JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and JOHN D. LUTHY concurred.
TENNEY, Judge:
¶1 James and Blanche Cox were married for over 20 years, during which time they had 10 children and acquired a large number of marital assets. In September 2012, Blanche filed for divorce.[1] After 4 years of pretrial litigation and then 14 days of trial, the district court issued a 35-page divorce ruling that settled various issues relating to child custody, child support, alimony, and the division of the marital estate.
¶2 James now appeals, arguing that many of the court’s rulings were not supported by adequate findings. We agree with James with respect to each challenged ruling. We accordingly vacate those rulings and remand for further proceedings.
BACKGROUND
¶3 James and Blanche Cox were married in 1990. During their marriage, they had 10 children and acquired a large number of assets. In September 2012, Blanche filed for divorce. After 4 years of litigation, the case went to trial, and that trial occurred over the course of 14 days between December 2016 and May 2017. In January 2017 (while the trial was proceeding), the court issued a bifurcated divorce decree granting Blanche’s request for a divorce and reserving other issues for further hearings and determinations.
The Ruling
¶4 In October 2017, the court issued a 35-page Ruling and Memorandum Decision (the Ruling) that entered findings of fact and legal determinations regarding many issues related to child custody, child support, alimony, and the valuation and division of the marital estate. This appeal implicates the court’s findings and determinations regarding essentially three groups of issues: the parties’ marital properties, alimony and child support, and marital debts.[2]
Marital Properties
¶5 The court found that James and Blanche “enjoyed the benefit or acquired” five properties during their marriage: (1) the Hildale Home, (2) the Henderson Home, (3) the Eagle Mountain Home, (4) the Rockville Property, and (5) the Cedar Highlands Lots. The court then entered findings and made rulings regarding how to divide the parties’ marital interest in each property.
¶6 The Hildale Home: The court found that James built this home (located, as our reference would suggest, in Hildale, Utah) before his marriage to Blanche. The court found that James, Blanche, and their children lived in this property until 2010, after which they moved to a different residence. The court heard testimony that title to the Hildale Home was held by the United Effort Plan Trust (the Trust). But the court then concluded that no evidence had been presented of the value of James’s interest in the Trust and that “establishing the value of a beneficial interest in property of the [Trust]” would be “practically and legally impossible.” The court acknowledged that Blanche had submitted an appraisal of the Hildale Home at trial (which, according to the record on appeal, estimated its value as being around $200,000), but the court concluded that the appraisal was deficient because it failed to account for costs and fees associated with the Trust ownership. From all this—and without any further explanation— the court then ruled that Blanche was “entitled to an award of $100,000” based on the home’s value.[3]
¶7 The Henderson Home: The court found that this home was purchased by James in 2004 for $420,000. It found that after the parties fell behind on mortgage payments, at which point they still owed around $288,000, the house was “lost in a short sale in 2013 for $225,000.” The court made a finding that the fair market value of the home at the time, according to Zillow, was $323,861.
¶8 But the court also heard competing testimony from the parties about whether the loss of the home could have been avoided. From Blanche, the court heard testimony that the home “could have been rented out” but that James refused to sign papers that would have modified the loan and, theoretically, allowed the parties to avoid losing it. From James, however, the court heard testimony that maintaining or leasing the home wasn’t actually possible for several different reasons.
¶9 From this, the court found that “[t]he parties would likely have had at least $100,000 in equity to split if they had kept” the Henderson Home and “rented it as suggested by [Blanche] numerous times.” The court then ruled that James “should be responsible to, and give [Blanche] credit for, $50,000 in equity representing her share of the lost asset dissipated by him.”
¶10 The Eagle Mountain Home: The court found that James and Blanche bought this home in 2009 and made a $120,000 down payment on it, $80,000 of which was borrowed from James’s mother. The court found that they moved into the home sometime in 2010 and began using it as their primary residence. James testified that he had at one point intended to sell the Eagle Mountain Home in an effort “to cover all the debts” on the parties’ credit cards but that Blanche refused to cooperate with him on the sale. Evidence presented at trial suggested that the home was sold in 2015 by a bankruptcy trustee for $520,000, with the parties still owing $292,000 at that time. Without citing any specific piece of evidence, the court found that if the Eagle Mountain Home had “not been lost to a forced sale, [Blanche] would have been able to receive at least another $25,000 today because of the current market value of $606,000,” and the court then ruled that she was “entitled to that sum.”
¶11 The Rockville Property: The court described this as a “7.5 acre parcel of farm property” located near Rockville, Utah. In its ruling on how to divide the marital interest in this property, the court referred to evidence it had received indicating that the parties were “forced to sell” the property for $270,000 after falling behind on the mortgage payments, as well as evidence showing that the parties still owed around $190,000 on the property when it was sold.
¶12 But the court then referred to several sources of evidence it had received that suggested that this property had a higher value and could have been sold for more. For example, it referred to evidence that a realtor had listed what the court thought was a similar 11.4 acre parcel for $1,195,000 (though the court then acknowledged that it was “debatable” whether this comparison provided an accurate valuation for the Rockville Property). The court also noted testimony that a realtor had valued the property at “approximately $900,000” due to “28 [shares of] water rights [that were] attached to it.” And the court referred to an “analysis from Zillow” that suggested the property’s value was $1,195,000.
¶13 From all this, the court then found that the forced sale of the property for $270,000 was a loss that “cost the parties at least $450,000 each,” and the court awarded Blanche “damages of $450,000 offset by monies she did receive in the amount of $42,000.”
¶14 The Cedar Highlands Lots: The Cedar Highlands Lots were “two lots down by Cedar City,” one of which was around 2 acres and the other around 2.5 acres. The court found that the lots were purchased for $40,000 each sometime in 2003 but that they were later “lost” through a forced sale because of the parties’ ongoing failure to pay various taxes and fees.
¶15 At trial, there was conflicting evidence and argument about the amount of the loss suffered by the parties because of the sale of these lots. James testified that the parties lost $60,000, while Blanche claimed that they lost somewhere between $153,000 and $280,000 (with her estimate being largely based on the lots’ appreciation in value since the time that the parties had purchased them—and, thus, the parties’ loss of potential equity by virtue of the forced sale). The court ultimately found that the parties’ inability to “pay the property taxes and Homeowners Association fees . . . resulted in [an] $80,000 loss to the parties.” The court did not explain how it had arrived at the $80,000 amount, nor did it explain how this loss was to be distributed between the parties.
Alimony and Child Support
¶16 Blanche’s Income: Under an initial subheading of the Ruling that was entitled “The Parties[’] Income,” the court found that Blanche is “an experienced bookkeeper with QuickBooks who has elected to be employed by About Faceology,” but that she was currently a “self employed Uber/Lift driver and has been so since 2015.” Under a subsequent subheading entitled “Income of the Parties,” however, the court then determined that “[f]or child support purposes [Blanche’s] income cannot be imputed at more than [the] minimum wage of $1,257 per month.” Elsewhere in the Ruling, and without explanation for the discrepancy, the court found that Blanche’s imputed minimum wage income was actually $1,260 per month (rather than $1,257). The court included no explanation for its conclusion that Blanche’s income could not be imputed at more than the minimum wage.
¶17 Child Support: At the time of the Ruling, the parties had five minor children. The court initially ordered James to pay $3,781 per month in child support. Elsewhere in the Ruling, however, and again without explanation, the court stated that it was ordering James to pay $3,336 per month in child support.
¶18 Alimony: Turning to alimony, the court noted that under the controlling statute, it should consider a number of factors. One of the factors it considered was Blanche’s “financial condition and needs.” With respect to this factor, the court opined that Blanche’s “needs have been overstated in her financial declarations,” but the court made no ruling about Blanche’s financial condition and what her needs actually were. With respect to Blanche’s earning capacity, the court again noted that Blanche “claim[ed] she earns just a little better than minimum [wage] even though she is an experienced and sophisticated bookkeeper with many years of experience having run, managed, overseen and monitored millions of dollars in income and expenses that ran through the parties[’] businesses.” But the court made no further findings about her particular earning capacity as it related to a potential alimony award. The court also noted that there were “minor children in the home,” five of whom were “younger than eighteen years of age or have not yet graduated from high school with their expected class.” But the court made no findings about how (or how much) these children impacted Blanche’s earning capacity. Finally, with respect to James’s ability to pay alimony, the court found that James was a “voluntarily under employed” electrician, and it then opined that “[t]here is no question that [Blanche] claims that her needs exceed hers and [James’s] monthly incomes.” Considering these factors together, the court then ordered James to pay $8,286 per month in alimony.
Marital Debts
¶19 Finally, the court made certain findings concerning the “business debt” that was “incurred” by the parties during the marriage. While the divorce proceedings were pending, James filed a Chapter 7 bankruptcy petition. In the Ruling, the court found that, after the bankruptcy proceedings had begun, James incurred $30,000 in debt while purchasing stock in his business and business-related property from the bankruptcy trustee. Since the court determined that Blanche was “entitled to 50% of [the] value” of the business, the court then concluded that she was entitled to an award of $15,000 as a result of this debt.
¶20 The court also noted that Blanche had “received financial compensation from the sale of assets and the conversion of assets into cash.” But the court opined that it was “difficult, if not impossible, to decipher whether each expenditure was personal, business related, or partially business-related.” From this, and without further explanation, the court awarded Blanche “judgment against [James] in the amount of $50,000.”
Motions for Clarification
¶21 James and Blanche were both dissatisfied with the Ruling, and in January 2018, they each filed a motion requesting clarification. Each motion raised a host of issues regarding alleged errors.
¶22 Of note here, in her motion, Blanche asked for clarification “as to whether or not” she was entitled to $25,000 for the Eagle Mountain Home or, instead, “another amount.” She argued that an award of $25,000 “seem[ed] incorrect mathematically” because if the fair market value of the Eagle Mountain Home was $606,000, and the home sold for $520,000, the “resulting equity would have been $86,000, which if divided equally would result in [Blanche] receiving judgment for $43,000,” as opposed to $25,000. Blanche also requested clarification as to the court’s determination “that the loss to the parties” concerning the Cedar Highlands Lots was $80,000. She argued that, based on the evidence presented at trial, the loss was $280,000. Blanche also requested clarification regarding the court’s determination of marital debts, specifically, whether the $15,000 was “to be added to the $50,000 for a total of $65,000” or whether “there [was] another number the court considered.” Finally, Blanche requested clarification of the court’s order regarding child support, given that in one portion of its Ruling the court ordered James to pay child support in the amount of $3,781 per month, and in another portion it altered that amount to $3,336 per month.
¶23 In his motion, James likewise requested clarification of various aspects of the Ruling. Among other things, he asked the court to “enter supplemental, amended, and or additional findings” regarding its ruling that Blanche was “entitled to $100,000” concerning the Hildale Home, explaining that he was “unaware of any evidence upon which the [court] could have relied in finding the $100,000 in equity the [court] awarded” Blanche. James also asked for clarification on the court’s findings concerning the Henderson Home, Eagle Mountain Home, and Rockville Property, asserting that the court had not “identified the facts upon which it relied” in making its calculations. Regarding the Henderson Home, James alleged that the court’s finding that “the parties would likely have had at least $100,000 in equity if the home had been rented” for the years 2013 through 2017 “fail[ed] to account for the costs of managing a rental property from a long distance, the likelihood of vacancies, the cost of utilities, maintenance, repairs, property taxes” and other related fees. Regarding the Eagle Mountain Home, James argued that the Ruling did not “accurately account for the additional $25,000” that Blanche received from the bankruptcy trustee “in addition to the $102,486.28 she received” from the sale. Regarding the Rockville Property, James requested clarification as to what facts the court relied upon to conclude that “the parties owned 28 shares of water,” given that the evidence “actually showed,” in his view, that they owned only 19 shares of water. Additionally, James requested clarification as to the court’s comparison of the Rockville Property to a parcel of “11.4 acre[s] of land with Virgin River frontage that was listed for $1,195,000.” Finally, with respect to the marital debts, James asked the court to “enter supplemental, amended and or additional findings” that would “identify the facts upon which [the court] relied in awarding [Blanche] $15,000 representing [the business’s] hypothetical equity or value.”
¶24 In the meantime, the Office of Recovery Services (ORS) intervened in the case based on its obligation to provide child support enforcement services. ORS filed a memo in response to Blanche’s motion for clarification in which it likewise requested clarification of the child support amount. After recounting its view of the evidence, ORS recommended that if Blanche’s income was imputed at minimum wage, and if James’s income was imputed at $18,500 per month, James should be ordered to pay $3,236 per month for the five minor children.
¶25 In August 2018, the court issued a ruling on James’s and Blanche’s motions. With respect to the child support amount, the court now ordered that James’s monthly obligation be $3,236 per month, thus apparently adopting ORS’s recommendation. With respect to the properties, the court now ruled—without explanation—that Blanche was entitled to $25,000 in relation to the Eagle Mountain Home and $40,000 for the Cedar Highland Lots. And with respect to the marital debts, the court found— again without explanation—that “[t]he $15,000 amount awarded is to be added to the $50,000 amount awarded for a total of $65,000” to be awarded to Blanche.
¶26 The court ordered Blanche’s counsel to prepare the final findings of fact and conclusions of law. In a November 2018 filing, however, Blanche alleged that she was unable to do so without “additional findings” regarding, among others, the marital debts. In May 2019, the court heard additional oral arguments. After the parties filed additional objections and motions, the case was reassigned from Judge Lynn Davis—who had heard the trial testimony and had issued both the Ruling and the rulings on the motions for clarification—to Judge Robert Lunnen. Judge Lunnen then heard oral arguments on the parties’ objections and outstanding motions.
The Supplemental Decree
¶27 In April 2021, the court (through Judge Lunnen) issued a “Supplemental Decree of Divorce” (the Supplemental Decree).[4]
¶28 The Supplemental Decree reiterated and incorporated many of the findings and determinations from the Ruling. As in the Ruling, for example, the court awarded Blanche $100,000 for the Hildale Home, $50,000 for the Henderson Home, and the (clarified) amount of $40,000 for the Cedar Highlands Lots. But without explanation, the court altered the order regarding the Eagle Mountain Home, awarding Blanche $43,000 as opposed to the $25,000 that was previously ordered. Also without explanation, the court altered the order regarding the Rockville Property, first concluding that Blanche’s offset should be $38,000, not $42,000, and now awarding Blanche $412,000 from this property as opposed to the $408,000 that had previously been awarded.
¶29 The court also determined that Blanche’s income should be imputed at minimum wage for a total of $1,260 per month. Based on its findings about the parties’ incomes, it then ordered James to pay $3,236 per month in child support, and it again ordered him to pay $8,286 per month in alimony.
¶30 Finally, the court awarded Blanche $65,000 relating to the marital debts. The court explained that $15,000 of that amount “represent[ed] her interest” in various purchases made by James from the bankruptcy trustee and that the remaining $50,000 represented “her interest in other assets, business and otherwise.”
¶31 James timely appealed.
ISSUE AND STANDARD OF REVIEW
¶32 James argues that the district court issued “inadequate” fact findings to explain its rulings regarding the marital properties, child support and alimony, and marital debts. “We review the legal adequacy of findings of fact for correctness as a question of law.” Lay v. Lay, 2018 UT App 137, ¶ 4, 427 P.3d 1221 (quotation simplified); see also Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262 (“We review the legal sufficiency of factual findings—that is, whether the trial court’s factual findings are sufficient to support its legal conclusions—under a correction-of-error standard, according no particular deference to the trial court.” (quotation simplified)).[5]
ANALYSIS
¶33 A district court’s “[f]indings of fact are adequate . . . only when they are sufficiently detailed to disclose the steps by which the district court reached its ultimate conclusion on each issue.” Oldroyd v. Oldroyd, 2017 UT App 45, ¶ 5, 397 P.3d 645. When assessing a challenge to the adequacy of a district court’s findings, we look to whether the court “adequately disclosed the analytic steps” it took in reaching its conclusions. Keiter v. Keiter, 2010 UT App 169, ¶ 21, 235 P.3d 782. In this sense, the court’s findings of fact must show that its “judgment or decree follows logically from, and is supported by, the evidence.” Id. ¶ 17 (quotation simplified). “This obligation facilitates meaningful appellate review and ensures the parties are informed of the trial court’s reasoning.” Shuman v. Shuman, 2017 UT App 192, ¶ 5, 406 P.3d 258; see also Fish v. Fish, 2016 UT App 125, ¶ 22, 379 P.3d 882 (explaining that findings “are adequate when they contain sufficient detail to permit appellate review to ensure that the district court’s discretionary determination was rationally based”). While “unstated findings can be implied if it is reasonable to assume that the trial court actually considered the controverted evidence and necessarily made a finding to resolve the controversy, but simply failed to record the factual determination it made,” Fish, 2016 UT App 125, ¶ 22 (quotation simplified), we “will not imply any missing finding where there is a matrix of possible factual findings and we cannot ascertain the trial court’s actual findings,” Hall v. Hall, 858 P.2d 1018, 1025–26 (Utah Ct. App. 1993) (quotation simplified).
¶34 James argues that a number of the court’s findings were inadequate. His arguments address three groups of findings— namely, findings regarding (I) marital properties, (II) child support and alimony, and (III) marital debts. We address each group in turn.[6]
Marital Properties
¶35 James first challenges the adequacy of the findings that supported the rulings about how to value and distribute the parties’ marital properties. We recognize at the outset that district courts “have considerable discretion in determining property distribution in divorce cases.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 11, 440 P.3d 757 (quotation simplified). But while a district court “does not have to accept [a party’s] proposed valuation” of an item in the marital estate, the court “does have to make findings sufficient to allow us to review and determine whether an equitable property award has been made.” Taft v. Taft, 2016 UT App 135, ¶ 53, 379 P.3d 890. In ruling on such a claim, we will uphold a district court’s “valuation of marital assets” if “the value is within the range of values established by all the testimony, and as long as the court’s findings are sufficiently detailed and include enough subsidiary facts to disclose the steps by which the ultimate conclusion on each factual issue was reached.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 64, 507 P.3d 385 (quotation simplified), cert. denied, 525 P.3d 1259 (Utah 2022).
The Hildale Home
¶36 James first argues that the court’s findings regarding the Hildale Home were inadequate. In James’s view, the court “simply concluded that $100,000 was an appropriate amount of an award without providing factual findings” supporting “the appropriateness” of that award. We agree.
¶37 The court’s discussion of the Hildale Home spans roughly two pages of the Ruling. Much of the discussion concerns the ownership of the home. The court found that the home’s title is held by the Trust, that James’s interest in the home is that “of a beneficiary” to the Trust, and that Blanche, by contrast, is “not a legal beneficiary” of the Trust. But the court then found that “[n]o evidence was presented to the court of the value [of] [James’s] beneficial interest” in the Trust and that “establishing the value of a beneficial interest in property of the [Trust] is practically and legally impossible[,]” in part, because “the Trust is not receptive to, nor responsive to, legal inquiries.” The court also recognized that Blanche submitted an appraisal of the home, but it then concluded that the appraisal was not an adequate mechanism for establishing the home’s value because the appraisal failed to account for “title to the home being in the [Trust], the costs of getting the [Hildale Home] conveyed from the [Trust], or the thousands of dollars owed to the [court] appointed Trustee of the [Trust] which the Trustee is owed for administering the [Trust’s] assets.” After discounting its ability to rely on either James’s interest in the Trust or Blanche’s appraisal, the court ruled that the property was “a marital asset” to some “narrow extent.” Without further explanation, it then ruled that while it couldn’t grant title to Blanche, she was “entitled to an award of $100,000.”
¶38 We recognize the difficulties that the court faced with this trial in general—as should be clear by now, this was a very complicated divorce with a lot of things to decide and divide. And as evidenced by the preceding paragraph, the nature of parties’ apparent interest in the Hildale Home made the question of how to divide that interest particularly complicated. But even so, we see nothing in the Ruling that “adequately disclosed the analytic steps” the court took, Keiter, 2010 UT App 169, ¶ 21, when deciding that Blanche was entitled to $100,000. The court clearly explained what it thought it couldn’t rely on, but it didn’t explain what it thought it could rely on or how it arrived at this particular amount. Without such an explanation, James has no meaningful way to challenge that $100,000 award, nor do we have any meaningful way to assess whether it was legally warranted in light of the “matrix of possible factual findings” on this issue that are apparent from the record. Hall, 858 P.2d at 1025 (quotation simplified). We accordingly vacate this determination.
The Henderson Home
¶39 James next argues that the court “did not provide any analysis” as to how it determined there was $100,000 in equity in the Henderson Home and that, as a result, the $50,000 award to Blanche was based on inadequate findings. We agree.
¶40 The court found that the home was purchased by James in 2004 for $420,000. It explained that by August 2012, James and Blanche were “months behind in their [mortgage] payment” and that they owed $288,000 when the home was “lost in a short sale in 2013 for $225,000.” The court made a finding that the fair market value of the home at the time—according to Zillow—was $323,861.[7] The court found that James and Blanche “would likely have had at least $100,000 in equity to split if they had” managed to keep the home, but because James “ignored” Blanche’s suggestions to rent the home out, which in theory would have prevented them from losing it, it then ruled that James “should be responsible to, and give [Blanche] credit for, $50,000 in equity representing her share of the lost asset dissipated by him.” It appears the court thus based the $50,000 award on its finding that “the parties could likely have rented and made money as shown or just maintained [the Henderson Home] and sold it for profit presently.”
¶41 James’s initial argument here is that it’s unclear how the court arrived at the $100,000 in equity that it then divided. In response, Blanche suggests that this amount could have been derived from the court’s apparent acceptance of the home’s fair market value as being $323,861 (a value derived from Zillow— which, again, neither party has challenged on appeal as being improper), an amount that is approximately (though, we note, not precisely) $100,000 more than the parties received in the short sale. We have some concern that Blanche is asking us to do too much inferential work on our own, and we could vacate on this basis alone. But in any event, the court’s division of the apparent equity also seems to have been based on a dissipation (or, perhaps, a waste) determination stemming from James’s conduct. Assuming this was so, the court’s findings about James’s conduct, whether the home could actually have been rented out, what the parties could have received in rent, and whether this unspoken amount would actually have prevented them from losing the home were all either missing or decidedly cursory. We’ve previously held, however, held that when a court rules that a party “should be held accountable for the dissipation of marital assets,” the court must support the ruling with “sufficiently detailed findings of fact that explain the trial court’s basis” for that ruling, and we’ve also laid out a number of factors that “may be relevant to” and could support such a ruling. Rayner v. Rayner, 2013 UT App 269, ¶¶ 19–21, 316 P.3d 455 (quotation simplified). While that list is not mandatory or exhaustive, we still have an inadequate findings-based foundation here from which we could review what seems to have been an implicit dissipation determination. When coupled with the lack of explanatory findings about the basis for the equity determination, we conclude that the findings about this home are, as a whole, legally inadequate to support meaningful appellate review of this ruling. We accordingly vacate them.
The Eagle Mountain Home
¶42 James argues that the court’s findings regarding the Eagle Mountain Home were legally inadequate. We agree.
¶43 In the Ruling, the court (through Judge Davis) initially awarded Blanche $25,000 for this home. But the court failed to explain the analytic steps it took to arrive at that amount. The court did enter a few findings about this home—namely, that the parties made a $120,000 down payment when they purchased the home in 2009 ($80,000 of which was borrowed from James’s mother), that they were forced to sell it in 2015 in conjunction with James’s bankruptcy, and that, as a result of that sale, Blanche received “one half” of its equity. But the court made no findings about the sale price or how much equity the parties had in the home at the time of the sale. And then, without any explanation, the court opined that “[h]ad it not been lost to a forced sale,” Blanche “would have been able to receive at least another $25,000 today” because of the home’s “current market value.” The court provided no basis for the $25,000 amount, and we see no reasonable basis in its findings for inferring one.
¶44 Of note, the court (through Judge Lunnen) then changed the awarded amount in the Supplemental Decree, now awarding Blanche $43,000 for it. But the court didn’t explain why it increased this award from the award that had previously been entered in the Ruling. And while Blanche suggests on appeal that the court had now accepted a new valuation of the home that she offered in her motion for clarification, the court never said that it was doing so, nor did it provide any other explanation for why it increased this award at all, let alone by this particular amount.
¶45 In light of this procedural history, it’s unclear to us what analytic steps led the court to first award Blanche $25,000 for this home and what caused the court to later change that award to $43,000. As a result, the findings with respect to this home are legally inadequate and are therefore vacated.
The Rockville Property
¶46 James argues that the court’s findings about the Rockville Property are legally inadequate because it’s “not clear” how the court “reached its valuation of the Rockville Property” or how it divided that value as part of its division of the marital estate. We agree.
¶47 In the Ruling, the court explained that the Rockville Property was a “7.5 acre parcel of farm property” owned by James and Blanche near Rockville, Utah. As for its value and how to determine that value, the court pointed to three options: (1) it noted that a realtor had listed a similar 11.4 acre parcel for $1,195,000, though the court opined that this valuation was “debatable”; (2) the court noted that Blanche “discussed” its value with a realtor who “indicated back then” (which, though unsaid by the court, seems from context to have been in 2013) that the “lot was worth approximately $900,000, due to the 28 water rights attached to it”; and (3) the court pointed to a “[c]urrent market value analysis from Zillow” that “estimate[d]” the property’s value at $1,195,000. The court then found that the parties were “forced to sell” the property in December 2013 for $270,000 due to financial troubles. And the court apparently faulted James for this, determining that at the time of the forced sale, the parties “only owed approximately $190,000” on the property, that it could have been refinanced, and that it was James’s fault that they did not do so. From this, the court found that the forced sale “cost the parties at least $450,000 each,” and it accordingly awarded Blanche “damages of $450,000 offset by monies she did receive in the amount of $42,000.”
¶48 From an adequacy-of-the-findings perspective, the initial problem here is that the court never stated whether it was accepting $1,195,000 or $900,000 as the property’s value. Given that the property’s value would be the numerator for any division of it as a marital asset, this omission is, of course, significant. And while Blanche invites us to engage in some loose math that would account for both possibilities and arrive at the same endpoint, the difference between the two initial valuations might matter if James wished to mount a sufficiency of the evidence challenge. Moreover, to the extent that the court’s determination about how to divide the property’s value turned on an implicit dissipation determination, we again note that the court failed to support such a determination with adequate findings. And finally, while the court offset the award to Blanche by “monies she did receive in the amount of $42,000,” an amount that it later changed to $38,000 in the Supplemental Decree, the court didn’t explain the basis for either amount in either ruling.[8]
¶49 Given the unanswered questions about how the court valued both this property and the offset, we have no basis for conducting a meaningful review of this award. We accordingly vacate it.
The Cedar Highlands Lots
¶50 James’s final property-related challenge is to the findings regarding the Cedar Highlands Lots. In James’s view, the court improperly failed to “indicate . . . how the $80,000 was calculated.” We again agree.
¶51 In the Ruling, the court found that James and a business partner had purchased the two lots for $40,000 each, that Blanche had “controlled the book-keeping for the marital businesses,” and that the lots “were lost when the parties were unable or could not pay the property taxes and Home Owners Association fees,” thus “result[ing] in [an] $80,000 loss to the parties.” In a subsequent ruling, the court determined that this loss should now result in an award of $40,000 to Blanche, and that award was later confirmed in the Supplemental Decree.
¶52 From the court’s findings, it’s unclear why the court determined that there was an $80,000 loss. The court seems to have assumed that the lots were completely lost with no return in value, but the court never said so. And more importantly, even assuming that this was the implicit finding, the court never explained why it concluded that Blanche should receive an award of $40,000 as the result of this particular loss to the marital estate of $80,000. Without such an explanation, we have no meaningful basis for reviewing the ruling. As a result, we vacate it.
Child Support and Alimony
¶53 James challenges the adequacy of the findings relating to child support and alimony. James’s challenges here fall into two groups: first, he challenges the adequacy of the findings relating to Blanche’s income (which, as explained below, matter to both child support and alimony); and second, with respect to the alimony determination, he challenges the adequacy of the court’s findings relating to Blanche’s financial condition and needs.
Blanche’s Income
¶54 James argues that the court’s findings regarding Blanche’s income were inadequate because they failed to “provide any reasoning for disregarding [Blanche’s] earning capacity.” We agree.
¶55 A party’s income matters to a determination of both child support and alimony. First, with respect to child support, a “noncustodial parent’s child support obligation is calculated using each parent’s adjusted gross income.” Twitchell v. Twitchell, 2022 UT App 49, ¶ 34, 509 P.3d 806 (quotation simplified); see also Utah Code §§ 78B-12-202, -301 (establishing guidelines for child support awards). Importantly, the court “is required to enter detailed and specific findings on all material issues which must be considered when making a child support award.” Breinholt v. Breinholt, 905 P.2d 877, 881 (Utah Ct. App. 1995) (quotation simplified). But “so long as the steps by which the ultimate conclusion on each factual issue was reached are apparent, a trial court may make findings, credibility determinations, or other assessments without detailing its justification for finding particular evidence more credible or persuasive than other evidence supporting a different outcome.” Shuman, 2017 UT App 192, ¶ 6 (quotation simplified). Second, with respect to alimony, a court must examine, among other factors, “the recipient’s earning capacity or ability to produce income.” Miner v. Miner, 2021 UT App 77, ¶ 16, 496 P.3d 242 (quotation simplified). And a court must in “all cases . . . support its alimony determinations with adequate findings . . . on all material issues,” and “failure to do so constitutes reversible error, unless pertinent facts in the record are clear, uncontroverted, and capable of supporting only a finding in favor of the judgment.” Id. ¶ 17 (quotation simplified).
¶56 Of note, when “there is insufficient evidence of one of the statutory alimony factors, courts may impute figures.” Gardner v. Gardner, 2019 UT 61, ¶ 98, 452 P.3d 1134 (quotation simplified). For example, a “court may impute income to a former spouse for purposes of calculating alimony after finding that the former spouse is voluntarily unemployed or voluntarily underemployed.” Fish, 2016 UT App 125, ¶ 15. And it “is not unusual for courts to impute income to a spouse who has not worked during the marriage (or who has not worked for a number of years preceding the divorce) but who is nevertheless capable of producing income.” Petrzelka v. Goodwin, 2020 UT App 34, ¶ 26, 461 P.3d 1134 (emphasis in original). But when a court imputes income, the “imputation cannot be premised upon mere conjecture; instead, it demands a careful and precise assessment requiring detailed findings.” Christensen v. Christensen, 2017 UT App 120, ¶ 22, 400 P.3d 1219 (quotation simplified); see also Reller v. Argenziano, 2015 UT App 241, ¶ 33, 360 P.3d 768 (“Before imputing income to a parent, the trial court must enter findings of fact as to the evidentiary basis for the imputation.” (quotation simplified)).
¶57 Income can likewise be imputed as part of a child support determination. See Utah Code § 78B-12-203(8). But, as with an alimony award, a court must support such an imputation with adequate findings. See id. § 78B-12-203(8)(a) (explaining that in contested cases, “[i]ncome may not be imputed to a parent unless,” after an evidentiary hearing on the matter, the court “enters findings of fact as to the evidentiary basis or the imputation”); id. § 78B-12-203(8)(b) (detailing the evidentiary bases upon which a court may impute income for child support purposes); see also Rayner, 2013 UT App 269, ¶ 10 (“Imputation cannot be premised upon mere conjecture; instead, it demands a careful and precise assessment requiring detailed findings.” (quotation simplified)).
¶58 Here, the court determined that although Blanche was currently working as a “self employed Uber/Lift driver,” her “income cannot be imputed at more than minimum wage of $1,257 per month.” In a different portion of the Ruling, however, the court found that Blanche’s “gross income” should actually be imputed at “$1,260 per month.”
¶59 On appeal, James doesn’t focus on this three-dollar discrepancy. Rather, James argues that the court erred by failing to explain why Blanche’s income should be imputed at minimum wage at all. As James points out, the court elsewhere found that Blanche is “an experienced bookkeeper with QuickBooks who has elected to be employed by About Faceology,” and it further found that she was “an experienced and sophisticated bookkeeper with many years of experience having run, managed, overseen and monitored millions of dollars in income and expenses that ran through the parties[’] businesses.”
¶60 Having reviewed the Ruling, we see no explanation for the court’s determination that, although Blanche is an experienced bookkeeper with the skill set to manage millions of dollars in income for a company, her income should still be imputed at minimum wage. In an attempt to justify this on appeal, Blanche points to a passing statement from the alimony portion of the ruling in which the court noted that the parties “have ten children, five of which are younger than eighteen years of age or have not yet graduated from high school with their expected class.” But as James points out in response, the parties had even more minor children at home during the years in which Blanche was working as a bookkeeper with responsibilities for “millions of dollars in income.” And while it’s possible that the court believed that something had now changed that would prevent Blanche from still doing this work (such as her new status as a post-divorce single parent), the court never said this or entered any findings to support such a determination, it never explained why it was implicitly determining that Blanche could work as an Uber/Lyft driver but not as a bookkeeper, and it entered no findings to explain why her current employment as an Uber/Lyft driver would result in an income imputation of minimum wage.
¶61 To be clear: as with the other issues in this appeal, we express no opinion about the proper resolution of any of these questions. But without an explanation from the district court, James has no basis for properly challenging the decision about Blanche’s income, nor do we have an adequate basis for reviewing it. Given the importance of Blanche’s income to both child support and alimony, we accordingly vacate those rulings.
Blanche’s Financial Condition and Needs
¶62 As part of its alimony determination, the court was also required to consider Blanche’s “financial condition and needs.” Miner, 2021 UT App 77, ¶ 16 (quotation simplified). James argues that the court failed to enter adequate findings to support this assessment. We agree.
¶63 In the Ruling, the court noted that Blanche had claimed that she had “monthly needs of $18,565,” but it then concluded that these needs were “overstated.” And while Blanche had also suggested that she needed the alimony award to account for “over $200,000 in credit card and business debts,” the court suggested that this debt was either accounted for by other portions of its ruling or had “been discharged in the bankruptcy case.”
¶64 But even so, while the court then concluded that James “simply does not make sufficient money to satisfy all of [Blanche’s] claims” about what “she reasonably needs to support herself,” the court did not make any determination about what Blanche’s needs actually are. As James correctly points out, the absence of such an explanation prevents us from conducting a meaningful review of how this factor should weigh into the court’s alimony award, a problem that is compounded by the failure discussed above to adequately explain its determination about Blanche’s income.
¶65 We accordingly vacate the alimony award to allow the court to enter more detailed findings and, “if necessary, recalculat[e] . . . appropriate alimony.” Fitzgerald v. Fitzgerald, 2005 UT App 67U, para. 6 (quotation simplified); see also Eberhard v. Eberhard, 2019 UT App 114, ¶¶ 39–40, 449 P.3d 202 (faulting a district court for not “spelling out” “how much more [the petitioner] actually needs each month to pay down her debt and elevate herself to the marital standard of living,” thus leaving the appellate court “unable to discern whether the alimony award, in fact, exceeds her needs”).
III. Marital Debts
¶66 Finally, James challenges the adequacy of the court’s findings with respect to the parties’ marital debts. We agree that these findings are inadequate.
¶67 “In issuing a divorce decree, a trial court must include an order specifying which party is responsible for the payment of joint debts, obligations, or liabilities of the parties contracted or incurred during marriage.” Fox v. Fox, 2022 UT App 88, ¶ 32, 515 P.3d 481 (quotation simplified), cert. denied, 525 P.3d 1263 (Utah 2022); see also Utah Code § 30-3-5(3)(c)(i). Utah law “requires only a fair and equitable, not an equal, division of the marital debts.” Fox, 2022 UT App 88, ¶ 32 (quotation simplified). A district court is in the “best position to weigh the evidence, determine credibility and arrive at factual conclusions”; as a result, a district court’s division of marital debts is “entitled to a presumption of validity.” Mullins v. Mullins, 2016 UT App 77, ¶ 20, 370 P.3d 1283 (quotation simplified). But, again, the district court must enter findings of fact that are “sufficiently detailed to disclose the steps by which [it] reached its ultimate conclusion on each issue.” Oldroyd, 2017 UT App 45, ¶ 5.
¶68 Here, the court found that the “parties incurred business debt while married.” James challenges the adequacy of the findings with respect to two of those debts.
¶69 First, the court found that as a result of James’s bankruptcy, James took on $30,000 in debt to finance the purchase of his business’s stock and other business-related property. In the court’s view, Blanche was “entitled to 50% of [the] value” of the business, which meant, in its view, that she was also entitled to $15,000. But the court never explained why it concluded that Blanche was entitled to this amount. While it’s possible, as Blanche now suggests, that the court thought that James had drawn the $30,000 from marital assets—and, thus, that $15,000 of it belonged to Blanche—the court didn’t say this, and its reference to this as “$30,000” in “debt” that James had incurred is somewhat at odds with this inference. In the absence of any explanation, we vacate this ruling.
¶70 Second, at the close of the “Marital Debts” section of its ruling, the court found that Blanche had “received financial compensation from the sale of assets and the conversion of assets into cash.” But it then opined that it was “difficult, if not impossible, to decipher whether each expenditure was personal, business related, or partially business-related.” Without any further explanation, the court then held that Blanche
was “awarded judgment against [James] in the amount of $50,000.”
¶71 It’s entirely unclear to us what the basis for this $50,000
award was. So far as we can tell, the court seems to have concluded that Blanche had already received some prior distributions from marital assets and that she should now receive $50,000 more. But there’s no explanation for how the court arrived at this particular amount, what the amount was linked to, or why it would be listed alongside an analysis of “Marital Debts.” Without any such explanation, we vacate this award.
CONCLUSION
¶72 We agree with James’s assertion that the challenged findings were not legally adequate and that these inadequacies impaired both his ability to challenge the court’s various rulings and our ability to review them. We accordingly vacate the above rulings and remand the case with instructions for the court to enter more detailed findings and then alter any of its rulings as may be necessary.
[1] Because the parties share the same last name, we’ll follow our normal practice and refer to them by their first names, with no disrespect intended by the apparent informality.
[2] In this Background, we’ll recount the main findings regarding each ruling at issue on appeal, but in some instances, additional relevant findings will be discussed in the Analysis below.
[3] With respect to some (though not all) of the dollar amounts included in the rulings at issue, the court added “.00” signifiers. For readability, those have been omitted throughout this opinion.
[4] As noted above, the court had previously entered a bifurcated divorce decree while the trial on the parties’ assets and the like was still ongoing.
[5] As evidenced by the passages quoted above, there’s something of a disconnect in how we’ve referred to this kind of argument in past cases. In some cases, we’ve described it as an argument about the “legal adequacy” of the district court’s findings, see, e.g., Lay v. Lay, 2018 UT App 137, ¶ 20, 427 P.3d 1221, but in others, we’ve described it as an argument about the “legal sufficiency” of the findings, see, e.g., Brown v. Babbitt, 2015 UT App 161, ¶ 5, 353 P.3d 1262. For consistency’s sake, it might be better if bench and bar alike settled on a single usage. And on reflection, we suggest that such an argument should be described in adequacy terms.
The reason for this is to reduce the potential for confusing this kind of argument with the similar sounding but substantively distinct “sufficiency of the evidence” argument. At the risk of over-simplification: a sufficiency of the evidence argument asserts that there was insufficient evidentiary support for a particular factual finding. As detailed more fully below, however, the argument at issue here—a challenge to the adequacy of the findings—asserts that the court’s findings did not adequately explain the basis for the court’s rulings, thereby impairing our ability to review those rulings (for sufficiency of the evidence or anything else).
[6]Two notes are warranted at the outset—one about our usage patterns regarding the rulings at issue, and one about a threshold argument made by Blanche.
First, as discussed above, there are two decisions that largely drive the various arguments in this case: the Ruling and the Supplemental Decree. The Ruling was issued by Judge Davis, who heard the trial evidence, while the Supplemental Decree was issued by Judge Lunnen, who was assigned to the case after the Ruling was issued. At one of the hearings in the intervening period, Judge Lunnen responded to a party’s argument by stating that “[t]he findings, they’re set in stone. So all this is . . . a result of the findings.” As noted, however, Judge Lunnen did alter a few of the Ruling’s legal determinations in the Supplemental Decree. In consequence of how this all played out, the Supplemental Decree recites many of the findings that were issued in the Ruling, though not with the same level of detail. It instead essentially incorporates the bulk of the Ruling by implicit reference. For this reason, the parties’ arguments on appeal have largely focused on whether the findings from the Ruling were adequate, and we’ll follow suit. To avoid redundancy, we won’t repeatedly mention whether we think the findings from the Supplemental Decree were likewise inadequate (even if they were reiterated in the Supplemental Decree); instead, we’ll discuss the Supplemental Decree only in those instances where it differs in some meaningful way from the Ruling (usually because of an altered legal determination).
Second, in her opening brief, Blanche argues that James did “not comply with Utah’s marshaling requirement” in his briefing on appeal. But the marshaling requirement applies when a party “seeks to prevail in challenging the sufficiency of the evidence to support a factual finding or a verdict on appeal.” State v. Nielsen, 2014 UT 10, ¶ 40, 326 P.3d 645; see also State v. Wall, 2020 UT App 36, ¶ 53, 460 P.3d 1058; Wilson v. Sanders, 2019 UT App 126, ¶ 17, 447 P.3d 1240. As noted, however, James is not arguing that there was insufficient evidence to support any particular finding. Rather, James is arguing that the findings were inadequate to explain the court’s various rulings. As we’ve explained, an argument about the adequacy of the findings presents a legal question. Because of this, “marshaling is not required.” Jensen v. Jensen, 2009 UT App 1, ¶ 8 n.3, 203 P.3d 1020; see also Woodward v. Fazzio, 823 P.2d 474, 477–78 (Utah Ct. App. 1991) (“There is, in effect, no need for an appellant to marshal the evidence when the findings are so inadequate that they cannot be meaningfully challenged as factual determinations. . . . Rather, appellant can simply argue the legal insufficiency of the court’s findings as framed.”).
[7] While a topic at oral argument, neither party raised on appeal the issue of whether the district court could appropriately rely on Zillow for its valuation of the property, as opposed to evidence submitted at trial. For this reason, we do not address the issue here.
[8] It seems possible (if not probable) that this offset was intended to reflect a determination that the parties received $80,000 in equity when they sold the property for $270,000 while still owing $190,000 on it. But if this was the determination, (1) the court didn’t say so, and (2) it also didn’t explain the basis for initially deviating upward by $2,000 to arrive at $42,000, nor did it explain the basis for subsequently deviating downward by $2,000 to arrive at $38,000.
When do courts value the marital estate? At time of separation, or at the time the court enters the Decree of Divorce?
This is a question that often causes divorcing people’s heart to sink. I’ll tell you why, but first, let’s answer the question of whether courts value the marital estate in a divorce action: at time of separation, or at the time the court enters the Decree of Divorce?
The first answer to this question is: the court can value the marital estate at any time, if it can articulate a good reason for doing so.
“Generally, the marital estate is valued at the time of the divorce decree or trial.” Jacobsen v. Jacobsen, ¶ 39, 257 Pacific.3d 478 (cleaned up). However, as with alimony, the court has broad discretion to use a different date so long as its decision it supported by “sufficiently detailed findings of fact explaining its deviation from the general rule.” Id.; see also Rayner, 2013 UT App 269, ¶ 19, 316 P.3d 455 (“A trial court has broad discretion to deviate from [the] general rule when circumstances warrant.” (cleaned up)). “As a general rule, the marital estate is valued at the time of the divorce decree,” Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct.App.1993); see also Berger v. Berger, 713 P.2d 695, 697 (Utah 1985), and that “any deviation from the general rule must be supported by sufficiently detailed findings of fact that explain the trial court’s basis for such deviation,” Rappleye, 855 P.2d at 262.
Ryan A. Rudd and Nicholas S. Nielsen, Attorneys for Appellee
JUDGE DAVID N. MORTENSEN authored this Opinion, in which JUDGES GREGORY K. ORME and JILL M. POHLMAN concurred.
MORTENSEN, Judge:
¶1 When Vicki and Randall Beckham came before the district court for a bench trial on a divorce petition, Vicki[1] asked the court to order that she be a named beneficiary under one of the then-existing term life insurance policies on Randall. The court denied this request, a determination with which neither party takes issue. Despite both parties acknowledging that the policy had no value, however, and while expressly noting that the policy was not presented in evidence, the district court ordered Randall to reimburse Vicki the premiums she had paid for this “asset” for several years to the tune of $40,000. Randall appeals, claiming the district court erred in this award. We agree and reverse.
¶2 During the divorce proceeding, Vicki and Randall disputed how two term life insurance policies on Randall’s life should be treated. Vicki asserted that the court should award her a beneficiary interest in one of the policies. In ruling on the matter, the district court noted that the parties had failed to provide the court “with the policies at issue” and that it was “unclear whether these term life insurance policies were renewable by year, or after a number of years, or ended upon Randall’s death, or were terminated in the event of a divorce.” The court also stated that “Vicki’s counsel argued that they did not receive the policy in discovery,” and citing rule 37 of the Utah Rules of Civil Procedure, the court opined that “if that [was] the case, that issue could have and should have been resolved through the appropriate pretrial procedure.” See Utah R. Civ. P. 37(a)(1)(E) (“A party . . . may request that the judge enter an order . . . compelling discovery from a party who fails to make full and complete discovery.”).
¶3 Although the court determined that it “may award a life insurance beneficiary interest to a spouse upon divorce, under general principles of law concerning the apportionment of marital assets,” it declined to do so, reasoning that Vicki did not have a financial need for the insurance benefits, that the parties never reached an understanding regarding the apportionment of the life insurance policies, and that there was “no reason to perpetuate a relationship between” the parties by granting Vicki a beneficiary interest in a policy on Randall’s life. Accordingly, the court concluded that the policies would “remain with Randall” and that he would “continue to control the beneficiary designation going forward.”
¶4 However, the court found that the parties had treated the “two policies as marital assets during the marriage,” that each party had “spent a significant amount on annual premiums,” that the “policies were clearly part of the parties’ future planning and provided a benefit to them,” and that the “evidence was clear that each party used their own funds to pay for the respective policies.”
¶5 Accordingly, the court determined that Vicki should be reimbursed for her contribution to the premiums of one of the policies:
[I]n the interest of fairness and equity, Vicki should be awarded $40,000 from Randall to reimburse her for the annual premiums she paid for the policy over the past eight years. The testimony at trial was very clear that each party used their own funds to pay for the respective policies. Thus, Vicki contributed to an asset that will remain with Randall; it is thus fair and equitable for him to reimburse her for the amounts she paid—amounts that have maintained the policy and allowed Randall to perpetuate that [p]olicy on behalf of his newly named beneficiaries.
Randall appeals, asserting that the district court should not have ordered reimbursement of premiums paid during the marriage.
ISSUE AND STANDARDS OF REVIEW
¶6 Randall argues that the district court erred “in invoking its equitable powers to order [him] to reimburse [Vicki] for term life insurance policy premiums paid during the marriage.” “A district court has considerable discretion considering property division in a divorce proceeding, thus its actions enjoy a presumption of validity. We will disturb the district court’s division only if there is a misunderstanding or misapplication of the law indicating an abuse of discretion.” Johnson v. Johnson, 2014 UT 21, ¶ 23, 330 P.3d 704 (cleaned up). And “[w]hen a district court fashions an equitable remedy, we review it to determine whether the district court abused its discretion.” Collard v. Nagle Constr., Inc., 2006 UT 72, ¶ 13, 149 P.3d 348; accord Kartchner v. Kartchner, 2014 UT App 195, ¶ 14, 334 P.3d 1.
ANALYSIS
¶7 In a divorce proceeding, a district court is empowered to enter “equitable orders relating to the children, property, debts or obligations, and parties.” See Utah Code Ann. § 30-3-5(1) (LexisNexis Supp. 2021). Here, the district court characterized the life insurance policy as a marital asset. Citing Utah Code section 30-3-5, the court noted its authority to divide marital assets and indicated that the parties had “treated” the policy as a “marital asset[] during their marriage” and that “Vicki contributed to an asset that will remain with Randall.”
¶8 The court explicitly acknowledged that it did not have access to the life insurance policies because the parties did not provide them to the court.[3] Given this lacuna, the court acknowledged that it was “unclear whether these term life insurance policies were renewable by year, or after a number of years, or ended upon Randall’s death, or were terminated in the event of a divorce.” But the court also noted that Vicki “could have and should have” resolved the lack of production “through the appropriate pretrial procedure,” presumably a statement of discovery issues seeking to compel discovery. See Utah R. Civ. P. 37(a)(1)(E).
¶9 Given the court’s acknowledgment that it was unaware of the nature of the policy, it follows that it was equally unaware whether the policy was still in effect or if it had cash value. Indeed, Vicki took the position at trial that the insurance policy had no value: “[T]hese . . . term life insurance policies . . . don’t have value. It’s contingent upon an act.” And she explicitly stated that the policy had no “cash value” and was limited to “[j]ust the death benefit.” Randall also took the position that the policy had “no value.” Neither the district court’s findings of fact and conclusions of law nor the parties’ briefs on appeal point to any record basis on which to base a conclusion that the insurance policy retained any value. Instead, all the value related to the policy—as far as the record indicates—was consumed during the marriage.[4]
¶10 Accordingly, Vicki was not entitled to reimbursement for the premiums for the simple reason that either she or the marital estate received the value—in the form of mitigating the risk in the event of Randall’s death—of the premiums she paid. Short of collecting on a claim, mitigation of risk is generally the very nature of the benefit one receives from insurance. Vicki may indeed be entitled to reimbursement if the premiums had enhanced the value of Randall’s estate to her exclusion. But on the record before us, the payment of the insurance premiums did not enrich Randall such that he continued to enjoy—to the exclusion of Vicki—the benefit of the premiums after the divorce. Or put another way, there is no record evidence that Randall “is retaining some sort of good purchased with the money” spent on the life insurance premiums. See In re Marriage of Fluent, No. 16-1321, 2017 WL 2461601, at *3 (Iowa Ct. App. June 7, 2017).[5] Rather, the only conclusion that the sparse evidence could sustain is that the “benefit” of the insurance premiums was received by Vicki during the corresponding terms of life insurance coverage. And this benefit consisted of protection from the risk associated with Randall’s potential death during each of the paid terms of the policy—a benefit that was consumed in each term. But after each paid term lapsed, Randall did not retain some benefit from the premiums—or at least there is no record evidence of a retained benefit. Thus, the premiums were not reimbursable to Vicki because she—or the marital estate—had already received the value of those premiums in the coverage the insurance policy provided on Randall’s life during the marriage.
¶11 Expressed differently, the premiums were a paid-for resource that had been consumed—like many household expenditures—during the marriage. And like the money paid for any other proper living expense incurred during a marriage, the money paid for the insurance premiums was not reimbursable upon divorce because the value of the expense associated with that item—in this case, assurance against risk provided by insurance premiums—was used up during the marriage. See Heckler v. Heckler, No. FA040084101S, 2005 WL 529940, at *1–2 (Conn. Super. Ct. Jan. 27, 2005) (denying, in a divorce proceeding, a husband’s request that his former wife reimburse him for “certain living expenses he paid on the wife’s behalf during the marriage”); see also Czepiel v. Allen, No. FA 9886060, 1999 WL 99097, at *1 (Conn. Super. Ct. Feb. 16, 1999) (“The court does not allow reimbursement for telephone bill expenses or other household expenses [that] were joint undertakings of their family . . . .”). The insurance premiums Vicki paid—even if they did proceed from her own earnings—were akin to the living expenses that are “part and parcel” of the daily marital undertaking. See Czepiel, 1999 WL 99097, at *2. As such, they were not reimbursable to her upon divorce as she had already received the value she bargained for in voluntarily assuming the expense of the premiums.
¶12 Thus, the expenditures for the insurance premiums fell into the category of normal living expenses voluntarily paid from marital assets, and they were not subject to reimbursement because they had been entirely exhausted and consumed in paying for a marital expense, namely, buying life insurance for Randall—from which Vicki would have benefited had Randall died during the term of the policy. See Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988) (“[I]n Utah, trial courts making ‘equitable’ property division pursuant to section 30-3-5 should . . . generally award property acquired by one spouse by gift and inheritance during the marriage (or property acquired in exchange thereof) to that spouse, together with any appreciation or enhancement of its value, unless . . . the property has been consumed . . . .” (emphasis added)); see also In re Marriage of Rolfe, 699 P.2d 79, 84 (Mont. 1985) (noting that the district court “erred in returning the value of” certain prenuptial property that had “long since been consumed” during the course of a fifteen-year marriage); In re Marriage of Fluent, 2017 WL 2461601, at *3 (determining that it was “inequitable” to require a wife to reimburse her former husband $74,000 of his own funds that he had voluntarily used during the marriage “to maintain the parties’ basic standard of living” and “for the benefit of both himself and his family, without providing any accounting for these expenditures or identifying any asset (beyond the marital home) into which the monies were allegedly spent” (cleaned up)).
¶13 Accordingly, the district court exceeded its discretion in ordering reimbursement where there was no evidence that Randall continued to benefit after the divorce from the previous payments of the premiums.
CONCLUSION
¶14 Because Vicki had already received the benefit of the insurance premiums she paid, we conclude that the district court exceeded its discretion in ordering Randall to reimburse Vicki $40,000 for the premiums.
[1] Our practice is to refer to parties by their first names when they share a last name.
[2] “On appeal from a bench trial, we view the evidence in a light most favorable to the trial court’s findings, and therefore recite the facts consistent with that standard.” Chesley v. Chesley, 2017 UT App 127, ¶ 2 n.2, 402 P.3d 65 (cleaned up).
[3] Insofar as Vicki attempts to cast the absence of the insurance policy as a failure of Randall to disclose it, we note that Vicki had the burden of producing evidence of the provisions of the policy in question. After Randall offered testimony of the policy’s cash value—testimony we note that Vicki appeared to agree with at trial when she characterized the policy as having no “value” apart from its value contingent on Randall’s death, see infra ¶ 9—Vicki had the burden of offering evidence of an alternative valuation. See Argyle v. Argyle, 688 P.2d 468, 470–71 (Utah 1984) (stating that if a party asserts that an asset should be valued by a different measure, then “the burden of offering further evidence on alternative methods of valuation” falls on that party); accord Beesley v. Beesley, 2003 UT App 202U, para. 2.
[e]ach premium payment gives rise to an enforceable contractual right of coverage for an additional period of time. As premiums are paid over the life of the policy, distinct property interests in coverage for various periods of time arise. Of those distinct property interests, only one is worth anything in hindsight: coverage for the term during which the insured dies.
In re Marriage of Burwell, 164 Cal. Rptr. 3d 702, 713 (Cal. Ct. App. 2013). “Prior terms of coverage only lack value in hindsight (i.e., when it is certain the contingency has failed). Prospectively, all coverage terms have at least expected value.” Id. at 713 n.12. Thus, here the policy had no value in the sense that the premium coverage periods had expired without the contingency occurring, and these are the very terms for which Vicki received reimbursement.
[5] It is unclear how the district court found that Randall benefited from the payment of premiums by allowing him to “perpetuate” the policy for “his newly named beneficiaries.” At best, this benefit identified by the court seems speculative because the court had explicitly stated that it did not have access to the policies and that it was “unclear whether these term life insurance policies were renewable by year, or after a number of years, or ended upon Randall’s death, or were terminated in the event of a divorce.”
[6] The court ordered Randall to pay Vicki a cash payment of $68,750 plus any gains realized from non-retirement accounts and IRAs. This amount consisted of equalizing payments of $23,658.50 for non-retirement assets, $2,913 for IRAs, $1,000 for gains on a non-retirement account, $1,250 for a half-interest in a burial plot, and $40,000 for the life insurance premium reimbursement. We note the sum of these values is $68,821.50, which is $71.50 more than the court’s addition yielded. On remand, the court should resolve this discrepancy.
DUANE CROFT KNOWLES, Appellant, v. CELIA FERN KNOWLES, Appellee.
Opinion
No. 20200032
Filed April 7, 2022
Second District Court, Farmington Department
The Honorable David R. Hamilton
No. 174700123
Julie J. Nelson and Alexandra Mareschal, Attorneys for Appellant
Emily Adams and Sara Pfrommer, Attorneys for Appellee
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES RYAN M. HARRIS and DIANA HAGEN concurred.
CHRISTIANSEN FORSTER, Judge:
¶1In 2016, Duane Croft Knowles and Celia Fern Knowles separated after nearly thirty years of marriage. During their separation, the district court awarded Celia1 temporary alimony and, after a bench trial, entered a final alimony award. Duane now appeals those awards, arguing the court abused its discretion in (1) declining to award him credit for purported overages he paid in temporary alimony, (2) calculating the parties’ expenses in determining the final alimony award, and (3) selecting the date to value the retirement accounts. We affirm in part and reverse in part and remand.
BACKGROUND2
¶2Duane and Celia were married in December 1989. They remained married for twenty-nine years, during which time they had six children. For the duration of the marriage, Duane worked as an optometrist and supported the family financially.
¶3In 2016, Duane and Celia separated. At that time, only two of the children were minors.3 Upon the parties’ separation, Celia remained in the marital home, which was paid off. Each month Duane used his income to pay the family’s bills and any remaining funds were then divided between the parties; in the initial months following their separation, Celia received $200 more per month than Duane, after which the excess was split 50/50. After several months of this informal arrangement, both parties filed motions for temporary orders, supported by financial declarations.
¶4In Celia’s financial declaration, she reported a nominal monthly income of $103.52 from her massage therapist side business but requested the court impute the minimum wage for full-time employment to her in the amount of $1,257 per month. Celia also declared that her monthly financial needs were $8,476.91. This total included, among other things, orthodontic expenses for one of the parties’ minor children and a monthly donation for tithing to Celia’s church.
¶5In Duane’s financial declaration, he reported a net monthly income of $9,671.08 from his job as an optometrist. Duane calculated his monthly expenses as $5,054.70 and included in those expenses a line-item for a tithing donation to his church.
¶6 The competing motions for temporary orders were reviewed before a commissioner in September 2017. Duane was ordered to pay Celia $3,797 in alimony each month, beginning in July 2017. The commissioner noted that “the issue of retroactive alimony prior to July 1, 2017,” would be “reserve[d]” and that Duane “shall receive credit for amounts he has paid [Celia] or on behalf of [Celia] during this time.” In calculating temporary alimony, the commissioner adjusted the stated monthly expenses for both parties, including eliminating the claimed monthly expense for tithing. The commissioner did not exclude, however, Celia’s claimed orthodontic expenses for the parties’ minor children.
¶7 Duane objected to the commissioner’s alimony recommendations, arguing that the commissioner had improperly calculated the parties’ needs by failing to “equalize the parties[’] standards of living” and “by failing to consider the parties[’] historical standard of living.” In addition, he argued that the temporary award should cover only the actual expenses of the parties and not “projected expenses” such as possible orthodontics for the parties’ ten-year-old child who did not yet have braces.
¶8Following briefing and argument on Duane’s motion, the district court sustained the commissioner’s recommendations as to the parties’ temporary expenses and incomes. In particular, the court noted that including the orthodontic expenses in calculating Celia’s needs “was not erroneous” because “[e]ven if orthodonti[cs] is not presently involved, it could occur in the immediate future.” However, the court agreed with Duane that some of Celia’s expenses were inflated and that alimony should be adjusted accordingly. The court then reduced the temporary alimony award from $3,797 to $2,809, with payments set to begin on July 1, 2017, the same day set by the commissioner in his initial order.4
¶9In 2019, two years after Duane filed for divorce, the parties went to trial. During the course of the two-day bench trial on financial issues, both parties testified, along with their respective experts.
¶10 Duane first challenged the district court’s award of temporary alimony, arguing that Celia’s financial declarations were not adequately supported and that she had failed to prove the marital standard of living and her actual needs. In support of this argument, Duane called as an expert a forensic accountant to testify regarding the parties’ marital standard of living. The expert first testified that prior to the parties’ separation in 2016, the monthly marital expenses for both parties together were $9,338, or $4,669 each. He then explained that Celia had requested $8,476.91 in her financial declaration but had been spending only around $4,755.02 per month. He also opined that, based on the parties’ historical spending, tithing donations to their church were part of the marital standard of living.
¶11In addition to challenging the amount of alimony, Duane asked the court to credit him $64,000 for what he characterized as an “overage” he paid in temporary alimony. In essence, Duane argued that the temporary alimony figure he had paid for approximately two years had been too high and asked the court to adjust that figure retroactively and award him the difference between what he had paid and what he should have paid. He argued that Celia had “intentionally dissipated the marital estate by overspending,” “over-inflat[ing] her needs,” and “refusing to work” despite having “the ability to work full time.”
¶12 Following trial, the district court entered its findings of fact and conclusions of law. Based on its analysis of the parties’ income and needs, the court awarded Celia $2,770 in permanent alimony per month moving forward.
¶13 In reaching that amount, the court first analyzed each party’s income. It calculated Duane’s monthly net income at $9,368, after averaging the prior four years of his annual income as stated in his tax returns. The court also imputed a monthly net income of $1,874 to Celia, finding that “she is voluntarily underemployed” and “capable of employment.”
¶14 The court then analyzed the needs of each party. It first declined to “award any donations or tithing for either party.” It reasoned that the tithing payments were “a religious preference” and “not a necessary living expense.”
¶15 Next, after examining Celia’s multiple financial declarations and other relevant evidence, the district court found that her post-divorce living expenses would be $5,382 per month. To reach this amount, the court excluded some of Celia’s claims for expenses, finding the supporting evidence “lacking, remote in time[,] and remote in detail.” But the court also added additional expenses for a future mortgage and for health insurance, which had not been included in Celia’s financial declarations.
¶16Finally, the court examined Duane’s financial declarations and supporting evidence and determined that his monthly post-divorce living expenses, excluding child support, would be $5,833. In so doing, the court excluded only “the expense of donations,” finding Duane’s other expenses “to be appropriate.”
¶17 After setting the amount of permanent alimony, the district court addressed both parties’ claims regarding alimony arrears and overpayments. Without addressing the merits of the parties’ arguments, the court summarily concluded that both parties had failed “to provide or to carry the weight of the evidence in their respective favor” and declined to credit Duane for any overpayments of temporary alimony.
¶18With respect to the parties’ retirement accounts, the court awarded each party “one-half of the value of the marital portion of the retirement accounts, . . . with a valuation date of August 2, 2019,” the date on which the court announced its oral ruling.
¶19 Following the district court’s oral ruling, Duane filed a document requesting further clarification on a number of issues, including, as relevant here, his taxpayer filing status and the valuation date of the retirement accounts. As to his taxpayer filing status, Duane noted that his “ability to pay should be reduced by $224/month as his taxable income will be higher” because of the change in his filing status following the divorce. As to the valuation date of the retirement accounts, Duane noted that the division date “should be the date of separation” and not the date of divorce.
¶20 In response to Duane’s request, the district court issued an order rejecting both arguments. First, it declined to change Duane’s taxpayer filing status, reasoning that Duane had not provided sufficient evidence to rebut its previous ruling. Second, it declined to change the valuation date of the retirement accounts. It acknowledged that “typically the date of division of retirement accounts is the date of divorce” but, due to the “totality of the circumstances” presented in this case, determined to use August 2, 2019 as the “date of division,” noting that the parties had not made “sufficient argument about a different division date being used.”
ISSUES AND STANDARDS OF REVIEW
¶21 Duane now appeals and raises three issues for our consideration. First, he contends that the district court erred “by failing to correct for overage paid in temporary alimony.” “District courts have considerable discretion in determining alimony and determinations of alimony will be upheld on appeal unless a clear and prejudicial abuse of discretion is demonstrated.” Burggraaf v. Burggraaf, 2019 UT App 195, ¶ 26, 455 P.3d 1071 (quotation simplified).
¶22 Second, Duane contends that the district court erred in calculating the amount of the permanent alimony award. Specifically, he argues that the court miscalculated the parties’ expenses by failing to include the tithing contribution each paid to their church, by “including an ongoing expense for orthodonti[cs],” and by “miscalculating [Duane’s] tax obligation.” We review a district court’s alimony determination for an abuse of discretion. See id. In determining alimony, a court exceeds its discretion if its alimony award “lacks a reasonable basis.” Redden v. Redden, 2020 UT App 22, ¶ 15, 461 P.3d 314.
¶23 Third, Duane contends that the district court erred by “setting an arbitrary valuation date for the retirement accounts rather than the date of separation.” “The [district] court in a divorce action is permitted considerable discretion in adjusting the financial and property interests of the parties, and its actions are entitled to a presumption of validity.” Rayner v. Rayner, 2013 UT App 269, ¶ 4, 316 P.3d 455 (quotation simplified). “Thus, we will not disturb a court’s distribution of marital property unless it is clearly unjust or a clear abuse of discretion.” Goggin v. Goggin, 2013 UT 16, ¶ 44, 299 P.3d 1079 (quotation simplified).
ANALYSIS
I. Overpayment of Temporary Alimony
¶24 Duane first contends that the district court abused its discretion by failing to credit him for what he considers to have been excess payments made to Celia pursuant to the court’s temporary alimony order. Duane argued below, and argues now on appeal, that the temporary alimony award was erroneous because Celia obtained it by submitting inflated and unjustified need claims that the district court rejected after hearing the evidence at trial. Specifically, he argues that the temporary award underestimated the amount of income to be imputed to Celia, relied on an inflated estimate of Celia’s needs, and included a triple award for the children’s medical expenses.
¶25 Celia first responds that Duane failed to preserve this issue below, with the exception of his claim regarding the triple award of medical expenses. She then asserts that Duane’s argument fails on the merits because his comparison of the temporary and final awards fails to account for changes in her circumstances during the two-year period between separation and trial. We turn first to the preservation argument and then address the merits.
A. Preservation
¶26 Celia asserts that Duane’s overpayment argument regarding her expenses and income is unpreserved because the argument Duane raised in the district court is based on an “entirely distinct legal theory” from the argument he raises on appeal. (Quotation simplified.) In the district court, Duane argued that he paid too much in temporary alimony because Celia had “dissipated the marital estate by overspending” and had refused to work. Celia asserts these arguments are distinct from the argument Duane raises here, which is that the temporary alimony award was overinflated because of adjustments to Celia’s alimony award made by the district court at the time of trial. We disagree with Celia’s characterization of the arguments and conclude that the issue was properly preserved.
¶27“Our preservation requirement is well-settled: we require parties to have raised and argued before the district court the issue that they raise and argue before us on appeal, and if a party does not, it has failed to preserve the issue.” True v. Utah Dep’t of Transportation, 2018 UT App 86, ¶ 23, 427 P.3d 338 (quotation simplified). “An issue is preserved for appeal when it has been presented to the district court in such a way that the court has an opportunity to rule on it.” State v. Rogers, 2020 UT App 78, ¶ 20, 467 P.3d 880 (quotation simplified). A party asserting error on appeal must have raised the issue before the district court “specifically, in a timely manner, and with support by evidence and relevant legal authority.” True, 2018 UT App 86, ¶ 24. “New arguments, when brought under a properly preserved issue or theory,” may be properly considered on appeal. Id. ¶ 32 (quotation simplified). “Such arguments include citing new authority or cases supporting an issue that was properly preserved.” State v. Johnson, 2017 UT 76, ¶ 14 n.2, 416 P.3d 443.
¶28 The arguments Duane raised repeatedly in the district court are, in fact, based on the same facts and legal theories as those he raises here. In the proceedings on temporary orders, Celia filed a financial declaration stating that her monthly need was $8,476.91, which was only $1,000 short of Duane’s entire net income. At that time, Celia was working a de minimis amount and had no expenses for health insurance or housing since she was residing in the paid-off marital home and receiving health insurance through Duane’s employment. The commissioner reduced some of Celia’s claimed expenses and imputed income to her based on full-time work at a minimum wage income and then recommended that Duane pay temporary alimony in the amount of $3,797 per month.
¶29 Duane objected to the commissioner’s recommendation, arguing that Celia’s requested amount far exceeded the marital standard of living. Duane requested that the district court immediately correct the inflated temporary alimony because he was concerned that the court would decline to correct it retroactively. The court agreed that some of Celia’s expenses were inflated and reduced the temporary award to $2,809. Dissatisfied with the court’s resolution of the issue, Duane filed a petition for interlocutory appeal with this court, again making the argument that the temporary alimony award was excessive because Celia’s claimed expenses were excessive. His petition was denied.
¶30 Having been only partially successful in urging the district court to reduce the temporary award before trial, Duane again challenged the temporary award at trial. Indeed, Duane maintains that much of his motivation to take the case to trial— rather than to settle out of court—was to have the temporary alimony award corrected. Duane filed a trial brief in which he argued that he should be credited for any overage he had paid in temporary alimony and that temporary alimony should be “reduced retroactively as it was incorrectly applied.” Specifically, Duane argued that Celia had “over-inflated her needs” and “misled the [c]ourt with her financial declaration.” After the district court announced its preliminary oral ruling, Duane argued in post-trial briefing that the court should award him a judgment for “alimony that was over-paid during the temporary orders.” And at oral argument on the post-trial issues, Duane again argued that “[t]he temporary order created a substantial inequity between the parties” and that he should be given a judgment for the amounts he overpaid. The court noted Duane’s argument but declined to analyze the merits of his arguments or credit him for any overpayment.
¶31 In short, Duane repeatedly argued below that the temporary alimony award was wrong for two broad reasons. First, he claimed that it was wrong due to Celia’s allegedly overstated expenses. Second, he claimed that it was wrong due to Celia’s allegedly understated earning capacity. Duane sought credit for these overages based on his argument that the evidence presented at trial failed to support the temporary award. This is the same argument that Duane advances here. The fact that Duane now illustrates the issue by pointing to the discrepancies between the temporary alimony order and the final alimony award (and noting the adjustments made to the final award to account for Celia’s increased expenses for housing and health insurance) does not change the essence of Duane’s argument. We therefore conclude that Duane adequately preserved the issue for our consideration.
B. Temporary Awards
¶32 Utah Code section 30-3-3(3) authorizes an award of temporary alimony “to provide money, during the pendency of the action, for the separate support and maintenance of the other party and of any children in the custody of the other party.” Utah Code Ann. § 30-3-3(3) (LexisNexis Supp. 2021). Although orders providing for temporary support are operative during the pendency of the divorce proceeding, they are not final orders from which an appeal of right may be taken. Rather, as interlocutory orders, they are subject to continuing review and modification by the district court until the issuance of a final judgment. See IHC Health Services, Inc. v. D & K Mgmt., Inc., 2008 UT 73, ¶ 27, 196 P.3d 588 (recognizing the broad discretion of district courts to reconsider and modify interlocutory rulings before final judgment).
¶33 Although district courts have discretion in fashioning temporary orders, temporary alimony is subject to the same requirements as a regular alimony award. See Dahl v. Dahl, 2015 UT 79, ¶¶ 85–98, 459 P.3d 276 (describing factors applied to temporary alimony and concluding the district court did not abuse its discretion in denying temporary alimony when wife failed to provide documentation of her needs). As is the case with awards of permanent alimony, temporary alimony awards must “follow[] logically from, and [be] supported by, the evidence.” Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 13, 80 P.3d 153 (quotation simplified).
¶34 Because of their nature, however, temporary awards are often based on limited evidence. Typically recommended by a domestic relations commissioner after a brief proffer hearing based largely on the financial declarations submitted by the parties, see Utah R. Jud. Admin. 6-401(2)(H), such temporary orders may result in awards that are not supported by the more substantial evidence presented at a later trial. For this reason, district courts have the authority to revisit temporary orders and, if warranted, retroactively modify them in the final divorce decree. See Utah Code Ann. § 30-3-3(4); id. § 30-3-5(4); id. § 78B12-112(4) (2018); Miner v. Miner, 2021 UT App 77, ¶ 101, 496 P.3d 242; McPherson v. McPherson, 2011 UT App 382, ¶¶ 12, 17, 23, 265 P.3d 839.
¶35 This court’s opinion in McPherson illustrates this point and is instructive here. There, husband appealed the district court’s denial of his request for a retroactive modification of his temporary alimony obligation. McPherson, 2011 UT App 382, ¶ 10. The court had based its initial temporary award on the recommendation of the domestic relations commissioner who, in turn, had based it on husband’s salary at the time of the initial support hearing. Id. ¶¶ 3, 5. When the court entered the temporary award, it was unaware that husband had since been fired from his job. Id. ¶ 5. Husband thereafter moved to amend the temporary order to recalculate his child support and alimony obligations in accordance with his then-decreased salary. Id. ¶ 7. The court denied the motion, reasoning that husband’s decreased salary was likely the result of his voluntary underemployment. Id. Following a bench trial, however, the court reversed course, finding that husband was not voluntarily underemployed. Id. ¶ 19. It therefore reduced husband’s future support obligations. Id. But it nevertheless denied husband’s request for a retroactive modification of his temporary support obligations, reasoning there was “no basis in law, fact, or equity to retroactively reduce the amounts.” Id. (quotation simplified).
¶36 On appeal, this court reversed and remanded with instructions for the district court to modify the temporary alimony award retroactively. Id. ¶ 24. While recognizing the considerable discretion district courts possess in determining alimony, we emphasized that such awards must be supported by an explanation based on the evidence. Id. ¶ 23. Because the temporary alimony award was based on the erroneous assumption (later rejected by the district court) that husband was voluntarily underemployed, there was no justification for the higher award. Id. ¶ 21. This court held that the district court abused its discretion by failing to retroactively modify husband’s temporary support obligations, reasoning that “[e]ven if the commissioner’s recommendations seemed well founded at the time of the hearings, once the premise of that decision was proved inaccurate, there was no reasoned basis to impose temporary support obligations that were mathematically impossible for [h]usband to pay.” Id. ¶ 23.
¶37Like the husband in McPherson, Duane argues the district court abused its discretion when it failed to credit him for temporary alimony payments that were higher than the amount the court determined was appropriate after hearing the evidence at trial. We therefore consider whether the district court’s refusal to modify the temporary alimony award was supported by its factual findings and rulings at trial.
¶38Duane identifies $62,627 in alleged discrepancies between the district court’s award of permanent alimony based on the trial evidence and its award of temporary alimony based on the proceedings before the commissioner. These consist of discrepancies between (1) Celia’s imputed income ($16,255 in overage); (2) Celia’s needs ($38,250 in overage); and (3) the amount awarded for medical expenses ($8,152 in overage). While Celia argues that these discrepancies are readily explainable, the district court offered no such explanation. Despite Duane’s request for reimbursement of what he argued was excessive temporary alimony, the court summarily declined to reconcile the differences, stating only that “neither party submitted sufficient evidence for arrears or overages.” But the district court’s summary refusal to consider the merits of the issue on the basis of insufficient evidence does not suffice, because the evidence supporting Duane’s request for reimbursement of asserted overages was the very same evidence that supported the court’s award of permanent alimony.5 Indeed, the court’s explanation for its refusal to address the discrepancies between the temporary and final award is no more sufficient than the McPherson court’s conclusory statement that there was “no basis in law, fact, or equity to retroactively reduce the amounts.” See 2011 UT App 382, ¶ 19 (quotation simplified). We therefore turn to the alleged discrepancies Duane identifies.
Celia’s Imputed Income
¶39 An alimony award must account for the ability of the recipient spouse to support themselves. See Utah Code Ann. § 30-3-5(9)(a)(ii) (LexisNexis Supp. 2021). At the temporary stage, the court imputed $1,225 in net income to Celia. But at trial, the court agreed with Duane and found that Celia was “voluntarily underemployed” and “capable of employment.” Based on the testimony presented at trial, the court imputed to Celia $1,874 per month in net income, which represented an increase of $649 per month over the amount imputed in the temporary award. And the court made no finding suggesting that Celia could not have earned that amount during the pendency of the proceedings, or otherwise justifying the discrepancy between the temporary order and its findings at trial. The court should have considered whether Celia had the same earning capacity during the separation.
Celia’s Needs
¶40 An alimony award also must account for the financial condition and needs of the recipient spouse. See id. § 30-3-5(9)(a)(i). At the temporary stage, when Celia was residing in the paid-off marital home and receiving health insurance through Duane’s employment, the court found that Celia had monthly expenses (needs) of $5,370. After imputing a monthly net minimum wage of $1,225 to Celia and giving Duane credit for $1,336 in monthly child support payments, the court entered a temporary alimony award of $2,809 per month.
¶41 At trial, however, the court found that evidentiary support for Celia’s expenses was “lacking, remote in time,” “remote in detail,” and “artificial.” It therefore disallowed many of her claimed expenses. It then added a monthly mortgage expense of $1,015 to account for the fact that Celia would be required to refinance the marital home to cash out Duane’s equity. It also added a monthly health insurance expense of $503 because Celia would no longer be eligible for insurance through Duane’s employer after the divorce. Following these adjustments, the court made a finding that Celia’s monthly post-divorce expenses were $5,382. Excluding the post-divorce adjustments for housing and health insurance, the permanent award based on the trial evidence was $1,530 per month less than the temporary award or a total of $38,250 over the twenty-five months that Duane paid support pursuant to the temporary order. Duane argues that the district court erred in failing to award him this overage.
¶42 Celia argues that this court should reject Duane’s argument because he failed to marshal the evidence supporting the district court’s permanent award. She argues that Duane disregarded the evidence supporting her need for support after “the collapse of her 27-year marriage where she was largely a stay-at-home parent.” But marshalling is not required, because Duane has not raised a sufficiency argument or challenged the district court’s factual findings. And Celia has not explained why the length of the marriage or her status as a stay-at-home parent justifies the discrepancies in the amount of the temporary and final awards, since these issues are properly considered in determining the length of the alimony award and the level of income to impute to the receiving spouse. See id. § 30-3-5(9)(a)(ii), (iv).
¶43 Celia next argues that Duane is committing a logical fallacy of false equivalence by comparing the temporary and final alimony awards because there are significant differences between the two kinds of awards. She posits that a spouse’s needs, ability to produce income, and support of minor children may change from the time a court orders temporary alimony to the time of the final award and suggests that this is the explanation for the discrepancies here. She asserts that she was able to earn more income as time went on because her children were growing and their medical needs had decreased. She therefore suggests the district court determined she could earn more after the divorce was final than during its pendency. A court could conceivably find that a party is able to earn more at the time of trial than at the time of temporary orders. But the court made no such finding here, and we note that at no point during the temporary proceedings did Celia argue that the children’s medical needs prevented her from working. Indeed, the commissioner imputed her minimum wage for full-time work, and the district court found that Celia was voluntarily underemployed and flatly rejected her argument that she could not work because of the children’s medical needs.
¶44Finally, Celia argues that Duane’s line-by-line comparison
of the temporary and permanent awards is misleading because an alimony award is based on a more generalized determination of the amount necessary for both parties to maintain the standard of living that they enjoyed prior to the divorce. Because the temporary award ($2,809) was only $39 higher than the final award ($2,770), Celia maintains that the court’s failure to make an adjustment could not have been an abuse of discretion. But this argument ignores the adjustment made to the temporary award to account for mortgage and health insurance expenses.6 And more importantly, it is at odds with the district court’s express finding that evidentiary support for Celia’s claimed expenses was “lacking, remote in time,” “remote in detail,” and “artificial.” The court should have considered the merits of Duane’s arguments regarding these discrepancies to determine whether a modification of the temporary alimony award was in order.
Medical Expenses
¶45 Duane also argues that the temporary alimony award erroneously included a triple award of medical expenses. The temporary orders awarded Celia approximately $400 per month for medical expenses for the parties’ children, as well as half the funds in the parties’ health savings account (HSA). In addition, the temporary orders required that Duane pay for half the children’s medical costs. Duane reasons that Celia should not have been awarded the $400 per month for medical expenses and half of the HSA account, because he was already required to pay for half of the children’s medical costs. And he argues this inequity was exacerbated at trial when the court awarded Celia an additional lump sum for orthodontic expenses and miscellaneous out-of-pocket medical expenses. Duane seeks a credit in the total amount of $8,152.
¶46 Celia disputes Duane’s claim, arguing that Duane has failed to demonstrate that the money she was awarded for medical expenses exceeded the actual needs of the family. She also points to the district court’s finding that she had established the amount of the medical expenses with receipts and testimony not refuted by Duane, and that the award was to be paid from the HSA, not in addition to it.
¶47Duane responds that Celia is confusing the district court’s award for medical expense arrearages with the ongoing expenses included in calculating Celia’s need. He explains the court included approximately $400 per month in medical expenses in calculating Celia’s expenses, awarded Celia half the HSA account, and then duplicatively ordered Duane to pay for half the children’s medical expenses during the temporary orders period. After trial, Celia was awarded $150 per month in health care expenses and Duane was awarded the entire HSA amount. As was the case with Duane’s claim to recover overages associated with Celia’s allegedly inflated expenses and underemployment, the district court did not engage with Duane’s arguments that the temporary alimony award was $541 too high, stating only that it “had previously ruled that [Celia] is entitled to an award of medical expenses” and that it would “not modify its previous ruling.” There was no legal justification for the court’s refusal to examine the merits of Duane’s claim.
Remand
¶48Temporary support orders are interlocutory in nature and therefore subject to continuing modification by the district court through the date of the final decree. Because they are often based on proffers that may differ from the actual evidence presented at trial, such temporary orders may result in awards that are not supported by the evidence presented at a later trial. For this reason, district courts have not only the authority, but the obligation, to revisit temporary orders when requested and, if warranted, to “true-up” or retroactively modify them to comport with the evidence.
¶49While district courts retain broad discretion in fashioning support orders in divorce proceedings, they are obligated to analyze a timely claim by a party seeking to true-up a temporary support order with the evidence received at trial. This true-up process consists of a two-part exercise. If a true-up is timely requested, the court should first make factual findings relevant to the temporary award to determine whether it was supported by the evidence. If the court finds, after hearing all the evidence presented at trial, that the temporary order was inappropriate, then the court should proceed to the second step: determining whether a true-up is warranted in the case at hand. In many cases, a party who has demonstrated that a temporary order was inappropriate and unsupported by the more comprehensive evidence presented at trial will be entitled to a retroactive modification of that order. See McPherson v. McPherson, 2011 UT App 382, ¶¶ 21–24, 265 P.3d 839. But in some cases, a court may find that such retroactive modification is inappropriate or inequitable, notwithstanding an inaccuracy or error in the temporary order. In making the determination whether to order a true-up, a court should identify the considerations bearing on its decision and should enter careful findings explaining the basis for that determination.
¶50Here, Duane was entitled to have the district court engage on the merits in determining whether he was entitled to a true-up. As we have discussed, Duane repeatedly asked the district court to consider his contention that the temporary alimony award was too high and timely sought an offset based on the evidence presented at trial. At trial, the court concluded that Celia should be imputed more income than was included in calculating the temporary alimony. It also found that Celia’s claimed expenses were lacking in evidentiary support. But it failed to analyze, explain, or reconcile the discrepancies between the numbers used to calculate the temporary and final alimony orders. It similarly failed to engage in or analyze Duane’s claim that both the temporary and final alimony orders had duplicated the award for the children’s medical expenses. This was an abuse of its discretion. We therefore remand the matter to the district court to complete the first step of the true-up process by making appropriate factual findings relevant to the temporary award to determine whether it was supported by the evidence. If the court finds the temporary order was overinflated, it must then determine whether a true-up is warranted. And it should also consider Duane’s claim that both the temporary and final alimony awards included a triple award of the children’s medical expenses.
II. Calculation of the Final Alimony Award
¶51Duane next contends that the district court erred, in three ways, in calculating the final alimony award: (1) it did not consider tithing paid to the parties’ church as consistent with the marital standard of living, (2) it failed to consider Duane’s post-divorce tax bracket, and (3) it included orthodontics as a permanent expense. We address each argument in turn.
A. Tithing
¶52 Duane argues that the district court miscalculated his ability to pay alimony by excluding expenses that it deemed unnecessary. According to Duane, the court analyzed whether the parties’ claimed expenses were “necessary,” rather than whether they were consistent with the “marital standard of living.” (Quotation simplified.) After doing so, it determined that tithing paid to the parties’ church was not a necessary obligation and therefore excluded it from Duane’s list of expenses, thus inaccurately increasing his ability to pay.
¶53 When setting an alimony award, the district court must consider a number of statutory factors, including “the financial condition and needs of the recipient spouse,” “the recipient’s earning capacity or ability to produce income,” and “the ability of the payor spouse to provide support.” Utah Code Ann. § 30-35(9) (LexisNexis Supp. 2021). “Furthermore, the award should advance, as much as possible, the purposes of alimony by assisting the parties in achieving the same standard of living they enjoyed during the marriage, equalizing the parties’ respective standards of living, and preventing either spouse from becoming a public charge.” Hansen v. Hansen, 2014 UT App 96, ¶ 6, 325 P.3d 864 (quotation simplified).
¶54 In adhering to these principles, this court has described the proper process to be followed by courts when awarding alimony:
First, the court must assess the needs of the parties, in light of their marital standard of living. Next, the court must determine whether the receiving spouse is able to meet [their] own needs with [their] own income. If the court finds that the receiving spouse is unable to meet [their] own needs with [their] own income, the court must then assess whether the payor spouse’s income, after meeting [their own] needs, is sufficient to make up some or all of the shortfall between the receiving spouse’s needs and income.
Redden v. Redden, 2020 UT App 22, ¶ 21, 461 P.3d 314 (quotation simplified). If the court determines after conducting this analysis “that there are insufficient resources to meet the baseline needs established by the marital living standard, the court should then equitably allocate the burden of the shortfall between the parties.” Rule v. Rule, 2017 UT App 137, ¶ 22, 402 P.3d 153.
¶55As an initial matter, the court must assess the needs of the parties not by applying its own sense of which expenses are truly necessary but, instead, by examining whether their claimed expenses are consistent with the standard of living the parties established during the marriage. See id. ¶ 15. This assessment is fact-sensitive and individualized and must be limited to a determination of whether the claimed needs are “based on the parties’ historical standard of living.” See Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 12, 80 P.3d 153; see also Anderson v. Anderson, 2018 UT App 19, ¶ 31, 414 P.3d 1069 (defining “standard of living as a minimum of necessities, comforts, or luxuries that is essential to maintaining a person in customary or proper status or circumstances” and “disavow[ing] the notion that standard of living is determined by actual expenses alone” (quotation simplified)). Indeed, it is not the job of the district court to “appl[y] its own sense of what was reasonable under the circumstances.” See Dobson v. Dobson, 2012 UT App 373, ¶ 29, 294 P.3d 591.
¶56 In comporting with this principle, this court has upheld alimony awards that included unique expenses—even expenses some observers might deem frivolous or unnecessary—where such expenses were consistent with the marital standard of living. See, e.g., Miner v. Miner, 2021 UT App 77, ¶¶ 22, 26, 44, 496 P.3d 242 (awarding receiving spouse, among other things, $1,000 per month for “tennis-related expenses,” $625 per month for “entertainment,” and $5,000 per month for horse care and maintenance where each expense was a historical marital expense supported by the evidence). Moreover, courts may infer that “the parties’ current expenses were based on the marital standard of living when the majority of the expenses in the [payor spouse’s] current financial declaration are identical in amount to those identified as marital expenses in the [receiving spouse’s] current financial declaration.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 48, 449 P.3d 202 (quotation simplified); see id. (finding that receiving spouse’s request for $300 per month for donations and gifts was reasonable “[i]n light of the fact that the court allocated the same amount for each party to spend on donations and gifts”). Accordingly, as long as a party’s claimed expenses are consistent with the marital standard of living, are based on sufficient factual findings, and advance, as much as possible, the purposes of alimony, such expenses should be included in the “needs” calculation.
¶57 The district court did not follow this process here, however. In setting the alimony award, the court did not analyze whether the parties’ tithing payments were an expenditure consistent with the marital standard of living. Instead, the court declined to “award any donations or tithing for either party” based on its finding that “tithing is a donation and . . . not a necessary living expense.” We agree with Duane that in so doing, the court eliminated the expense based on a subjective needs judgment that ignored the requirement that it assess the expense based on how the parties chose to spend and allocate their money while married. See Bakanowski, 2003 UT App 357, ¶ 12. And here, the parties presented evidence that their historical standard of living consistently included paying tithing to their church.7 By failing to assess whether the parties’ expenditures were consistent with the marital standard of living, the court abused its discretion. Accordingly, we reverse the court’s determination on this point and remand for the court to reassess the tithing expense following the process detailed above. The court should make a finding as to whether tithing was included in the parties’ marital standard of living and, if it was, should account for that expense in calculating alimony.8 If inclusion of tithing in the calculation results in a shortfall, the shortfall should be equitably allocated between the parties.
B. Tax Status
¶58Duane next argues that the district court miscalculated his ability to pay because it failed to consider his post-divorce tax obligation. When awarding alimony, the district court must consider “the ability of the payor spouse to provide support,” Utah Code Ann. § 30-3-5(9)(a)(iii) (LexisNexis Supp. 2021), which “includes consideration of the payor spouse’s tax obligations,” McPherson v. McPherson, 2011 UT App 382, ¶ 13, 265 P.3d 839.
¶59The court calculated Duane’s ability to pay by averaging “the last four years” of his net income as listed in his historical tax returns. Based on those returns, the court determined that Duane’s tax obligation would be $24,335.77. In making this determination, the court failed to consider that during each of those years the parties’ filing status was married filing jointly, but that after the divorce Duane’s filing status would—at least for a time—be single or head of household, which would increase his tax obligation. Because the court failed to properly consider Duane’s tax obligation, we reverse and remand for it to recalculate Duane’s post-divorce tax obligations.
C. Orthodontics
¶60 Duane next argues that the district court “mistakenly included $112 per month for orthodonti[cs] in the alimony award.” He contends that this award is improper because (1) no evidence supported an orthodontics expense “that will endure for the entire . . . length of the alimony,” (2) he already pre-paid orthodontics as part of temporary alimony, and (3) he was already ordered to pay half the children’s medical expenses. As previously discussed, the temporary alimony award included $167 per month for orthodontic expenses for the parties’ ten-year-old child who was not yet wearing braces. Duane sought an offset for this amount against the final alimony award and further argued that the alimony award for orthodontic expenses was duplicative in light of the court’s separate order that Duane pay half of the children’s medical expenses. But the district court declined to address Duane’s arguments. Because we have remanded these issues for further consideration, we need not resolve at this juncture Duane’s claims regarding the orthodontics expenses. Rather, we direct the district court to reexamine the issue and articulate the factual and legal basis for its decision.9
III. Valuation Date for the Retirement Accounts
¶61 Finally, Duane argues that the district court abused its discretion by assigning a valuation date to the parties’ retirement accounts that was “long after the date of separation, yet not the date of divorce.”
¶62“Generally, the marital estate is valued at the time of the
divorce decree or trial.” Jacobsen v. Jacobsen, 2011 UT App 161, ¶ 39, 257 P.3d 478 (quotation simplified). However, “a court has broad discretion to value the parties’ marital assets at a different time, such as that of separation, if it determines that the circumstances so warrant.” Petrzelka v. Goodwin, 2020 UT App 34, ¶ 47, 461 P.3d 1134. “[A]ny deviation from the general rule must be supported by sufficiently detailed findings of fact that explain the [district] court’s basis for such deviation.” Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct. App. 1993).
¶63 In this case, the parties separated on May 24, 2016. In 2019, the matter proceeded to a multi-day bench trial that took place between January and April. The court delivered its oral ruling on August 2, 2019. In that ruling, the court addressed the division of the parties’ retirement accounts, ordering that they “be divided . . . 50/50 to each party, effective . . . today, . . . August the 2nd.” Approximately four months later, on December 11, 2019, the court reduced its oral ruling to writing.
¶64Duane contends that the valuation date set by the district court is “arbitrary” and not supported by sufficient findings. He maintains that the court should have set the valuation date as the date of separation. We disagree.
¶65 The valuation date was not arbitrary; it was in fact consistent with the general rule that “the marital estate is valued at the time of the divorce decree or trial.” See Jacobsen, 2011 UT App 161, ¶ 39 (quotation simplified). Here, the court set the valuation date as August 2, 2019—the same date on which it delivered its oral ruling at the close of trial. Because the court followed the general rule of setting the valuation date at the time of trial, it was not required to articulate any additional findings of fact explaining its decision. See id.
¶66 Moreover, the district court was not presented with sufficient evidence to justify a departure from the general rule. After the court’s oral ruling, Duane filed a motion to alter or amend arguing, among other things, that the date of separation should be used as the valuation date because Celia did not contribute to the retirement accounts during the period between the separation and the date of the divorce and therefore should not benefit from the increase in its value.
¶67The court considered Duane’s motion and issued an order upholding its choice of valuation date. It explained that “due to the totality of the circumstances a firm date of August 2nd, 2019 is the date of division of the retirement assets. The Court finds that there was not sufficient argument about a different division date being used.” Given the lack of argument as to an alternative valuation date, the court had no option other than to set the date as the date “of the divorce decree or trial.” See id. (quotation simplified). Duane does not persuade us that the district court acted outside the bounds of its discretion in setting the valuation date for the retirement accounts.
CONCLUSION
¶68 The district court abused its discretion by failing to meaningfully address Duane’s argument that based upon the court’s own post-trial findings, he was entitled to an offset for overages paid in temporary alimony, including offsets arising from the amount of Celia’s imputed income and inflated expenses. The district court similarly erred in failing to consider Duane’s arguments regarding the award of medical expenses, including orthodontics. The district court also abused its discretion when calculating Duane’s ability to pay permanent alimony by excluding tithing as part of the marital standard of living and by underestimating Duane’s post-divorce tax obligation. But we affirm the court’s valuation date for the parties’ retirement accounts. We therefore reverse the district court’s alimony award and remand the matter to the court for reconsideration of the alimony award in accordance with this opinion.
JUDGES GREGORY K. ORME and MICHELE M. CHRISTIANSEN
FORSTER concurred. HAGEN, Judge:
¶1 During their thirty-four years of marriage, Dean and Janice Erickson acquired substantial assets, including a veterinary pharmaceutical business.[1] But, in anticipation of their divorce, Janice engaged in an intentional scheme to dissipate those assets and devalue the marital estate. Solely because of Janice’s misconduct, the district court appointed a receiver, ordered a valuation of the couple’s business, and sanctioned Janice with the obligation to pay all Dean’s attorney fees and costs.
¶2 Janice now contends that the court erred when it failed to deduct her personal goodwill when calculating the value of the couple’s business, excluded her rebuttal expert on valuation, and imposed sanctions against her that were greater than the injury her misconduct caused Dean. We affirm on the first two issues and remand on the third.
¶3 Dean filed for divorce from Janice in early 2017. The couple’s marital estate consisted of substantial assets, including a veterinary pharmaceutical business, Meds for Vets, LLC (Meds). Meds “is a pharmaceutical compounding business with many employees.” The company “does the majority of its business online through its website” and sells “to customers throughout the country.” At the time of the divorce, Meds employed three pharmacists who held the necessary licenses to conduct the business. Janice was one of those pharmacists and held “the majority of the licenses.” Janice also functioned “as the sole manager and chief executive officer of Meds.”
¶4 Around the time Dean filed for divorce, Janice entered into a series of fake business contracts with a friend for the purpose of dissipating marital assets. Dean moved the court for a temporary restraining order, asking the court to appoint a receiver for Meds. The court denied the temporary restraining order but appointed a receiver for Meds in an effort “to prevent further irreparable injury/harm to the marital estate through waste/dissipation of marital assets.” At the recommendation of the receiver, Janice was allowed to continue her role in the company due to her “familiarity with the industry, regulatory environment and existing relationship[] with the customer base . . . so as to not disrupt [Meds’] operations and employees.”
¶5 In addition to the oversight of Meds, the receiver had authority to conduct an “investigation concerning whether and how the joint marital assets . . . were used or misused and how to effectively separate the parties and their marital estate in all business regards.” In its final report to the court, the receiver concluded that Janice had dissipated known marital assets totaling $2,247,274. Janice accomplished that feat, in part, by unilaterally entering into a fraudulent “business relationship which resulted in a substantial and ongoing dissipation of marital assets.”
¶6 The receiver was also charged with “perform[ing] a valuation of the normalized operation of Meds.” The final report included a business valuation placing Meds’ value at $1,560,000. The valuation report explained the different factors considered, including “whether or not the enterprise has goodwill or other intangible value.” Ultimately, the valuation did not include any amounts associated with goodwill.
¶7 The court scheduled a trial on December 2, 2019, the Monday after the Thanksgiving holiday, to determine the final division of the marital estate. The pretrial disclosure deadline was set for November 4, but Janice moved to extend the deadline. The court granted her motion, extending the deadline to Tuesday, November 26 at 5:00 p.m.
¶8 Just before 5:00 p.m. on November 26, Janice filed a disclosure that identified a valuation expert she intended to call as a rebuttal witness. But she did not serve the disclosure on Dean’s attorney until after the deadline had passed. In addition, she did not provide the expert’s report to Dean’s attorney until the afternoon of Wednesday, November 27—the day before Thanksgiving and less than five days before trial.
¶9 On the first day of trial, Janice asked to call her valuation rebuttal expert as the first witness because it was the only day he was available to testify. Dean objected to the admission of the expert’s testimony because it was untimely disclosed, giving Dean insufficient time to prepare. The court allowed Janice to call the expert out of order and reserved its ruling on Dean’s objection until after the expert testified. During his testimony, the expert opined that the receiver’s valuation had overstated Meds’ value as an ongoing business by improperly considering Janice’s personal goodwill.
¶10 The court ultimately excluded the expert’s testimony based on Janice’s untimely disclosure. See Utah R. Civ. P. 26(d)(4) (“If a party fails to disclose or to supplement timely a disclosure or response to discovery, that party may not use the undisclosed witness, document, or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.”) The expert had testified that it had taken him only a few weeks to prepare his report, but that Janice had not hired him until shortly before trial. Accordingly, the court found that Janice “had ample opportunity to seek an independent valuation of the marital businesses at her own expense” and noted that it had “addressed this issue with [Janice] several times.” The court further found that Dean had an “understandable inability to be able to fully address [that information] in the limited time that remained prior to trial.”
¶11 The court alternatively ruled that even if it had not excluded Janice’s valuation rebuttal expert as untimely, his testimony was unpersuasive. The court rejected the expert’s opinion, based on Janice’s own representations, that Meds’ value was dependent on Janice’s personal goodwill. The court noted that Utah case law generally associates personal goodwill with “sole proprietorships essentially run by one person” and that such businesses are not “comparable to the situation here with [Meds].” The court also found that it had “not been provided any evidence from which [it could] draw a conclusion that [Janice’s] presence at [Meds], given the point to which its grown, is essential for that business to continue, given the number of employees and the extent of the operations that it has.”
¶12 After trial, the court entered a supplemental decree regarding the division of marital assets. The court “affirm[ed] and accept[ed] all recommendations, valuations, findings, and conclusions contained” in the receiver’s reports, unless the decree stated otherwise, “and incorporate[d] them by reference” into the decree, including the receiver’s $1,560,000 valuation of Meds.
¶13 Due to Janice’s “intentional efforts to dissipate marital assets,” the court also assigned the cost of the receivership and Dean’s attorney fees to Janice as a sanction for contempt and other misconduct. The court found that Janice’s behavior was sanctionable because she “engaged in substantial dissipation of marital assets” that was, “in some cases, in direct violation of this Court’s orders.” Indeed, “the approximately $2.5 million [she] dissipated . . . was one of the largest, if not the largest, blatant dissipation of marital assets the Court ha[d] ever seen.”
¶14 With respect to Dean’s legal fees, the court found that Janice’s contemptuous conduct forced Dean to incur “extraordinary legal costs in enforcing Court orders and attempting to track down and preserve marital assets” and that a “substantial amount of additional work [was] required to address the dissipation issues in this case” because of Janice. The court found that it was therefore appropriate and equitable to assign all Dean’s attorney fees to Janice because “[t]he lion’s share of [Dean’s] legal costs were incurred in connection with issues surrounding the dissipation of marital assets and the nefarious conduct engaged in by [Janice] in this case.”
¶15 More than three months after trial, Janice filed a motion for new trial pursuant to rule 59 of the Utah Rules of Civil Procedure, arguing that there was irregularity in the trial proceedings, that there was insufficient evidence to support the valuation of Meds, and that the court erred in awarding Dean attorney fees. The court dismissed that motion as untimely without reaching the merits.
ISSUES AND STANDARDS OF REVIEW
¶16 Janice now appeals, raising three issues. First, she contends the district court erred in the value it assigned to Meds because it failed to exclude the value of her personal goodwill. A district court is “entitled to a presumption of validity in its assessment and evaluation of evidence, and we defer to the district court’s findings of fact related to property valuation and distribution unless they are clearly erroneous.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 10, 440 P.3d 757 (cleaned up).
¶17 Second, she contends the court erred in excluding her valuation rebuttal expert as a sanction for untimely disclosure. “We review a district court’s decision [to impose] sanctions under rule 26(d)(4) for an abuse of discretion.” Segota v. Young 180 Co., 2020 UT App 105, ¶ 10, 470 P.3d 479 (cleaned up). We will find abuse of discretion where there exists an erroneous conclusion of law or “where there is no evidentiary basis for the trial court’s ruling.” Arreguin-Leon v. Hadco Constr. LLC, 2018 UT App 225, ¶ 15, 438 P.3d 25 (cleaned up), aff’d 2020 UT 59, 472 P.3d 927.
¶18 Third, she contends that the court erred when it ordered her to pay all Dean’s attorney fees and costs, rather than limiting the award to the amounts caused by her sanctionable conduct. “Both the decision to award attorney fees and the amount of such fees are within the sound discretion of the trial court.” Taft v. Taft, 2016 UT App 135, ¶ 86, 379 P.3d 890 (cleaned up).
ANALYSIS
I. The Valuation of Meds
¶19 In her challenge to the district court’s valuation of Meds, Janice argues that the court failed to consider the value of her personal goodwill.[3] “When valuing a business in marriage dissolution cases, district courts must consider whether goodwill is institutional or personal to one spouse.” See Marroquin v. Marroquin, 2019 UT App 38, ¶ 15, 440 P.3d 757. Goodwill is personal when the business “is dependent for its existence upon the individual who conducts the enterprise and would vanish were the individual to die, retire or quit work.” Stevens v. Stevens, 754 P.2d 952, 956 (Utah Ct. App. 1988). Personal goodwill is based on an individual’s “reputation for competency.” Marroquin, 2019 UT App 38, ¶ 15. And unlike institutional goodwill, personal goodwill is not subject to distribution in the marital estate. Id.
¶20 Janice contends that the district court erred as a matter of law by failing to consider whether the value of the business depended on goodwill that was personal to her and thus not divisible. We disagree. The district court did consider goodwill in valuing the business, but specifically found that there was no personal goodwill associated with Meds. Unless the court clearly erred, we presume this assessment is valid and we defer to its findings. See id. ¶ 10.
¶21 In finding that there was no personal goodwill associated with Meds, the court rejected Janice’s contention that Meds was comparable to a sole proprietorship and that her “personal goodwill, as opposed to entity or enterprise goodwill,” should have been excluded in valuing the company. The court concluded that Meds was unlike “sole proprietorships essentially run by one person”—where the value of the company rests primarily on the work and professional reputation developed by the proprietor—“given the number of [Meds] employees and the extent of its operations.”
¶22 On appeal, Janice claims that the court failed to consider the personal goodwill engendered by her own “management and licensure role” in Meds. Before the receiver’s appointment, Janice “had acted as sole manager and chief executive officer of the company,” but there was no evidence to suggest that placing someone else in that role would diminish the value of the company. Indeed, the court specifically found that it had not been “provided any evidence from which [it could] draw the conclusion that her presence at the business, given the point to which it’s grown, is essential for that business to continue given the number of employees and the extent of operations it has.” Janice has not demonstrated that those findings were clearly erroneous.
¶23 As evidence of her personal goodwill, Janice cites the receiver’s report that some Meds employees “attributed the company’s declining revenue, in part, to [Janice] being distracted by the divorce.” But the decline in Meds’ revenue during this period does not suggest that the company’s value was dependent on Janice being in a management role. To the contrary, the court found that Janice’s continued involvement was detrimental because she “continue[d] to take steps to harm and devalue” Meds, even after the appointment of the receiver. In other words, Meds’ declining revenue during that time was caused not by Janice’s inattention to her management role, but by her deliberate efforts to devalue the company.
¶24 Janice also points to the fact that the company used her licenses to operate in multiple states. The court found, however, that Meds holds the necessary pharmacy licenses among three pharmacists. And there was no evidence that Janice’s licenses could not be obtained by the other pharmacists already on staff or that Meds could not hire a replacement pharmacist with those licenses. Thus, the fact that some licenses were historically held by Janice does not undermine the court’s finding that the value of Meds as an ongoing business did not depend on Janice’s involvement.
¶25 In sum, the record shows that the court considered and rejected Janice’s contention that her personal goodwill was included in the valuation of the business, and Janice has not shown that those findings were clearly erroneous. Therefore, there is no basis on which to disturb the court’s valuation of Meds.
II. Excluding Janice’s Rebuttal Expert
¶26 Next, Janice challenges the court’s ruling excluding her valuation rebuttal expert based on her untimely disclosure. Expert disclosures are governed by rule 26 of the Utah Rules of Civil Procedure. Under that rule, proper disclosure of an expert witness requires the timely disclosure of “(i) the expert’s name and qualifications, . . . (ii) a brief summary of the opinions to which the witness is expected to testify, (iii) the facts, data, and other information specific to the case that will be relied upon by the witness in forming those opinions, and (iv) the compensation to be paid for the witness’s study and testimony.” Utah R. Civ. P. 26(a)(4)(A). “If a party fails to disclose or to supplement timely a disclosure or response to discovery, that party may not use the undisclosed witness, document, or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.” Id. R. 26(d)(4). “Thus, Utah law mandates that a trial court exclude an expert witness disclosed after expiration of the established deadline unless the district court, in its discretion, determines that good cause excuses tardiness or that the failure to disclose was harmless.” Solis v. Burningham Enters. Inc., 2015 UT App 11, ¶ 21, 342 P.3d 812 (cleaned up); see alsoArreguin-Leon v. Hadco Constr. LLC, 2018 UT App 225, ¶ 22, 438 P.3d 25 (“[I]f a party fails to disclose or supplement a discovery response, the evidence or testimony may not be used.”), aff’d 2020 UT 59, 472 P.3d 927.
¶27 Janice does not dispute that the disclosure of her valuation expert and his report was untimely. The question is whether Janice established an exception to the otherwise mandatory sanction of exclusion under rule 26(d)(4). We conclude that the district court did not exceed its discretion in rejecting Janice’s claim that her untimely expert disclosure was either harmless or justified.
¶28 First, the record amply supports the court’s conclusion that the untimely expert disclosure was not harmless. The court enlarged Janice’s time to serve her disclosures, extending her deadline from November 4 to November 26 at 5:00 p.m.—a mere six days before trial. On November 26, “shortly before 5:00 p.m.” Janice filed her expert disclosure with the court, but she did not serve that disclosure on Dean’s counsel until after the 5:00 p.m. deadline. Moreover, she did not serve the expert report until the following afternoon, the day before Thanksgiving. The timing left only the holiday weekend for Dean’s counsel to review the expert report and prepare to meet that testimony before the trial began on Monday. On the first day of trial, Janice called her rebuttal expert witness out of order, depriving Dean of any additional time he might have had to prepare during the course of the trial. The purpose of rule 26 is to eliminate unfair surprise and provide the opposing party with a reasonable opportunity to prepare for trial. Drew v. Lee, 2011 UT 15, ¶ 28, 250 P.3d 48. Here, the late disclosure deprived Dean of a reasonable opportunity to prepare to rebut the newly disclosed expert’s testimony. Under these circumstances, the district court acted well within its discretion in concluding that the late disclosure was not harmless.
¶29 Second, the record also supports the court’s determination that Janice had no good reason to delay disclosing her expert and his report. The court found that it gave Janice “months” to “call an expert to dispute the valuation that was done by the court-appointed receiver,” yet she waited until “a couple weeks” before trial to hire her valuation rebuttal expert. Moreover, the court found that Janice’s excuse for not hiring an expert—that she was waiting because she wanted the marital estate to pay for the expert—“carrie[d] no water with [the court]” because the court had made clear, at least since the previous August, that Janice had to pay for her own rebuttal valuation expert. Under these circumstances, the district court did not exceed its discretion in finding that the delay was unjustified.
¶30 We conclude that the district court did not abuse its discretion in finding that Janice’s untimely disclosure was neither excused for good cause nor harmless to Dean. Therefore, the district court correctly applied the automatic sanction dictated by rule 26(d)(4) and excluded the expert’s testimony.
III. Sanction of Attorney Fees and Costs
¶31 On appeal, Janice does not challenge the court’s finding that she engaged in sanctionable conduct and acknowledges that “the bulk of the court’s award of fees and allocation of costs were within the court’s authority.” Instead, she argues that the award was excessive because it included some attorney fees and costs not attributable to her sanctionable conduct. Because we cannot determine whether the attorney fees award exceeded the costs that Dean incurred as a result of Janice’s sanctionable conduct, we remand to the district court for further proceedings.
¶32 “[W]hen a court imposes an award of fees or costs as a sanction, its award must be limited to the amount actually incurred by the other party” as a result of the sanctionable conduct. Goggin v. Goggin, 2013 UT 16, ¶ 36, 299 P.3d 1079. In Goggin, the district court awarded the former wife all her attorney fees and costs after finding that they were “largely due to [her former husband’s] untoward and contemptuous behavior.” See id. ¶ 38 (cleaned up). Our supreme court reasoned that “this language implies that [the former wife] may have been awarded at least some attorney fees and out-of-pocket costs that were not caused by [the former husband’s] contemptuous behavior.” Id. (cleaned up). The supreme court therefore held that the district court had exceeded its discretion by awarding costs and fees in excess of the amount attributed to the sanctionable conduct. Id.
¶33 Here, it is not clear whether the district court limited the award to the fees and costs that Dean incurred as a result of Janice’s sanctionable conduct. In assigning the entire cost of Dean’s attorney fees and expenses to Janice, the court found that Dean had incurred “extraordinary legal costs in enforcing Court orders and attempting to track down and preserve marital assets” and that a “substantial amount of additional work [had been] required to address the dissipation issues in this case.” Yet the court also found that Dean’s legal fees and costs “incurred in connection with issues surrounding the dissipation of marital assets and the nefarious conduct engaged in by [Janice]” merely constituted the “lion’s share” of Dean’s legal fees. Like the district court’s use of the term “largely” in Goggin, the use of the term “lion’s share” here suggests that a portion of Dean’s fees and costs were not the direct result of Janice’s sanctionable conduct. To the extent that the attorney fees award included such additional costs, it exceeded the district court’s discretion.
¶34 Accordingly, we vacate the attorney fee award and remand for further proceedings. On remand, the district court should either make findings to support the determination that all Dean’s legal expenses were caused by Janice’s sanctionable conduct or modify the award to exclude any amounts not caused by that conduct.[4]
CONCLUSION
¶35 Janice has not shown that the court failed to consider goodwill in valuing the business or that it clearly erred in finding that there was no personal goodwill associated with Meds. Nor has she shown that the court exceeded its discretion in determining that her untimely expert disclosure was not harmless or justified. However, to the extent that the attorney fees award exceeded the costs Janice’s sanctionable conduct caused Dean to incur, the court exceeded its discretion in granting that award. Therefore, we remand for further proceedings on that issue consistent with this opinion.[5]
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[1] As is our practice when parties share the same last name, we refer to each by their first names, intending no disrespect to either party.
[2] “On appeal from a bench trial, we view the evidence in a light most favorable to the trial court’s findings, and therefore recite the facts consistent with that standard, and we present conflicting evidence to the extent necessary to clarify the issues raised on appeal.” Nakkina v. Mahanthi, 2021 UT App 111, n.2, 496 P.3d 1173 (cleaned up).
[3] Janice also argues that there was “[i]rregularity in the proceedings” because the receiver “hire[d] a business valuator who is . . . a partner with the receiver at the [same] firm.” But this issue was not preserved. See Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48, ¶ 14, 48 P.3d 968 (explaining that for an issue to be preserved “(1) the issue must be raised in a timely fashion; (2) the issue must be specifically raised; and (3) a party must introduce supporting evidence or relevant legal authority” (cleaned up)). Janice did not challenge this alleged irregularity below. It appears that Janice may have attempted to raise the issue in a motion pursuant to rule 59 of the Utah Rules of Civil Procedure, see Utah R. Civ. P. 59(a)–(a)(1) (providing that “a new trial may be granted to any party on any issue” because of “irregularity in the proceedings of the court, jury or opposing party, or any order of the court, or abuse of discretion by which a party was prevented from having a fair trial”), but the district court properly refused to consider that motion as untimely, and the issue is therefore unpreserved for appeal, see Tschaggeny v. Milbank Ins. Co., 2007 UT 37, ¶ 30, 163 P.3d 615 (holding that an issue raised in an untimely posttrial motion was not preserved for appellate review where district court “properly refused to address the” untimely motion).
[4] Dean argues that even if the district court awarded attorney fees and costs not attributable to Janice’s contemptuous behavior, that error was harmless because a mathematical error resulted in Janice not paying the intended award. If the district court determines that “a clerical mistake or a mistake arising from oversight or omission” has occurred, the court may correct the mistake on remand. See Utah R. Civ. P. 60(a).
[5] “Although [Dean] requests attorney fees on appeal, because the trial court awarded [him] attorney fees only as a sanction for [Janice’s] conduct during litigation, we deny that request.” Liston v. Liston, 2011 UT App 433, ¶ 27, n.6, 269 P.3d 169.
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.
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Utah Family Law, LC | divorceutah.com | 801-466-9277
GARY LEE FISCHER, Appellant, v. MELISSA KAY FISCHER, Appellee.
Opinion
No. 20200557-CA
Filed December 30, 2021
Seventh District Court, Moab Department
The Honorable Don Torgerson
No. 184700047
Steve S. Christensen and Clinton R. Brimhall, Attorneys for Appellant
Andrew Fitzgerald, Attorney for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGES JILL M. POHLMAN and RYAN M. HARRIS concurred.
ORME, Judge:
¶1Gary Lee Fischer challenges the district court’s division of the marital estate in the parties’ divorce decree, which awarded Melissa Kay Fischer the marital home, a vehicle, and profits from a business that Gary operated.1 Gary also challenges the court’s denial of his post-trial motion for a new trial regarding the division of a savings account Melissa first disclosed at trial. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
BACKGROUND2
¶2Following a nearly 29-year marriage, Gary and Melissa separated on April 8, 2018. Gary filed for divorce approximately two months later. The case proceeded to trial in June 2019. The main issues at trial involved the division of various bank accounts, personal property, vehicles, the marital home, and an insurance business Gary had started during the marriage with Melissa’s help.
¶3At trial, the parties testified regarding their assets. During cross-examination of Melissa, Gary learned for the first time that Melissa had an American Express bank account with a balance of $50,000. Melissa testified that she set up the account in “early” 2019, long after the parties had separated. She explained that the account was started with money from her share of various accounts she co-owned with Gary and that she was able to get the balance to $50,000 because she “worked so hard to save” money after they separated. Gary did not then inquire further regarding this account.
¶4After hearing all the relevant testimony, the court made an oral ruling from the bench, determining that Gary’s business was established using marital funds. It ruled, however, that because the business “is the equivalent of a professional degree, what you would expect to see with a solo practitioner, attorney or accountant, or a doctor in solo practice,” it had “to value this asset minus any goodwill component.”3 The court then explained that
the balance of the [business] bank account as of today is $5,000. [Melissa] is entitled to one-half of that amount. Additionally, it is apparent from the tax returns that the business has made a profit in excess of its expenses and [Gary’s] salary. Net profit has been $2,144 per month consistently through 2017, and [Gary] testified that it’s been constant since then. Accordingly, that profit is a profit of this asset, and so 14 months worth of that profit, [Melissa’s] share is $15,008.
So the asset is marital in the sense that it was established during the marriage and it was an asset to be considered in dividing, but the Court finds that there’s no future equity share that is divisible, and so other than those monetary amounts, the Court awards the interest in the LLC to [Gary] 100 percent, and I certainly understand that it’s frustrating. We help our spouses be successful, and they take our great ideas and they incorporate them into their business, and we give input to their endeavors, but in the end, I’m bound by the existing law, which says that this isn’t a marketable asset unless he’s running it, and . . . so that’s the basis for that finding.
¶5Regarding the tangible marital assets, the court found that there was $292,285 equity in the home, resulting in a share of $146,142.50 for each party. The court nevertheless awarded the home to Melissa, explaining that Gary’s share of the equity would be “used to offset the other property awards in this case.” The court also allocated a vehicle worth $25,000 to Melissa. The court awarded Gary four vehicles and a trailer. The first three vehicles were valued at $29,600, $17,833, $51,450. The fourth vehicle, which still had money owing on it, had $4,000 in equity. The trailer was valued at $8,000. The court additionally distributed to Gary jewelry, art, and other personal property having a combined value of $57,590. The court valued all these assets “as of the date of divorce.”
¶6With respect to the parties’ joint bank accounts, the court decided that it would be more appropriate to divide these accounts as they stood at the time of the parties’ separation rather than at the time of divorce. The court stated that it did this
because it was the clearest picture of what the parties’ asset actually was. Since then, they’ve each gone on to either save money [or spend money]. She saved money. It appears he spent money. So that seemed to be the fairest division of the cash accounts . . . given how long the separation has been, over a year.
¶7The court also ordered that Melissa’s retirement accounts, valued as of the date of divorce, be split equally between the parties. The court determined that the American Express account was not divisible in the divorce because it was Melissa’s separate property. The court then concluded that “if my math is correct, that should leave a wash on all of the property.”
¶8In response to this ruling, Gary filed a post-trial motion, in which he argued that the court’s division of marital assets was “not equal.” He asserted that the court awarded a total of $396,793 in marital assets to Melissa, which included (1) the home at $292,285, (2) half the business account at $2,500, (3) half the profits from the business from the time of separation to the time of divorce at $15,008, (4) a vehicle at $25,000, (5) half the balance in two bank accounts existing at the time of separation at $12,000, and (7) the American Express account at $50,000.4 Gary then argued that the court awarded him only $197,981 in marital assets consisting, of (1) half the business account at $2,500, (2) half the profits from the business from the time of separation to the time of divorce at $15,008, (3) the four vehicles valued at a total of $102,883, (4) the trailer at $8,000, (5) the personal property items at $57,590, and (6) half of the two bank accounts at $12,000. Gary asserted that, as a result, Melissa received $198,812 more than he did—$148,812 once the $50,000 American Express Account is subtracted from Gary’s calculation. See supra note 4. In essence, Gary’s position was that the court’s math was in fact quite wrong when it mused that, “if my math is correct, that should leave a wash on all of the property.”
¶9 The court subsequently issued a written order memorializing its findings and rulings at trial. In that order, regarding the award of the marital home to Melissa, the court conceded that
[a]lthough the Court endeavored to equally divide the assets in the case, with [Gary] receiving the majority of high-value personal property to offset his share of equity in the home, the final division of property does not equally divide the value in the marital home. Nevertheless, the Court believes the division is equitable, based on all circumstances in the case.
[Gary] would like the home sold, with the cash divided equally. But the costs of sale would likely deplete most of the difference in the equity division. Neither party would benefit from those lost funds and [Melissa] would be left without a home. Additionally, although the Court awards [the business to Gary], it is apparent that [Melissa] significantly contributed to making [the business] a success. Her contribution to the business is not quantifiable. But the overall division of property and assets in this case is equitable, when the business is considered.
The court also determined that the American Express account would be awarded to Melissa as her separate property because it had been initially funded with her share of sums from marital accounts, then enhanced with post-separation deposits. The court also reiterated that it valued “the cash accounts as of the date of separation” because “[a]fter separation, [Gary] spent significant money and incurred substantial debt” and “[g]iven the length of separation, the value at the time of separation provides for the most equitable division of the cash accounts.” The court then reaffirmed its oral ruling regarding the remainder of its award.
¶10 Gary subsequently filed another motion, this time requesting a new trial under rule 59(a) of the Utah Rules of Civil Procedure on the American Express account issue. He asserted that Melissa had “disclosed at trial and not before that she had a $50,000 American Express savings account” and that he “was genuinely surprised by this trial disclosure.” He claimed that he “should have had the opportunity to investigate this account and trace its origin to determine whether [Melissa’s] representations about it were accurate.”
¶11The district court denied Gary’s motion in another written order. It stated that “with reasonable diligence, [Gary] could have discovered the account before trial but did not utilize the discovery process to his advantage.” It additionally stated that “[Gary] did not object at trial to the introduction of the information related to the account and [Melissa] testified that the account was created after separation.”
¶12Gary appeals.
ISSUES AND STANDARDS OF REVIEW
¶13 Gary raises three issues on appeal. First, he asserts that the district court erred in determining that the American Express account was Melissa’s separate property and in denying his motion for a new trial on that issue. This issue implicates two standards of review. First, “whether property is marital or separate is a question of law, which we review for correctness.” See Brown v. Brown, 2020 UT App 146, ¶ 13, 476 P.3d 554 (quotation simplified). Second, “we review the decision to grant or deny a motion for a new trial only for an abuse of discretion.” State v. Loose, 2000 UT 11, ¶ 8, 994 P.2d 1237.
¶14 Next, Gary challenges the court’s award to Melissa of $15,008 of the business’s profits accrued during the fourteen months from the time of the couple’s separation until trial. We review the district court’s ruling on this issue for an abuse of discretion. See Jones v. Jones, 700 P.2d 1072, 1074 (Utah 1985).5
¶15 Finally, Gary asserts that the court abused its discretion when it awarded Melissa a disproportionate share of the marital estate without providing findings that justify the unequal division.6 “In a divorce proceeding, the trial court may make such orders concerning property distribution and alimony as are equitable. The trial court has broad latitude in such matters, and orders distributing property and setting alimony will not be lightly disturbed.” Id. (internal citation omitted).
ANALYSIS
American Express Account
¶16 Gary asserts that the district court erred in determining the American Express account was Melissa’s separate property and in denying his motion for a new trial on that issue. Although the marital estate is generally valued “at the time of the divorce,” see Rappleye v. Rappleye, 855 P.2d 260, 262 (Utah Ct. App. 1993), a district court, in its discretion, may determine that property acquired post-separation, but before entry of a final divorce decree, is separate property so long as this decision is “supported by sufficiently detailed findings of fact that explain the trial court’s basis for such deviation,” see Donnelly v. Donnelly, 2013 UT App 84, ¶¶ 41, 45, 301 P.3d 6 (quotation simplified). See also Shepherd v. Shepherd, 876 P.2d 429, 432–33 (Utah Ct. App. 1994).7
¶17 Here, the court’s decision to categorize the American Express account as Melissa’s separate property flowed logically from its ruling on the parties’ joint bank accounts. In that ruling, the court made specific findings supporting its decision to adjudicate the bank accounts as of the date of separation rather than at the time of divorce. It stated that it was doing so because it “seemed to be the fairest division” due to the fact that, “[a]fter separation, [Gary] spent significant money and incurred substantial debt,” while Melissa saved money. Moreover, the court relied on the length of the separation—some fourteen months—during which both parties lived independently of one another.8 Thus, given that the court decided to adjudicate the parties’ joint accounts as of the time of separation rather than at the time of divorce, the general rule that all assets obtained during the marriage are marital property did not apply, by extension of this same logic, to the American Express account.
¶18 The district court therefore did not err when it determined that the American Express account was Melissa’s separate property.9 It follows, then, that the court likewise didnot abuse its discretion in denying Gary’s motion for a new trial on this issue. See State v. Loose, 2000 UT 11, ¶ 8, 994 P.2d 1237.
Business Profits
¶19 Gary next contends that “the district court abused its discretion when it determined that Melissa should be awarded half of the ‘profits’ accrued by the business in the 14 months prior to trial.” “In Utah, marital property is ordinarily divided equally between the divorcing spouses and separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse.” Olsen v. Olsen, 2007 UT App 296, ¶ 23, 169 P.3d 765. “The primary purpose of a property division . . . is to achieve a fair, just, and equitable result between the parties.” Riley v. Riley, 2006 UT App 214, ¶ 27, 138 P.3d 84 (quotation simplified).
¶20 Gary essentially argues that there were no profits from the business because all the money earned was simply his income and any award to Melissa would therefore essentially be alimony, which the district court had already determined neither party needed. But Gary’s attempt to equate the profits with his salary, or with alimony, is unavailing because the court found that the net profits had “been $2,144 per month consistently through 2017, and [Gary] testified that it’s been constant since then.” The court also found, with our emphasis, that “[t]axreturns show that, since separation, the business has made a profit in addition to expenses and [Gary’s] salary.” And Gary has not shown on appeal how these findings underpinning the court’s ruling were erroneous. See State v. Thompson, 2020 UT App 148, ¶ 20, 476 P.3d 1017 (“To successfully challenge a district court’s factual findings on appeal, an appellant must establish a basis for overcoming the healthy dose of deference owed to factual findings, generally by identifying and dealing with supportive evidence through the process of marshaling.”) (quotation simplified). See also State v. Nielsen, 2014 UT 10, ¶ 40, 326 P.3d 645 (“[A] party who fails to identify and deal with supportive evidence will never persuade an appellate court to reverse[.]”).
¶21Therefore, because Gary has not meaningfully addressed the supportive evidence behind these findings, which findings adequately explain the court’s ruling, we hold that the court did not abuse its discretion in distributing the business profits as it did.
III. Equitable Distribution of Assets
¶22 Gary’s final argument is that the district court abused its discretion when it awarded nearly $150,000 more of the real and personal property comprising the marital estate to Melissa than it did to him. Specifically, Gary asserts that “the district court abused its discretion in two ways: it did not follow the guideline that marital assets are to be split equally and it did not provide adequate findings to support its departure from the equal division presumption.” We agree.
¶23 In dividing the marital estate in a divorce proceeding, “[e]ach party is presumed to be entitled to . . . fifty percent of the marital property.” Burt v. Burt, 799 P.2d 1166, 1172 (Utah Ct. App. 1990). “But rather than simply enter such a decree, the court should then consider the existence of exceptional circumstances and, if any be shown, proceed to effect an equitable distribution in light of those circumstances[.]” Id. Thus, “once a court makes a finding that a specific item is marital property, the law presumes that it will be shared equally between the parties unless unusual circumstances, memorialized in adequate findings, require otherwise.” Hall v. Hall, 858 P.2d 1018, 1022 (Utah Ct. App. 1993) (emphasis added). See Bradford v. Bradford, 1999 UT App 373, ¶ 27, 993 P.2d 887 (“An unequal division of marital property . . . is only justified when the trial court memorializes in . . . detailed findings the exceptional circumstances supporting the distribution.”) (quotation simplified).
¶24 On appeal, both parties expend significant effort in arguing how the court’s award of real and personal property was either equitable or inequitable. We need not endeavor to directly resolve this debate, however, because the court’s ruling lacked adequate findings to support the disparate distribution. Here, Melissa was awarded the entirety of the net value in the home, $292,285, and a car valued at $25,000. In total, Melissa was awarded $317,285. Gary, on the other hand, was awarded four vehicles with a total value of $102,883, the trailer at $8,000, and the other personal property items with a total value of $57,590. Gary was therefore awarded $168,473. This left a $148,812 discrepancy in favor of Melissa.10
¶25 Although the district court “has broad latitude” in equitably distributing the marital estate, see Olsen v. Olsen, 2007 UT App 296, ¶ 8, 169 P.3d 765 (quotation simplified), it cannot unequally divide that estate unless it “memorializes in adequate findings” the “unusual circumstances” that justify doing so, Hall, 858 P.2d at 1022 (emphasis added) (quotation otherwise simplified). Here, the court unequally divided the marital estate but did not enter adequate findings detailing the unusual circumstances that justified such an award. The court’s justification for its disparate award is limited to three observations.
¶26First, the court opined, without pointing to any evidence, that the cost of selling the home would deplete any disparity that might exist between the parties and benefit neither. In the absence of evidence to this effect, this is purely speculative, and we are hard-pressed to see how the commissions and other fees in selling the home would be anywhere near large enough to overcome the substantial discrepancy in the value of the property awarded to each party. The court also rationalized the disparity by concluding that Melissa would otherwise be without a home, but presumably this would have been a momentary event given her assets, her employment, and her share of the sale proceeds. These are simply not the kind of exceptional circumstances that would justify such a disparity. Cf. Bradford, 1999 UT App 373, ¶ 27 (“In this case, the trial court’s only finding justifying the award of the [entire] home to Mr. Bradford was that ‘the house and property is in fact not partitionable as it contains a residence, road and river frontage. If an interest were to be conveyed the house would have to be refinanced or sold.’ This finding is insufficient, by itself, to support an award of the marital home entirely to Mr. Bradford.”) (footnote omitted). Indeed, district courts “often order a sale of marital property and equitably divide the proceeds between the parties” or “allow one spouse to ‘buy out’ the other spouse’s interest in marital property,” and the district court here “made no adequate finding explaining why either of these two remedies was not appropriate for the parties in this case.” See id.
¶27 Second, the court stated that while “the final division of property does not equally divide the values in the marital home,” it was nonetheless “equitable, based on all circumstances in the case.” This is a conclusory statement and not a finding that justifies the unequal distribution of marital assets. General comments about the equitability of an award are simply not enough to overcome the presumption that marital property should be “shared equally.” Hall, 858 P.2d at 1022.
¶28 Finally, the court noted that although it awarded the business to Gary, “it is apparent that [Melissa] significantly contributed to making [the business] a success. Her contribution to the business is not quantifiable. But the overall division of property and assets in this case is equitable, when the business is considered.” Once again, this is not a finding sufficient to explain such a large departure from the presumptively appropriate equal distribution of the marital estate. See Bradford, 1999 UT App 373, ¶ 27. The court found that the business had no marketable value, and thus it is unclear how it quantified Melissa’s contribution. Further, the court’s observations about Melissa’s contributions do not demonstrate “exceptional circumstances” that justify a nearly $150,000 difference in the property awards to each party. See Burt v. Burt, 799 P.2d 1166, 1172 (Utah Ct. App. 1990).
¶29 Without adequate findings detailing why Melissa should be entitled to such an unequal split of the marital estate, we cannot affirm the court’s award. We therefore remand the case to the district court either (1) to make adequate findings specifically detailing (and quantifying) the exceptional circumstances that would justify the unequal distribution of the marital estate, or (2) if such findings are not appropriate on this record, then to equally distribute the marital estate.11
CONCLUSION
¶30 The district court did not err in determining that the American Express account was Melissa’s separate property or exceed its discretion in awarding to her half of the profits the business accrued from the time of separation until trial. The court did err, however, in unequally dividing the marital estate without entering adequate findings justifying that unequal distribution. We therefore affirm in part and reverse in part, and we remand to the district court for further proceedings consistent with this opinion.
Utah Family Law, LC | divorceutah.com | 801-466-9277
Can a divorced spouse claim rights to a previous primary residence?
A court can, in exceptional circumstances, award a spouse some or all of your premarital and separate property that is clearly not a marital asset. In the jurisdiction where I practice family law (Utah), the rule in caselaw is:
Dunn v. Dunn, 802 P.2d 1314 (Utah Ct.App. 1990):
The general rule is that equity requires that each party retain the separate property he or she brought into the marriage, including any appreciation of the separate property. Burt v. Burt, 799 P.2d 1166, 1168 (Utah Ct.App.1990) (separate property, in this case inherited property, includes “its appreciated value” during the marriage). Exceptions to this general rule include whether the property has been commingled, whether the other spouse has by his or her efforts augmented, maintained, or protected the separate property, and whether the distribution achieves a fair, just, and equitable result. Id.; Noble v. Noble, 761 P.2d 1369, 1373 (Utah 1988).
Elman v. Elman, 245 P.3d 176 (Utah Ct.App. 2002):
In distributing property in divorce proceedings, trial courts are first required to properly categorize the parties’ property as marital or separate. See, e.g., Kelley v. Kelley, 2000 UT App 236,¶ 24, 9 P.3d 171. Generally, trial courts are also required to award premarital property, and appreciation on that property, to the spouse who brought the property into the marriage. See Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App.1990); see also Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988).
6¶ 19 However, separate property is not “totally beyond [a] court’s reach in an equitable property division.” Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct.App.1990). The court may award the separate property of one spouse to the other spouse in “ ‘extraordinary situations where equity so demands.’ ” Id. (quoting Mortensen, 760 P.2d at 308); see also Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah Ct.App.1993) (“ ‘Exceptions to this general rule include whether … the distribution achieves a fair, just, and equitable result.’ ” (quoting Dunn, 802 P.2d at 1320)).
Can a divorced spouse claim rights to a premarital primary residence?
A court can, in exceptional circumstances, award a spouse some or all of your premarital and separate property that is clearly not a marital asset. In the jurisdiction where I practice family law (Utah), the rule in caselaw is:
Dunn v. Dunn, 802 P.2d 1314 (Utah Ct.App. 1990):
The general rule is that equity requires that each party retain the separate property he or she brought into the marriage, including any appreciation of the separate property. Burt v. Burt, 799 P.2d 1166, 1168 (Utah Ct.App.1990) (separate property, in this case inherited property, includes “its appreciated value” during the marriage). Exceptions to this general rule include whether the property has been commingled, whether the other spouse has by his or her efforts augmented, maintained, or protected the separate property, and whether the distribution achieves a fair, just, and equitable result. Id.; Noble v. Noble, 761 P.2d 1369, 1373 (Utah 1988).
Elman v. Elman, 245 P.3d 176 (Utah Ct.App. 2002):
In distributing property in divorce proceedings, trial courts are first required to properly categorize the parties’ property as marital or separate. See, e.g., Kelley v. Kelley, 2000 UT App 236,¶ 24, 9 P.3d 171. Generally, trial courts are also required to award premarital property, and appreciation on that property, to the spouse who brought the property into the marriage. See Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App.1990); see also Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988).
6¶ 19 However, separate property is not “totally beyond [a] court’s reach in an equitable property division.” Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct.App.1990). The court may award the separate property of one spouse to the other spouse in “ ‘extraordinary situations where equity so demands.’ ” Id. (quoting Mortensen, 760 P.2d at 308); see also Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah Ct.App.1993) (“ ‘Exceptions to this general rule include whether … the distribution achieves a fair, just, and equitable result.’ ” (quoting Dunn, 802 P.2d at 1320)).
2020 UT App 171 – Miller v. Miller
THE UTAH COURT OF APPEALS
RYAN MILLER, Appellant,
BRENDA MILLER, Appellee.
Opinion
No. 20190748-CA
Filed December 24, 2020
Second District Court, Farmington Department
The Honorable Michael Edwards
No. 134701192
Jonathan Hibshman, Marco Brown, and Rodney R. Parker, Attorneys for Appellant
Dustin D. Gibb, Attorney for Appellee
JUDGE KATE APPLEBY authored this Opinion, in which
JUDGES JILL M. POHLMAN and DIANA HAGEN concurred.
APPLEBY, Judge:
¶1 Ryan Miller appeals the district court’s dismissal of his petition to modify the parties’ divorce decree. Ryan’s[1] petition asked that he be appointed the primary custodial parent of the parties’ children. The district court dismissed the petition for failure to state a claim under rule 12(b)(6) of the Utah Rules of Civil Procedure and, alternatively, for the parties’ failure to engage in a dispute resolution procedure before seeking court intervention. On appeal, Ryan contends the court applied the wrong standards for dismissal under rule 12(b)(6) and for determining whether a change of circumstances justified modifying the divorce decree. He also challenges the court’s dismissal of his petition based on his failure to use a dispute resolution procedure before filing the petition. We reverse and remand for further proceedings.
BACKGROUND
¶2 Ryan and Brenda divorced in June 2014. The divorce decree incorporated, and was based on, the parties’ stipulation and property settlement agreement. The parties stipulated, and the court decreed, that they would have joint legal and physical custody of their children, with Brenda as the “primary physical custodial parent” and the children attending school based on her residence. The parties’ stipulation and the decree also separately provided parent-time for Ryan.
¶3 Additionally, the parties stipulated to a parenting plan. As relevant here, the plan expressed an overarching preference for resolving co-parenting disputes between them, using “experts to assist them” in doing so “when they are unable to resolve conflict themselves” and to “solve problems and make joint decisions by working through [the] decision-making procedure” included in the plan. It also expressed the parties’ agreement to make “major decisions” regarding the children together and to use a mediator before seeking a resolution in court when, “after following the joint decision-making procedure and implementing the governing principles,” the parties were unable to “reach a consensus.”
¶4 In May 2019, Ryan filed a petition to modify the divorce decree (the Petition). He contended it was in the children’s best interest that he be awarded “primary custody” of them, “with Brenda enjoying parent-time pursuant to Utah Code Annotated, Section 30-3-35.1.”[2] Ryan asserted there had been “substantial and material changes in circumstances that were unforeseeable” at the time the decree was entered, and he made twelve allegations in support.
¶5 Specifically, Ryan alleged: (1) “Brenda does not communicate with Ryan regarding [the children] and their needs”; (2) Ryan was “not informed” when one of the children “suffered a concussion” or about the associated “activity restrictions”; (3) “Brenda has refused to allow [the children] to attend significant events in Ryan’s and [the children’s] lives”; (4) Ryan and his current spouse have a two-year-old child “with whom [the children] are bonded and with whom they desire to spend more time,” and Ryan’s current spouse works from home and is able to care for the children; (5) “Ryan’s job and work hours have stabilized” since the decree was entered, “giving him predictability in when he is at home and able to spend time” with the children; (6) during Ryan’s Thursday overnight parent-time, he “spends much of the time . . . doing homework” with the children, “which has accumulated throughout the week” while the children were with Brenda; (7) “Brenda does not give [the children] their medication”; (8) the children “have been neglected in their personal hygiene and appearance”; (9) Brenda allows the children “constant screen time”; (10) Brenda is cohabiting with someone who is “forcing [the children] into a vegan lifestyle, resulting in malnourishment,” and who has warrants out for his arrest; (11) the children have asked “Ryan if they can spend more time with him”; and (12) “Brenda has an established pattern of neglecting” the children.
¶6 Brenda filed a motion to dismiss the Petition pursuant to rule 12(b)(6) of the Utah Rules of Civil Procedure, which provides that a party may move for dismissal of a complaint for “failure to state a claim upon which relief can be granted.” Brenda contended Ryan’s allegations “fail[ed] to meet the high burden required for a change of custody” because none of them, “even if true, constitute[d] a material and substantial change in circumstances.” Therefore, Ryan had “failed to state a claim upon which the relief he seeks, a change of custody, could possibly be granted.”[3] Brenda did not argue that the Petition should be dismissed for the additional reason that Ryan had failed to use dispute resolution procedures in relation to his request to modify custody.
¶7 After an evidentiary hearing, the district court dismissed the Petition on two independent grounds. First, the court agreed with Brenda that the Petition failed to state a claim under rule 12(b)(6) for modification of custody. It addressed each of the changed-circumstances allegations and determined most of them “could support some change.” But it determined many of the allegations were entitled to “little weight” as part of its “substantial and material change in circumstances analysis.” Ultimately, the court concluded that the allegations, taken “as a whole,” “as true,” and “in the light most favorable to [Ryan]” “do not amount to an allegation that there has been a material and substantial change in the circumstances of the parties and their children that would justify the change requested.” On this basis, the court concluded Ryan failed to state a claim upon which the custody modification could be granted and dismissed the Petition.
¶8 Second, as an alternative ground for dismissal, the court determined Utah Code section 30-3-10.4(1)(c)[4] “means what it says” regarding the use of dispute resolution procedures to resolve disputes related to the modification of custody. During the hearing on Brenda’s motion, the court sua sponte raised the issue of whether the parties had attempted to use a dispute resolution procedure, and the court determined they had not. Because Ryan “admitted through counsel that he has not sought” to engage in such procedures, the court determined the Petition was additionally dismissed “for failure to properly use alternative dispute resolution procedures.”
¶9 Ryan timely appeals.
ISSUES AND STANDARDS OF REVIEW
¶10 Ryan appeals the Petition’s dismissal under rule 12(b)(6) of the Utah Rules of Civil Procedure. “We review a decision granting a motion to dismiss for correctness, granting no deference to the decision of the district court.” Fehr v. Stockton, 2018 UT App 136, ¶ 8, 427 P.3d 1190 (quotation simplified). “We likewise review the district court’s subsidiary legal determinations for correctness.” Id.[5]
¶11 Ryan also challenges the court’s dismissal of the Petition for failure to use dispute resolution procedures, contending the court erred by sua sponte determining that his failure to use dispute resolution procedures justified dismissal of the Petition. While district courts generally have inherent authority and discretion regarding the “manage[ment of] their own affairs so as to achieve the orderly and expeditious disposition of cases,” see PDC Consulting, Inc. v. Porter, 2008 UT App 372, ¶ 14, 196 P.3d 626 (quotation simplified), to the extent this issue implicates the process afforded to Ryan, it is a legal question we consider under a correctness standard, see Brigham Young Univ. v. Tremco Consultants, Inc., 2007 UT 17, ¶ 25, 156 P.3d 782.
ANALYSIS
¶12 The district court dismissed the Petition for failure to state a claim under rule 12(b)(6) of the Utah Rules of Civil Procedure. Ryan contends the court misapplied the dismissal standard under, and exceeded the scope of, the rule. He argues the court improperly “established facts” and “proceeded to the merits of [his] claims in reviewing his allegations of changed circumstances.” Relatedly, Ryan contends the court erred by applying an incorrect standard for a petition to modify a divorce decree. Characterizing the Petition as requesting only a change in parent-time rather than a change of custody, he argues the court erred by applying the heightened changed-circumstances standard applicable to custody change requests.
¶13 Ryan also argues the district court erred by granting the motion to dismiss on the alternative ground that he had not utilized dispute resolution procedures in seeking modification of the decree.
¶14 We address each issue below, ultimately concluding the court erred in granting Brenda’s motion for dismissal under rule 12(b)(6) for failure to state a claim and in sua sponte dismissing the Petition due to the parties’ failure to engage in dispute resolution procedures.
I. Dismissal for Failure to State a Claim
A. Applicable Principles
¶15 “A complaint states a claim upon which relief can be granted if it alleges the facts and sets forth the legal basis for an available legal remedy.” Simmons Media Group, LLC v. Waykar, LLC, 2014 UT App 145, ¶ 15, 335 P.3d 885 (quotation simplified). “A rule 12(b)(6) motion to dismiss admits the facts alleged in the complaint but challenges the plaintiff’s right to relief based on those facts.” Blanch v. Farrell, 2018 UT App 172, ¶ 14, 436 P.3d 285 (quotation simplified). Our review of a rule 12(b)(6) dismissal is “concerned solely with the sufficiency of the pleadings, and not the underlying merits of the case.” Fehr v. Stockton, 2018 UT App 136, ¶ 8, 427 P.3d 1190 (quotation simplified); see also Capri Sunshine, LLC v. E & C Fox Invs., LLC, 2015 UT App 231, ¶ 11, 366 P.3d 1214 (“The purpose of a rule 12(b)(6) motion is to challenge the formal sufficiency of the claim for relief, not to establish the facts or resolve the merits of a case.” (quotation simplified)); Shah v. Intermountain Healthcare, Inc., 2013 UT App 261, ¶ 6, 314 P.3d 1079 (explaining that a rule 12(b)(6) review concerns the “legal sufficiency of the claim”). “We assume the truth of the factual allegations in the complaint and draw all reasonable inferences therefrom in the light most favorable to the plaintiff.” Fehr, 2018 UT App 136, ¶ 8 (quotation simplified). While courts “need not accept legal conclusions or opinion couched as facts,” Miller v. West Valley City, 2017 UT App 65, ¶ 12, 397 P.3d 761 (quotation simplified), “[a] district court should grant a motion to dismiss only if it is clear from the allegations that the non-moving party would not be entitled to relief under the set of facts alleged or under any facts it could prove to support its claim,” O’Hearon v. Hansen, 2017 UT App 214, ¶ 10, 409 P.3d 85; see also Van Leeuwen v. Bank of Am. NA, 2016 UT App 212, ¶ 6, 387 P.3d 521 (stating that dismissal under rule 12(b)(6) “is justified only when the allegations of the complaint clearly demonstrate that the plaintiff does not have a claim” (quotation simplified)).
¶16 The Petition requested a change in primary custody. Modification of an order establishing joint physical or legal custody is governed by Utah Code section 30-3-10.4. It provides that upon petition by “one or both of the parents, . . . the court may, after a hearing, modify or terminate an order that established joint legal custody or joint physical custody if” “the verified petition or accompanying affidavit initially alleges that admissible evidence will show that the circumstances of the child or one or both parents or joint legal or physical custodians have materially and substantially changed since the entry of the order to be modified” and that “a modification of the terms and conditions of the order would be an improvement for and in the best interest of the child.” Utah Code Ann. § 30-3-10.4(1)(a), (b) (LexisNexis 2019). This is a two-part test: the court “first must decide whether there are changed circumstances warranting the exercise of the court’s continuing jurisdiction to reconsider the custody award,” and it may then proceed to the best interest determination “only if circumstances have materially and substantially changed.” Erickson v. Erickson, 2018 UT App 184, ¶ 14, 437 P.3d 370 (quotation simplified).
¶17 The change-in-circumstances inquiry is a threshold requirement for reopening a custody order. Doyle v. Doyle, 2011 UT 42, ¶ 25, 258 P.3d 553. It has two requirements: “the party seeking modification must demonstrate (1) that since the time of the previous decree, there have been changes in the circumstances upon which the previous award was based; and (2) that those changes are sufficiently substantial and material to justify reopening the question of custody.” Peeples v. Peeples, 2019 UT App 207, ¶ 15, 456 P.3d 1159 (quoting Hogge v. Hogge, 649 P.2d 51, 54 (Utah 1982)). “Prohibiting a court from reopening the custody question until it has first made a threshold finding of substantially changed circumstances serves multiple interests.” Doyle, 2011 UT 42, ¶ 25 (quotation simplified). “First, because a custody decree is predicated on a particular set of facts, that decree is res judicata,” with the result that the changed-circumstances requirement “prevents an unnecessary drain on judicial resources by repetitive litigation of the same issue when the result would not be altered.” Id. (quotation simplified). Second, the changed-circumstances requirement “protects the custodial parent from harassment by repeated litigation.” Id. (quotation simplified). Finally, the requirement “protects the child from ‘ping-pong’ custody awards.” Id. (quotation simplified); see also Peeples, 2019 UT App 207, ¶ 14 (noting the “important ends” served by the changed-circumstances requirement are avoiding “the deleterious effects of ‘ping-pong’ custody awards that subject children to ever-changing custody arrangements” and “prevent[ing] the undue burdening of the courts and the harassing of parties by repetitive actions” (quotation simplified)).
¶18 Our courts have recognized that “the change in circumstances required to justify a modification of a divorce decree varies with the type of modification sought.” Erickson, 2018 UT App 184, ¶ 16 (quotation simplified). For example, when modifying parent-time (as opposed to custody), “the petitioner is required to make only some showing of a change in circumstances, which does not rise to the same level as the substantial and material showing required when a district court alters custody.” Id. (quotation simplified); see also Blocker v. Blocker, 2017 UT App 10, ¶ 12, 391 P.3d 1051.
¶19 Further, “in some cases, a lesser showing of changed circumstances may support modifying a stipulated award than would be required to modify an adjudicated award,” because “the res judicata policies underlying the changed-circumstances rule are at a particularly low ebb.” Peeples, 2019 UT App 207, ¶ 15 (quotation simplified); see also Elmer v. Elmer, 776 P.2d 599, 603 (Utah 1989); Zavala v. Zavala, 2016 UT App 6, ¶¶ 16–17, 366 P.3d 422.
¶20 Nevertheless, for custody changes, “[t]he required finding of a material and substantial change of circumstances is statutory,” with the result that “[n]either this court nor the supreme court has purported to—or could—alter that requirement.” Zavala, 2016 UT App 6, ¶ 16; see also Peeples, 2019 UT App 207, ¶ 13. As a result, although the changed-circumstances showing may differ depending on the case, “[i]f a custody award has already been entered, custody will not be re-examined absent a material and substantial change of circumstances.” Zavala, 2016 UT App 6, ¶ 16; see also Peeples, 2019 UT App 207, ¶ 15 (acknowledging “that the change-in-circumstances requirement still applies even in cases involving stipulated (as opposed to adjudicated) custody orders”). See generally Doyle, 2011 UT 42, ¶ 38 (“Even an overwhelming case for the best interest of the child could not compensate for a lack of proof of a change in circumstances.”).
¶21 Applying these principles, we conclude the district court improperly applied the rule 12(b)(6) standard when it dismissed the Petition. As we discuss below, in evaluating the Petition, the court properly determined Ryan requested a change in custody rather than a change in parent-time. But although the court properly categorized the Petition as seeking a change in custody and recited the correct rule 12(b)(6) standard, the court exceeded the scope of that standard when it weighed the change-of-circumstances allegations on their merits instead of assuming their truth to determine whether the Petition “allege[d] that admissible evidence will show that the circumstances of the child or one or both parents or joint legal or physical custodians have materially and substantially changed since the entry of the order to be modified.” See Utah Code Ann. § 30-3-10.4(1)(a); see also Fehr, 2018 UT App 136, ¶ 8. On this basis, we reverse the rule 12(b)(6) portion of the district court’s dismissal order.
¶22 Because the court’s application of rule 12(b)(6) depends on its determination that the Petition sought a change in custody rather than in parent-time, we first address Ryan’s challenge to the court’s custody standard determination, then address the court’s rule 12(b)(6) application in light of the proper custody standard.
B. Custody Standard
¶23 Ryan contends the district court, in evaluating the Petition, improperly applied the heightened changed-circumstances standard applicable to custody changes. He claims the Petition merely requested a change in parent-time and asserts the court erred by declining to apply the lesser changed-circumstances showing applicable to changes in parent-time.
¶24 The district court determined the standard applicable to modification requests for custody changes in Utah Code section 30-3-10.4(1) was the appropriate standard to apply, which required the Petition to allege “that admissible evidence will show that the circumstances of the child or one or both parents or joint legal or physical custodians have materially and substantially changed since the entry of the order to be modified.” Utah Code Ann. § 30-3-10.4(1)(a) (LexisNexis 2019). In doing so, the court noted that Ryan’s request was “the polar opposite” of the custody and parent-time arrangement in place under the decree. And ultimately it concluded, applying the standard articulated in section 30-3-10.4(1), that the allegations did not demonstrate “the circumstances of the children or one or both of the parents [had] materially and substantially changed since the entry” of the divorce decree. (Emphasis added.)
¶25 We perceive no error in the changed-circumstances standard the court applied. First, although the divorce decree granted the parties joint legal and physical custody, Brenda was designated as the “primary physical custodial parent,” with Ryan awarded parent-time. The Petition plainly requested the court to award Ryan “primary custody” of the children, “with Brenda enjoying parent-time,” and set forth a number of “substantial and material change[s] in circumstances” Ryan believed supported his request. Although on appeal Ryan characterizes his request merely as a change in parent-time, he nevertheless agrees that it asked to “mak[e] him the primary physical custodian.”
¶26 In this respect, Ryan’s request is more than merely a request to change parent-time. If the request were granted, Ryan would be deemed the primary custodial parent, with Brenda receiving parent-time. This change would dramatically decrease the number of overnights the children would spend per year with Brenda while increasing them for Ryan. Among other things, Brenda’s overnights would decrease from 220 per year to 145, and Ryan’s would increase to 220. See generally id. § 30-3-35.1 (LexisNexis 2019) (setting forth the number of overnights and schedule applicable to parent-time). The change also would substantially disrupt and alter the children’s routines, expectations, and time with Brenda attendant to her designation as the children’s primary custodial parent since the 2014 decree. Additionally, the change could affect where the children attend school because the decree provided they would “attend school based upon [Brenda’s] residence” as she was designated the primary custodial parent.
¶27 Thus, we do not agree with Ryan that his request is properly characterized merely as a change in parent-time; in substance, he has asked for an order to have the children’s primary custodial parent changed.[6] We therefore conclude the court correctly applied the statutory changed-circumstances standard applicable to custody modification requests under section 30-3-10.4—whether there has been a substantial and material change in circumstances justifying a modification of the divorce decree—as opposed to the lesser showing applicable to mere parent-time changes.[7]
¶28 In short, we perceive no error in the court’s decision to apply to the Petition the standard applicable to custody change requests under Utah Code section 30-3-10.4(1).
C. Rule 12(b)(6) Standard
¶29 Ryan contends the district court erred by dismissing his Petition under rule 12(b)(6) of the Utah Rules of Civil Procedure. He argues it misapplied, and exceeded the scope of, rule 12(b)(6) in dismissing the Petition. We agree.
¶30 Rule 12(b)(6) permits a party to move for dismissal of a complaint on the grounds that it “fail[s] to state a claim upon which relief can be granted.” Utah R. Civ. P. 12(b)(6). This means that, even accepting the complaint’s allegations as true, “it is clear . . . that the non-moving party would not be entitled to relief under the set of facts alleged or under any facts it could prove to support its claim.” O’Hearon v. Hansen, 2017 UT App 214, ¶ 10, 409 P.3d 85; see also Van Leeuwen v. Bank of Am. NA, 2016 UT App 212, ¶ 6, 387 P.3d 521 (stating that dismissal under rule 12(b)(6) “is justified only when the allegations of the complaint clearly demonstrate that the plaintiff does not have a claim” (quotation simplified)).
¶31 The Petition sought a change in the parties’ custody arrangement. See supra ¶¶ 23–28. As discussed above, in the context of petitions to modify custody orders, the allegations must demonstrate “that admissible evidence will show that the circumstances of the child or one or both parents or joint legal or physical custodians have materially and substantially changed since the entry of the order to be modified.” Utah Code Ann. § 30-3-10.4(1)(a) (LexisNexis 2019). To meet the changed-circumstances requirement, the Petition thus had to include allegations demonstrating “(1) that since the time of the previous decree, there have been changes in the circumstances upon which the previous award was based; and (2) that those changes are sufficiently substantial and material to justify reopening the question of custody.” Peeples v. Peeples, 2019 UT App 207, ¶ 15, 456 P.3d 1159 (quoting Hogge v. Hogge, 649 P.2d 51, 54 (Utah 1982)).
¶32 Here, the district court articulated the correct legal standard, but ultimately misapplied it. It recognized its duty “to review [the changed-circumstances allegations] of the Petition . . . and to take those alleged facts at face value and any inferences that can be drawn from them in favor of the non-moving party” to determine whether the Petition stated a claim for modifying the custody order. And the court recited the appropriate standard in reaching its conclusion that Ryan had “not supported the allegation that admissible evidence will show that the circumstances of the children or one or both of the parents have materially and substantially changed since the entry of the order to be modified,” stating it reached its conclusion by “taking all allegations together and considering them in the light most favorable to [Ryan].”[8]
¶33 But in reaching that conclusion, the court acknowledged that most of the Petition’s allegations “could support some change” and thereby constituted appropriate considerations for evaluating a custody change. Nevertheless, the court discounted those allegations in conducting its analysis of the changes. The court determined that, for various reasons, many of the Petition’s allegations were entitled to little weight. For example, it determined that allegations about Brenda’s failure to communicate, failure to allow the children to attend “significant events,” allowance of constant screen-time, and neglect were entitled to “little weight” in the overall substantial and material change analysis. Similarly, the court determined that several of the allegations, including the homework-related, cohabitation, and medication-regime allegations, were “of less value” in the substantial and material change analysis as the result of Ryan’s failure to engage in alternative dispute resolution and enforcement proceedings before bringing the Petition. And for certain allegations, including those regarding screen-time and Brenda’s cohabitation, the court acknowledged that it needed more facts to properly analyze the weight and consideration to be afforded them in the overall change-of-circumstances analysis, yet it also discounted the allegations for that reason.
¶34 By analyzing the weight and value of the allegations as well as the necessity of more facts, the court proceeded past the proper rule 12(b)(6) question—whether the Petition stated a legally sufficient claim for a substantial and material change in circumstances—to the merits-related questions of whether the various allegations actually constituted a material and substantial change in circumstances. See Fehr v. Stockton, 2018 UT App 136, ¶ 8, 427 P.3d 1190 (stating that a rule 12(b)(6) inquiry is “concerned solely with the sufficiency of the pleadings, and not the underlying merits of the case” (quotation simplified)). Doing so was error.
¶35 To be sure, the determination of whether allegations of changed circumstances amount to a material and substantial change is a legal one. See Huish v. Munro, 2008 UT App 283, ¶ 19, 191 P.3d 1242 (characterizing a court’s conclusion about “whether a material change in circumstances has occurred that would warrant reconsidering the original decree” as a “legal conclusion” (quotation simplified)); Hudema v. Carpenter, 1999 UT App 290, ¶ 21, 989 P.2d 491 (same). As a result, if changed-circumstances allegations clearly raise only circumstances that our courts have already determined to be insufficient to justify modification of a divorce decree as a matter of law, a district court may dismiss a modification petition as failing to state a legally sufficient claim. See generally O’Hearon, 2017 UT App 214, ¶ 10 (stating a motion to dismiss should be granted “only if it is clear from the allegations that the non-moving party would not be entitled to relief under the set of facts alleged or under any facts it could prove to support its claim”); cf. Peeples, 2019 UT App 207, ¶¶ 25, 27 (stating “[i]ssues that were present prior to the decree, and continue to be present in much the same way thereafter,” as well as “violations of a custody order by one party,” ordinarily do not “justify reexamining the propriety of the [custody] order”); Kelley v. Kelley, 2000 UT App 236, ¶ 22, 9 P.3d 171 (concluding “remarriage and/or failure to make support payments cannot alone justify a modification” of a divorce decree). Likewise, if a court determines a petition as a whole clearly does not allege a change in circumstances that has any relation to the parenting skills or custodial relationship or the circumstances on which the custodial arrangement was based, it may dismiss the petition for failure to state a claim. See O’Hearon, 2017 UT App 214, ¶ 10; cf. Becker v. Becker, 694 P.2d 608, 610 (Utah 1984) (stating that, to meet the materiality requirement, the change in circumstances must “have some material relationship to and substantial effect on parenting ability or the functioning of the presently existing custodial relationship” or “appear on their face to be the kind of circumstances on which an earlier custody decision was based”).
¶36 But because a determination of whether “substantial and material changes have occurred is a fact-intensive legal determination,” see Doyle v. Doyle, 2009 UT App 306, ¶ 15, 221 P.3d 888, aff’d, 2011 UT 42, 258 P.3d 553, a decision that a modification petition may be dismissed as legally insufficient under rule 12(b)(6) will be unusual. Here, the court expressly found that most of the allegations were appropriate considerations for a change-of-circumstances analysis and potentially could have supported a change of custody. In doing so, the court necessarily determined the allegations suggested that “admissible evidence will show that the circumstances of the child or one or both parents or joint legal or physical custodians have materially and substantially changed since the entry of the order to be modified.” See Utah Code Ann. § 30-3-10.4(1)(a). Once it made such a determination, the court’s task under rule 12(b)(6) was at an end. See Fehr, 2018 UT App 136, ¶ 8. It was improper for the court to proceed beyond the question of sufficiency of the pleadings to merits-related questions of how much weight, value, or type of consideration to give to certain allegations in the overall changed-circumstances analysis, particularly in light of the court’s acknowledgement that more facts were needed regarding some of the allegations for it to make that assessment in the first place. See id.
¶37 For these reasons, we conclude the district court erred in dismissing the Petition for failure to state a claim under rule 12(b)(6). The court exceeded the scope of a proper rule 12(b)(6) inquiry in dismissing the Petition. Accordingly, we reverse the rule 12(b)(6) portion of the court’s dismissal of the Petition.
II. Dismissal for Failure to Use Dispute Resolution Procedures
¶38 Ryan also challenges the district court’s alternative ground for dismissal because of his failure to use dispute resolution procedures, arguing the court exceeded its discretion to dismiss the Petition on this ground. He contends the court erred by sua sponte raising the dispute resolution procedure issue and then ruling on it as an alternative ground for dismissal. He points out that Brenda’s motion to dismiss “did not raise the issue of the alternate dispute resolution requirement” as a ground for dismissal, and he asserts the parties “had no knowledge the issue was being considered” by the court as a ground for dismissal until the hearing. On this basis, he contends the court erred by dismissing the Petition on this ground without allowing the parties to “fully brief the issue.” We agree.
¶39 Our supreme court has explained that Utah’s “appellate system has developed along the adversarial model, which is founded on the premise that parties are in the best position to select and argue the issues most advantageous to themselves, while allowing an impartial tribunal to determine the merits of those arguments.” State v. Johnson, 2017 UT 76, ¶ 8, 416 P.3d 443. In this respect, as a general rule, “all parties are entitled to notice that a particular issue is being considered by a court and to an opportunity to present evidence and argument on that issue before decision.” Plumb v. State, 809 P.2d 734, 743 (Utah 1990). “Sua sponte decisions by [district] courts are inconsistent with the notion of due process when parties are not provided advance notice that the court is considering a given course of action, and the losing party is not allowed to be heard thereon.” Jenkins v. Weis, 868 P.2d 1374, 1383 (Utah Ct. App. 1994) (Bench, J., dissenting). In other words, “[t]imely and adequate notice and an opportunity to be heard in a meaningful way are the very heart of procedural fairness.” Nelson v. Jacobsen, 669 P.2d 1207, 1211 (Utah 1983); see also Rubins v. Plummer, 813 P.2d 778, 780 (Colo. App. 1990) (“The right to prior notice and an opportunity to be heard is a critical part of our judicial system.” (citing Goldberg v. Kelly, 397 U.S. 254 (1970))). And, as to sua sponte dismissals in particular, a court should “normally refrain” from doing so unless the deficiency or issue “is brought to its attention by way of pleadings or motions by the parties.” See Rubins, 813 P.2d at 779. “[I]f the court is inclined to dismiss sua sponte, it must afford the plaintiff an opportunity to be heard” and to “persuade the court that dismissal is not proper” as a “matter of fundamental fairness, if not procedural due process.” Id.
¶40 Here, Brenda’s motion to dismiss did not raise the failure to use dispute resolution procedures in relation to the request to modify custody as a basis for failure to state a claim under rule 12(b)(6) or for dismissal on another basis; her motion sought dismissal only for failure to state that a material and substantial change had occurred, as required under Utah Code section 30-3-10.4(1)(a). Further, the relevant notice of hearing indicated the issue to be considered during the hearing was the motion to dismiss. See generally In re Cannatella, 2006 UT App 89, ¶ 3, 132 P.3d 684 (“To satisfy an essential requisite of procedural due process, a hearing must be prefaced by timely notice which adequately informs the parties of the specific issues they must prepare to meet.” (quotation simplified)).
¶41 As a result, Ryan was first made aware during the hearing itself that the court was considering dismissal on the additional ground that he had failed to use dispute resolution procedures before seeking court intervention. The court raised the dispute resolution issue sua sponte at the hearing, and apparently in the context of determining whether Ryan had satisfied the requirements for modification of custody under section 30-3-10.4(1). And without allowing Ryan an opportunity to brief the issue, it announced its ruling from the bench at the end of the hearing and dismissed the Petition on the additional ground that the parties had not met the dispute resolution requirement.
¶42 In doing so, the court denied Ryan an adequate opportunity to prepare for and address the dispute resolution issue before it announced its dismissal on that ground. For example, had Ryan been made aware that the court was considering the dispute resolution issue in conjunction with Brenda’s motion, he might have made an informed decision to forgo pursuing the Petition in favor of engaging in mediation or another dispute resolution procedure. In this respect, because of the court’s sua sponte treatment of the issue, Ryan was not afforded the opportunity to prepare for and address, with authority, whether engaging in dispute resolution proceedings, as set out in section 30-3-10.4, is required to state a claim for modification of custody or is otherwise required in every case before court intervention is sought. Cf. In re Adoption of B.Y., 2015 UT 67, ¶ 23, 356 P.3d 1215 (“Mere notice is an empty gesture if it is not accompanied by a meaningful chance to make your case.”). This denial of a briefing opportunity in light of the court’s sua sponte dismissal was significant where the court’s decision to dismiss on this ground appears to have been rooted in the court’s belief that engaging in a dispute resolution procedure is a prerequisite, under section 30-3-10.4, to filing a petition to modify custody. Relatedly, the court’s sua sponte consideration and ruling on the dispute resolution issue denied Ryan an opportunity to prepare for and address whether, given the particular nature of the allegations allegedly justifying a modification of custody and the terms of the parties’ parenting plan, the failure to engage in dispute resolution procedures before seeking court intervention was insufficient to justify the Petition’s dismissal.
¶43 Indeed, as Ryan has pointed out on appeal, there were some important questions raised by the court’s sua sponte treatment of the issue, including whether compliance with a dispute resolution procedure is required to state a claim for modification of custody or whether use of a dispute resolution procedure was required under the circumstances and in light of the allegations in this case. Because the court both sua sponte raised the issue for the first time and then rendered dismissal on it during the hearing, Ryan was denied an opportunity to research authority and consider, prepare for, and respond to these and other related issues. See In re Cannatella, 2006 UT App 89, ¶ 3.
¶44 For these reasons, the court’s sua sponte consideration of and dismissal based on the dispute resolution procedure issue, without affording Ryan the opportunity to research authority and prepare to address it, was error. In light of the lack of notice before the hearing that the court was considering dismissal for failure to engage in dispute resolution procedures and the complexity of the issues (as well as the variety of responses Ryan might have made had he been informed before the hearing that the court was evaluating the viability of the Petition on that ground), the court should not have dismissed on this ground before providing Ryan the opportunity to brief the issue. Accordingly, we reverse the court’s dismissal on the alternative ground of failure to use a dispute resolution procedure.
CONCLUSION
¶45 The district court applied the proper changed-circumstances standard in evaluating the Petition. But it misapplied the rule 12(b)(6) standard in dismissing the Petition. The court also erred by dismissing the Petition for failure to use dispute resolution procedures before seeking court intervention. Accordingly, we reverse and remand for further proceedings consistent with this opinion.
I’ve never seen a GAL or custody evaluator add value equal to the fees they charge
This post is the fourteenth in series of 15 posts on the subject of custody evaluations and the appointment of guardians ad litem (“GALs” for short) in Utah child custody cases when the judge could simply interview the children instead. You do not have to read all 16 posts to benefit from this series. Read as many or as few as you wish.
The purpose of this series is to make the case for the proposition that an interview by the judge is a faster, more accurate, more particular, more reliable, and less expensive form of evidence than what a GAL and/or custody evaluator provides.
I’ve never seen a guardian ad litem or custody evaluator add value to the child custody analysis that is equal to what the GAL and/or custody evaluator charged in fees, and here is why:
First and most glaring of all, there is no way to know if the guardian ad litem has done anything (let alone done anything well or poorly) because the guardian ad litem does not have to make a record and is not subject to discovery. The guardian ad litem could literally do nothing and lie through his or her teeth to the court and there is be no way discover and expose it except by dumb luck. Custody evaluators, as opposed to guardians ad litem, can be subject to some discovery, but rarely is a custody evaluator willing to part with his or her file contents in response to a discovery request. It is often very difficult to get a custody evaluator to comply with the discovery request, if a discovery request is made.
Back to the problems of guardians ad litem specifically. Because the guardian ad litem is not required to furnish the court with any proof in support of any alleged facts that underlie the GAL’s assertions and recommendations, the guardian ad litem’s assertions, analysis, and recommendations literally have the same evidentiary value as any other person’s bald claims.
If there are devoted guardians ad litem out there becoming intimately and accurately acquainted with their child clients’ circumstances and feelings AND providing verifiably accurate and credible factual information to the court, as well as sound analysis based upon and citing to such evidence, I have yet to witness that personally. If anyone viewing this has had a different experience that can be documented and verified, I plead with you to share it with me. I must warn you: even if you were to produce such of guardian ad litem, I would ask whether what the guardian ad litem charged for such a thing justify the expense when the child could have been interviewed directly by the judge instead.
Third, even if we were to grant that a guardian ad litem somehow furnished accurate evidence and analysis—without the basis of that evidence and analysis being subject to discovery and verification and without having to make a record of what the children are asked and what they say in response—the amount and quality of such evidence and analysis still does not justify the time and money consumed by the appointment of a guardian ad litem compared to the much lower cost, much shorter consumption of time, and greater accuracy of a judge’s on the record interview of the child.
Third District Court, Salt Lake Department
The Honorable Robert P. Faust
No. 144903963
Steve S. Christensen and Clinton R. Brimhall,
Attorneys for Appellant
James H. Woodall and Deborah L. Bulkeley,
Attorneys for Appellee
JUDGE DIANA HAGEN authored this Opinion, in whichJUDGES KATE APPLEBY and JILL M. POHLMAN concurred.
HAGEN, Judge:
¶1 In 2005, Heather and Renson Marroquin were married. Prior to the marriage, Renson owned and operated a vending machine business.[1] After Heather filed for divorce in 2014, the value of that business became a central question in valuing the marital estate and distributing its assets. On appeal, Heather challenges the district court’s valuation of the business, its failure to impose a due date or interest rate for payment of her half of the marital assets, and its denial of her motion to amend its findings and for a new trial. Because we conclude the district court did not exceed its discretion with respect to any of the issues raised by Heather on appeal, we affirm.
BACKGROUND
¶2 Before marrying Heather in 2005, Renson founded Deluxe Vending LLC and now owns a 99% interest in that company.[2] Deluxe Vending operates eighty-seven vending machines and three “micro-markets”[3] in numerous locations throughout Salt Lake City, Utah. For the first year of their marriage, and two summers following that, Heather helped Renson stock the vending machines throughout the day and count the money collected. Once she completed her education, Heather obtained other employment, but she continued to “help [Deluxe Vending] sporadically as needed or as requested.”
¶3 Renson managed and conducted all of Deluxe Vending’s business operations and had no other employees. He established personal relationships with the property owners, which allowed him to continue to operate his vending machines and micro-markets at their respective locations. Most of Deluxe Vending’s contracts are on a month-to-month basis and can be replaced by other vendors at any time after the monthly contract ends.
¶4 In 2014, Heather filed for divorce. The primary issue at the parties’ divorce trial was the value of Deluxe Vending and division of its assets. Each party obtained his or her own expert to testify to the business’s value. Heather’s expert is a certified public accountant who had “no credentials in the area of business valuation.” Heather’s expert initially valued Deluxe Vending between $725,000 and $900,000 but increased “his estimate to a range of $1,229,317 to $1,530,803” just before trial by using an “income approach to value the business,” which includes “goodwill associated with the business.” At trial, Heather’s expert reduced his estimated value of Deluxe Vending to $700,000.
¶5 Renson’s expert is a certified public accountant, with accreditations in business valuation and as a senior appraiser. He “devotes approximately 75% of his practice to performing business valuations and testifying as an expert.” Following accepted industry practices of using the net asset approach, Renson’s expert valued Deluxe Vending at $152,937. The value was determined by subtracting the fair market value of liabilities from the fair market value of assets and then subtracting “between a 5 and 10 percent marketability discount.” In this case, Renson’s expert “went on the low end and took [a] 5 percent” discount. Renson’s expert opined that Deluxe Vending did not have any “institutional goodwill,” but only personal or professional goodwill attributed solely to Renson. The expert explained that, “without the relationships that exist for the places where the vending machines are located, there is no potential for goodwill. There’s no income earning capacity that would be in excess of the value of the assets.” At trial, Renson’s expert testified that Heather’s expert was unreliable and opined that he “failed to follow accepted industry practices, that he relied on inaccurate information, and that he made unreasonable assumptions.”
¶6 In its findings of fact, the court rejected Heather’s expert’s valuation and found Renson’s expert to be more credible. It found that the business was worth $152,937, awarded Deluxe Vending to Renson, and ordered him to pay Heather “one-half of the value, or $76,468.50.” The court also awarded alimony to Heather and divided the equity of certain personal property in half. The court entered the divorce decree consistent with those findings of fact.
¶7 Heather filed a motion to amend the court’s findings of fact or for a new trial (the post-judgment motion). In the post-judgment motion, Heather argued that the court erred in determining the value of Deluxe Vending because Renson testified at trial that some of the business’s liabilities had been paid off since Renson’s expert prepared the valuation report. Relatedly, she argued that the court should amend its findings to account for the institutional goodwill of the business rather than attribute the goodwill solely to Renson. Heather asked the court to set a date for Renson’s payment to Heather for one-half the value of Deluxe Vending and the personal property award. She also asked the court to make findings “regarding Renson’s dissipation of marital funds.” Finally, she requested a new trial “because the court’s method of ruling was irregular and surprising.”
¶8 The court found that the post-judgment motion was Heather’s “attempt[] to modify and add additional terms that were not presented as evidence at trial nor were they presented when [she] was given an additional opportunity to provide information to the Court due to lack of information and evidence at trial.” Based on her “failure to provide the information as directed within the time frames set, the Court was left with only the information provided at trial upon which to make a determination.” The court therefore denied the post-judgment motion.
¶9 Heather appeals.
ISSUES AND STANDARDS OF REVIEW
¶10 Heather raises three principal issues on appeal. First, Heather claims that the district court’s valuation of Deluxe Vending was clearly erroneous in two respects. She contends the court erroneously determined that any goodwill associated with Deluxe Vending was personal to Renson. Relatedly, she contends the court erred in accepting the appraisal value assigned by Renson’s expert to Deluxe Vending several months before trial given that Renson testified at trial that the liabilities had been reduced. A district court is “entitled to a presumption of validity in its assessment and evaluation of evidence,” and we defer to the district court’s “findings of fact related to property valuation and distribution unless they are clearly erroneous.” Taft v. Taft, 2016 UT App 135, ¶ 63, 379 P.3d 890 (quotation simplified). We “will not disturb a court’s distribution of marital property unless it is clearly unjust or a clear abuse of discretion.” Id. ¶ 32.
¶11 Second, Heather contends the court erred when it failed to set a due date or impose an interest rate on Renson’s payment to Heather for one-half the value of Deluxe Vending and the one-half interest award of personal property. District courts “have considerable discretion in determining property distribution in divorce cases,” Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 8, 176 P.3d 476 (quotation simplified), and we will not disturb the district court’s determination absent a clear abuse of discretion, Taft, 2016 UT App 135, ¶ 59.
¶12 Third, Heather contends the district court erred in denying the post-judgment motion because “the transcript showed that the district court had halted or interfered with [her] attempts to elicit testimony regarding dissipation of marital assets.”[4] We will reverse a district court’s denial of a motion for a new trial or to amend the findings and judgment for abuse of discretion. Bergmann v. Bergmann, 2018 UT App 130, ¶ 12, 428 P.3d 89. “To the extent that our review turns on facts presented at trial, we defer to the trial court’s underlying findings of fact, which shall not be set aside unless clearly erroneous.” Id. (quotation simplified).
ANALYSIS
I. The Value of Deluxe Vending
¶13 Heather contends the district court made two errors when
calculating the value of Deluxe Vending. First, she argues that the court should have included institutional goodwill in its calculation. Second, she argues the court’s calculations of the value of the company should have taken into consideration Renson’s testimony regarding the reduction in liabilities of Deluxe Vending. We address each argument in turn and conclude that the court did not err when calculating the value of Deluxe Vending.
A. Goodwill of Deluxe Vending
¶14 Heather contends the district court “should have included goodwill value in its calculations” of the value of Deluxe Vending. “In a divorce proceeding, determining and assigning values to marital property is a matter for the trial court and this court will not disturb those determinations absent a showing of clear abuse of discretion.” Dunn v. Dunn, 802 P.2d 1314, 1317 (Utah Ct. App. 1990) (quotation simplified). “Marital property is ordinarily all property acquired during marriage and it encompasses all of the assets of every nature possessed by the parties, whenever obtained and from whatever source derived.” Id. at 1317–18 (quotation simplified). Here, Renson does not dispute that Deluxe Vending is marital property subject to division. See id.
¶15 When valuing a business in marriage dissolution cases, district courts must consider whether goodwill is institutional or personal to one spouse. See Sorensen v. Sorensen, 839 P.2d 774, 775 (Utah 1992) (agreeing with “jurisdictions that do not treat [personal] goodwill as a marital asset to be divided”). Institutional, or enterprise, goodwill “is based on the intangible, but generally marketable, existence in a business of established relations with employees, customers and suppliers, and may include factors such as a business location, its name recognition and its business reputation.” See DeSalle v. Gentry, 818 N.E.2d 40, 47 (Ind. Ct. App. 2004). Personal goodwill is based on an individual’s “reputation for competency” and is not subject to distribution upon divorce. Sorensen, 839 P.2d at 775–76; see also Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 44, 176 P.3d 476 (“There can be no good will in a business that is dependent for its existence upon the individual who conducts the enterprise and would vanish were the individual to die, retire or quit work.” (quotation simplified)).
¶16 Here, the district court concluded that the only goodwill associated with Deluxe Vending was personal to Renson. The court found that Deluxe Vending was the type of sole proprietorship where the owner’s goodwill is not a marital asset subject to division. Accordingly, the court did not consider Renson’s personal goodwill in calculating the value of Deluxe Vending.
¶17 Heather argues that Deluxe Vending is distinguishable from the type of sole proprietorship where goodwill is not subject to division. For example, she cites Sorensen, in which the district court valued a sole-practitioner dental practice at $100,060 and determined that $62,560 of that value represented the personal “goodwill” of the husband. 839 P.2d at 775. The husband appealed the district court’s decision, arguing that it “should not have included [personal] goodwill and reputation in its valuation of his dental practice.” Id. Our supreme court determined that “the goodwill of a sole practitioner is nothing more than his or her reputation for competency.” Id. “It may well be that if the sole practitioner retires at the time of a divorce and his or her practice is actually sold and an amount is realized over and above the value of the tangible assets, the full amount should be viewed as marital property.” Id. But where no actual sale of the business takes place, personal goodwill “should not be treated differently from a professional degree or an advanced degree,” and requiring the sole practitioner to pay the spouse “part of the value ascribed to the [personal] goodwill” would be inequitable. Id. at 775–76.
¶18 Relying on Sorensen, Heather asserts the district court made “no findings about [Renson] having a reputation that matters to the business’s operation.” Both the district court’s oral and written findings of fact refute this assertion. The court specifically found that “the goodwill of Deluxe Vending is solely attributable to Renson’s work, his efforts, and his reputation for competency” based on Renson “being the face of the business” and the “personal relationships” he has made with the property owners that have allowed him to continue to conduct business, largely on a month-to-month basis.
¶19 Deluxe Vending is more akin to the car dealership at issue in Stonehocker. In that case, the district court determined that a used car dealership formed by the husband during the course of the marriage was “in reality a sole proprietorship” and the success of the used car dealership was “solely attributable to [the husband’s] personal, professional reputation.” Stonehocker, 2008 UT App 11, ¶¶ 6, 40, 43. This court agreed that the used car dealership was “essentially [the husband’s] sole proprietorship,” because the wife had “only token involvement” in the business, and its success was “the product of [the husband’s] reputation, goodwill, and sole efforts.” Id. ¶¶ 40–42 (quotation simplified). The district court therefore correctly concluded that the value of the used car dealership “did not include any amount for goodwill.” Id. ¶ 43.
¶20 Here Renson owns 99% of Deluxe Vending and is the only employee of the business. He remains in contact with the entities that continue to allow Deluxe Vending to operate vending machines and micro-markets on the properties on a month-to-month basis. Heather’s involvement in the business was minimal and limited to stocking the machines and counting the money at the beginning of the marriage. Thus, Renson is akin to the sole proprietor in Stonehocker and Heather had “only token involvement” in Deluxe Vending’s operations. See id. ¶¶ 40–41 (quotation simplified).
¶21 Heather asserts that “anybody could step into [Renson’s] shoes and carry on with the business under its name and with its assets,” but she has not marshaled any record evidence that would support that assertion. See id. ¶ 9 (explaining that when a party challenges the findings of fact, the party “must first marshal the evidence in support of the findings and then demonstrate that the findings are unsupported by substantial evidence” (quotation simplified)). We therefore conclude that the district court did not exceed its discretion when it did not include institutional goodwill in calculating the value of Deluxe Vending.
B. Decreased Liabilities of Deluxe Vending
¶22 Heather contends the district court erred by basing its valuation of Deluxe Vending on the expert reports created prior to trial. Heather argues that the court should have valued the business as of the exact date of the divorce by accounting for Renson’s trial testimony that he had further paid down the business’s liabilities in the intervening months.
¶23 “Determining and assigning values to marital property is a matter for the trial court, and [we] will not disturb those determinations absent a showing of clear abuse of discretion.” Ebbert v. Ebbert, 744 P.2d 1019, 1023 (Utah Ct. App. 1987). Because Heather did not argue at trial that the district court should adjust the appraised value of Deluxe Vending based on a reduction in its liabilities, she cannot show an abuse of discretion.
¶24 Here, both parties submitted expert reports regarding the value of Deluxe Vending several months before trial. A valuation is necessarily a snapshot in time and both parties relied on the experts’ valuations when preparing for trial. Similarly, the district court relied on those expert reports and determined that Renson’s expert’s valuation was more credible. In the post-judgment motion, Heather cited portions of Renson’s testimony, noting that some of Deluxe Vending’s loans had been paid off or reduced. Heather argued that the court “should amend its findings consistent with the evidence at trial” by increasing the value of Deluxe Vending to account for the decrease in liabilities. Raising this factual issue for the first time in a post-judgment motion to amend the court’s findings of fact did not give Renson the opportunity to present evidence as to whether there were other changes that affected the valuation of Deluxe Vending, such as a decrease in assets. And Heather has failed to demonstrate that she could not have requested the court consider evidence outside of the experts’ valuation reports at trial. Cf. Hudema v. Carpenter, 1999 UT App 290, ¶ 40, 989 P.2d 491 (affirming the district court’s denial of a post-judgment motion for a new trial because “the evidence offered [in the post-judgment motion] could have been produced at trial with reasonable diligence”). Indeed, Heather elicited the testimony from Renson, but never asked the court to consider it when calculating the value of Deluxe Vending.
¶25 Heather cannot establish that the district court erred by not reducing the appraised value of Deluxe Vending, sua sponte, based on trial testimony regarding decreased liabilities. Nor has she shown that the district court abused its discretion in denying her post-judgment motion to amend its findings on grounds not presented at trial.
II. Failure to Set Due Date or Interest Rate for Heather’s Award of Marital Assets
¶26 Heather contends the district court “should have included an interest rate or due date” for her award of marital assets. Heather asserts that the court’s failure to do so places her “at such a disadvantage” that it amounts to “an abuse of discretion.” We disagree.
¶27 When the district court assigns a value to an item of marital property, the court must equitably distribute it “with a view toward allowing each party to go forward with his or her separate life.” Stonehocker v. Stonehocker, 2008 UT App 11, ¶¶ 13, 15, 176 P.3d 476. We will not disturb the district court’s payment determination absent a clear abuse of discretion. Taft v. Taft, 2016 UT App 135, ¶ 59, 379 P.3d 890; see also Stonehocker, 2008 UT App 11, ¶ 8.
¶28 Heather relies exclusively on Taft to support her argument. In Taft, the district court granted the husband “discretion to pay [the] judgment all at once or in monthly installments for a period of time.” 2016 UT App 135, ¶ 57 (quotation simplified). The court did not order any minimum payment and provided that if the husband chose to make monthly payments, he “shall begin equal monthly payments, and the duration of such monthly installment payments shall not exceed a period of ten years, whereupon the balance shall be paid to [the wife] in one final balloon payment.” Id. (quotation simplified). On appeal, the wife argued that this payment strategy was inequitable because it allowed the husband “to receive full immediate enjoyment of the assets awarded to him as well as the full use of [the wife’s] share of the assets while [the wife was] deprived of meaningful access to her award.” Id. ¶ 58 (quotation simplified). This court agreed, determining that the husband was “given nearly complete discretion regarding the payment to [the wife] of her share of the marital property over a ten-year period” at a low interest rate and that the wife, who had “been granted a substantial judgment in token of her share of the marital real property,” had “no ability to collect, access, or substantially enjoy until ten years pass[ed], unless [the husband] decide[d] otherwise.” Id. ¶ 59. This court therefore concluded “that the terms of [the wife’s] property judgment [were] inequitable and that the trial court exceeded its discretion by structuring the terms of [the wife’s] property judgment as it did.” Id. ¶ 62.
¶29 This case is distinguishable from Taft. The district court in Taft gave the husband discretion to delay payment to the wife in an inequitable way. Unlike the spouse in Taft, Heather does not lack the “ability to collect, access, or substantially enjoy” her award of marital property. See id. ¶ 59. Instead, she can collect on the judgment just as any other judgment creditor. See Utah R. Civ. P. 62(a) (providing that “[n]o execution or other writ to enforce a judgment may issue until the expiration of 14 days after entry of judgment, unless the court in its discretion otherwise directs”). Heather acknowledges this ability in her brief on appeal, stating that Renson “can hold onto the assets and reap the benefits while [Heather] waits for payment or expends time, effort, and money to enforce the divorce decree.” (Emphasis added.) Because Heather has not yet attempted to enforce the divorce decree, she cannot show that she has been deprived of meaningful access to her award or prevented from going forward with her separate life. We therefore conclude the district court did not abuse its discretion when it did not impose a due date or interest rate for the payment of Heather’s award of marital assets.
III. Irregularity of Proceedings
¶30 Finally, Heather contends the district court erred in denying her motion for a new trial based on an irregularity of the proceedings. Heather argues that she attempted to establish a claim that Renson dissipated marital assets, but the court declined to address it and “cut off [Heather’s] attempts to elicit testimony on the subject.”
¶31 Following a bench trial, “a new trial may be granted to any party on any issue” if, among other circumstances, “there was an “irregularity in the proceedings . . . or abuse of discretion by which a party was prevented from having a fair trial.” Utah R. Civ. P. 59(a)(1). “Because the grant of a new trial is ordinarily left to the sound discretion of the trial court, we will review the court’s decision in this regard under an abuse of discretion standard.” Child v. Gonda, 972 P.2d 425, 429 (Utah 1998). And “absent a showing by the appellant that the trial outcome would have differed, every reasonable presumption as to the validity of the [judgment] below must be taken as true upon appeal.” Id.
¶32 Here, Heather asserts that the district court, “on several occasions . . . cut off [Heather’s counsel’s] questioning” of Renson regarding the claim of dissipation of marital assets. She claims that, on one occasion, Heather’s counsel was “attempting to elicit testimony related to [Renson’s] credibility and the finer details of the evidence,” but the court “cut off the questioning” and “asked [Renson] point blank if he was hiding money.” Heather argues that this was “uniquely harmful” because it “was an unfair boon to [Renson]” and that the effect was to “shield[]” Renson “from questions about his waste of marital assets.” We disagree.
¶33 When determining “whether a party should be held accountable for the dissipation of marital assets,” there are “a number of factors that may be relevant,” including (1) “how the money was spent, including whether funds were used to pay legitimate marital expenses or individual expenses”; (2) “the parties’ historical practices”; (3) “the magnitude of any depletion”; (4) “the timing of the challenged actions in relation to the separation and divorce”; and (5) “any obstructive efforts that hinder the valuation of the assets.” Rayner v. Rayner, 2013 UT App 269, ¶ 19, 316 P.3d 455. “While marital assets are generally valued as of the date of the divorce decree, where one party has dissipated an asset, hidden its value or otherwise acted obstructively, the trial court may, in the exercise of its equitable powers, value a marital asset at some time other than the time the decree is entered, such as at separation.” Parker v. Parker, 2000 UT App 30, ¶ 13, 996 P.2d 565 (quotation simplified).
¶34 Our review of the record shows that Heather’s counsel asked questions about spending money, but never directly asked Renson whether the money came from either the company account or a joint checking account. See id. Instead, Heather’s counsel asked questions about where, when, and how much money Renson spent. The court interjected, stating, “Let’s just cut to the chase, do you have any other squirrel holes or nest eggs that you’ve been hiding or putting money in . . . that you didn’t report in your financial declarations and did not disclose to [c]ounsel?” Renson said he did not. Heather’s counsel then pursued a different line of questioning. When Heather’s counsel attempted to ask Renson again about where and when he spent his money, Renson’s counsel objected as to relevance, arguing that “unless [Heather] ties it to a business expense that’s been improperly claimed, he can spend his money on anything he wants.” See id. Heather’s counsel argued that it was relevant to the court’s consideration regarding attorney fees. The court sustained the objection and explained that “what people do with their income and how they spend it” is irrelevant. Cf. Rayner, 2013 UT App 269, ¶ 19.
¶35 Because Heather never asked the court to find that Renson’s personal spending decreased the value of the company or any other marital asset, the questions did not go to a material issue or fact in dispute. Heather had the opportunity at trial, on numerous occasions, to direct the court to specific assets that had been dissipated by Renson’s spending, but she did not. Heather therefore cannot show that she did not have the opportunity to present the issue to the district court or that she was denied a fair trial. See Utah R. Civ. P. 59(a)(1). Accordingly, the district court did not abuse its discretion when it denied her motion for a new trial based on an irregularity in the proceedings.
IV. Attorney Fees
¶36 Renson seeks attorney fees incurred on appeal under rule 33 of the Utah Rules of Appellate Procedure, arguing that Heather’s appeal was “frivolous or for delay.” Rule 33 allows for the sanction of “just damages, which may include . . . reasonable attorney fees” to the prevailing party if an appeal “is not grounded in fact, not warranted by existing law, . . . not based on a good faith argument . . . or [if taken] for the purpose of delay.” Utah R. App. P. 33(a),(b). “The sanction for bringing a frivolous appeal is applied only in egregious cases, lest there be an improper chilling of the right to appeal erroneous lower court decisions.” Maughan v. Maughan, 770 P.2d 156, 162 (Utah Ct. App. 1989) (quotation simplified). Although Heather has not been successful on appeal, her arguments were “worthy of consideration and should not be subject to the chilling effect” of rule 33 sanctions. See id.
CONCLUSION
¶37 We conclude the district court did not exceed its discretion when it calculated Deluxe Vending’s value without including institutional goodwill and when it did not recalculate the value of Deluxe Vending based on testimony elicited at trial regarding a reduction of liabilities. We further conclude the court did not exceed its discretion by not imposing a deadline on or interest rate for Renson’s payment to Heather where there are no limitations on her ability to enforce the judgment. And because Heather failed to show an irregularity in the proceedings, we conclude the court did not exceed its discretion when it denied the post-judgment motion for a new trial. Accordingly, we affirm.
Utah Family Law, LC | divorceutah.com | 801-466-9277
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[1] Because both parties share the same surname, we refer to them by their first names with no disrespect intended by the apparent informality.
[2] Heather is not the 1% interest owner of Deluxe Vending.
[3] Deluxe Vending’s micro-markets are “self-serve kiosks” that allow patrons to access food and beverage items from a cooler and then scan the item at the kiosk and pay with either a credit or debit card or with cash.
[4] Heather also contends the district court “abused or entirely failed to exercise its discretion when it declined to factor dissipation of marital assets into its division of the parties’ martial assets.” This argument is unpreserved. “[P]arties are required to raise and argue an issue in the trial court in such a way that the court has an opportunity to rule on it.” State v. Johnson, 2017 UT 76, ¶ 18, 416 P.3d 443 (quotation simplified). Failure to do so “precludes a party from arguing that issue in an appellate court, absent a valid exception,” such as plain error, ineffective assistance of counsel, or exceptional circumstances. Id. ¶¶ 18–19. Here, Heather never alleged at trial or in the post-judgment motion that the value of the marital assets should be adjusted to account for money Renson spent on non-marital assets. Nor did she identify Deluxe Vending’s bank account as the asset depleted or suggest that the money Renson spent on non-marital expenses was taken from the joint checking account. Instead, Heather asked the court to consider the alleged dissipation only with respect to attorney fees and alimony. Because Heather failed to raise this issue before the district court and she has failed to argue that an exception to preservation applies, see id., we decline to address it.