 days before trial.
¶18 Thus, had Kathy been informed that she would be Colten’s only case-in-chief witness,15 she would have been given a better opportunity to decide whether she needed to hire an attorney and investigate what Colten’s case really hinged on, better preparing herself for trial. Not being provided this information until 28 days before trial—months past the rule 26 deadline for initial disclosures—went against the purpose of rule 26, “which is to preclude parties from trying to gain an advantage by offering ‘surprise’ testimony at trial that has not been [properly] disclosed.” Arreguin-Leon v. Hadco Constr. LLC, 2018 UT App 225, ¶ 24, 438 P.3d 25, aff’d, 2020 UT 59, 472 P.3d 927. See also Utah R. Civ. P. 26 advisory committee notes (“The intent of [initial disclosures] is to give the other side basic information concerning the subjects about which the witness is expected to testify at trial, so that the other side may determine the witness’s relative importance in the case, whether the witness should be interviewed or deposed, and whether additional documents or information concerning the witness should be sought.”). As we have explained,
Disclosure of specific facts and opinions is required so that parties can make better informed choices about the discovery they want to undertake or, just as important, what discovery they want to forgo. More complete disclosures serve the beneficial purpose of sometimes giving the opposing party the confidence to not engage in further discovery. But this is only true if the potential for surprise is reduced by at least minimum compliance with the rule 26 disclosure requirements.
RJW Media Inc. v. Heath, 2017 UT App 34, ¶ 25, 392 P.3d 956. While RJW Media dealt with disclosures about expert testimony, these policy considerations apply to all disclosures and to the circumstances present in the instant case.
¶19 Essentially, Colten’s and the district court’s rationale would lead to the conclusion that it is always harmless to omit from initial disclosures the fact that the plaintiff plans to call the opposing party as a witness because that party will always know their own testimony. But this approach essentially eviscerates the rule that explicitly requires parties to designate the opposing party as a witness if they intend to call the opposing party in their case-in-chief at trial, albeit with a less extensive disclosure duty than with other witnesses. See Utah R. Civ. P. 26(a)(1)(A)(ii) (requiring parties to designate “each fact witness the party may call in its case-in-chief and, except for an adverse party, a summary of the expected testimony”). Ultimately, this rationale misses the point that an opposing party can be harmed in this situation. A party may well know the content of their own testimony, but the fact that they will or will not be called as a witness by the other side in the other side’s case-in-chief undoubtedly will dictate how they prepare to prosecute or defend at trial. Thus, the district court exceeded its discretion in determining that Colten’s failure to provide initial disclosures naming Kathy as his only case-in-chief witness was harmless, and the court should have precluded Colten’s use of her testimony due to his clear violation of the rule.
¶20 This is not the end of the inquiry, however, because “when we determine that a trial court erred, we do not reverse unless there is a reasonable likelihood that a different result would have been reached absent the errors,” or, in other words, we do not reverse unless the aggrieved party was prejudiced. Leev. Williams, 2018 UT App 54, ¶ 69, 420 P.3d 88 (quotation simplified). See also Utah R. Civ. P. 61 (“The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.”). We need not belabor this analysis. It is perfectly clear that had the court excluded Kathy from testifying as Colten’s witness, it is certain that a different result would have been reached given that Colten’s strategy was to call Kathy and then prove his case by impeaching her testimony. Specifically, had the court precluded Colten from calling Kathy to testify, Colten would have had no testimony to impeach and he would have been unable to prove his case for lack of evidence. Thus, Kathy was prejudiced by the court’s failure to exclude her as a witness for Colten.
Remaining Evidence
¶21 Colten argues that the district court did not err in admitting his remaining evidence because rule 26 “does not require a party to disclose witnesses or evidence if it is solely used for impeachment.” See Utah R. Civ. P. 26(a)(1)(A)(i). Colten also asserts that because “Utah has not held that the ‘solely for impeachment’ language means that you can only present it when challenging a particular witness’s veracity or credibility . . . , the trial court ha[d] the discretion to use impeachment evidence to assist in establishing the core facts of a case.” We disagree and we reverse the court’s ruling concerning the remaining evidence on two grounds.
First Ground: Kathy’s Testimony
¶22 To be clear, in a technical sense, we need not reach the district court’s impeachment ruling because of the nature of its order regarding Colten’s ability to call Kathy as a witness. Specifically, the court actually excluded Colten’s remaining witnesses and evidence from being used in his case-in-chief for anything other than impeachment by reason of his failure to make his initial disclosures. Accordingly, under the court’s ruling, and had Kathy been precluded from testifying as she should have been, Colten would not have been able to present any of his remaining evidence because the court would allow it only for the purpose of impeaching Kathy. And because we have determined that the court exceeded its discretion in allowing Colten to call Kathy as a witness despite not having initially disclosed his plan to do so, it necessarily follows that none of Colten’s remaining witnesses and evidence should have been allowed. Because Kathy could not properly have been called, there would have been no testimony to impeach. Kathy was thus necessarily prejudiced because, without this evidence, Colten could not have proven his case, and the district court should have then dismissed his petition. See Lee v. Williams, 2018 UT App 54, ¶ 69, 420 P.3d 88.
Second Ground: Limits of Impeachment Exception
¶23 We also reverse the district court’s ruling on the independent ground that, even if it was not error to allow Kathy to testify in Colten’s case-in-chief, the court misapplied the rules of civil procedure in allowing Colten to present his remaining witnesses and documents as impeachment evidence. Regardless of whether Kathy should have been permitted to testify, the court still erred in allowing Colten’s remaining evidence under rule 26’s impeachment exception.16
¶24Rule 26 states that
(a)(1) . . . a party shall, without waiting for a discovery request, serve on the other parties:
(A) the name and, if known, the address and telephone number of:
(i) each individual likely to have discoverable information supporting its claims or defenses, unless solely for impeachment, identifying the subjects of the information; and
(ii) each fact witness the party may call in its case-in-chief and, except for an adverse party, a summary of the expected testimony;
(B) a copy of all documents, data compilations, electronically stored information, and tangible things in the possession or control of the party that the party may offer in its case-in-chief . . . .
Utah R. Civ. P. 26(a)(1).
¶25“When we interpret a procedural rule, we do so according to our general rules of statutory construction.” Arbogast Family Trust v. River Crossings, LLC, 2010 UT 40, ¶ 18, 238 P.3d 1035. Thus, “we start by examining the ordinary meaning or usually accepted interpretation.” Id. If we determine the language is unambiguous, then the inquiry ends there. Pilot v. Hill, 2018 UT App 105, ¶ 11, 427 P.3d 508, aff’d, 2019 UT 10, 437 P.3d 362. Cf. Amax Magnesium Corp. v. Utah State Tax Comm’n, 796 P.2d 1256, 1258 (Utah 1990) (“[S]tatutory construction mandates that a statute be read according to its literal wording unless it would be unreasonably confusing or inoperable.”). In undertaking this inquiry, we presume “that the words and phrases used were chosen carefully and advisedly.” Amax Magnesium Corp., 796 P.2d at 1258.
¶26 Based on the plain language of rule 26, the “solely for impeachment” exception is found within subsection (a)(1)(A)(i), which addresses only “individual[s] likely to have discoverable information supporting [the party’s] claims or defenses.” Utah R. Civ. P. 26(a)(1)(A)(i). This exception does not appear in subsections (a)(1)(A)(ii) or (a)(1)(B), which deal with witnesses and documents and other tangible things that a party plans on using in its case-in-chief. Thus, because we presume that the drafters of the rule used the words and phrases in rule 26 “carefully and advisedly,” Amax Magnesium Corp., 796 P.2d at 1258, an impeachment exception cannot be read into subsections (a)(1)(A)(ii) and (a)(1)(B) to allow for witnesses or documents and tangible things a party plans to use in its case-in-chief to not be initially disclosed even if their use is focused on impeachment. Therefore, an analysis of whether a witness should have been disclosed turns initially on whether that witness will be called in a party’s case-in-chief or held in reserve as a possible rebuttal witness whose testimony is “solely for impeachment.”
¶27This interpretation comports with the purpose of the rule as a whole, see id. (“A principal rule of statutory construction is that the terms of a statute should not be interpreted in a piecemeal fashion, but as a whole.”), which is to maximize disclosure “to preclude parties from trying to gain an advantage by offering ‘surprise’ testimony at trial that has not been [properly] disclosed,” see Arreguin-Leon v. Hadco Constr. LLC, 2018 UT App 225, ¶ 24, 438 P.3d 25, aff’d, 2020 UT 59, 472 P.3d 927. If we were to allow a party to forgo disclosing in initial disclosures the witnesses and documents it planned to use in its case-in-chief and then slip them in at trial under the impeachment exception, then we would not be following the clear language of the rule, much less honoring its purpose.17
¶28 We first address the documents and tangible things the court allowed and then turn to the witnesses Colten was permitted to call at trial.
Documents and Tangible Things
¶29 Once Colten filed his petition, under subsection (a)(1)(B) any documents and tangible things in his possession that Colten intended to present in his case-in-chief were required to be disclosed to Kathy in initial disclosures. In making initial disclosures, no impeachment exception exists allowing such evidence not to be disclosed. Therefore, all the pictures Colten presented from inside Kathy’s home and the private investigator’s report should not have been allowed at trial because Colten failed to disclose any of it to Kathy in his initial disclosures.18 Utah R. Civ. P. 26(a)(1)(B); id. R. 26(d)(4).
Witnesses
¶30 Colten, Daughter, and the private investigator were all witnesses Colten called as part of his case-in-chief for purposes of subsection (a)(1)(A)(i) of rule 26. They were not merely “individual[s] likely to have discoverable information supporting [his] claims” who had nothing to offer beyond impeachment evidence, which would make them exempt from disclosure under subsection (a)(1)(A)(ii). On the contrary, as witnesses used exclusively in Colten’s case-in-chief, their contact information and a summary of their expected testimony was required to be served on Kathy in initial disclosures. See id. R. 26(a)(1)(A)(ii).
¶31 Colten’s trial strategy was to first call Kathy in his case-in-chief, and she categorically denied that she was cohabitating with Boyfriend. Continuing with his case-in-chief, Colten then called himself, Daughter, and the private investigator to testify that Kathy was, in fact, cohabitating with Boyfriend.19 The court allowed these witnesses to testify in Colten’s case-in-chief even though they had not been disclosed in initial disclosures because it ruled that they were used solely for impeaching Kathy’s testimony and did not have to be disclosed under subsection (a)(1)(A)(i). This reasoning was flawed because this subsection’s “solely for impeachment” exception did not properly come into play.20 While these witnesses may have been impeaching Kathy’s testimony, they were still called in Colten’s case-in-chief, before Kathy presented any evidence in her defense, and were thus fact witnesses Colten intended to call in his case-in-chief for purposes of subsection (a)(1)(A)(ii), thus requiring that they be disclosed in initial disclosures. This is borne out by the fact that had Colten simply called Kathy in his case-in-chief and then rested, his case would have been dismissed for lack of evidence. Rather, after he called Kathy to testify, he continued his presentation of witnesses and called himself, Daughter, and the private investigator to establish that Kathy was cohabitating—all as part of his case-in-chief.
¶32Based on the plain language of rule 26, the district court
erred in allowing Colten to call any of his witnesses or to present the photographs and investigator’s report because it was all used in Colten’s case-in-chief and was required to be disclosed in initial disclosures pursuant to subsections (a)(1)(A)(ii) and (a)(1)(B). Yet, the court essentially allowed Colten to present his entire case-in-chief under subsection (a)(1)(A)(i)’s impeachment exception, which is an incorrect use of that extremely limited exception, constituting reversible error.21 Because Colten was required to serve his initial disclosures detailing this information and failed to do so, Colten has to show that such failure was harmless to Kathy or that his failure to disclose was a result of good cause. See id. R. 26(d)(4). He has not made that showing, and Kathy was prejudiced by the district court’s erroneous ruling because without the evidence Colten presented during his case-in-chief, he could not have proven that Kathy cohabited with Boyfriend. See Lee v. Williams, 2018 UT App 54, ¶ 69, 420 P.3d 88.
CONCLUSION
¶33 The district court erred in allowing Colten to call his witnesses and present his documents at trial. Kathy was harmed by not being informed in the required initial disclosures that she would be called as a witness by Colten in his case-in-chief, and the court misapplied rule 26 of the Utah Rules of Civil Procedure in allowing Colten’s remaining witnesses to testify under the “solely for impeachment” exception because they were witnesses used in Colten’s case-in-chief. The court also erred in allowing Colten to present any of his documents and tangible things under the inapplicable impeachment exception. We therefore vacate the judgment against Kathy and remand with instructions to dismiss Colten’s petition to terminate alimony.
Utah Family Law, LC | divorceutah.com | 801-466-9277
BRUCE RAY MCFARLAND, Appellant and Cross-appellee, v. NICOLE S. MCFARLAND, Appellee and Cross-appellant.
Opinion
No. 20190541-CA Filed June 4, 2021
Second District Court, Farmington Department
The Honorable David J. Williams
No. 084701533
Jacob K. Cowdin and A. Douglas Anderson, Attorneys for Appellant and Cross-appellee
Angilee K. Dakic and Ryan C. Gregerson Attorneys for Appellee and Cross-appellant
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES MICHELE M. CHRISTIANSEN FORSTER and DAVID N. MORTENSEN concurred.
HARRIS, Judge:
¶1Bruce Ray McFarland (Bruce) and Nicole S. McFarland (Nicole)1 divorced in 2009 pursuant to a stipulated divorce decree, but soon thereafter began to ignore many of the decree’s important provisions. However, neither party brought any matter to the attention of the district court for some eight years, until Bruce filed a petition to modify in 2017, and Nicole followed up with a request that the court hold Bruce in contempt. Both parties now appeal the court’s ruling on those requests and, for the reasons discussed herein, we affirm in part, reverse in part, and remand for further proceedings.
BACKGROUND The Divorce Decree
¶2In 2008, after almost sixteen years of marriage, Bruce and Nicole separated, and Bruce filed a petition for divorce. Soon thereafter, the parties negotiated a resolution to the divorce proceedings, and filed papers memorializing their agreement. In February 2009, the court entered a decree of divorce (the Decree) that incorporated the parties’ stipulated agreement. With regard to alimony and the house in which they lived while they were married (the Home), the parties’ agreement was straightforward: Bruce was ordered to pay $1,700 per month in alimony to Nicole, beginning in November 2008 and continuing until Nicole “remarries, cohabits, dies, for a term equal to their marriage, or further order of the Court,” and Nicole was awarded the Home, including the obligation to make the mortgage payments.
¶3But the parties’ agreement regarding custody and child support was unusual. Bruce was to have overnight custody of the parties’ four children every week from Sunday evening until Friday morning, with the parties each enjoying weekend overnight custody on an alternating basis. During the modification proceedings at issue here, Nicole acknowledged that the arrangement entitled her to fewer than 30% of the overnights; indeed, the district court found that this arrangement resulted in Bruce having “24 overnights per month with the children,” leaving Nicole with just six, and neither party takes issue with that finding. But despite the fact that Bruce was awarded more than 70% of the overnights, see Utah Code Ann. § 30-3-10.1(2)(a) (LexisNexis 2009) (defining “joint physical custody” as any arrangement in which “the child stays with each parent overnight for more than 30% of the year”), the parties labeled their arrangement “joint . . . physical custody,” perhaps because the arrangement contemplated that Nicole would pick the children up from school every day and care for them until eight o’clock p.m., at which point Bruce was to retrieve the children so that they could “stay with him overnight.”
¶4With regard to child support, the parties agreed to calculate the amount using the sole custody worksheet, even though they labeled their arrangement as joint custody, and agreed that Bruce—and not Nicole, notwithstanding the fact that Bruce had the lion’s share of the overnights—would be considered the “Obligor Parent” on the worksheet. Using these parameters, the parties agreed that Bruce would pay Nicole monthly child support equating to one-half of what the worksheet said Bruce would owe if he were the Obligor Parent, an amount the parties computed to be $739.73 per month at the time the Decree was entered, when all four children were still minors.2
Post-Divorce Events and Conduct
¶5Soon after the court entered the Decree, both parties began to ignore many of its provisions. For instance, Nicole made no mortgage payments on the Home. And Bruce made only one alimony payment (in January 2009) and three child support payments (in December 2008, and January and February 2009), but after that made no payments of either kind.
¶6In addition, with Nicole’s permission, Bruce moved back into the Home in April 2009. After that point, although Bruce made no payments denominated as alimony or child support, he did resume paying the mortgage on the Home, a payment that happened to be $1,728 per month, only slightly more than Bruce’s alimony obligation. When Bruce first moved back in, he and Nicole lived separately for a time, but beginning in September 2009, and lasting until April 2010, Bruce and Nicole resumed cohabiting as a couple, which included sharing familial expenses and reinitiating sexual relations. It is not a matter of dispute in this case that, during that seven-month period, the parties were cohabiting, as that term is used in relevant statutes and case law. See Myers v. Myers, 2011 UT 65, ¶ 17, 266 P.3d 806 (identifying the “hallmarks of cohabitation, including participation in a relatively permanent sexual relationship akin to that generally existing between husband and wife and the sharing of the financial obligations surrounding the maintenance of the household” (quotation simplified)); see generally Utah Code Ann. § 30-3-5(10) (LexisNexis 2017) (stating that alimony “terminates upon establishment by the party paying alimony that the former spouse is cohabitating with another person”).
¶7In April 2010, Nicole enlisted in the military, and left Utah for basic training. Over the next seven years, Bruce resided in the Home with the children, and provided all necessary childcare and financial support, including making the monthly mortgage payments on the Home. Nicole served two tours of duty overseas with the military, and visited the children or took them on vacation periodically while on leave. But other than these short visits, Nicole exercised no custody or parent-time, and provided no significant financial support to the children. Eventually, in 2015, Nicole remarried.
¶8For the seven years following Nicole’s enlistment, both parties seemed content with their arrangement and, even though both were materially violating the terms of the Decree, neither filed so much as a single document with the court. In particular, neither party sought to modify the terms of the Decree, and neither party sought contempt sanctions against the other.
The Post-Divorce Filings
¶9The parties’ tacit arrangement came to an end in 2017 when Bruce sought to refinance the Home. Because Nicole had been awarded the Home in the Decree, Bruce asked Nicole to deed him the Home to facilitate the refinance. Nicole refused to authorize the refinance unless Bruce paid her half the equity, asserting that she owned the Home and that any mortgage payments made by Bruce constituted “either rent or alimony payments” that he owed her. Then, in June 2017, Bruce filed a petition to modify, followed by a motion for temporary orders in February 2018, bringing three separate provisions of the Decree to the court’s attention. First, Bruce requested that alimony be terminated, dating back to 2009. Second, Bruce asked the court to modify the Decree to award him sole physical and legal custody of the two remaining minor children, and asked that he be awarded child support payments from Nicole going forward. And finally, Bruce asked the court to modify the Decree to award him the Home, alleging that he assumed the mortgage to avoid foreclosure because Nicole had “abandoned the property when she joined the military.” While the petition and motion for temporary orders were pending, Bruce completed a refinance of the Home, apparently finding a way to close the transaction without Nicole’s authorization.
¶10 Nicole responded by filing two orders to show cause, asking the court to hold Bruce in contempt in three respects:
(1) for failing to make alimony payments; (2) for failing to make child support payments; and (3) for occupying the Home and for refinancing it without her authorization. Nicole asked the court to enter judgment in her favor for alimony and child support arrears, as well as for “the amount that [Bruce] cashed out when he refinanced” the Home, and asked the court to order that she obtain immediate “use and possession” of the Home.
¶11 After a hearing, a domestic relations commissioner certified a number of issues as ripe for an evidentiary hearing before the district court, including the following: (1) whether Bruce should be held in contempt for failing to pay alimony and, if so, the amount of arrears at issue; (2) whether Bruce should be held in contempt for failing to pay child support and, if so, the amount of arrears at issue; (3) whether Bruce should be held in contempt for refinancing the Home without Nicole’s consent; and (4) whether Bruce should be held in contempt for occupying and refusing to vacate the Home. All of the issues certified by the commissioner were framed as contempt or temporary order issues; the commissioner apparently did not envision that the hearing would be a final dispositive hearing on Bruce’s petition to modify.
¶12 In anticipation of the evidentiary hearing before the district court, both parties filed papers outlining their positions. Citing section 30-3-5(10) of the then-applicable Utah Code, Bruce argued that he did not owe any alimony arrears because his obligation to pay alimony terminated in 2009 due to “the cohabitation relationship” that the two established when they moved back into the Home together. Citing Scott v. Scott, 2017 UT 66, ¶¶ 10, 26–27, 26 n.7, 423 P.3d 1275, Nicole argued in response that, under the applicable statute as interpreted by our supreme court, a party attempting to terminate alimony for cohabitation must file a motion or petition “during [the] alleged co-habitation.”
¶13 Regarding child support, Bruce asserted that he should not be required to pay Nicole for any point after 2009, because the children had been almost entirely in his care since then. In particular, Bruce argued for the applicability of section 78B-12108 of the Utah Code, which provides that child support payments generally “follow the child,” and that changes in child support obligations can, under certain circumstances, occur “without the need to modify” the governing decree. See Utah Code Ann. § 78B-12-108(1), (2) (LexisNexis 2017). Bruce’s arguments in the pretrial briefing were entirely defensive—that is, he asserted that he should not be required to make child support payments to Nicole after 2009, but at no point did he assert an entitlement to child support arrears from Nicole regarding any time period prior to the filing of his petition to modify.
The Hearing and Subsequent Ruling
¶14 At the ensuing evidentiary hearing, the court heard live testimony from Bruce, Nicole, Bruce’s father, and the parties’ adult daughter. At the conclusion of the evidence, the court took the matter under advisement, and asked the parties to submit written closing arguments in the form of post-trial briefs.
¶15 In her closing brief, Nicole attempted to rebut Bruce’s cohabitation claim with two arguments. First, Nicole asserted that the governing statute, as interpreted in Scott, required Bruce to have requested termination of alimony during the period of cohabitation. Second, Nicole argued that, even if Bruce’s request was timely, no cohabitation occurred because Bruce, the payor spouse, did not qualify as “another person” within the meaning of the governing statute. See Utah Code Ann. § 30-3-5(10) (LexisNexis 2017) (stating that alimony terminates if “the former spouse is cohabitating with another person”). For his part, while he attempted to rebut all of Nicole’s claims, Bruce again made no affirmative claim to child support arrears running in his direction.
¶16A few weeks later, the court issued a written ruling. With regard to alimony, the court found Bruce in contempt for failing to make payments. First, the court concluded that the mortgage payments Bruce made were just that—mortgage payments on a house Bruce lived in—and could not be considered alimony, and it found that Bruce had not paid any alimony since 2009. Second, the court determined that, even if all of the hallmarks of cohabitation were present between September 2009 and April 2010, cohabitation had not occurred because “‘cohabitation’ does not include meeting the elements of cohabitation with the ex-spouse.” Accordingly, the court concluded that Bruce’s alimony obligation had not terminated in 2009 when the parties moved back in together, and that Bruce was in contempt for not paying alimony between 2009 and Nicole’s remarriage in 2015. Based on those findings, the court computed the alimony arrearage amount to be “$150,744.50 plus post-judgment interest,” and ordered Bruce to pay that amount.
¶17 With regard to child support, the court found that Bruce was not in contempt. The court accepted Bruce’s argument that, pursuant to section 78B-12-108 of the Utah Code, the child support obligation was to follow the children, and concluded that, pursuant to subsection (2) of that statute, which the court found applicable, Bruce was relieved of his child support obligation dating back to 2009, even though he did not file a petition to modify until 2017. In addition, the court offered its view that, even if section 78B-12-108 were inapplicable, “it would not be equitable to require” Bruce to pay child support to Nicole for time periods in which he cared for the children. On those bases, the court determined that Bruce had no obligation to pay child support to Nicole after 2009. But the court did “not find that [Nicole] was required to pay child support payments to [Bruce] after leaving for military service,” noting that, in its view, Bruce had not made any such affirmative claim, and instead had raised only defensive claims regarding any obligations he might have to Nicole.
¶18With regard to the Home, the court declined to find Bruce in contempt for not vacating the Home, refusing to quitclaim it to Nicole, or refinancing it. However, the court made no ruling on altering the Decree’s provision that originally awarded the Home to Nicole, stating simply that Bruce “shall be allowed, on a temporary basis, to remain” in the Home “until the matter is brought forth and certified” by the commissioner as ripe for an evidentiary hearing.
ISSUES AND STANDARDS OF REVIEW
¶19 Both parties appeal the district court’s ruling, raising two main issues for our review. First, Bruce challenges the court’s determination that his alimony obligation was not terminated by cohabitation. In advancing this argument, Bruce relies entirely on Utah’s alimony statute, and asserts that the court’s interpretation of that statute was incorrect. See Utah Code Ann. § 30-3-5(10) (LexisNexis 2017) (stating that a payor spouse’s obligation “terminates upon establishment by the party paying alimony that the former spouse is cohabitating with another person”).3 “The proper interpretation and application of a statute is a question of law which we review for correctness . . . .” Veysey v. Veysey, 2014 UT App 264, ¶ 7, 339 P.3d 131 (quotation simplified).
¶20 Next, both parties challenge the court’s child support rulings. Nicole takes issue with the court’s determination that Bruce did not owe her child support payments, pursuant to the terms of the Decree, after 2009. And Bruce asserts that the court erred by declining to order Nicole to pay child support arrears to him. Because the parties’ arguments center on interpretation and application of section 78B-12-108 of the Utah Code (Section 108), we review the district court’s decision for correctness. See Veysey, 2014 UT App 264, ¶ 7.4
ANALYSIS I. Alimony
¶21We first address Bruce’s claim that his alimony obligation terminated by operation of statute when the parties cohabited in 2009 and 2010. Because Bruce’s position is directly foreclosed by our supreme court’s decision in Scott v. Scott, 2017 UT 66, 423 P.3d 1275, we reject his challenge to the district court’s ruling.
¶22 At all relevant times during the events precipitating this appeal, Utah’s alimony statute provided that alimony obligations “to a former spouse terminate[] upon establishment by the party paying alimony that the former spouse is cohabitating with another person.” Utah Code Ann. § 30-3-5(10) (LexisNexis 2017) (emphasis added).5 In Scott, our supreme court was asked to interpret the same version of this statute. See 2017 UT 66, ¶ 3. After noting the statute’s use of present tense language—“is cohabitating”—the court interpreted the statute as requiring “the paying spouse to establish that the former spouse is cohabiting at the time the paying spouse files the motion to terminate alimony.” See id. ¶¶ 23, 33. While the Scott opinion was not published until 2017, the statutory language the court was interpreting in that case had been in effect at all times relevant to this case. See supra note 5. That is, Scott did not introduce a new rule that was effective only prospectively; rather, it provided an interpretation of statutory text that had already been in effect for several years. See DIRECTV, Inc. v. Imburgia, 577 U.S. 47, 56 (2015) (“[J]udicial construction of a statute ordinarily applies retroactively.”); see also Rivers v. Roadway Express, Inc., 511 U.S. 298, 311–12 (1994) (stating that “the principle that statutes operate only prospectively, while judicial decisions operate retrospectively, is familiar to every law student” (quotation simplified)).
¶23 Under the circumstances presented in this case, any cohabitation between Bruce and Nicole ceased sometime in early 2010. But Bruce did not file his petition to modify until 2017. It is therefore undisputed that the cohabitation to which Bruce points had long since ceased by the time he filed his petition to modify. Thus, under the statute then in effect (as interpreted by Scott), that petition was filed some seven years too late. Accordingly, Bruce cannot now complain that his alimony obligation should be terminated, by operation of statute, due to the parties’ long-since-concluded cohabitation. Bruce has therefore not carried his burden of demonstrating error in the district court’s ruling that Bruce’s alimony obligation lasted until Nicole’s 2015 remarriage,6 or in the court’s rulings holding Bruce in contempt for failing to pay alimony from 2009 through 2015 and ordering him to pay past-due alimony.7
Child Support
¶24 Next, we address the parties’ respective challenges to the district court’s child support rulings. As noted, Nicole takes issue with the court’s ruling that Bruce’s child support obligations to her, as set forth in the Decree, ended in 2009, and that therefore Bruce could not be held in contempt for not meeting those obligations. Building on that same ruling, Bruce takes issue with the court’s reluctance to go a step further and order Nicole to pay him child support arrearages dating to 2009. We begin our analysis by discussing some of the broad overarching principles governing modification of child support orders, including a discussion of Section 108 in particular. We then address the parties’ respective challenges, in turn, beginning with Nicole’s.
A
¶25In general, decrees in domestic relations cases are binding final judgments that may be modified “only under certain conditions.” Kielkowski v. Kielkowski, 2015 UT App 59, ¶ 21, 346 P.3d 690; see also Robertson v. Stevens, 2020 UT App 29, ¶¶ 6–7, 461 P.3d 323 (explaining that once “judgment is entered” in a divorce case, “the court’s power to modify the judgment is limited” (quotation simplified)). While there are several tools that can generally be used to modify final judgments, see, e.g., Utah R. Civ. P. 60(b), one tool that is specific to family law cases is the petition to modify, see id. R. 106(a) (stating that, in most cases, “proceedings to modify a divorce decree . . . shall be commenced by filing a petition to modify”); see also Ross v. Ross, 2019 UT App 104, ¶ 11, 447 P.3d 104 (“[R]ule 106 establishes a general rule . . . that any changes to divorce decrees must be brought about by the filing of a petition to modify.”). Parties in family law cases may use this tool, in accordance with applicable statutes and rules, to seek modification of various provisions of decrees, including child support provisions. See Utah Code Ann. § 78B-12-210(9)(a) (LexisNexis 2017) (“A parent . . . 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.”); see also id. § 30-3-5(3) (“The court has continuing jurisdiction to make subsequent changes or new orders for the custody of a child and the child’s support, maintenance, health, and dental care, and for distribution of the property and obligations for debts as is reasonable and necessary.”); id. § 30-3-5(8)(i)(i) (“The court has continuing jurisdiction to make substantive changes and new orders regarding alimony based on a substantial material change in circumstances . . . .”).
¶26 But in general, modifications to a decree’s provisions regarding child support payments may date back only to “the month following service” of the petition to modify “on the parent whose support is affected.” See id. § 78B-12-112(4); see also McPherson v. McPherson, 2011 UT App 382, ¶ 17, 265 P.3d 839 (stating that “the statute does limit the time period during which retroactive modification is available”). That is, as concerns child support provisions, parties are generally barred from obtaining modifications that date back further than the first day of the month after the month in which the petition to modify was served on the opposing party.
¶27 One potential exception to this general rule appears in Section 108, a statutory provision entitled “Support Follows the Child.” See Utah Code Ann. § 78B-12-108 (LexisNexis 2017). That section, in relevant part, reads as follows:
Obligations ordered for child support and medical expenses are for the use and benefit of the child and shall follow the child.
Except in cases of joint physical custody and split custody as defined in Section 78B-12-102, when physical custody changes from that assumed in the original order, the parent without physical custody of a child shall be required to pay the amount of support determined in accordance with [calculation guidelines found in other code sections] without the need to modify the order for . . . the parent who has physical custody of the child.
Id. (emphasis added). Thus, Section 108 contains an overarching mandate that child support payments “shall follow the child,” and provides that, under certain limited circumstances, child support obligations can change “without the need to modify” the child support provisions in the governing decree. Id.; see also Hansen v. Hansen, 2012 UT 9, ¶ 13, 270 P.3d 531 (stating that, under certain circumstances, Section 108 “allows redirection of child support [payments] without modification of the support order”). In this way, Section 108 constitutes an exception to the general rule that modifications to child support provisions may date back only to the month following service of the petition to modify on the opposing party: where Section 108 applies, it may allow modification of child support awards even further back in time.
¶28 But this exception comes with distinct statutory limits. Indeed, our supreme court has noted that Section 108 “contains two provisions: (1) a general statement that support shall follow the child and (2) a specific provision providing guidelines for redirection of child support to a new physical custodian.” Hansen, 2012 UT 9, ¶ 7. And the court has already foreclosed any argument that subsection (1)’s general statement—that child support “shall follow the child”—operates by itself “to redirect support payments any time anyone provides any shelter or sustenance to a child.” See id. ¶ 10. Instead, the specific requirements of subsection (2) operate to “modif[y] the general statement in subsection (1),” and those specific requirements serve as the prerequisites for entitlement to a retroactive change in child support that dates back further than the date of a duly served petition to modify. See id. ¶ 11.
¶29 Under the provisions of subsection (2), a litigant can obtain a change in a child support provision even “without the need to modify the order” itself, but only if two conditions are met: (a) there must be a change in “physical custody . . . from that assumed in the original order,” and (b) the case must not be one involving “joint physical custody.” See Utah Code Ann. § 78B-12-108(2).
B
¶30 Bruce asserts that Section 108 applies here, and allows him to obtain retroactive modification, dating all the way back to 2009, of the Decree’s child support provisions, even though he did not seek modification of either the custody provisions or the child support provisions until 2017. The district court agreed with Bruce’s interpretation of Section 108, and determined that Bruce was not in contempt for failure to pay Nicole child support between 2009 and 2017 because he had been caring for the children during that time and because child support should “follow the children.” (Citing Utah Code Ann. § 78B-12-108.)
¶31Nicole challenges the court’s interpretation of Section 108. We agree with Nicole because, for two independent reasons, Section 108 is inapplicable here. First, this is not a case in which physical custody ever legally changed “from that assumed in the original order.” See Utah Code Ann. § 78B-12-108(2) (LexisNexis 2017). And second, even assuming that some sort of de facto change of parent-time occurred in 2010 when Nicole joined the military, that change did not constitute a change in physical custody under the operative definition of that term. See id. §§ 30-3-10.1(3)(a), 78B-12-102(15) (each defining “joint physical custody” for its respective chapter).
1
¶32In order for Section 108’s exception to apply, the situation must involve a change in “physical custody . . . from that assumed in the original order.” See id. § 78B-12-108(2). The term “physical custody,” as used in this statute, is a “legal term of art” that “involve[s] much more than actual possession and care of a child.” See Hansen, 2012 UT 9, ¶¶ 12, 15, 19. “A physical custodian also has a legal responsibility to provide supervision and control.” Id. ¶ 15 (emphasis added).
¶33 Given this definition, a change in “physical custody” cannot occur without some sort of “formal legal process[].” Id. ¶¶ 19, 24. In most cases, this occurs by court order following the filing of a petition to modify. See id. ¶¶ 21, 25. In other “rare circumstances,” this can occur “by statute without the need for a hearing or court order.” Id. ¶ 25. But in any event,
child support should be redirected only to those persons or entities who acquire the rights and responsibilities of the child’s new “physical custodian” under the law. Usually that will happen only after adjudication and a formal order, but in all cases it requires fulfillment of the statutory procedures and standards for a change in physical custody. The actual provision of sustenance and support is insufficient.
Id.
¶34 In this case, no one disputes that Bruce assumed all responsibility for “sustenance and support” of the children after April 2010. See id. But in this context, provision of additional sustenance and support to the children beyond that anticipated in the Decree is not enough to effectuate an actual, legal change in physical custody. See id. Bruce took no steps—at least not until 2017—to follow the “formal legal processes” typically used to effectuate an actual change of physical custody. See id. ¶ 24. And Bruce makes no argument that this case presents any “rare circumstances” in which custody can change by operation of statute, even in the absence of a petition to modify. See id.
¶35Thus, no change in “physical custody”—in an actual legal sense, as required by the “term of art” definition of the statutory phrase, see id. ¶ 12 (quotation simplified)—occurred in April 2010, or at any time prior to the filing of Bruce’s petition to modify. Because physical custody did not change, Section 108’s narrow exception to the usual retroactivity rules governing modification of child support orders does not apply here, and therefore it does not enable Bruce to seek changes to the Decree’s child support obligations dating any further back than 2017.
2
¶36 Moreover, even if we were to assume, for purposes of argument, that a change in “physical custody” could theoretically be effectuated merely by a parent’s provision of additional sustenance and support beyond that required by the governing child support order, no such change occurred on the facts of this case. We have previously stated that “[c]ustody and parent-time are conceptually distinct.” See Ross v. Ross, 2019 UT App 104, ¶ 14 n.3, 447 P.3d 104. By statutory definition, there are two kinds of physical custody—sole physical custody and joint physical custody—with the dividing line based on the number of overnight visits enjoyed by each parent. See Utah Code Ann. §§ 30-3-10.1(3)(a), 78B-12-102(15) (both stating that “joint physical custody means the child stays with each parent overnight for more than 30% of the year, and both parents contribute to the expenses of the child in addition to paying child support” (quotation simplified)). Because either parent, in any given case, could be awarded sole physical custody— defined as having at least 70% of the overnights—there are three possible physical custody arrangements: (a) Parent 1 has sole custody; (b) Parent 2 has sole custody; and (c) the parents share joint custody. When a change occurs that causes one parent to obtain enough additional overnights to move from one category to another (e.g., from 25% of overnights to 35%, or from 65% to 75%), there has been a change in physical custody. See Ross, 2019 UT App 104, ¶¶ 16–17, 17 n.5. But when a change occurs in which one parent obtains a few additional overnights but not enough to move from one category to another, the change constitutes only a change in parent-time, and not a change in physical custody, as that term is statutorily defined. See id. ¶ 16 (noting that, in relocation cases, a parent need not file a petition to modify if scheduling changes necessitated by the proposed relocation would not change the statutory custody designation, and would change only parent-time).
¶37 In this case, the parties started out with an arrangement, under the Decree, in which Bruce had twenty-four overnights each month and Nicole had only six. Although the parties described that arrangement, in the Decree, as a joint custody arrangement, the label the parties assigned to the arrangement is inconsequential. See Stephens v. Stephens, 2018 UT App 196, ¶ 29, 437 P.3d 445 (stating that the “designation of ‘joint physical custody’ or ‘sole physical custody’” used in a decree “is not as important as whether the custody arrangement [actually] exceeds the statutory threshold for joint physical custody” (quotation simplified)). And here, despite the parties’ label, their arrangement was actually a sole custody arrangement. See Utah Code Ann. § 78B-12-102(15). As noted, the district court made a specific (and unchallenged) finding on this point, and correctly concluded that, because the Decree awarded Nicole only “approximately 20% of the overnights,” it described a sole custody arrangement.
¶38 Thus, the more recent arrangement, following Nicole’s departure into the military, did not result in a change of custody. After Nicole left, Bruce went from about 80% of the overnights to nearly 100% of the overnights. Thus, Bruce had sole physical custody of the children under the original arrangement, and he maintained sole physical custody of the children after Nicole left. See id. In this situation, while Nicole’s departure did result in practical (if not official) changes to the parties’ division of parent-time, it did not effectuate any change in physical custody, under the statutory definition of that term.
¶39 Section 108 applies only in instances where “physical custody changes.” See id. § 78B-12-108(2). For both of the reasons just discussed, no change in physical custody occurred here, and therefore Section 108 cannot provide Bruce an escape from the usual rule that modifications to a domestic decree’s child support provisions cannot date back any further than the month following service of the petition to modify. See id. § 78B-12112(4). We therefore sustain Nicole’s challenge to the district court’s interpretation of the relevant statutes.
3
¶40 The district court’s ruling also included an alternative basis for declining Nicole’s request that Bruce pay child support arrearages. Specifically, the court stated as follows:
Finally, and regardless [of] whether [Section 108] applies here, it would not be equitable to require [Bruce] to pay child support arrearages to [Nicole] in this case. Even if that statute does not apply directly, subsection (1) is instructive of the legislature’s intent that child support “is for the use and benefit of the children.” . . . It would not be equitable to acknowledge that [Bruce] was the sole provider after moving back into the [Home] and especially after [Nicole] entered the military, acknowledge that [Nicole] provided very little, if any, support to the children since that time, but nonetheless require [Bruce] to pay the alleged child support arrearages requested by [Nicole].
¶41We do not necessarily disagree with the court’s sentiment (although we note that, in a big-picture sense at least, there are equities on the other side of the equation too: we can see wisdom in a bright-line rule requiring parties to file petitions to modify child support provisions, and in limiting parties’ ability to obtain changes to decrees that date back any further than the month following service of the relevant petition to modify). Looking just at the facts of this case, there does seem to be something intuitively inequitable about requiring Bruce to pay child support arrearages to Nicole. And we acknowledge that district courts are often given wide discretion to apply equitable principles in family law cases. See Harmon v. Harmon, 491 P.2d 231, 232 (Utah 1971) (“In order to carry out the important responsibility of safeguarding the interests and welfare of children, it has always been deemed that the courts have broad equitable powers.”).
¶42 But our legislature has enacted a number of statutes that govern certain aspects of family law cases, and we are aware of no principle of law that allows courts to override statutes, in particular cases, simply out of generalized equitable concerns. See Martin v. Kristensen, 2021 UT 17, ¶ 53 (stating that courts have “no equitable power to override” statutory mandates due to generalized concerns of “public policy and equity”). At a minimum, the district court has not adequately explained how its equitable concerns, in this situation, allow it to supersede statutory mandates or interpretations of those statutes by our supreme court. For instance, the district court’s reliance on subsection (1) of Section 108 as being “instructive of the legislature’s intent” that child support obligations shall “follow the child[ren]” appears misplaced, given our supreme court’s explanation, in Hansen v. Hansen, that “[s]ubsection (1)’s general directive cannot possibly be interpreted unqualifiedly . . . to redirect support payments any time anyone provides any shelter or sustenance to a child,” and that subsection (1) is “modifie[d]” by the “specific limitation[s]” found in subsection (2). See 2012 UT 9, ¶¶ 10–11, 270 P.3d 531. And as we have noted, supra ¶¶ 30–39, the prerequisites of subsection (2) are not satisfied here. Apart from the language in subsection (1), the court does not otherwise explain how generalized equitable considerations, no matter how weighty, can justify modification of a child support order back beyond the month following service of the petition to modify, given our legislature’s clear directive that such orders may be modified “only from the date of service of the pleading on the obligee.” See Utah Code Ann. § 78B-12112(4).
¶43 We observe that there may well be specific doctrines of equity or discretion that could apply in this situation to temper Nicole’s requests. Nicole presented her request in the context of an order to show cause seeking contempt, a legal doctrine that has its own elements and requirements, see Von Hake v. Thomas, 759 P.2d 1162, 1172 (Utah 1988) (setting forth the required showing for a contempt finding), in which courts are afforded discretion in selecting an appropriate sanction once contempt is found, see Utah Code Ann. § 78B-6-310(1) (LexisNexis 2018) (stating that, “[i]f the court finds the person is guilty of the contempt, the court may impose a fine” or other punishment (emphasis added)); id. § 78B-6-311(1) (stating that a court “may order” the contemnor to pay the aggrieved party “a sum of money sufficient to indemnify and satisfy the aggrieved party’s costs and expenses” (emphasis added)). Alternatively, various equitable doctrines may apply in situations like this, depending on the circumstances. See, e.g., Soter’s, Inc. v. Deseret Fed. Sav. & Loan Ass’n, 857 P.2d 935, 939–40 (Utah 1993) (discussing the doctrine of waiver and its elements); Veysey v. Veysey, 2014 UT App 264, ¶ 16, 339 P.3d 131 (discussing the doctrine of laches and its elements); Bahr v. Imus, 2009 UT App 155, ¶ 6, 211 P.3d 987 (discussing the doctrine of equitable estoppel and its elements). We express no opinion as to the applicability of any such doctrine to the facts of this case. But the district court did not ground its child support ruling—that Bruce should not be required to make child support payments—in its post-contempt sentencing discretion or in any specific equitable doctrine; instead, as we interpret its order, it concluded that, due to unspecified equitable considerations, Bruce should be relieved from any obligation to make payments in the first place. In our view, the court has not adequately explained how equitable considerations can override statutory commands in this case.
¶44Accordingly, we reverse the district court’s determination that Bruce was not “required to pay child support payments to [Nicole] after [Nicole left] for military service,” and we remand the matter for further proceedings on Nicole’s request that Bruce be held in contempt for failing to make child support payments.
C
¶45Finally, given our conclusion regarding Nicole’s challenge to the district court’s child support ruling, we can readily dispose of Bruce’s challenge to that same ruling. As an initial matter, we agree with the district court’s conclusion that Bruce made no affirmative claim, before the district court, to any child support arrears dating back further than the service of his petition to modify. On that basis alone, the district court was justified in not awarding him any. But more substantively, for the reasons already explained, we find no merit in Bruce’s argument that Section 108 operates to allow him to look all the way back to 2009 for modification of the Decree’s child support provisions.
CONCLUSION
¶46 The district court correctly determined that Bruce’s alimony obligation was not terminated—at least not under the alimony statute—by the parties’ cohabitation in 2009 and 2010, because the statute required Bruce to file a petition seeking termination while the cohabitation was still occurring, and he did not do so. Accordingly, the district court did not err by holding Bruce in contempt for failing to pay alimony after 2009, and in ordering Bruce to pay past-due alimony through 2015, and we affirm those orders.
¶47 However, the district court erred in its interpretation of Section 108, and erred in concluding that Section 108 operated to relieve Bruce of his obligation, under the Decree, to continue to pay Nicole child support after 2010. In this case, neither Section 108, nor generalized equitable concerns, operates to relieve Bruce of that obligation, and neither allows Bruce to obtain a modification of his child support obligations dating back any further than the month following service of his petition to modify. Accordingly, we reverse the district court’s determination to the contrary, and remand the case for further proceedings, consistent with this opinion, on Nicole’s request for contempt relating to child support and on Bruce’s petition to modify.
Utah Family Law, LC | divorceutah.com | 801-466-9277
I was divorced and lied to during my divorce and I am disabled can I take my ex back to court for spousal support?
Can you try? Yes. Will you succeed? Probably not. Unless you can prove (not persuade, but demonstrate by objectively, independently verifiable proof) that your ex-husband defrauded the court, you’re likely stuck with the decree and court orders you’ve got. This is extremely difficult in its own right. This is also extremely expensive and most people don’t have that kind of money.
HUGH LYNN BJARNSON,
Appellant,
v.
JENNIFER LOU BJARNSON,
Appellee.
Opinion
No. 20190734-CA
Filed October 16, 2020
Fourth District Court, Provo Department
The Honorable Derek P. Pullan
No. 164400963
Aaron R. Harris, Attorney for Appellant
Rosemond G. Blakelock and Megan P. Blakelock, Attorneys for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES MICHELE M. CHRISTIANSEN FORSTER and JILL M. POHLMAN
concurred.
ORME, Judge:
¶1 Hugh Lynn Bjarnson and Jennifer Lou Bjarnson were married in 2008. In 2016, Hugh[1] filed for divorce, and the parties separated three months later. Following a bench trial, the district court entered a decree of divorce in 2019. The court’s alimony determination is the sole point of contention on appeal.
¶2 Following the couple’s separation, Jennifer moved in with her ailing mother, with whom she had also lived between the time she separated from a former husband and when she moved in with Hugh. She could not recall how long she had lived with her mother the first time but said that she had done so “briefly.” Her mother’s residence is a fully furnished three-level home, on five acres, in which Jennifer had her own bedroom. When she moved in following her separation from Hugh, she did not pay rent, although she provided care to her mother and testified that she paid her mother’s water assessment. Jennifer asserted at trial that she could not afford to rent an apartment at that time and was “living there because [she had] nowhere else to live.” It was entirely unclear how long she would remain there.[2]
¶3 The court determined that Jennifer was entitled to a monthly alimony award of $1,830, $1,000 of which accounted for her anticipated monthly housing expense, as reflected in her financial declaration. But because she was not obligated to pay rent while living with her mother, the court ordered Hugh to make alimony payments “for the length of the marriage in the amount of $830 per month until . . . Jennifer secures her own housing,” at which time the “alimony will increase to $1,830 per month.” Hugh appeals.
¶4 Hugh’s argument is limited to the prospective aspect of the district court’s alimony award. He does not challenge the $830 monthly obligation currently payable. Instead, he contends that the court exceeded its discretion by ordering a prospective increase in his alimony obligation based upon an uncertain future event. We agree.
¶5 Although “trial courts have broad latitude in determining whether to award alimony and in setting the amount, and we will not lightly disturb a trial court’s alimony ruling, . . . we will reverse if the court has not exercised its discretion within the bounds and under the standards we have set.” Rule v. Rule, 2017 UT App 137, ¶ 11, 402 P.3d 153 (quotation simplified). See also State v. De La Rosa, 2019 UT App 110, ¶ 4, 445 P.3d 955 (“Trial courts do not have discretion to misapply the law.”) (quotation simplified). We conclude that it was legal error for the district court to order a prospective increase in alimony based on a possible future event without first finding when—or even whether—such an event will occur. Instead, the court should have reserved the question of a possible change in alimony for a later petition to modify the alimony award should Jennifer’s housing situation change.
¶6 “A prospective change in alimony alters the award to which the recipient spouse would otherwise be entitled based on the trial court’s anticipation of a future event that will materially change the parties’ circumstances.” Boyer v. Boyer, 2011 UT App 141, ¶ 15, 259 P.3d 1063. But because “the trial court will be better able to make an educated adjustment when and if [a possible future] event actually occurs,” id., “prospective changes to alimony are disfavored,” Richardson v. Richardson, 2008 UT 57, ¶ 10, 201 P.3d 942. Indeed, they are appropriate “only as to future events that are ‘certain to occur within a known time frame.’” MacDonald v. MacDonald, 2018 UT 48, ¶ 40, 430 P.3d 612 (quoting Richardson, 2008 UT 57, ¶ 10). Thus, in Richardson, a prospective change in alimony was appropriate where it was based on events that were certain to occur on specified dates. See 2008 UT 57, ¶¶ 10–11. In contrast, “a plan to retire, without actually retiring, would be insufficient to justify a prospective alimony reduction.” Id. ¶ 10.
¶7 Here, the district court ordered Hugh to pay a prospective alimony increase of $1,000 per month when “Jennifer secures her own housing.” Other than noting that Jennifer was “residing with her mother rent free right now,” the court made no factual findings regarding her future housing. It did not find that it was “certain” that Jennifer would secure her own independent housing, much less that it would occur “within a known time frame.” See id. Indeed, it could not have so found absent any indication that Jennifer was actively searching for independent housing, that she intended to move out of her mother’s home within a certain timeframe, or that her current living arrangements would be short-lived. The amount of the appropriate increase was also necessarily speculative. The $1,000 may have been a solid estimate based on current conditions, but either high or low depending on when and whither she relocates—if she does. The prospective modification to the alimony award was thus improper under Richardson and its progeny, even though the court’s desire for efficiency is understandable.
¶8 Jennifer argues that “[h]ousing was not considered by the court to be some ‘future’ event.” Rather, she contends the court ordered the alimony increase with the goal of “restor[ing] the parties to the same standard of living that existed during the marriage,” and because an independent living situation had been Jennifer’s standard of living during her marriage, the court properly determined that she was entitled to monthly alimony payments in the amount of $1,830. In support of this argument, she relies on Sauer v. Sauer, 2017 UT App 114, 400 P.3d 1204, in which we affirmed the trial court’s decision to base part of its alimony award on the payee’s future expected housing expenses. See id. ¶ 10. In Sauer, the trial court based its decision on the facts that the payee “live[d] in a trailer on a friend’s property” and that “it [was] unknown how long a person can survive on the good nature of a friend.” Id. (quotation simplified). We noted that the court’s “determination ma[de] conceptual sense” because “[i]n the aftermath of a separation, a party may temporarily return to his or her parents’ home, shelter with friends, or become homeless and thus incur no actual housing expenses.” Id. ¶ 10 n.3. In such situations, “the court may consider what constitutes a reasonable rental or mortgage payment in the relevant area for housing similar to the housing previously shared by the parties.” Id.
¶9 Although the district court in this case would have been entitled to make such a determination if it had found that Jennifer’s living situation with her mother was a temporary byproduct of the divorce, as with the examples mentioned in Sauer, the court took a different course. Instead of ordering Hugh to immediately begin making monthly payments of $1,830—as would have been consistent with the approach taken in Sauer— the court determined that a monthly alimony award of $830 was sufficient to maintain Jennifer’s standard of living while she lived with her mother. The court then made the $1,000 increase in alimony conditional on Jennifer securing her own housing at some later date. The increase was unquestionably a prospective change to its alimony award because it was based “on the trial court’s anticipation of a future event that will materially change the parties’ circumstances,” i.e., a change in Jennifer’s living situation. See Boyer, 2011 UT App 141, ¶ 15. Thus, the court erred in ordering the prospective increase without first concluding that the material change was “certain to occur within a known time frame.” See Richardson, 2008 UT 57, ¶ 10.
¶10 To be sure, the uncertainty of whether or when Jennifer would secure her own independent living arrangement does not undercut her ability to do exactly that at some future date and to seek a corresponding increase in the amount of her alimony. The district court already determined that she would be entitled to an increase in that event. But the proper procedure for seeking an increase in alimony, should she eventually secure other housing, would be for her to file a petition to modify the alimony award. See Utah Code Ann. § 30-3-5(10)(a) (LexisNexis Supp. 2020). Where an anticipated event is too speculative for the court to consider in its alimony determination at the time of divorce, as is the case here, “the court may . . . delay the determination” by entering “findings indicating that the future [event] has not been considered in making the present award” because material information regarding the future event was unavailable to the court at the time of the divorce decree, thereby avoiding future dismissal of the petition to modify on foreseeability grounds. MacDonald, 2018 UT 48, ¶ 35 (quotation simplified). See id. ¶¶ 34–36, 40–41.
¶11 We therefore vacate the portion of the court’s decree prospectively increasing the alimony award and remand for the court to enter the necessary findings so that the issue is preserved for future resolution and the determination can be made later upon a petition to modify, with any “foreseeability” argument Hugh might otherwise be inclined to make being effectively foreclosed.[3]
Utah Family Law, LC | divorceutah.com | 801-466-9277
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[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] Nothing in the record or briefing suggests that Jennifer’s living situation has changed subsequent to entry of the divorce decree.
[3] Because Hugh prevails on appeal, we deny Jennifer’s request for attorney fees, premised on rule 33 of the Utah Rules of Appellate Procedure.
Do you flee the country to avoid alimony? Or do you happily comply?
First, let’s discuss the “option” of fleeing the country to avoid paying alimony. It’s not really an option unless you consider obeying the law optional. In one sense, obeying the law is not optional because the law itself says so and makes provision for its enforcement by those who will not obey it. In another sense, obeying the law is not morally or ethically optional because if everyone treated obedience to law as optional and without adverse consequences for disobedience to it, we’d have anarchy, chaos, and misery.
Second, you have more options than those you listed in your question. If you are divorced and forced to pay alimony to your narcissistic ex-spouse, you not only have the options of 1) fleeing the country to avoid paying or 2) “happily complying”; you can also 3) grudgingly comply or 4) have the option of taking action in court to modify or terminate the alimony award.
The option of taking action in court to modify or terminate the alimony award is contingent on whether you can meet the legal requirements for modification. In Utah, where I practice divorce law, those requirements are either:
Unless a decree of divorce specifically provides otherwise, establishment by the party paying alimony that the former spouse, after the order for alimony is issued, cohabits with another individual, even if the former spouse is not cohabiting with another person when the party paying alimony files the motion to terminate alimony (and note that a party paying alimony to a former spouse may not seek termination of alimony under this provision later than one year from the day on which the party knew or should have known that the former spouse has cohabited with another individual); or
proving that, based on a substantial material change in circumstances not foreseeable at the time of the divorce, a modification or termination of the alimony award is warranted or necessary. Regardless of whether a party’s retirement is foreseeable, the party’s retirement is a substantial material change in circumstances that is subject to a petition to modify alimony, unless the divorce decree expressly states otherwise.
In determining an alimony modification (which could include termination), the income of any subsequent spouse of the alimony payor may not be considered, with the exceptions that the court may consider the subsequent spouse’s financial ability to share living expenses, or if the court finds that the payor’s improper conduct justifies that consideration, or if the court finds some other compelling reason to do so.
Utah Family Law, LC | divorceutah.com | 801-466-9277
DEIDRE SUE JANSON,
Appellant,
v.
JEFFREY ALAN JANSON,
Appellee.
Opinion No. 20170541-CA
Filed June 20, 2019
Third District Court, Salt Lake Department
The Honorable Andrew H. Stone
No. 164906327
Jamie Carpenter, Attorney for Appellant
Kara L. Barton and Ashley Wood, Attorneys for Appellee
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES GREGORY K. ORME and DIANA HAGEN concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 Deidre Sue Janson appeals the district court’s order denying her motion to set aside a written stipulation (the Stipulation) entered in her divorce action against Jeffrey Alan Janson. We affirm.
BACKGROUND
¶2 The parties entered into the Stipulation following mediation on November 14, 2016, to resolve the issues in their divorce. As part of the Stipulation, Deidre[1] agreed to pay Jeffrey alimony of $2,500 per month for eighteen months and $1,500 per month for an additional eighteen months.
¶3 The Stipulation awarded the marital home to Jeffrey.
Deidre was awarded half of the equity in the home, less $45,000 that constituted Jeffrey’s inherited funds. The Stipulation also divided the equity in the parties’ vehicles, requiring Deidre to pay Jeffrey $13,178 from her share of the parties’ bank accounts to equalize the vehicle equity disparity.
¶4 The parties had a number of retirement funds and accounts. Regarding the retirement, the parties agreed as follows:
[Deidre] has the following retirement accounts: Utah Retirement in the amount of approximately $72,440; General Electric in the approximate amount of $100,435; Roth IRA in the approximate amount of $18,252; FDIC in the approximate amount of $16,719 and $17,431; and Utah Pension in the amount of $15,281.
[Jeffrey] has the following retirement accounts: Fidelity in the approximate amount of $22,012; Bernstein in the approximate amount of $18,305.
The above retirement accounts will be divided equally between the parties. In addition [Deidre] has a premarital IRA in the approximate amount of $17,682 which is her separate property.
[Jeffrey’s] Alliant Technical Systems Pension plan which will be divided pursuant to the Woodward formula.
The parties will share equally the cost of any qualified domestic relation order.
¶5 On January 12, 2017, Deidre moved to set aside the Stipulation on the ground that there was not a meeting of the minds regarding various provisions in the agreement. She asserted that she “did not receive [Jeffrey’s] financial disclosures until the morning of mediation and was not able to consult with her attorney prior to mediation.” She asserted that because her Utah pension was listed with its approximate value alongside the other retirement accounts, her understanding was that Jeffrey was to receive only half of the listed $15,281 partial lump sum value of that pension rather than half of the entire monthly payment amount as determined by a qualified domestic relations order (QDRO). According to Deidre, the total value of Jeffrey’s half of the pension if the monthly payment option were utilized would amount to approximately $80,000. Deidre claimed that had she understood that Jeffrey would be entitled to half of the entire Utah pension, she would not have agreed to provisions granting Jeffrey premarital equity in the home. She pointed to the lack of specific dates for the accounts to be divided and the impracticality of preparing a QDRO for every retirement account as support for her assertion that the Stipulation should be interpreted as granting Jeffrey only half of the stated partial lump sum value of her Utah pension account.[2]
¶6 Jeffrey opposed the motion to set aside the Stipulation, pointing out that his financial declaration was provided to Deidre well in advance of mediation and that she was represented by counsel at the mediation. He also explained the discrepancy between how the Stipulation described the division of his pension account and how it described the division of Deidre’s—his account had been partially accrued prior to the marriage, whereas Deidre’s had been accrued entirely during the period of the marriage. He asserted that Deidre was aware that an equal division of her pension could result in him receiving half of the monthly payments rather than half of the partial lump sum payout value because her own financial declaration included a summary of the various payout options. Jeffrey also asserted that only three QDROs, at maximum, were necessary to divide the retirement accounts.
¶7 In responding to Jeffrey’s memorandum in opposition to her motion, Deidre raised additional issues impacting the Stipulation’s alimony award—she indicated that after filing the motion to set aside, she was involuntarily terminated from her job without notice, that the loss of her job precluded her from continuing to pay alimony, and that Jeffrey had become eligible to draw on his social security and retirement accounts to support himself. She asserted that these changes in circumstances justified setting aside the Stipulation.
¶8 Following a hearing, the district court denied Deidre’s motion. The court found that both parties understood that Deidre’s Utah pension had the potential for an annuitized benefit. The court determined that the language in the Stipulation dividing the pension equally was clear as to how the retirement accounts would be treated and contained sufficient detail to enforce the Stipulation. The court stated that it was reasonable to anticipate that additional details would be filled in when the QDROs were prepared. The court also determined that issues related to Deidre’s alleged change in circumstances should be handled separately as a petition to modify.
¶9 Deidre now appeals.
ISSUES AND STANDARDS OF REVIEW
¶10 Deidre asserts that the Stipulation is unenforceable because there was no meeting of the minds regarding various aspects of the Stipulation.[3]
Whether the parties had a meeting of the minds sufficient to create a binding contract is an issue of fact, which we review for clear error, reversing only where the finding is against the clear weight of the evidence, or if we otherwise reach a firm conviction that a mistake has been made.
LD III, LLC v. BBRD, LC, 2009 UT App 301, ¶ 13, 221 P.3d 867 (quotation simplified).
¶11 Deidre also asserts that the district court erred in declining to consider her substantial change in circumstances argument as a basis for setting aside the Stipulation and instead determining that a petition to modify was the necessary route for her to pursue this argument. Whether a district court erred in accepting and enforcing a proffered stipulation is reviewed for an abuse of discretion. See In re N.M., 2018 UT App 141, ¶ 17, 427 P.3d 1239.
ANALYSIS
The District Court Did Not Clearly Err in Rejecting Deidre’s Assertion That There Was No Meeting of the Minds.
¶12 “It is a basic principle of contract law there can be no contract without a meeting of the minds.” Granger v. Granger, 2016 UT App 117, ¶ 14, 374 P.3d 1043 (quotation simplified). “A binding contract exists where it can be shown that the parties had a meeting of the minds as to the integral features of the agreement and that the terms are sufficiently definite as to be capable of being enforced.” LD III, LLC v. BBRD, LC, 2009 UT App 301, ¶ 14, 221 P.3d 867 (quotation simplified). “Whether there is a meeting of the minds depends on whether the parties actually intended to contract, and the question of intent generally is one to be determined by the trier of fact.” Terry v. Bacon, 2011 UT App 432, ¶ 21, 269 P.3d 188 (quotation simplified).
¶13 “[I]n divorce cases, the ability of parties to contract is constrained to some extent by the equitable nature of the proceedings . . . .” Granger, 2016 UT App 117, ¶ 15. “Because retirement funds are prospectively marital property if acquired or contributed to during the marriage, the distribution of such marital funds must fit within the overarching principle of equity unless the parties have freely and knowingly agreed to a different result that has been appropriately sanctioned by the court.” Id. ¶ 16. Nevertheless, “it is not the court’s prerogative to step in and renegotiate the contract of the parties. Instead, courts should recognize and honor the right of persons to contract freely and to make real and genuine mistakes when the dealings are at arms’ length.” Id. ¶ 14 (quotation simplified).
A. Retirement Funds
1. The Court Did Not Err in Accepting Jeffrey’s Interpretation of the Stipulation.
¶14 At the evidentiary hearing, the district court considered both parties’ testimonies regarding their understanding of the Stipulation and their intent regarding the division of their retirement funds. Having considered this evidence, the district court found that both parties understood that Deidre’s Utah pension had the potential for an annuitized benefit and that the Stipulation was clear that the listed retirement accounts were to be divided equally between the parties. Deidre asserts that this conclusion was clearly erroneous because it is inconsistent with the principle that retirement funds that can be “presently valued” should be equally divided.
¶15 As a general matter, equitable division of a defined benefit plan is accomplished by the Woodward formula[4] and equitable division of a defined contribution plan is accomplished by dividing the value contributed during the marriage. Granger Granger, 2016 UT App 117, ¶ 23, 374 P.3d 1043. While Deidre’s pension fund had a “partial lump sum” payout option—which was listed as the “approximate value”[5] in the Stipulation—it also had a monthly payment option. Because pension funds are presumptively divided according to the Woodward formula, an interpretation of the Stipulation that requires dividing the entire fund rather than only the partial lump sum amount is more consistent with equity. It is also the most logical approach in light of Deidre’s own financial declaration, which acknowledged that her Utah pension had a monthly payment option.
¶16 Deidre also asserts that Jeffrey himself testified that he believed the “approximate” amount listed for Deidre’s pension, rather than the entire pension, would be divided equally. But the record does not support Deidre’s characterization of Jeffrey’s testimony. At the hearing, Jeffrey was asked, “So it was your understanding that [the] specific value you listed would be, at least with 401-Ks or whatnot, would be divided. You would get half of that value?” (Emphasis added.) Jeffrey responded, “It would be half the value as identified by the amounts listed in the stipulation.” Jeffrey was asked specifically about the division of the 401(k)s, not the pension. Thus, his answer to this question cannot be construed as a statement that he expected and agreed that the pension would be divided only according to the amount listed in the Stipulation.
¶17 Indeed, Jeffrey testified that based on the document Deidre produced in her financial declaration outlining the various options for the distribution of the Utah pension, he understood that Deidre’s pension could be taken either “as a partial lump sum” or as “monthly payments” and that he “would have a choice” either to take half of the monthly payments or to add half of the partial lump sum to his share of the distributions of the other IRA and 401(k) accounts. Deidre also testified that she knew that a monthly payment could be an option for payout of her pension. Thus, the court’s interpretation of the Stipulation is supported by the evidence and is not clearly erroneous.
2. The Court Did Not Err in Enforcing the Stipulation.
¶18 Deidre also asserts that the Stipulation should not be enforced because it was not equitable. She argues that the district court should have considered the Stipulation as a whole and recognized that she had given up other valuable assets in exchange for treating the pension as a lump sum rather than as a monthly benefit calculated by utilizing the Woodward formula. However, there is nothing on the face of the Stipulation to indicate that such an exchange was made. The Stipulation states that Jeffrey was granted an extra $45,000 of equity in the home because he had contributed inherited funds to the home, not in exchange for the retirement.
¶19 Even if the court had accepted Deidre’s argument, it is by no means clear that she gave up anything in exchange for the pension, let alone something of comparable value such that the court should have recognized the retirement division as inequitable. Presumably, Jeffrey would have contested Deidre’s assertion that the inheritance funds were comingled, and she has not established that she was equitably entitled to share in the portion of the equity gained by investing the inheritance funds. Further, her half of that portion of the equity was significantly smaller than the amount of the pension Jeffrey would be giving up by accepting half of the partial lump sum value rather than half of the monthly payments. Additionally, Deidre herself asserted only that her belief regarding the pension made her “a little more flexible” on the issue of the allegedly comingled inheritance, not that she bargained for an exchange of one for the other.
¶20 To require the district court to examine and evaluate the Stipulation to the degree recommended by Deidre would be to undermine the parties’ right to contract freely. While courts should ensure that the provisions of a divorce stipulation comply with “the overarching principle of equity,” Granger v. Granger, 2016 UT App 117, ¶ 16, 374 P.3d 1043, they are also to “respect[] and give[] considerable weight” to the parties’ agreement, Maxwell v. Maxwell, 796 P.2d 403, 406 (Utah Ct. App. 1990). Thus, weighing every provision of a stipulation against every other to ensure that the parties have reached a perfectly fair agreement is beyond the scope of the court’s mandate.
¶21 Indeed, the court’s equity analysis generally focuses “not on the contract’s subject matter, but rather on whether the contract was fairly negotiated and does not result in an outcome so severely one sided that it prevents the district court from fulfilling its equitable obligations.” Ashby v. Ashby, 2010 UT 7, ¶ 21, 227 P.3d 246. We see nothing in the record to suggest that the district court was presented with such a situation. Both parties were represented by counsel, and the terms of the Stipulation were not so one-sided as to give the court reason to believe that the parties’ agreement had violated the principles of equity. Thus, the court did not exceed its discretion in determining that the Stipulation’s division of the retirement funds was enforceable.
B. Deidre’s Arguments Regarding Alimony and Vehicles Were Not Preserved for Appeal.
¶22 On appeal, Deidre renews the arguments made in her motion to set aside that there was no meeting of the minds with respect to the Stipulation’s provisions regarding alimony and the division of equity in the vehicles. However, the district court made no ruling on these issues.[6]
¶23 “[I]n order to preserve an issue for appeal the issue must be presented to the trial court in such a way that the trial court has an opportunity to rule on that issue.” Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48, ¶ 14, 48 P.3d 968. “[O]nce trial counsel has raised an issue before the trial court, and the trial court has considered the issue, the issue is preserved for appeal.” Id. (emphasis added).
¶24 We agree with Jeffrey that Deidre’s reference to the alimony and vehicle issues in her motion to set aside was not sufficient to preserve them for appeal when she did not present evidence or argue these issues to the district court at the evidentiary hearing and the district court did not rule on them. “[T]he mere mention of an issue in the pleadings, when no supporting evidence or relevant legal authority is introduced at trial in support of the claim, is insufficient to raise an issue at trial and thus insufficient to preserve the issue for appeal.” LeBaron & Assocs., Inc. v. Rebel Enters., Inc., 823 P.2d 479, 483 (Utah Ct. App. 1991). Further, a party may waive an issue by relinquishing or abandoning it before the district court, either expressly or impliedly. State v. Johnson, 2017 UT 76, ¶ 16 n.4, 416 P.3d 443.
¶25 “The fundamental purpose of the preservation rule is to ensure that the district court had a chance to rule on an issue before an appellate court will address it.” Helf v. Chevron U.S.A. Inc., 2015 UT 81, ¶ 42, 361 P.3d 63. Because the district court did not rule on the alimony and vehicle issues, and Deidre made no attempt to remedy that omission before raising the issues on appeal, her arguments regarding these issues are unpreserved, and we will not consider them for the first time on appeal. See Vandermeide v. Young, 2013 UT App 31, ¶¶ 8–9, 296 P.3d 787 (holding that a challenge to a district court’s failure to rule on an issue raised in the pleadings was not preserved for appeal, because the appellants did not object to the court’s findings or file a post-judgment motion requesting additional findings).
II. Deidre Will Have the Opportunity to Pursue Her Change of Circumstances Argument in the Context of a Petition to Modify.
¶26 Deidre also argues that the district court erred in declining to consider the change in her employment status as a basis for setting aside the Stipulation before a final order was entered. Although Deidre filed her motion to set aside prior to the entry of the final Decree of Divorce (the Decree), the court declined to consider whether the Stipulation should be modified based on a change of circumstances, stating, “[O]ur procedural rules contemplate that a petition to modify has to be made when the parties reached this state of the proceeding. The Parties reached a resolution in this case and new situations are handled differently.”
¶27 The district court has the discretion to reconsider a prior ruling any time before a final judgment is entered. See Utah R. Civ. P. 54(b); see also Hafen v. Scholes, 2014 UT App 208, ¶ 3, 335 P.3d 396 (per curiam); Durah v. Baksh, 2011 UT App 159, ¶ 5, 257 P.3d 458 (per curiam). However, to seek a modification of a divorce decree, a movant must show “a substantial change of circumstances occurring since the entry of the decree and not contemplated in the decree itself.” Gardner v. Gardner, 2012 UT App 374, ¶ 38, 294 P.3d 600 (emphasis added) (quotation simplified).
¶28 The change in Deidre’s employment status occurred after the Stipulation was signed but before the Decree was entered. Thus, Deidre asserts that the district court’s refusal to reconsider the alimony portion of the Stipulation as part of her motion to set aside was an abuse of discretion because it put her in a catch-22—the court would not let her seek a modification prior to the entry of the Decree, but she would be precluded from seeking one afterward because her alleged change in circumstances occurred before the entry of the Decree.
¶29 We agree with Deidre that the district court, contrary to its own assertion, had the discretion to reconsider whether to accept the parties’ Stipulation as to alimony prior to the entry of the Decree, since the alleged change in circumstances occurred prior to a final judgment being entered. This issue was relevant to the court’s consideration of whether the Stipulation complied with the “overarching principle of equity.” See Granger v. Granger, 2016 UT App 117, ¶ 16, 374 P.3d 1043. The court may have determined that the Stipulation as to alimony was no longer equitable in light of the change in circumstances and that the parties would not have entered into the Stipulation as to alimony had they been aware that Deidre would lose her employment.
¶30 However, while considering Deidre’s alleged substantial change of circumstances at an earlier stage of the proceedings may have been desirable as a matter of judicial economy, Deidre has not been prejudiced by the district court’s refusal to do so. Deidre filed a Petition to Modify on January 9, 2018, which is currently pending in the district court. The district court gave Deidre leave to pursue her substantial change of circumstances argument subsequent to the entry of the Decree, and Jeffrey has conceded that she should be allowed to do so. These circumstances avoid the catch-22 scenario Deidre feared. Because Deidre has not actually been precluded from raising her substantial change of circumstances claim, any error on the part of the district court in declining to consider her motion to set aside the alimony portions of the Stipulation on that basis was harmless.
CONCLUSION
¶31 The district court’s interpretation of the Stipulation’s retirement provisions is supported by the evidence presented at the evidentiary hearing. Deidre’s arguments concerning other aspects of the Stipulation were not preserved, and we therefore do not consider them. Further, while the district court could have considered Deidre’s arguments concerning her alleged change in circumstances in the context of the motion to set the Stipulation aside, the court’s refusal to do so was not prejudicial. Deidre will be permitted to pursue her claim in the context of the petition to modify already filed with the district court. Accordingly, we affirm the district court’s denial of Deidre’s motion to set aside the Stipulation.
Utah Family Law, LC | divorceutah.com | 801-466-9277
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[1] Because the parties share the same last name, we refer to them by their first names to avoid confusion, meaning no disrespect by the apparent informality.
[2] Deidre also challenged other provisions of the Stipulation that she asserted were inartfully drafted. Specifically, she claimed that there was a mathematical error in the calculation of the vehicle equity and that a lack of language regarding the parties’ incomes and needs in the alimony provision had the potential to preclude a future modification. However, she did not present argument or evidence on these issues at the evidentiary hearing, and the district court ultimately made no ruling on them. See infra ¶¶ 22–25.
[3] Deidre also asserts that the district court erred in determining that the Stipulation was unambiguous. Although the court stated that it considered the Stipulation’s language to be “clear,” it did not make an explicit ruling regarding whether the Stipulation was ambiguous. In fact, the district court’s consideration of extrinsic evidence suggests that the court actually did consider the Stipulation to be ambiguous, since the purpose of considering extrinsic evidence is to clarify ambiguous terms in the contract. See Ward v. Intermountain Farmers Ass’n, 907 P.2d 264, 268 (Utah 1995) (explaining that if a court determines that a contract is ambiguous, the next step is to admit extrinsic evidence “to clarify the ambiguous terms”). We therefore review only the district court’s evaluation of the extrinsic evidence and its determination that Jeffrey’s interpretation of the Stipulation was more reasonable, that there was a meeting of the minds regarding how the retirement was to be divided, and that the
Stipulation was enforceable.
[4] The Woodward formula grants a spouse one-half of the “portion of the retirement benefits represented by the number of years of the marriage divided by the number of years of the [acquiring spouse’s] employment.” Woodward v. Woodward, 656 P.2d 431, 433–44 (Utah 1982).
[5] Incidentally, the fact that the parties listed only the “approximate” values of the various retirement funds also undermines Deidre’s assertion that the parties intended to effectuate the division based on the listed values rather than the actual values of the funds.
[6] Deidre asserts that the court’s ruling that “[i]n order to have a contract, the Court doesn’t need perfect clarity on every factual point” constituted a ruling on all the issues she raised. However, Deidre omits vital language from the court’s ruling. The court actually stated, “In order to have a contract, the Court doesn’t need perfect clarity on every factual point that might fill in a QDRO here.” (Emphasis added.) Thus, it is clear from the context that the court’s ruling contemplated only the issues Deidre raised with respect to the retirement, not the alimony and vehicle issues.
This opinion is subject to revision before final publication in the Pacific Reporter
MacDonald v. MacDonald – 2018 UT 48
IN THE SUPREME COURT OF THE STATE OF UTAH
KIRKPATRICK MACDONALD,
Petitioner,
v.
LEE ANN MACDONALD,
Respondent.
No. 20170789
Filed September 5, 2018
On Certiorari to the Utah Court of Appeals
Third District, Silver Summit
The Honorable Kara L. Pettit
No. 104500031
Attorneys:
Troy L. Booher, Julie J. Nelson, Bart J. Johnsen, Salt Lake City, for Petitioner
Matthew A. Steward, Shannon K. Zollinger, Salt Lake City, for Respondent
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in which CHIEF JUSTICE DURRANT, JUSTICE HUMONAS, JUSTICE PEARCE, and JUSTICE PETERSEN joined.
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 Kirkpatrick MacDonald (MacDonald) filed a petition to vacate or reduce the alimony award to his former spouse Lee Anne MacDonald (now known as Lee Anne Fahey). The district court denied MacDonald’s petition under Utah Code section 30-3-5(8)(i)(i). In doing so it applied a standard set forth in a line of cases from our court of appeals, which allows a modification of an alimony order only if there is a substantial change in circumstances that was not “contemplated” in the original decree of divorce. See Bolliger v. Bolliger, 2000 UT App 47, ¶ 11, 997 P.2d 903. That decision was affirmed on appeal to our court of appeals, but under a different standard.
¶2 The court of appeals repudiated the contemplated in the decree standard set forth in Bolliger and other cases. It concluded that those cases had been overtaken by the text of Utah Code section 30-3-5(8)(i)(i), which allows for a modification only where there is “a substantial material change in circumstances not foreseeable at the time of the divorce.” But it affirmed the district court on the ground that the change in circumstances alleged by MacDonald was foreseeable at the time of the divorce in this case.
¶3 MacDonald asks us to reverse the court of appeals on the grounds that (1) the contemplated in the decree standard should be read into the statute by virtue of the “prior construction” canon of interpretation, see Christensen v. Indus. Comm’n, 642 P.2d 755, 756 (Utah 1982) (discussing the prior construction canon); and (2) the change in circumstance identified by MacDonald was neither contemplated in the divorce decree nor foreseeable at the time of the divorce. We affirm, while clarifying the standard that applies under Utah Code section 30-3-5(8)(i)(i).
¶4 We hold that there is no basis in the prior construction canon for the contemplated in the decree standard set forth in Bolliger and other cases. We base that conclusion on the absence of the core predicate for this canon—an authoritative construction by the courts of the operative language of the statute. Neither Bolliger nor any of the other cited cases ever attempted to interpret the text of the statute. They simply perpetuated a standard set forth in a prior line of cases (and established under a prior statutory regime). And without an authoritative construction of the statute there is no basis for the prior construction canon.
¶5 To this extent we affirm the standard embraced by the court of appeals. We hold that the plain language of the statute applies— and that the question is whether an alleged substantial change was “foreseeable” at the time of the divorce, not whether it was “contemplated” in the divorce decree. But we also raise a point of clarification that is not addressed explicitly in the decision of the court of appeals. We clarify that the inquiry of foreseeability is limited to the universe of information that was presented in the record at the time the district court entered the divorce decree.
¶6 We also affirm the court of appeals’ application of the legal standard to the facts of this case under this clarified standard. We hold that MacDonald failed to carry his burden of establishing, on the basis of the record that was before the court that entered the divorce decree, that the change that he alleges was not foreseeable.
I
¶7 MacDonald filed for divorce from Fahey in February 2010. MacDonald and Fahey entered into a mediated settlement agreement, which was fully incorporated into a divorce decree. That agreement required MacDonald to pay alimony to Fahey through December 2020 (or earlier if she remarried, cohabited, or died). Per the agreement, alimony payments increased from $2,000 per month to $6,000 per month after December 2012—the last month that MacDonald owed a monthly $4,000 property settlement payment to Fahey.
¶8 The agreement also divided the marital real property. Fahey acquired ownership to three unencumbered lots. MacDonald agreed to pay the homeowner’s association fees and property taxes on those lots as a loan, for five years or until Fahey sold one of the lots, at which time Fahey would reimburse MacDonald.
¶9 After the settlement agreement was signed and the divorce decree was entered one of Fahey’s lots sold for $1,425,000. MacDonald “was directly involved in and responsible for the sale.” Both MacDonald and Fahey agreed to that sale prior to entry of the divorce decree. And the sale closed shortly after the decree was entered. Fahey placed most of the proceeds from the property sale into an investment account that she previously opened with the $200,000 financial settlement MacDonald paid Fahey before mediation. That investment account now produces about $45,000 in annual income for Fahey.
¶10 In light of the property sale and Fahey’s new income, MacDonald filed a petition to vacate or reduce the alimony award under Utah Code section 30-3-5(8)(i). The district court denied MacDonald’s petition. In so doing it applied a test from a line of cases handed down by the Utah Court of Appeals, citing Wall v. Wall, 2007 UT App 61, 157 P.3d 341; Moon v. Moon, 1999 UT App 12, 973 P.2d 431; and Moore v. Moore, 872 P.2d 1054 (Utah Ct. App. 1994). That test grants the district court continuing jurisdiction to modify a divorce decree when a substantial change of circumstances is “not contemplated” by the decree itself. The court concluded that the divorce decree “expressly contemplate[d] that [Fahey] would sell the lots and use the proceeds of the sales of those lots to pay her expenses[,]” therefore precluding the court from modifying the alimony award.
¶11 MacDonald appealed the denial of the petition. The court of appeals affirmed. But it based its decision on a different standard than that applied by the district court. It interpreted Utah Code section 30-3-5(8)(i)(i) to warrant a modification of alimony only when “a substantial material change in circumstances [was] not foreseeable.” MacDonald v. MacDonald, 2017 UT App 136, ¶ 12, 402 P.3d 178. And it defined “‘foreseeable’ as ‘being such as may reasonably be anticipated.’” Id. ¶ 11 (citing WEBSTER’S THIRD INT’L DICTIONARY 890 (1971)). “From the linguistic and structural position of this term in the statute” the court of appeals inferred “that the legislature purposely did not use the verb ‘foresee’ in its past tense, ‘foreseen.’” Id. It also found that “distinction . . . important.” Id. It concluded that “[i]f the provision required that the changed circumstances warranting modification were not actually foreseen, then a petitioner would bear the burden of showing that when the decree was entered the parties or the court had not actually contemplated that such a change would occur.” Id. “Instead,” the court concluded, “the legislature employed the adjective ‘foreseeable,’” which in the court of appeals’ view “includes not only those circumstances which the parties or the court actually had in mind, but also circumstances that could ‘reasonably be anticipated’ at the time of the decree.” Id.
¶12 In so holding the court of appeals rejected the standard that MacDonald sought to import from a line of prior court of appeals cases—most significantly Bolliger v. Bolliger, 2000 UT App 47, 997 P.2d 903. MacDonald had cited Bolliger for the proposition that a successful petition for a change in alimony must show that “a substantial material change of circumstances has occurred ‘since the entry of the decree and not contemplated in the decree itself.’” Id.¶ 11 (emphasis removed) (quoting Durfee v. Durfee, 796 P.2d 713, 716 (Utah Ct. App. 1990)). Yet the court of appeals rejected the Bolliger standard on the ground that the court in that case had not addressed the governing statutory language, enacted by the legislature in 1995, but instead had simply carried forward a standard that had been adopted in our case law before the enactment of the governing statute. MacDonald, 2017 UT App 136, ¶ 16 (concluding that “the Bolliger court did not address whether the 1995 amendment altered the applicable standard” and holding that “the standard did change and we apply that standard today”).
¶13 The court of appeals then affirmed the district court’s decision under the statutory standard. It did so on the ground that it could not “say that it was unforeseeable that Fahey would sell some of the real estate and invest the proceeds” in the manner that she had done. Id. ¶ 18. To support that conclusion the court of appeals emphasized the following points: (a) the “express terms” of the divorce decree “discussed certain obligations that would arise if and when Fahey sold the [p]roperty,” thus leaving “no doubt” that the sale of the property was foreseeable, id. ¶ 19; (b) a “reasonable person will normally act in a prudent manner to protect his or her financial interests and security,” such that it is “not merely foreseeable” but “likely” that a person in Fahey’s position would assure that the proceeds of a real estate transaction “would not be frittered away or left to gather dust,” id. ¶ 18; and (c) Fahey invested the $200,000 that was paid to her by MacDonald “in an investment account,” such that it “is hardly a stretch to foresee that if real property were liquidated the proceeds of that sale might be deposited in that same account for investment purposes,” id. In light of “these facts” the court of appeals held that “the trial court did not exceed its discretion when it concluded that MacDonald failed to show an unforeseeable substantial material change in circumstances from the time” of the divorce decree. Id. ¶ 19.
¶14 MacDonald filed a petition for certiorari. The threshold question presented is a question of law—as to the governing standard on a petition to modify an alimony award. Our review of such a question is de novo. In re Baby B., 2012 UT 35, ¶ 41, 308 P.3d 382. We are also asked to consider the propriety of the court of appeals’ application of the governing standard to the facts of this case. Our review of the court of appeals’ decision is for correctness. State v. Levin, 2006 UT 50, ¶ 15, 144 P.3d 1096.
II
¶15 The court of appeals applied a standard that asks not whether a given change in circumstances was “contemplated” in a divorce decree but instead whether that change was “foreseeable” at the time the decree was entered. MacDonald v. MacDonald, 2017 UT App 136, ¶¶ 17–19, 402 P.3d 178. It defined foreseeable as that which “may reasonably be anticipated.” Id. ¶ 11 (quoting WEBSTER’S THIRD INT’L DICTIONARY 890 (1971)). And it concluded that the district court did not exceed its discretion in concluding that MacDonald failed to show that Fahey’s sale of the property and investment of its proceeds was “an unforeseeable substantial material change” at the time of the original divorce decree. Id. ¶ 19.
¶16 MacDonald challenges the court of appeals’ decision on two fronts. His first argument is a challenge to the legal standard adopted by the court of appeals. His second goes to the application of that standard to the facts of this case. We affirm the judgment of the court of appeals, but offer some clarification on the governing standard.
The Governing Standard Under Section 30-3-5(8)(i)(i)
¶17 MacDonald views the contemplated in the decree standard as a matter established by settled case law. He asks us to reverse the court of appeals on the basis of the “prior construction” canon of statutory interpretation. This canon says that an amendment to a statutory scheme can be presumed to have incorporated an authoritative “judicial construction[]” of statutory language that was in place when the legislature adopted the amendment. See Christensen v. Indus. Comm’n, 642 P.2d 755, 756 (Utah 1982). MacDonald views this canon as applicable because he sees the contemplated in the decree standard as an established judicial construction of Utah Code section 30-3-5(8)(i)(i). He claims that the court of appeals erred in crediting the statutory text, which speaks in terms of an unforeseeable change rather than one not specifically contemplated in a divorce decree, because he thinks that the prior construction canon compels the conclusion that the statute incorporates the interpretation embraced in Bolliger and other cases.
¶18 The parties argue over two separate components of the operative test. The first goes to the relevant verb and verb tense: MacDonald says that the operative standard is contemplated, meaning actually anticipated (past tense) at the time of the divorce decree, while Fahey says that the standard is foreseeable, meaning reasonably capable of being anticipated. The parties argue at length about this question, with MacDonald insisting that the prior construction canon requires an inquiry into whether the alleged change was contemplated and Fahey asserting that the statutory language is clear in speaking only of reasonable foreseeability.
¶19 But this is not the only dimension of the parties’ disagreement. MacDonald is also asking for a standard that speaks to the relevant universe of information to be considered in assessing contemplation (or foreseeability). In arguing for a contemplated in the decree standard MacDonald is also asking us to confine the analysis of whether a certain change was contemplated or foreseeable to information set forth in the divorce decree or at least evident in the record of the district court.
¶20 We hold that the prior construction canon is not applicable in these circumstances. We find no authoritative judicial construction of the governing statutory text and thus hold that there is no basis for a conclusion that the legislature adopted the standard endorsed in a line of case law into the terms of the statute. And on that basis we affirm the court of appeals’ determination that Utah Code section 30-3-5(8)(i)(i) means what it says—a court has authority to grant a petition to modify an alimony order if there is a “substantial material change in circumstances not foreseeable at the time of the divorce.” (Emphasis added).
¶21 We explain the basis for this conclusion in Part II.A.1 below. But this speaks only to the verb and verb tense question. That leaves the question of the relevant universe of information to consider in deciding whether an alleged “substantial material change in circumstances” is foreseeable. This is a question that the court of appeals did not address expressly. We consider it in Part II.A.2, and conclude that MacDonald is right to suggest that foreseeability should be assessed on the basis of information either in the divorce decree or at least in the record of the court that entered it.
“Not Contemplated” or “Not Foreseeable”? (The Prior Construction Cannon)
¶22 The prior construction canon applies where “a word or phrase” in a statute “has been authoritatively interpreted by the highest court in a jurisdiction, or has been given a uniform interpretation by inferior courts.” ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 322(2012). Where this premise is established the courts treat the authoritative interpretation of a word or phrase as a legal term of art. And a “later version” of a statute “perpetuating the wording is presumed to carry forward” the established judicial interpretation. Id.; see id. at 324 (articulating the “term of art” justification for this canon; noting that a word or phrase that has been authoritatively construed acquires a “technical legal sense” that “should be given effect in the construction of later-enacted statutes”); see also Rueda v. Utah Labor Comm’n, 2017 UT 58, ¶ 94 & n.32, P.3d (opinion of Durrant, C.J.) (relying on the prior construction canon to conclude that “by accident” is a term of art in the Workers’ Compensation Act).
¶23 This canon, however, requires an actual prior construction. All of our cases that have embraced this canon have arisen in circumstances in which a statutory amendment or reenactment is adopted in the face of a body of cases interpreting the words of the statute.[1] That stems from the central premise of the canon. Without a prior judicial construction of the terms of a statute there is no basis for the conclusion that the legislature has “carr[ied] forward” the judicial interpretation given to a prior version of the statute. SCALIA & GARNER, READING LAW 322.
¶24 And here we have no basis for this crucial premise of the canon. None of the cases cited by MacDonald involves an attempt to interpret the controlling language of Utah Code section 30-3-5(8)(i)(i). The contemplated in the decree standard, in fact, was applied in our case law well before the initial adoption of the controlling statute. That statute (which speaks of whether an alleged change was “foreseeable”) was first enacted in 1995. UTAH CODE§ 30-3-5(5)(g)(i) (1995). Before that date, the governing statute said nothing of foreseeability (or contemplation). It simply recognized the broad discretion of the court to grant a petition to modify. Id.§ 30-3-5(3) (1994) (“The court has continuing jurisdiction to make subsequent changes or new orders for the support and maintenance of the parties . . . as is reasonable and necessary.”).
¶25 The body of cases invoked by MacDonald to support the contemplated in the decree standard existed under this broad, general provision. The reference to a change “contemplated” in the divorce decree traces back to a series of decisions of this court.[2] But there are no Utah Supreme Court cases on this issue after the 1995 enactment of the now-controlling statute. And there is accordingly no authoritative decision from this court – no Utah Supreme Court “judicial construction” to sustain the prior construction canon.
¶26 The same goes for the Utah Court of Appeals. There is again a long line of court of appeals decisions that speak in terms of a change “contemplated” in a divorce decree.[3] But the seminal cases trace back to a time that long predates the 1995 enactment of the now-controlling statute.[4] And the post-1995 cases, to the extent they restate the contemplated in the decree standard, do so without any independent statutory analysis—without any authoritative judicial construction.
¶27 MacDonald points to Bolliger v. Bolliger, 2000 UT App 47, 997 P.2d 903, for his contrary conclusion. Bolliger was indeed handed down after the 1995 enactment of the controlling statute. And, as MacDonald notes, Bolliger does apply the contemplated in the decree standard. See id. ¶¶ 11–20. But Bolliger still does not hand down an authoritative judicial construction of the 1995 statute. As the court of appeals in this case noted, Bolliger punts on this question on the ground that the parties in that case had not challenged the applicability of case law “requiring evidence that [an alleged] change was foreseen at the time of the divorce.” Id. ¶ 11 n.3 (emphasis added).
¶28 That concession was understandable given that the divorce decree in that case was entered in 1987—many years before the 1995 enactment of the new statute. See id. ¶ 2. The timing of the divorce decree is likely the explanation for the court of appeals’ determination that the older cases were “sound and grounded in principles of res judicata.” Id. ¶ 11 n.3. If a divorce decree was handed down at a time when an earlier legal regime was in place, the parties might well have expected that their decree would be governed by the law in place at that time. See State v. Clark, 2011 UT 23, ¶ 13, 251 P.3d 829 (“[W]e apply the law as it exists at the time of the event regulated by law in question.”). The Bolliger court, in any event, seemed to think of it that way. And it surely did not engage in an interpretation of the 1995 statute. Nor did any of the other cases cited by MacDonald.
¶29 We reject MacDonald’s threshold argument on this basis. We hold that an essential premise of the prior construction canon is a prior construction of the operative statutory language. And because there was no prior construction of Utah Code section 30-3-5(8)(i)(i) we agree with the court of appeals that the meaning of the statute was an open question.
¶30 We also agree with the court of appeals that the statute plainly contradicts the body of cases cited by MacDonald on the verb tense point that he raises. The statute speaks clearly and unequivocally in terms of a showing of a substantial material change that is “not foreseeable.” UTAH CODE § 30-3-5(8)(i)(i). That verb and verb tense are inconsistent with the “contemplated” formulation in the prior case law. We affirm the court of appeals and repudiate the contemplated standard in the case law on this basis.
The Record for Assessing Foreseeability
¶31 The above conclusion, however, does not resolve the second dimension of MacDonald’s argument—the question of the relevant universe of information to be considered in deciding whether an alleged substantial material change is foreseeable. The foreseeability inquiry requires a threshold determination of the relevant scope of information to be considered. It is not enough to simply note that something is foreseeable if it can be reasonably anticipated. See MacDonald v. MacDonald, 2017 UT App 136, ¶ 11, 402 P.3d 178 (citing a dictionary definition to this effect). Anything and everything can be reasonably anticipated if we assume omniscient access to enough information. But that cannot be what the statute has in mind— otherwise the statute would be a nullity, and we cannot construe it as such. See Meinhard v. State, 2016 UT 12, ¶ 33, 371 P.3d 37.
¶32 In this sense the governing statute is underdeterminate. It articulates the governing standard (“not foreseeable”). And it identifies the relevant timeframe (“at the time of the divorce”). See UTAH CODE § 30-3-5(8)(i)(i). But it doesn’t tell us what information to consider in deciding whether an alleged substantial change is foreseeable.
¶33 We can answer that question, however, by resorting to a body of case law—the same body of cases discussed in Part II.A.1 above. We have refused to treat those cases as having adopted an authoritative judicial construction of foreseeability under the statute because the cited cases never interpreted the term foreseeable. They announced a standard requiring that a change be actually contemplated, and they did so in a line of cases handed down under a statutory regime that did not identify a legal standard but instead conferred broad discretion on the trial court. The actually contemplated standard is in nowise an interpretation of the governing statute. And we have declined to deem it incorporated into the statute under the prior construction canon of interpretation.
¶34 But that does not render this body of cases irrelevant. The cases do more than just speak to the relevant verb tense. They also speak to the relevant universe of information that is to be considered in assessing whether an alleged change is sufficient to sustain a petition to modify. On that question the cases cited by MacDonald are clear and consistent. For years our “appellate courts have consistently required that trial courts make adequate findings on all material issues of alimony to reveal the reasoning followed in making the award.” Johnson v. Johnson, 855 P.2d 250, 253 (Utah Ct. App. 1993). Our court of appeals has accordingly noted 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.” Id. And it has connected this requirement to a limitation on the scope of information that courts can consider in assessing whether an alleged substantial change is sufficient to sustain a petition to modify an alimony award.
¶35 The court of appeals has explained how the trial court is to decide whether to consider future income in making an alimony award. In the Johnson case the court noted that “[i]f . . . future income. . . is too speculative at the time of trial to anticipate the effect it will have on a receiving spouse’s financial condition and needs, the court may, in its discretion, delay the determination of how the future income will affect the alimony award.” Id. at 254. But the court also identified a means for this “delay”: the court can “make findings indicating that the future income has not been considered in making
¶36 The court of appeals has held, in other words, that “[t]he fact that the parties may have anticipated an increase of income in their own minds or in their discussions does not mean that” the change is foreseen or foreseeable. Durfee v. Durfee, 796 P.2d 713, 716 (Utah Ct. App. 1990). “In order for a material change in circumstances” to be foreseen or foreseeable “there must be evidence, preferably in the form of a provision within the decree itself, that the trial court anticipated the specific change.” Id. (emphasis added).
¶37 This is an answer to the scope of information question. It is consistently established in the above line of cases. And we think it appropriate to adopt this limitation as a gloss on the standard set forth in Utah Code section 30-3-5(8)(i)(i).
¶38 When the legislature enacted this statute in 1995 it overrode the actually contemplated standard set forth in the case law. See SCALIA & GARNER, READING LAW 256 (“If the legislature amends or reenacts a provision . . . a significant change in language is presumed to entail a change in meaning.”). But it did not override the other element of these cases—the element limiting the foreseen or foreseeable inquiry to information contained in the record of the trial court that entered the divorce decree. The statute, in fact, is silent on the threshold inquiry into the universe of information that is to be considered in the foreseeability analysis. Supra ¶ 32. This inquiry is a necessary predicate to the court’s determination that a change is foreseeable. Supra ¶ 31. That means the 1995 statute does not comprehensively cover the alimony modification standard. And when the legislature prescribes a rule “not ‘in full,’” “what remains is to be governed by preexisting law, unamended.” SCALIA & GARNER, READING LAW 96. The court of appeals previously answered this threshold question. See, e.g., Durfee, 796 P.2d at 716; Dana v. Dana, 789 P.2d 726, 729 (Utah Ct. App. 1990). And our preexisting determination on the relevant scope of information remains controlling, so long as it is consistent with the terms of the controlling statutory scheme. For that reason we find it appropriate to incorporate this aspect of the cases cited by MacDonald into the statute.
¶39 We do so not on the basis of the prior construction canon of interpretation but because the 1995 statute does not comprehensively detail the foreseeability inquiry. That inquiry must be conducted by reference to some appropriate universe of information. And because the statute does not itself speak to that universe we look to preexisting law to regulate the relevant scope of information—our court of appeals’ cases.
¶40 This conclusion responds to a practical or policy argument advanced by MacDonald. MacDonald has insisted that the contemplated in the decree standard is necessary to reconcile the standard for alimony modification with the standard we established for prospective modification (within an alimony decree). See Richardson v. Richardson, 2008 UT 57, 201 P.3d 942. In Richardson we held that a divorce decree may be prospectively modified (within the decree itself) only as to future events that are “certain to occur within a known time frame.” Id. ¶ 10. In MacDonald’s view the contemplated in the decree standard from the court of appeals cases is an essential counterpart to the Richardson test. Thus, MacDonald says that (a) a future event that is certain to occur within a known time frame may be built into the divorce decree, with a prospective modification triggered by the occurrence of that event; but (b) a future event that is less certain but foreseen should be noted by findings by the court that entered the divorce decree, in a manner that opens the door to a petition for modification. As to events not expressly contemplated in the decree, however, MacDonald asserts that they are not sufficient to sustain a petition to modify.
¶41 MacDonald’s concerns are valid. But his point goes only to the universe of information question. It provides additional, pragmatic support for assessing foreseeability on the basis of information evident in the record before the district court that handed down the divorce decree. For these and other reasons we agree with MacDonald that the foreseeability of an alleged substantial change should be assessed only on the basis of material available in the record of the trial court that entered the original divorce decree (or that is the proper subject of judicial notice).
Application of the Governing Standard
¶42 MacDonald also challenges the court of appeals’ application of the governing standard under Utah Code section 30-3-5(8)(i)(i). He first notes that the divorce decree did “not obligate” Fahey to sell her property. And he accordingly suggests that the sale of the property was not foreseeable when it sold almost immediately after the divorce decree was entered.
¶43 MacDonald also contends that the court of appeals erred in basing its assessment of foreseeability on the vague notion that an owner might sell her property and that most people are likely to be prudent with their finances. In MacDonald’s view “a quick sale at a windfall price” was not foreseeable, nor was “the amount of money” Fahey would ultimately “generate.” Thus, MacDonald suggests that the statute contemplates a specific notion of foreseeability— foreseeability of a specific decision to invest the proceeds of the property sale (rather than spend them or use them in some other way) in a manner creating a specific stream of income.
¶44 We affirm. The sale of the property was foreseeable under the express terms of the decree. And MacDonald has not established that Fahey’s investment of the proceeds was unforeseeable.
¶45 The divorce decree’s express provisions confirm that the sale of the property was foreseeable. The decree expressly “discussed certain obligations that would arise if and when Fahey sold the [p]roperty.” MacDonald v. MacDonald, 2017 UT App 136, ¶ 19, 402 P.3d 178. It mandated “that certain expenses would be paid from the proceeds flowing from the sale of the awarded real property.” Id. The express terms of the decree thus “leave[] no doubt that the sale of the [p]roperty” was foreseeable. Id.
¶46 MacDonald highlights aspects of the transaction—the precise sales price and exact timing of the sale—that he claims were unforeseeable. And he asserts that the unforeseeability of these details sustains his petition to reopen the alimony award at issue. We disagree. An alimony award may be reopened when a petitioner identifies a “substantial material change in circumstances not foreseeable at the time of the divorce.” UTAH CODE § 30-3-5(8)(i)(i) (emphasis added). That means that the petitioner bears the burden of showing that the changed circumstances that he claims to be material were unforeseeable (based on evidence in the record at the time of the initial divorce decree). Some details will always be unforeseeable. No one could have foreseen the precise sales price to the penny or the exact date of the closing of the transaction. But these are not the alleged material circumstances. The relevant circumstance was the sale of the property (and subsequent investment of the proceeds, which we discuss below). And MacDonald has not shown that that was not foreseeable.
¶47 MacDonald bears the burden of proving unforeseeability, moreover. And he must do so on the basis of evidence in the original trial record. The record evidence is sparse—consisting of the divorce petition, the stipulated agreement, the trial court’s findings of fact and conclusions of law, and the decree of divorce.[5] And none of these documents provide a basis for MacDonald’s assertion that the approximate date or sales price of the property were unforeseeable. Certainly we have “no evidence that the parties agreed to the property distribution based on any mutual understanding of the value of the parcels involved.” MacDonald, 2017 UT App 136, ¶ 19n.7. Nor do we have any basis for concluding that the foreseeable property sale had an expected sale date.
¶48 We also agree with the court of appeals that MacDonald failed to carry his burden of proving that Fahey’s investment of the proceeds of this transaction was unforeseeable. Id. ¶ 18. The court of appeals took judicial notice of the notion that “[a] reasonable person will normally act in a prudent manner to protect his or her financial interests and security.” Id. It also stated that “[i]t would be unreasonable to expect that Fahey would necessarily either dissipate [the cash settlement she received from the decree] in the short term or that she would otherwise not handle these funds in a financially prudent manner.” Id. We find no error in this approach.
¶49 MacDonald is right to note that the foreseeability inquiry cannot rest on post hoc rationalizations about what a reasonable person might likely have done. The focus must be on information in the record at the time of the entry of the original divorce decree. But that does not foreclose a court’s judicial notice of the sorts of financial choices that a reasonable person is likely to make. Nor does it excuse the petitioner from carrying his burden of proof. And here MacDonald has not established that it was unforeseeable, based on the record of the trial court that entered the original divorce decree, that Fahey would invest the proceeds of the foreseeable property sale in the general manner in which she invested them.
¶50 Some of the details of the investment may have been unforeseeable. The specific broker that Fahey would ultimately use, for example, likely was not foreseeable. Nor was the precise rate of return that she would earn. But those are minor details—not the core material circumstance that MacDonald claims has changed. That circumstance is the availability of an income stream generated by a property sale and a conservative investment of the proceeds. And MacDonald has not shown that those events were unforeseeable at the time of the divorce decree and based on the record in the court that entered that decree.[6] We affirm on that basis.
¶51 In so doing we also reject MacDonald’s assertion that the fact-intensive nature of the foreseeability inquiry requires a remand to the district court. Such a remand would have been permissible— certainly within the discretion of the court of appeals. But we see no reason to require it. And we affirm on the ground that MacDonald has failed to carry his burden of establishing that the sale of property and investment of proceeds was unforeseeable.
III
¶52 A petition to modify an alimony order requires a showing of “a substantial material change in circumstances [that was] not foreseeable at the time of the divorce.” UTAH CODE § 30-3-5(8)(i)(i). We hold that this provision means what it says. A petitioner must make a showing that a substantial, material change was “not foreseeable at the time of the divorce.” We affirm the court of appeals on this point, and we repudiate a line of cases that had held that a petition to modify can be sustained upon a showing that an alleged material change was not “contemplated” in the divorce decree.
¶53 In so doing we clarify, however, that the foreseeability inquiry must be based on evidence that was in the record of the trial court that entered the decree. And we affirm the court of appeals’ determination that MacDonald failed to carry his burden of establishing that Fahey’s sale of the property and investment of the proceeds were not foreseeable.
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[1] See, e.g., Rocky Mountain Helicopter, Inc. v. Carter, 652 P.2d 893, 895–96 (Utah 1982) (explaining that the statutory text at issue was “squarely addressed in” a previous case, determining that the later amendments were minor, and concluding that the legislature adopted our interpretation when it “re-enact[ed] th[e] subdivision without substantial change”); State v. Roberts, 190 P. 351, 352 (Utah 1920) (applying the prior construction canon where a prior case interpreted the statute and “the Legislature re-enacted the section in the precise language as it was when it was construed in the [prior] [c]ase”); see also Jedrziewski v. Smith, 2005 UT 85, ¶¶ 12–13, 128 P.3d 1146 (rejecting the application of the prior construction canon in the absence of a majority opinion interpreting the statute).
[2] Mineer v. Mineer, 706 P.2d 1060, 1062 (Utah 1985); Stettler v. Stettler, 713 P.2d 699, 701 (Utah 1985); Naylor v. Naylor, 700 P.2d 707, 710 (Utah 1985); Lea v. Bowers, 658 P.2d 1213, 1215 (Utah 1983).
[3] See, e.g., Young v. Young, 2009 UT App 3, ¶ 9, 201 P.3d 301 (citing the alimony modification statute and holding that “social security benefits can constitute a substantial material change in circumstances for alimony modification purposes, so long as not expressly foreseen in the original decree of divorce” (emphasis added)); Wall v. Wall, 2007 UT App 61, ¶ 11, 157 P.3d 341 (noting that a substantial change of circumstances must not be “contemplated in the decree itself” but further stating that a change “reasonably contemplated at the time of divorce . . . is not legally cognizable as a substantial change in circumstances” (quoting Moore v. Moore, 872 P.2d 1054, 1055 (Utah Ct. App. 1994), and Dana v. Dana, 789 P.2d 726, 729 (Utah Ct. App. 1990))); Nelson v. Nelson, 2004 UT App 254, ¶ 2, 97 P.3d 722 (quoting the alimony modification statute and then quoting the contemplated in the decree standard); Bolliger v. Bolliger, 2000 UT App 47, ¶ 11, 997 P.3d 903 (quoting the alimony modification statute and then quoting the contemplated in the decree standard).
[4] See, e.g., Moore, 872 P.2d at 1055–56; Throckmorton v. Throckmorton, 767 P.2d 121, 124 (Utah Ct. App. 1988).
[5] The remaining documents filed in the record prior to the divorce decree entry are not relevant to the issues before us.
[6] The court of appeals seems to have reached outside the relevant record in concluding that Fahey’s generation of investment income was foreseeable in light of the fact that “Fahey put the $200,000 [cash settlement], which was paid prior to the execution of the Agreement, in an investment account.” MacDonald, 2017 UT App 136, ¶ 18. In light of that evidence, the court of appeals concluded that “[i]t is hardly a stretch to foresee that if real property were liquidated the proceeds of that sale might be deposited in that same account for investment purposes.” Id. But the premise of this analysis does not appear in the record of the trial court that entered the original divorce decree. For that reason we do not rely on Fahey’s alleged investment of the $200,000 settlement in our foreseeability analysis.
Matt G. Wadsworth, Attorney for Appellant Holly Paulsen, Appellee Pro Se
JUDGE KATE A. TOOMEY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and DIANA HAGEN concurred.
TOOMEY, Judge:
¶1 Keith Paulsen appeals the district court’s denial of his motion for summary judgment in connection with his petition to modify the parties’ divorce decree to decrease his monthly alimony obligation. He also challenges the court’s findings entered after trial on the petition to modify. We affirm in part and vacate in part and remand.
¶2 The parties obtained a bifurcated divorce decree in November 2004, reserving several issues for trial. Following trial in late 2005, the district court entered a second decree in which it awarded Keith[1] legal and physical custody of the parties’ five children and ordered him to pay Holly $1,408 per month in alimony with an offset of $408 for child support, leaving a net alimony payment of $1,000 per month. The court determined that Holly was underemployed and imputed to her income of $1,850 per month. The court found Holly’s monthly expenses to be $2,949 per month.
¶3 In 2013, Keith petitioned to modify the decree, asking the district court to terminate his alimony obligation to Holly. The basis for Keith’s petition was Holly’s alleged ability to earn no less than $3,467 per month and a reduction in her monthly expenses by virtue of nearly having satisfied her mortgage. Keith’s petition also stated that his alimony obligation was $1,000 per month.
¶4 Holly answered Keith’s petition, denying that she was capable of earning $3,467 per month. Holly admitted she was close to satisfying her mortgage “but denie[d] that she [did] not have a housing expense.” Holly noted that her interpretation of the decree’s alimony award differed from Keith’s: “the alimony was actually $1408.00 with a child support off set of $408.00 leaving a net of $1000.00. Now that all of the children are emancipated the alimony amount is $1408.00.” She also argued that Keith “has failed to take into account the Jones v. Jones factors which include the current living expenses of [Holly] and [Keith’s] ability to assist in those expenses.”
¶5 In October 2014, Keith filed a motion for summary judgment “on the broad issue of alimony.” In his supporting memorandum, he stated that, according to Holly’s paystubs, “she now makes $16.00 per hour or $33,280.00 yearly. This equates to $2,773.33 per month gross or $2,357.33 net per month.” He also alleged that Holly told him that “she now makes over $3,200 per month.” As to Holly’s expenses, he merely cited the district court’s finding at the time alimony was initially set that her monthly expenses were $2,949 per month. Keith also pointed out that, at that time, Holly had yet to file a completed financial declaration. Keith did not include any facts regarding his financial situation. In his memorandum, he argued a substantial material change in circumstances had occurred because Holly’s income had increased and she was close to paying off her mortgage. In addition, he argued that his alimony obligation should be decreased based on several expenses he thought should not have been included when the court made its initial alimony determination.
¶6 In response to Keith’s motion for summary judgment, Holly filed a cross-motion for summary judgment and a combined memorandum supporting her cross-motion for summary judgment and opposing Keith’s motion for summary judgment. The memorandum argued Keith had “failed to demonstrate a substantial change in circumstances not contemplated at the time the Decree was entered,” because “[t]he amount and length of the mortgage was understood by the trial court at the time” the decree of divorce was entered. Holly did not dispute the facts Keith alleged in his motion for summary judgment.
¶7 Keith responded, noting that his motion’s statement of facts “were entirely unrebutted and therefore must be deemed admitted as a matter of law.” Accordingly, he argued, Holly “has no further need of alimony.” Keith further argued that the divorce decree was “‘bereft of any reference to the changed circumstance at issue’” and therefore was “‘not contemplated in the original divorce decree.’” (Quoting Wall v. Wall, 2007 UT App 61, ¶ 12, 157 P.3d 341.)
¶8 The district court heard these matters in January 2015 and denied both motions for summary judgment. In explaining the basis for denying Keith’s motion, the court stated, “I simply do not have enough facts at this point and it’s not correct that as a matter of law that I can determine this . . . . I don’t have enough, in [Keith’s] motion for instance, to even show me what the expenses of [Holly] are.” The court reiterated that it did not have sufficient facts and that it was not simply a matter of Holly’s failure to respond to Keith’s motion for summary judgment. The court continued, “I just am not in a position to be able to rule on a motion for summary judgment and say as a matter of law, that in fact, there ought to be a modification of the alimony award.”
¶9 Before trial, Keith and Holly filed several financial declarations, updating their declarations as necessary. In Holly’s January 2015 declaration, she declared that her gross income was $2,650 per month (including $50 per month in support from her adult children), that her net income was $2,397.76, and that her expenses were $4,782 per month. Notably, her expenses did not include a mortgage payment, because she had paid off her house. In July 2015, Holly filed her final updated financial declaration. The updated declaration reflected that her gross income was $2,750 per month, an increase of $100 due to an increase in the declared support from her adult children, and that her net income was $2,505.19 per month. Her claimed expenses decreased to $4,675 per month. Holly arrived at this number after adding some expenses and deducting others. She added the following monthly expenses: $500 for a home equity line of credit she had opened, an additional $300 for attorney fees, and $200 for contributions to her daughter’s church mission, equaling a total of $1,000 of added expenses. She deducted the following monthly expenses: $207.10 in credit card payments, $300 in savings contributions, $200 less in donations, and $400 less in personal debt payments, equaling a total of $1,107.10 in deductions.
¶10 Keith’s final updated financial declaration declared that his gross income was $11,666 per month, that his net income was $8,632 per month, and that his expenses were $21,216.25 per month.
¶11 The petition to modify finally reached the trial stage in late August 2015. In November, the district court entered its findings of fact and conclusions of law. Among other things, the court stated that Keith’s “testimony regarding his financial situation is not credible,” that “[s]ome expenses listed by [Keith] are not current, actual expenses,” and that “[o]ther stated expenses . . . [Keith] claims are not credible nor otherwise appropriate.” Despite these findings, the court decreased Keith’s monthly alimony obligation from $1,000 to $117.
¶12 The district court based its decision to reduce alimony on several findings regarding Holly’s financial situation. It found that her “reduced mortgage expense and the 33% income increase constitutes a substantial change in material circumstances.” It also found that some of Holly’s claimed expenses did not exist at the time alimony was initially determined and therefore reduced them. In making its calculations, the court used figures from Holly’s January 2015 financial declaration, not her final updated financial declaration. After reducing Holly’s claimed expenses, the court found that her appropriate monthly expenses were $2,464.90. The court found that Holly’s net monthly income was $2,347.76. It apparently arrived at this figure by taking Holly’s claimed net income in her January 2015 financial declaration and subtracting the $50 of support from Holly’s adult children. Finally, the court arrived at the reduced alimony figure of $117 by calculating the difference between Holly’s appropriate expenses and net income. Keith filed a timely notice of appeal.[2]
¶13 Keith first contends the district court erred by not granting his motion for summary judgment where the facts alleged in the motion were either undisputed or uncontroverted by Holly. Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Utah R. Civ. P. 56(a). We review a district court’s ruling on a motion for summary judgment for correctness. Johansen v. Johansen, 2002 UT App 75, ¶ 4, 45 P.3d 520.
¶14 We focus our analysis on the second prong of the summary judgment standard—whether Keith is entitled to judgment as a matter of law. To be entitled to judgment as a matter of law on his petition to modify the decree of divorce, Keith was first required to show that Holly’s increased income and satisfaction of her mortgage constituted “a substantial material change in circumstances not foreseeable at the time of the divorce.” Utah Code Ann. § 30-3-5(8)(i)(i) (LexisNexis Supp. 2017). Then, if he succeeded in making this showing, the district court was required to consider several factors before making an alimony determination, including (1) “the financial condition and needs of the recipient spouse,” (2) “the recipient’s earning capacity or ability to produce income,” and (3) “the ability of the payor spouse to provide support.” Id. § 30-3-5(8)(a)(i)–(iii); accordMoon v. Moon, 1999 UT App 12, ¶ 29, 973 P.2d 431. Consideration of these factors is critical to achieving the purposes of alimony, which are: “(1) to get the parties as close as possible to the same standard of living that existed during the marriage; (2) to equalize the standards of living of each party; and (3) to prevent the recipient spouse from becoming a public charge.” Rule v. Rule, 2017 UT App 137, ¶ 14, 402 P.3d 153 (citation and internal quotation marks omitted).
¶15 Because Keith’s alleged facts did not address Holly’s current financial expenses or his ability to pay, the district court was unable to fully consider the required factors before making an alimony determination. Thus, Keith had not demonstrated that he was entitled to judgment as a matter of law.
¶16 We note that the district court could have independently concluded Keith did not satisfy his burden of showing that Holly’s increased income and satisfaction of her mortgage constituted a substantial material change in circumstances not foreseeable at the time of the divorce. See MacDonald v. MacDonald, 2017 UT App 136, ¶¶ 9–14, 402 P.3d 178, cert. granted (Utah 2017)(discussing the foreseeability element and concluding that “foreseeable” “includes not only those circumstances which the parties or the court actually had in mind, but also circumstances that could ‘reasonably be anticipated’ at the time of the decree”). First, the divorce decree specifically stated, “Each party is awarded the home in which they live including all equity and each shall pay the mortgage.” Thus, not only did the decree contemplate that the mortgage would eventually be paid off, but it was also foreseeable that it would be. Second, Keith did not demonstrate that Holly’s incremental increase in income over nearly a decade was unforeseeable. In his motion, Keith did not address the foreseeability element of the changed circumstances standard.[3] Accordingly, we conclude the district court did not err in denying Keith’s motion for summary judgment.
¶17 Keith next contends the district court abused its discretion by reducing rather than terminating his alimony obligation. In connection with this contention, Keith argues the court’s findings as to Holly were inadequate and clearly erroneous. We will not disturb a district court’s ruling on alimony “as long as the court exercises its discretion within the bounds and under the standards we have set and has supported its decision with adequate findings and conclusions.” Mark v. Mark, 2009 UT App 374, ¶ 6, 223 P.3d 476 (citation and internal quotation marks omitted). “Findings of fact are adequate to support the district court’s financial determinations 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, and “follow[] logically from, and [are] supported by, the evidence,” Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 13, 80 P.3d 153 (citation and internal quotation marks omitted). We review a district court’s findings of fact for clear error.[4]Nicholson v. Nicholson, 2017 UT App 155, ¶ 5, 405 P.3d 749. We conclude that the district court’s findings of fact as to Holly are inadequate, but we express no opinion as to what an equitable alimony award might be.
¶18 We first address the district court’s finding as to Holly’s income. The court found that Holly’s gross income was $2,600 per month and that her net income, excluding the support from her adult children, was $2,347.76. These figures were determined by relying on Holly’s January 2015 financial declaration. But the court failed to explain why it based Holly’s income on the January 2015 financial declaration rather than the updated version Holly filed in July 2015, and it failed to justify its income determination in light of Holly’s 2013 W-2 and 2014 tax return, both of which established that Holly’s gross income had been higher than $2,600 per month. For example, in 2013, Holly’s gross annual income was $33,415.83, an average of $2,784.65 per month; in 2014, Holly’s gross annual income was $34,409.56, an average of $2,867.46 per month.
¶19 Second, in calculating Holly’s reasonable expenses, the district court used the figures from Holly’s January 2015 financial declaration rather than the figures from Holly’s final updated financial declaration. Because the two declarations were quite different, see supra ¶ 9, the figure the court reached is inaccurate.
¶20 Third, the court found that Holly’s “reduced mortgage expense and the 33% income increase constitutes a substantial change in material circumstances.” In making this finding, the court failed to address the foreseeability element in the changed circumstances standard. Holly’s satisfaction of the mortgage was specifically contemplated in the divorce decree and was otherwise foreseeable, as the court was well aware of the duration of the mortgage. The court did not explain why Holly’s incremental increase in income over nearly a decade was unforeseeable, especially where Keith’s income similarly increased over that period from $8,370 gross per month to $11,666 gross per month. Cf. Fish v. Fish, 2016 UT App 125, ¶ 19, 379 P.3d 882 (“We are not aware of any Utah authority requiring a district court to find that [a substantial material change in circumstances] has occurred simply because one party’s income has increased and the divorce decree did not discuss possible increases in income. Were it otherwise, creeping inflation could necessitate recalculation of nearly all alimony awards on an annual or biennial basis.”).
¶21 Finally, we are troubled that the court simultaneously found that (1) it had “considered the applicable factors for determining what constitutes a reasonable alimony award” and (2) Keith’s testimony and financial declarations “[were] not credible.” Moreover, the court’s findings do not address the standard of living the parties enjoyed during the marriage. This court has explained that, when determining the recipient spouse’s financial condition and needs, it must do so “in light of the marital standard of living.” Rule v. Rule, 2017 UT App 137, ¶ 15, 402 P.3d 153. Indeed, two major purposes of an alimony award are “to get the parties as close as possible to the same standard of living that existed during the marriage” and “to equalize the standards of living of each party.” Id. ¶ 14 (citation and internal quotation marks omitted). We also emphasize that the marital standard of living is not determined by actual expenses alone. See Howell v. Howell, 806 P.2d 1209, 1212 (Utah Ct. App. 1991). “The needs of each party, determined according to the marital standard of living, then provide a baseline from which to craft an alimony award that best fulfills the purposes of alimony[.]” Rule, 2017 UT App 137, ¶ 15. And if a court is persuaded to adjust the amount of alimony, it must provide factual support to show that the receiving spouse “will be able to support [himself or] herself at a standard of living to which [the spouse] was accustomed during the parties’ marriage, or that the [payor spouse] is no longer able to pay.” Fullmer v. Fullmer, 761 P.2d 942, 951 (Utah Ct. App. 1988); see alsoWilliamson v. Williamson, 1999 UT App 219, ¶¶ 8, 11, 983 P.2d 1103 (providing that the statutory factors that apply to an initial award of alimony also apply “to a redetermination of alimony during a modification proceeding” because the “goal of alimony . . . is to equalize the parties’ standards of living”).
¶22 Because of these errors, “[w]e are unable to trace with accuracy the steps by which the district court reached its ultimate conclusion.” See Oldroyd v. Oldroyd, 2017 UT App 45, ¶ 11, 397 P.3d 645. Therefore, the district court’s findings of fact and support thereof are inadequate. See id.; Mark v. Mark, 2009 UT App 374, ¶ 6, 223 P.3d 476. Accordingly, we vacate the district court’s ruling reducing Keith’s alimony obligation and remand for further findings consistent with the appropriate legal standards set forth in this opinion.
¶23 We conclude the district court did not err in denying Keith’s motion for summary judgment, but we vacate its ruling in reducing Keith’s alimony obligation and remand for further proceedings consistent with this opinion.
[1] . “As is our practice in cases where both parties share a last name, we refer to the parties by their first name with no disrespect intended by the apparent informality.” Smith v. Smith, 2017 UT App 40, ¶ 2 n.1, 392 P.3d 985.
[2] . The notice of appeal indicated that the appeal was directed to the Utah Supreme Court, and Keith’s brief characterized this as a case over which the supreme court has jurisdiction. But the court of appeals has original jurisdiction over this appeal, and the appeal was redirected to this court accordingly. See Utah Code Ann. § 78A-4-103(2)(h) (LexisNexis Supp. 2017).
[3] . The foreseeability element became statutorily required in 1995. See Utah Code Ann. § 30-3-5(7)(g)(i) (Lexis Supp. 1995); accordMacDonald v. Macdonald, 2017 UT App 136, ¶ 9, 402 P.3d 178, cert. granted (Utah 2017).
[4] 4. Keith raises two additional arguments. The first of these is that the district court “committed clear error by including gifts without a finding of extraordinary circumstances and by including post decree debt on [Holly’s] expenses.” In making this argument, Keith does not cite the record and, except for one passing reference to rule 26.1 of the Utah Rules of Civil Procedure, does not cite any authority, much less undertake any reasoned analysis. Accordingly, this argument is inadequately briefed, and we do not consider it. See Utah R. App. P. 24(a)(8); Bank of America v. Adamson, 2017 UT 2, ¶ 11, 391 P.3d 196. The second argument, as far as we can tell, is a challenge to the district court’s determination that the $150 expense it allowed Holly to include in calculating her reasonable expenses in the initial alimony determination was not a new expense for purposes of calculating Holly’s expenses at the time of modification. Keith’s argument is difficult to follow. At some points, he argues it was improper for the district court to allow the $150 expense in its initial alimony determination. But that determination is outside the scope of this appeal and is untimely, and we therefore cannot consider it. See Utah R. App. P. 4(a). At other points, Keith argues that, in determining Holly’s expenses at the time of modification, the district court improperly included the attorney fees Holly accrued in litigating the petition to modify, but he is incorrect. The court in fact deducted those expenses from its final calculation. Accordingly, we do not further address this argument.
Utah Family Law, LC | divorceutah.com | 801-466-9277
QUESTION: Can the alimony award be decreased if the alimony payor had a drastic change in income?; i.e., if he lost his job or was demoted and now makes less than half of what he did previously? Is there a process to modify the alimony award?
ANSWER: Yes. In Utah (I can’t speak for any other jurisdiction), if the alimony payor’s can prove that his ability to pay has decreased through no fault of his own and his realistic, reasonable prospects for getting a new job (that he can actually work and for which he is qualified and can do without having to change his life radically) that pays what his lost job pays, then a decrease or termination of alimony could (and likely would) be appropriate. To seek a reduction, the payor would need to file a petition to modify the alimony award by decreasing the amount the payor must pay.
Thanks for your question.
Utah Family Law, LC | divorceutah.com | 801-466-9277