Jeremy G. Jones, Jeffrey C. Jensen, Sandy, for respondent
Julie J. Nelson, Millcreek, Alexandra Mareschal, Salt Lake City,
for petitioner
ASSOCIATE CHIEF JUSTICE PEARCE authored the opinion of the Court in
which CHIEF JUSTICE DURRANT, JUSTICE PETERSEN, JUSTICE HAGEN, and
JUDGE REUBEN RENSTROM joined.
Having recused herself, JUSTICE POHLMAN did not participate;
DISTRICT COURT JUDGE REUBEN RENSTROM sat.
ASSOCIATE CHIEF JUSTICE PEARCE, opinion of the Court:
INTRODUCTION
¶1 Utah law permits parents to establish the paternity of their child by signing and filing a voluntary declaration of paternity (VDP) with the Office of Vital Records and Statistics. UTAH CODE §§ 78B-15-301-302. Sarah Benson and Taylor Scott, an unmarried couple, signed a VDP in which they both represented that Scott was the father of Benson’s child (Child). Problem was, Scott was not Child’s biological father, and both Scott and Benson knew that when they signed the VDP.[1]
¶2 After they submitted the VDP to the state, Benson continued to allow Scott to act as a father to Child, much as she had since Child’s birth. But she eventually cut off contact between Scott and Child. Scott filed a complaint, asserting he was Child’s father and asking the court for joint legal and physical custody. Benson challenged the VDP and asked the court to declare that Scott was not Child’s father.
¶3 The district court applied the Utah Uniform Parentage Act and concluded that the VDP should be set aside because of the parties’ fraud and a mutual mistake. See id. § 78B-15-307(1). But it also concluded that, under the Act, Scott should be adjudicated to be Child’s father. See id. § 78B-15-608. Benson appealed, and the court of appeals affirmed.
¶4 Before us, Benson argues that the court of appeals misinterpreted the Act because once the district court concluded that the VDP was the product of fraud and mistake, the Act did not provide a path for Scott to continue to assert that he should be deemed to be Child’s father.
¶5 We reject Benson’s reading of the Act and affirm.
BACKGROUND
¶6 Benson was pregnant with Child when she met and began dating Scott. Scott knew that Benson was pregnant with Child while they were dating and that he was not Child’s biological father.
¶7 But Scott attended Child’s birth and played a substantial role as a parental figure in Child’s life for the next seven years. Child’s biological father passed away shortly after Child’s birth.
¶8 During their dating relationship, Benson became pregnant with Scott’s biological child (Sibling). Before Sibling was born, Benson and Scott—who had never married—split up.
¶9 Because the couple never married, Utah law did not consider Scott to be Sibling’s “presumed father.” Benson initiated a paternity action, which established that Scott was Sibling’s biological father. See supra ¶ 31 n.7. Scott and Benson settled that action by agreeing to sign a voluntary declaration of paternity (VDP)—in which Scott acknowledged that he was Sibling’s father—and by obtaining an order that gave Scott joint custody of and required him to pay child support for Sibling.[2] Under their custody agreement, Scott enjoyed near-equal parent-time with Sibling.
¶10 Scott often cared for Child at the same time and in the same manner that he cared for Sibling. This pattern continued even after Scott married someone other than Benson.[3]
¶11 At some point, Benson was arrested and charged with driving under the influence. Benson pleaded guilty, and her driving privileges were suspended. For the next several months, Scott—at Benson’s request—was the primary caregiver to both Child and Sibling.
¶12 Benson suffered from mental health issues during this period. She wanted a plan to ensure that both of her children would be cared for if she were no longer around. This thinking culminated in Scott and Benson signing and submitting a VDP that represented to the state that Scott was Child’s biological father, even though both Scott and Benson knew that representation was false. The Office of Vital Records updated Child’s birth certificate to reflect Scott’s paternity.
¶13 For a year or so after signing the VDP, Scott and Benson maintained contact and shared parenting responsibilities for both children. Eventually Benson—who had married and whose husband wanted to adopt Child—cut off contact between Scott and Child.
¶14 Scott filed a paternity action, seeking to be declared Child’s legal father and asking for joint legal and physical custody of Child. Benson counter-petitioned, challenging Scott’s paternity and asking to have the VDP set aside.
¶15 The district court treated Benson’s counter-petition as an action to invalidate the VDP under the Utah Uniform Parentage Act. The Act provides that a VDP can be challenged because of fraud, duress, or material mistake of fact. UTAH CODE § 78B-15-307. Benson also filed a motion asking the court to compel Scott to submit to genetic testing, which she asserted would demonstrate that Scott was not Child’s biological father.
¶16 Scott agreed that a genetic test would prove he was not Child’s biological father, and the parties stipulated to that fact. But Scott asked the court to disregard the biological reality under section 608 of the Act—a provision that allows a court to disregard genetic test results in certain circumstances.[4]
¶17 Benson moved for summary judgment and asked the court to set aside the VDP because the parties had made a “material mistake of fact,” a term statutorily defined to include situations in which “genetic test results . . . exclude a declarant father.” Id. § 78B15-307(5). Benson’s motion also asked the court to find that Scott and Child did not have a father-child relationship because the VDP had been “successfully challenged.”
¶18 The court denied the motion, reasoning that, even though genetic test results would show Scott was not Child’s father, there was no “mistake” because both parties knew Scott was not Child’s biological father when they signed the VDP, and because they “chose at the time to jointly raise a child.”
¶19 After denying Benson’s summary judgment motion, the court held a three-day evidentiary hearing. The district court found that Scott and his witnesses were “generally credible” and that Scott’s description of his relationship with Child was “particularly credible.” The court found that Benson’s own testimony was also “generally credible” but rejected her testimony regarding some aspects of Scott and Child’s relationship.
¶20 The district court reversed the reasoning it had employed to deny summary judgment and concluded that the parties had been operating under a “material mistake of fact” when they signed the VDP. The court also found that Scott and Benson did not defraud each other but that the VDP was still the product of fraud because it committed “fraud against the Utah State Division of Vital Statistics.” The district court determined that the VDP should be set aside and that it was void ab initio and had “no legal force or effect.”
¶21 The district court also accepted the parties’ stipulation that Scott was not Child’s biological father as the “genetic testing” the Act references. The district court also accepted that this “testing” confirmed Scott was not Child’s biological father.[5]
¶22 But the district court ultimately determined that Scott was Child’s legal father, reasoning that its conclusion that the VDP should be set aside “draws the court to [section 608].” The court determined that Benson’s conduct estopped her from denying Scott’s parentage and that it would be inequitable to disrupt Scott and Child’s relationship. The district court also concluded that, after a review of the factors in section 608, it was in Child’s best interest for Scott to be Child’s legal father. The court found that Scott “played a substantial role in [Child’s] life for the first seven years of [Child’s] life, and that role was involuntarily terminated” by Benson. The court also found that “[t]here is and has been a strong bond and attachment between [Scott] and [Child], and there has been since [Child’s] birth.”
¶23 Benson appealed to the court of appeals, which upheld the district court’s ruling. Scott v. Benson, 2021 UT App 110, ¶ 1, 501 P.3d 1148. Like the district court, the court of appeals concluded that Scott was Child’s legal father even though Benson successfully challenged the VDP under section 307 of the Act. See id. ¶¶ 31–32. But, unlike the district court, the court of appeals reasoned that a successful 307 challenge did not render the VDP void from its inception. Id. ¶ 40. The court of appeals instead held that a successful 307 challenge meant that a VDP could be “set aside, on a going-forward basis,” but only as long as section 608 “does not counsel otherwise.” Id. And it concluded that section 608 did not demand a different conclusion than the one the district court reached. See id. ¶¶ 40, 43.
¶24 Benson petitioned for certiorari review contending that the court of appeals misinterpreted the Act.
STANDARD OF REVIEW
¶25 “We review questions of statutory interpretation for correctness, affording no deference to the lower court’s legal conclusions.” Cardiff Wales, LLC v. Washington Cnty. Sch. Dist., 2022 UT 19, ¶ 16, 511 P.3d 1155 (cleaned up).
ANALYSIS
¶26 Benson first claims that the court of appeals wrongly opined that the Act permitted the district court to conduct a section 608 analysis after it concluded that the VDP was fraudulent and based on a material mistake of fact. According to Benson, the court of appeals erred because once a VDP is successfully challenged, the court’s analysis should end in favor of the challenger. Benson also claims that the court of appeals’ interpretation of the statute raises constitutional issues, leads to absurd results, and promotes bad policy.
I. THE COURT OF APPEALS DID NOT ERR WHEN IT APPLIED
SECTION 608 TO DISREGARD THE GENETIC TEST RESULTS
A. The Court of Appeals Correctly Upheld the District Court’s
Decision to Apply Section 608
¶27 Benson first argues the court of appeals incorrectly upheld the district court’s decision to set aside the genetic test results that showed that Scott was not Child’s biological father.[6] Benson argues that section 608 “does not apply to every proceeding commenced under 307” and that, in this case, section 608 “has no application that is consistent with the language of the statute.”
¶28 The Act outlines two ways a VDP can be set aside. It allows either of the signatories to rescind a VDP by filing a voluntary rescission within sixty days of the date the VDP became effective or before “the date of notice of the first adjudicative proceeding to which the signatory is a party, before a tribunal to adjudicate an issue relating to the child, including a proceeding that establishes support,” whichever is earlier. UTAH CODE § 78B-15-306(1). If neither signatory rescinds the VDP—as in this case—they must look to section 307 to challenge the VDP.
¶29 Section 307 provides:
After the period for rescission . . . has expired, a signatory of a declaration of paternity or denial of paternity, or a support-enforcement agency, may commence a proceeding to challenge the declaration or denial only on the basis of fraud, duress, or material mistake of fact.
Id. § 78B-15-307(1).
¶30 In other words, after the VDP has been signed, either of the signatories can rescind it before the earliest of sixty days or notice of an adjudicative proceeding. Id. § 78B-15-306(1). After the statutory rescission period passes, either a signatory or a support-enforcement agency can challenge the validity of the VDP. This challenge can be based on fraud, duress, or material mistake of fact. Id. § 78B-15307(1). A challenge based on fraud or duress can be brought at any time. Id. § 78B-15-307(3). A challenge based on material mistake of fact can only be brought within four years after the declaration is filed. Id. § 78B-15-307(4).
¶31 The Act also contemplates that, in some situations, a court can ignore genetic test results when determining paternity. Id. § 78B15-608. Section 608 permits the district court to do this when “the conduct of the mother or the presumed or declarant father estops that party from denying parentage” and “it would be inequitable to disrupt the father-child relationship between the child and the presumed or declarant father.” Id. § 78B-15-608(1).[7]
¶32 Subsection 608(2) outlines factors a court must consider to determine whether disregarding test results is in the best interest of the child. These factors include how long a presumed or declarant father acted as a child’s father, the nature of the relationship between the child and potential father, and harm to the child if the relationship between the child and potential father is disrupted.[8]
¶33 Benson argues that the court of appeals misread the statute when it endorsed the district court’s decision to conduct the section 608 analysis after it set aside the VDP under section 307. She claims that genetic testing, and therefore section 608, is “irrelevant” to this inquiry “because the ground to set aside the VDP was already established: fraud.” In Benson’s view, the district court starts with the section 307 inquiry and cannot look to section 608 if the court finds that the VDP is the product of fraud, duress, or mistake of fact.
¶34 The court of appeals disagreed with Benson’s argument and held that the district court appropriately applied section 608 because, while other provisions of the Act state when the VDP should be considered “invalid from its inception,” section 307 does not. Scott v. Benson, 2021 UT App 110, ¶¶ 34, 37–38, 501 P.3d 1148. The court of appeals concluded the central question was about “the consequence of a successful Section 307 challenge.” Id. ¶ 36. The court of appeals determined that “the Act’s silence on this point must be viewed in tandem with the specific instructions” given for successfully voiding or rescinding a VDP in other sections of the Act. Id. ¶ 38.
¶35 The court of appeals reasoned that “there is no statutory basis for concluding that a declaration of paternity is void simply because a Section 307 challenge is successful.” Id. ¶ 32. The court of appeals therefore concluded that a district court may look to section 608 to decide whether to disregard genetic testing even after the district court finds a ground to set the VDP aside under section 307.
¶36 In other words, the court of appeals sees the process to challenge a VDP as requiring two steps. In the first step, the district court examines the VDP under section 307 and determines if a challenge to its validity is successful. Id. ¶ 40. If the challenge is successful, the district court moves to step two and applies section 608 to assess whether principles of equity and estoppel should prevent the court from allowing the declaration to “be set aside, on a going-forward basis.” Id. Benson also appears to see this as a two-step process, but she reads the Act to end the inquiry after the first step if the section 307 challenge is successful.
¶37 The aim of statutory interpretation “is to ascertain the intent of the legislature,” and the “best evidence of the legislature’s intent is the plain language of the statute itself.” Castro v. Lemus, 2019 UT 71, ¶ 17, 456 P.3d 750 (cleaned up). We “read the plain language of the statute as a whole, and interpret its provisions in harmony with other statutes in the same chapter and related chapters.” State v. Barrett, 2005 UT 88, ¶ 29, 127 P.3d 682 (cleaned up). Occasionally, “statutory text may not be plain when read in isolation, but may become so in light of its linguistic, structural, and statutory context.” Bryner v. Cardon Outreach, LLC, 2018 UT 52, ¶ 12, 428 P.3d 1096 (cleaned up).
¶38 When we read the statute’s plain language, we see a different structure than Benson and the court of appeals did. The Act does not contemplate the sequential inquiry that the court of appeals describes and that Benson wants. Rather, when a party challenges a VDP, the Legislature intends that, in appropriate cases, the section 608 factors be considered as part of the question of whether the VDP should be invalidated.
¶39 Section 308, titled “Procedure for rescission or challenge,” sets forth the procedure a court must employ to decide whether to set aside a VDP. UTAH CODE § 78B-15-308. Among the instructions section 308 provides to the district court is the mandate that a “proceeding to rescind or to challenge a declaration of paternity or denial of paternity must be conducted in the same manner as a proceeding to adjudicate parentage under Part 6, Adjudication of Parentage.” Id. § 78B-15-308(4) (emphasis added).
¶40 This means that when Benson challenged the VDP under section 307, the procedure to challenge the VDP had to be conducted in the same manner as adjudication of parentage under Part 6.[9] And, under Part 6, section 608, a district court can ignore genetic test results in appropriate circumstances. Thus, by section 308’s plain language, the court must follow the procedures of Part 6, which, in appropriate cases, incorporates the section 608 analysis into a proceeding challenging a VDP’s validity. This causes us to read the statute as calling for a single-step rather than a two-step inquiry.[10]
¶41 This reading resolves the first problem that Benson identifies. Benson claims that the district court erred (and the court of appeals erred in blessing the district court’s decision) because it looked to section 608’s factors after it concluded that the VDP was the product of mutual mistake and fraud on the state. Benson claims that the district court should not have moved to “step two” (a section 608 analysis), because the inquiry ended after “step one” (a conclusion under section 307 that the VDP was the product of fraud and mutual mistake)[11]
¶42 That problem does not arise when the statute is read correctly. A district court conducts a proceeding on a section 307 challenge in the same manner it conducts a proceeding on a challenge to paternity. Thus, in a proceeding challenging a VDP, the court can consider whether or not to set aside genetic testing based on the factors in section 608, just as it could in a proceeding to challenge paternity.[12]
B. Benson’s Argument that the Court of Appeals’ Reading Creates a
Conflict with Other Provisions of the Act Is Unavailing
¶43 Benson next argues that the court of appeals erred because its reading of the statute creates a conflict between section 608 and section 617.[13]
¶44 Section 617 states:
The tribunal shall apply the following rules to adjudicate the paternity of a child:
The paternity of a child having a presumed, declarant, or adjudicated father may be disproved only by admissible results of genetic testing excluding that man as the father of the child or identifying another man as the father of the child.
Unless the results of genetic testing are admitted to rebut other results of genetic testing, a man identified as the father of a child under Section 78B-15-505 must be adjudicated the father of the child, unless an exception is granted under Section 78B-15-608.
. . . .
(4) Unless the results of genetic testing are admitted to rebut other results of genetic testing, a man properly excluded as the father of a child by genetic testing must be adjudicated not to be the father of the child.
UTAH CODE § 78B-15-617.
¶45 Benson argues that Scott was “properly excluded” as Child’s father and therefore must “be adjudicated not to be the father of the child” without the section 608 analysis, because subsection 617(2) mentions section 608, and subsection 617(4) does not. Id. § 78B-15617.
¶46 The court of appeals “acknowledge[d] the apparent inconsistency between subsections (2) and (4) of Section 617,” but held that, if they followed Benson’s interpretation, “Section 608— which exists only to give courts an opportunity to disregard genetic evidence in appropriate circumstances—would be effectively excised from the Act.” Scott, 2021 UT App 110, ¶ 38 n.9. Because the court did “not perceive therein a legislative intent to abrogate Section 608,” it held that Benson’s reading was unpersuasive. Id.
¶47 We see neither the conflict Benson perceives nor the inconsistency the court of appeals described. Section 617(2) refers to “a man identified as the father” and requires that a man whom genetic testing identifies as the father must be adjudicated the father unless the district court disregards the test results under section 608. UTAH CODE § 78B-15-617(2).
¶48 Section 617(4) refers to a man “properly excluded as the father of a child by genetic testing.” Id. § 78B-15-617(4). That subsection also provides that a man properly excluded by genetic testing must be adjudicated to not be the father. Id. Although subsection 617(4) does not explicitly reference section 608, it does so implicitly by referring to a man “properly excluded” by genetic testing. A man is not “properly excluded” by genetic testing if the district court disregards that testing under section 608.
¶49 Here, Scott was identified as the non-genetic father. But he was not “properly excluded as the father” of Child because the genetic testing in this case was set aside as the statute contemplates. There is no conflict between sections 608 and 617.
II. BENSON’S CONSTITUTIONALITY, ABSURDITY, AND PUBLIC POLICY RGUMENTS DO NOT DICTATE A DIFFERENT RESULT
¶50 For her next set of arguments, Benson strays from the text and contends that we should reject the court of appeals’ interpretation because it raises constitutional issues, leads to absurd results, and is contrary to public policy.
A. Benson Has Not Demonstrated that the Court of Appeals’ Reading
of the Statute Raises Constitutional Concerns That Require
a Different Interpretation
¶51 Benson contends that the court of appeals interpreted the Act in a way that raises constitutional concerns. She further argues that the court of appeals’ reading of section 608 is one that “allows a legal and genetic stranger to take advantage of its provisions” and thus “diminish[es] a mother’s fundamental right to ‘direct the upbringing of [her] children,’” (quoting Troxel v. Granville, 530 U.S. 57, 65 (2000)). Benson asserts that we should apply the constitutional avoidance canon and reverse the court of appeals.
¶52 The constitutional avoidance canon permits a court to “reject[] one of two plausible constructions of a statute on the ground that [one interpretation] would raise grave doubts as to [the statute’s] constitutionality.” Utah Dep’t of Transp. v. Carlson, 2014 UT 24, ¶ 23, 332 P.3d 900. But when we can, we “decide cases on the preferred grounds of statutory construction, thereby avoiding analysis of underlying constitutional issues unless required to do so.” Id. ¶ 24 (cleaned up).
¶53 Moreover, we do not usually invoke the canon just because we have “doubts about the constitutionality” of a statute. Id. ¶ 25. Nor can we use the canon to “break faith with the statute’s text” and “rewrite the statute” to save an unconstitutional statute. State v. Garcia, 2017 UT 53, ¶ 59, 424 P.3d 171. We simply recognize that where there are two plausible constructions of a statute, and one steers clear of constitutional problems, we presume that the Legislature intended to enact the constitutional interpretation.[14] See Carlson, 2014 UT 24, ¶ 23.
¶54 We take Benson’s point that the Act has the potential to tread into constitutional territory. This court has recognized that “parents have a fundamental right to make decisions concerning the care and control of their children.” Jensen ex rel. Jensen v. Cunningham, 2011 UT 17, ¶ 73, 250 P.3d 465. Section 608, in which the Legislature provides a path to declare a person who is not genetically related to the child a parent, has the potential to compromise the genetic parent’s constitutional right.
¶55 But Benson does not offer us a plausible reading of the Act that avoids the potential constitutional concern. Instead, Benson’s proffered solution is to read the Act so that section 608 does not apply to most non-biological fathers. This would require us to rewrite the statute, something that we cannot do.
¶56 Where Benson cannot offer a plausible interpretation of the text that avoids the constitutional concern, Benson’s obligation is to demonstrate that the statute is unconstitutional. Benson has not made that argument.
¶57 That is not to say that we do not understand Benson’s concern. The Act allows someone who is not a genetic parent to gain parental rights and to potentially exercise them at the expense of the genetic parent’s rights. But Benson does not explain how, under the circumstance before us, this would violate her constitutional rights. She does not discuss the impact of her own role in seeking to defraud the State by conspiring to sign a VDP she knew was inaccurate. Nor has she analyzed the impact on her parental rights of permitting Scott to exercise parental-like rights for a number of years. Nor has she explained the impact of the district court’s unchallenged finding that it was in Child’s best interest to not set the VDP aside.
¶58 With neither a plausible interpretation of the statute that both adheres to the text and avoids the constitutional concerns, nor briefing aimed at demonstrating that sections of the Act should be struck as unconstitutional, we reject Benson’s challenges.
B. The Court of Appeals’ Interpretation Does Not Lead to Absurd Results in This Case
¶59 Benson asks us to employ the absurd consequences canon to overturn the court of appeals’ interpretation of the statute. According to Benson, holding that Scott was the “declarant father,” after the district court found the VDP was successfully challenged, leads to absurd results. As an initial matter, for the reasons we outline above, we do not agree that the VDP was “successfully challenged.” But even assuming we could accept that premise, the absurd consequences canon does not require a different interpretation. Benson claims, by way of example, that it would be absurd for a woman who was coerced into signing a VDP to have to endure a section 608 analysis where a district court would consider whether it was in the best interests of her child to set aside the VDP she was coerced to sign.
¶60 The absurd consequences canon allows us to “resolve an ambiguity by choosing the reading that avoids absurd results when statutory language plausibly presents us with two alternative readings.” Utley v. Mill Man Steel, Inc., 2015 UT 75, ¶ 47, 357 P.3d 992 (Durrant, C. J., concurring in part on behalf of the majority) (cleaned up). We conclude that statutory language yields absurd results when those results are “so overwhelmingly absurd no rational legislator could have intended them.” Id. ¶ 46.
¶61 Even if we can conceive of scenarios where the statute the Legislature enacted might produce an absurd result, we do not stray from the statute’s text in a case where the application of the Act in the case before us does not lead to an absurd result. See, e.g., State v. Sanders, 2019 UT 25, ¶ 54 n.13, 445 P.3d 453.
¶62 In Sanders, for example, we upheld Sanders’ conviction for illegal possession of a firearm. Id. ¶ 2. Sanders argued that the State’s proffered statutory construction—which did not leave room for an innocent possession defense—was absurd because there were circumstances where the application of that construction could yield an absurd result. Id. ¶ 51. We agreed with Sanders that it was “not difficult to conceive of factual scenarios where the lack of an innocent possession defense might lead to an absurd result,” such as a felon taking a gun from a toddler to place it safely out of reach. Id. ¶ 54. But the potential for an absurd result in a hypothetical case did not help Sanders, because this was “not the case before us.” Id. Sanders’ arguments were unavailing because they did not demonstrate absurd legislative policy or “that the application of that policy to [Sanders], under the circumstances presented [in that case], yielded an absurd result.” Id. ¶ 51.
¶63 As in Sanders, Benson does not meet her burden of demonstrating that the court of appeals’ statutory interpretation led to absurd results in her case. A rational legislature could have intended the result the district court ordered. At least, Benson has not convinced us that a rational legislature could not have intended that the district court look to the real-world effects on Child if it divested Scott of the parental relationship Benson had allowed to grow.
C. Benson’s Policy Arguments Do Not Allow Us to Ignore or Modify the Statute’s Text
¶64 Benson also advances policy arguments to support a different reading of the Act. Benson claims that conducting a section 608 analysis after a VDP is successfully challenged ignores “a statutory preference for genetic paternity” and would thereby “undermine[] the purposes and policies that form the basis of the comprehensive statutory scheme.”[15] She also claims this interpretation would encourage fraudulent VDPs, possibly at the expense of biological fathers.
¶65 When we can glean the Legislature’s intent from the statute’s text, we have no reason to entertain arguments that we might be able to enact better policy by placing judicial glosses on the text. We have advised that “[w]here the legislature has spoken[,] our role is limited. In the face of duly-enacted legislation we no longer have a primary policymaking role. We are left only to interpret the terms of the statute and then to implement them.” M.J. v. Wisan, 2016 UT 13, ¶ 69, 371 P.3d 21 (cleaned up). Benson may have legitimate policy concerns and may even be able to articulate a statutory scheme that better promotes public policy than the one on the books. But “we have repeatedly declined invitations to interpret statutes contrary to their plain language even when a party offers an interpretation that might better advance the Legislature’s purpose.” Zilleruelo v. Commodity Transporters, Inc., 2022 UT 1, ¶ 40, 506 P.3d 509. We do so again.
CONCLUSION
¶66 The court of appeals correctly concluded that the district court did not err when it looked to the factors in Utah Code section 78B-16-608 to disregard the genetic test results that would have excluded Scott as Child’s father.
¶67 We affirm the court of appeals’ decision and remand the case to the district court for further proceedings.
[1] The record refers to the appellant as both Benson and Cooper— Cooper being the last name she took when she married. To remain consistent with the court of appeals’ opinion, we refer to the appellant as Benson.
[2] Utah Code section 78B-15-301 creates and authorizes the use of VDPs. Utah law permits the “mother of a child and a man claiming to be the genetic father of the child . . . [to] sign a declaration of paternity to establish the paternity of the child.” Id. The VDP must be signed or authenticated “under penalty of perjury, by the mother and by the declarant father.” Id. § 78B-15-302(1)(b). By signing, the mother and declarant father aver that “the child whose paternity is being declared: (i) does not have a presumed father, or has a presumed father whose full name is stated; and (ii) does not have another declarant or adjudicated father.” Id. § 78B-15-302(1)(d). The VDP is effective once it is “filed and entered into a database established and maintained by the Office of Vital Records.” Id. § 78B15-302(9).
[3] Benson and Scott disagree on the extent to which Scott had equal parenting time with both Sibling and Child, but Benson’s brief concedes that Scott “continued to have a relationship with Child.”
[4] Under section 608, a court can disregard genetic test results that exclude a declarant father from genetic parentage if the behavior of one of the VDP signatories estops that party from denying parentage and if disrupting the child and declarant-father relationship would be inequitable. Id. § 78B-15-608(1). When a court decides whether to ignore genetic testing, the Act instructs it to focus on the child’s best interest by examining several factors, including the bond between the declarant father and child, and the potential harm to a child if paternity is disestablished. Id. § 78B-15-608(2).
[5] The Act provides a detailed description of what constitutes genetic testing. See id. § 78B-15-102(13). Notably, that definition does not include a stipulation concerning what the genetic tests would show had a test been performed. The district court nevertheless concluded: “Genetic testing has confirmed that Petitioner is not the biological father of [Child].” This conclusion was not directly challenged on appeal, so we do not address it further other than to emphasize that we explicitly offer no opinion on whether a stipulation can be the genetic testing the Act contemplates.
[6] Benson also argues that genetic tests were unnecessary because the parties agreed Scott was not Child’s biological father, so section 608, which only allows the court to set aside genetic testing (or deny a motion for testing), does not apply. But Benson does not directly challenge the district court’s conclusion that the stipulation qualifies as genetic testing for the purposes of section 608. Because Benson has not mounted a challenge to the district court’s conclusion, we accept, without comment, the district court’s decision that the stipulation was the equivalent of a genetic test. See supra ¶ 21 n.5.
[7] A “presumed father” must be someone who, at one point, was married to the mother. See id. § 78B-15-204(1) (defining when a man is a presumed father). Because Benson and Scott were never married, Scott is not and never was Child’s presumed father.
(a) the length of time between the proceeding to adjudicate parentage and the time that the presumed or declarant father was placed on notice that he might not be the genetic father;
(b) the length of time during which the presumed or declarant father has assumed the role of father of the child;
(c) the facts surrounding the presumed or declarant father’s discovery of his possible nonpaternity;
(d) the nature of the relationship between the child and the presumed or declarant father;
the age of the child;
(f) the harm that may result to the child if presumed or declared paternity is successfully disestablished;
(g) the nature of the relationship between the child and any alleged father;
(h) the extent to which the passage of time reduces the chances of establishing the paternity of another man and a child-support obligation in favor of the child; and
(i) other factors that may affect the equities arising from the disruption of the father-child relationship between the child and the presumed or declarant father or the chance of other harm to the child.
Id. § 78B-15-608(2).
[9] Although Benson sometimes references “section 307” in her briefs, it bears noting that section 307 does not outline what a party must show to successfully challenge a VDP. Rather, section 307 details the circumstances in which a party can bring a challenge after the sixty-day period has expired. Id. § 78B-15-307. Section 308 contains the Legislature’s instructions on how to proceed with a VDP challenge, and that section directs a court to proceed in the same manner as any other adjudication of parentage under Part 6.
[10] It is not difficult to envision why the Legislature would structure the statute this way. In many—if not most—cases, a party will use genetic test results to prove the fraud or mutual mistake of fact that could be used to set aside the VDP.
[11] The court of appeals also opined that a successfully challenged VDP “is subject to being declared ineffective on a forward-looking basis.” Scott, 2021 UT App 110, ¶ 31. The Act itself is largely silent on the effects of setting aside a VDP. We know that the Legislature told us that a declarant father whose VDP is rescinded cannot claw back child support he paid. See UTAH CODE § 78B-15-308(6) (“If the declaration is rescinded, the declarant father may not recover child support he paid prior to the entry of an order of rescission.”). And we know that the Legislature has declared that at “the conclusion of a proceeding to rescind or challenge a declaration of paternity, . . . the [court] shall order the Office of Vital Records to amend the birth record of the child, if appropriate.” Id. § 78B-15-308(5). But the Act does not tell us what other consequences might flow from setting a VDP aside. Since we don’t need to answer that question to resolve this case, we vacate the court of appeals’ conclusion that a successfully challenged VDP may be “ineffective on a forward-looking basis.” See Scott, 2021 UT App 110, ¶ 31. And we leave the question for a case where that determination matters to the outcome and is specifically briefed.
[12] Benson also argues that the district court erred when it applied section 608 because that section applies to declarant fathers, and “[o]nce the court granted [Benson’s section 307] challenge, Child was no longer a child ‘having a declarant father.’” Benson additionally claims that Scott was not a declarant father because subsection 201(2) of the Act, the provision on father-child relationships, means a successful VDP challenge disestablishes a father-child relationship. UTAH CODE § 78B-15-201(2). As we have explained, if the section 307 challenge is conducted in the same manner as a paternity determination—as the statute requires—the district court applies section 608 as part of the determination to set the VDP aside. And someone in Scott’s position does not lose his declarant father status unless the court invalidates the VDP.
[13] 13 Benson also argues that the court of appeals erred because the Act should be interpreted in light of the Act’s purported purpose— favoring the recognition of genetic parentage. Benson argues that the court of appeals’ interpretation of the statute “which would allow the signatory to a successfully challenged VDP to nonetheless rely on section 608, undermines the purposes and policies that form the basis of the comprehensive statutory scheme.” But we don’t normally interpret the statute in light of its supposed purpose when the plain text tells us how the Legislature intended the statute to operate. See Zilleruelo v. Commodity Transporters, Inc., 2022 UT 1, ¶ 31, 506 P.3d 509 (“In general, where a statute’s language is unambiguous and provides a workable result, we need not resort to other interpretive tools, and our analysis ends.” (cleaned up)). Sticking to the text helps us avoid “the peril of interpreting statutes in accordance with presumed legislative purpose” as “most statutes represent a compromise of purposes advanced by competing interest groups, not an unmitigated attempt to stamp out a particular evil.” Olsen v. Eagle Mountain City, 2011 UT 10, ¶ 23 n.6, 248 P.3d 465. Thus, in a case like this, where the statutory language is plain, we have no need to start poking around the statute’s purposes in hopes of finding a gloss to put on the text.
[14] In State v. Garcia, for example, we employed the canon to choose between two interpretations of “unlawful user” in determining how to read a statute. We chose the interpretation that “comport[ed] better with the statute’s text” because following the text of the statute best “preserve[d] the legislative intent.” Garcia, 2017 UT 53, ¶ 61.
[15] We again note that we do not agree with Benson that the VDP had been “successfully challenged.” We nevertheless engage with the substance of her arguments.
JAMES M. DUFFIN III,
Appellee and Cross-appellant,
v. BRANDY E. DUFFIN,
Appellant and Cross-appellee.
Opinion
No. 20200361-CA
Filed May 12, 2022
Third District Court, West Jordan Department
The Honorable Matthew Bates
No. 184400962
T. Jake Hinkins and Kurt W. Laird, Attorneys for Appellant and Cross-appellee
Martin N. Olsen and Beau J. Olsen, Attorneys for Appellee and Cross-appellant
JUDGE DAVID N. MORTENSEN authored this Opinion, in which JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS concurred.
MORTENSEN, Judge:
¶1 In prototypical fashion, a young married couple—James and Brandy Duffin[1]—set about building a new house. They prequalified for a loan, hired a real estate agent, paid a deposit of $1,000 with marital funds, entered into a contract with a builder, went to a design center to pick out finishes, and attended the closing together. However, in atypical fashion, James’s father and grandfather reimbursed the $1,000 deposit, paid an additional $18,000 as a preconstruction deposit, and at closing paid the balance of the purchase price of $410,875 in cash. Only James’s name was placed on the deed. Months later, as James and Brandy’s marriage relationship deteriorated, James deeded the property to himself and his father. A divorce action was filed, and at trial, the district court concluded, among other things, that any interest James and Brandy had in the house was not marital property and that Brandy should be awarded attorney fees. Brandy appeals, claiming that any interest she and James have in the house is a marital interest. James cross-appeals, challenging the determination on fees. We reverse the district court’s determination regarding the house, but we affirm the decision regarding attorney fees.
BACKGROUND
¶2 Brandy and James were married in March 2015. They had two children during their union.
¶3 In April 2016, Brandy and James, having been approved for a loan of up to $360,000, entered into a real estate purchase agreement to purchase a house in West Jordan, Utah. Using a cashier’s check from an account in his name, James paid a security deposit of $1,000 on the contract.[2] James testified that his father (Father) reimbursed him for the $1,000, though he could not remember how that reimbursement occurred.
¶4 In June 2016, James’s grandfather (Grandfather) paid $18,000 for the preconstruction deposit, but James asserted that the money was actually an advance on Father’s inheritance from Grandfather. At closing, Father paid the outstanding balance on the home, again with money allegedly received as an advance on his own inheritance.
¶5 On February 8, 2017—the day before closing—James sent an email, titled “Loan Contract,” to Father stating that Father “is dispensing a loan of $429,875.42 to purchase a home,” which was identified as the house for which James and Brandy had signed the real estate purchase agreement. In that document, James identified himself as the party responsible for repayment of the loan. Notably, the Loan Contract did not mention interest or a payment schedule; rather, it provided that Father could “demand payment of this loan at anytime.”
¶6 Brandy and James moved into the completed house. A warranty deed conveying title of the house from the seller to James—Brandy’s name does not appear on the deed—was recorded on February 9, 2017.
¶7 About a year later, in February 2018, James added Father to the title of the house by executing and recording a new warranty deed. Brandy contended that the “marriage was struggling and divorce was a very real possibility” at the time James added Father to the title of the property.
¶8 As it turns out, Brandy and James separated in July 2018, and James petitioned for divorce in August 2018. James further asked that the assets and liabilities of the marital estate be divided equitably and that the parties bear their own attorney fees and costs.
¶9 As relevant here, in his financial declaration, submitted in October 2018, James listed the house as an asset with no amount owing, noting that it was a “[c]ash purchase” by Father and that it was acquired in his and Father’s names.
¶10 In her counter-petition, in addition to addressing custody and parent-time issues, Brandy requested that the house be sold and the equity split equally. Brandy also asked for attorney fees.
¶11 James later asserted—during the divorce proceedings— that he purchased the house on behalf of Father, who lived in California, and that he was just doing the “leg work” for Father. He also asserted that he and Brandy “weren’t prequalified on [their] own merits” but had used Father’s bank statements in the application.[3] However, James admitted that he never informed anyone that he was acting as the agent of Father. And James conceded that he was not aware of “written documentary evidence” indicating an agency relationship but that there were “certainly conversations” between him and Father to that effect.[4] James also contended that an agreement between him and Father gave James the option to purchase the house from Father.
¶12 Father echoed much the same in his deposition on the matter, saying that he had “been talking to [James] about purchasing a home for [him] in Utah for quite some time” and that James acted on his behalf in purchasing the house. Father explicitly stated that he “[a]bsolutely” never intended the house to be a gift to James. Father clarified, “I provided all the money. My son worked as my agent in obtaining that house. And it was always understood between my son and me that that was my house.” But Father admitted that there was no document that would evidence any sort of an agency relationship between them.
¶13 Father explained that his name was not on the deed to the house because he “wanted to empower” James by having him “go through the process” of purchasing a house. Father asserted that he was involved in the design of the house and “oversaw the whole thing.” But he admitted there were “no writings, no emails or text messages between the two of [them] about the house plans.” Rather, Father explained, “[I]t was just a . . . casual, loving, walking down the street, arm around my son,” asking, “What do you think, Jim?”
¶14 Father indicated that he needed to “subsidize the relationship [between James and Brandy] until it really got off . . . on a good start.” However, Father indicated that Brandy was never involved in the conversations about the help he was extending to them: “The whole . . . financial situation, . . . my support, my allowing them to live in that house, all of that was between me and my son.”
¶15 For her part, Brandy testified that there was never any discussion that the house would belong to anyone other than her and James. Specifically, she said there was never any mention made to her that the house was being built for Father or that Father had any input on the construction. She clarified that she and James “picked out all of the finishings” and the floor plan of the house. Brandy testified that at no time during construction did James ever indicate that he needed to check with Father to verify that he was “okay” with their design selections because it was going to be Father’s house. In terms of paying for the house, Brandy stated that she and James were prequalified for a loan on the house, that the $1,000 deposit was paid with a cashier’s check funded with money from their commingled accounts, and that she and James were present together at the closing. Brandy further testified that she and James completed the landscaping and added, among other features, a fence, basketball standard, and cement pad.
¶16 With regard to the house, the court found that it was not marital property. The court reasoned,
The parties went into this home with the expectation that they would purchase it together. They picked the lot, they picked the design of the home, they selected trim and other finishings in the home, and they entered into a [real estate purchase agreement] with [the seller], and the parties expected that they would have a mortgage and that they would pay for this home using their respective incomes. But when it came time to actually close on this transaction, that is not what happened. Instead, [Father] paid for the home in its entirety, and James was the only one who was put on the deed.
¶17 The court went on to note that James and Brandy “lived in the home for what is a relatively short duration. They did not pay rent, they did not pay any sort of mortgage or loan, they did not pay utilities or property taxes. Those were all paid by income from [Father] towards the home.” And even though James and Brandy did “contribute somewhat to the home by putting in some shrubberies, a basketball standard, putting down a concrete pad, [and] installing a small fence,” the court concluded that “given the large amount of equity in this home, upwards of $450,000, those small contributions . . . [did] not convert [the house] into a marital asset.”
¶18 The court concluded,
[The house] was an asset that was titled only in James’s name. It was paid for by [Father]. . . . To determine that it was a marital interest would essentially be to give to Brandy a tremendous windfall of something that was not acquired in any rational sense of the word by the efforts of the marriage or the work or efforts of the marriage. So to the extent that there is any interest in the home, it is not a marital interest and to the extent that James has an interest in the home, it is not a marital interest.[5]
¶19 Lastly, the court awarded attorney fees to Brandy, at least in part:
Given the parties’ respective incomes, particularly that James has income a little bit more than four times the income that Brandy has, Brandy has a need for assistance in paying her attorney’s fees [and] those fees were necessary for her to be able to defend herself in this divorce action. However, she did not prevail 100 percent on all of her claims[6] and everything she was seeking, so the Court hereby awards her 60 percent of her attorney’s fees.
¶20 Both parties appeal, Brandy with respect to the determination that any interest she and James had in the house was not marital property, and James with respect to the award of attorney fees.
ISSUES AND STANDARDS OF REVIEW
¶21 Brandy contends that the district court erred in concluding that any interest she and James had in the house acquired during the course of the marriage was not marital property and thus not subject to distribution. “We will not disturb a property award unless we determine that there has been a misunderstanding or misapplication of the law resulting in substantial and prejudicial error, the evidence clearly preponderates against the findings, or such a serious inequity has resulted as to manifest a clear abuse of discretion.” Nakkina v. Mahanthi, 2021 UT App 111, ¶ 16, 496 P.3d 1173 (cleaned up).
¶22 In his cross-appeal, James contends that the district court erred in ordering him to pay 60% of Brandy’s attorney fees pursuant to Utah Code section 30-3-3(1). “We review the district court’s award of attorney fees under Utah Code section 30-3-3, including the amount of the award, for abuse of discretion.” Eberhard v. Eberhard, 2019 UT App 114, ¶ 6, 449 P.3d 202.
ANALYSIS
I. The Status of the Parties’ Putative Interest in the House as Marital Property
¶23 “Marital property is ordinarily all property acquired during marriage and it encompasses all of the assets of every nature possessed by the parties, whenever obtained and from whatever source derived.” Marroquin v. Marroquin, 2019 UT App 38, ¶ 14, 440 P.3d 757 (cleaned up). “Separate property, in contrast, is typically a spouse’s premarital property or property received by gift or inheritance during the marriage.” DeAvila v. DeAvila, 2017 UT App 146, ¶ 15, 402 P.3d 184.
¶24 “In Utah, marital property is ordinarily divided equally between the divorcing spouses and separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse.” Olsen v. Olsen, 2007 UT App 296, ¶ 23, 169 P.3d 765. Specifically,
When dividing property in a divorce, the court should first properly categorize the parties’ property as part of the marital estate or as the separate property of one or the other. Then, the court should presume that each party is entitled to all of that party’s separate property and one-half of the marital property, regardless of which spouse’s name appears on the title to the marital property.
Allen v. Ciokewicz, 2012 UT App 162, ¶ 46, 280 P.3d 425 (cleaned up); see also Bradford v. Bradford, 1999 UT App 373, ¶ 26, 993 P.2d 887 (stating that marital property may be distributed equitably “regardless of who holds title”).
¶25 Here, the district court erred in its determination that insofar as James or Brandy had a property interest in the house, that interest was not marital.
¶26 Throughout the pendency of the divorce proceedings, James explicitly rejected the notion that the house was a gift. And there is no indication in the record that James received the house as part of his inheritance. Nor was the house James’s premarital asset—it was indisputably acquired during the marriage. Thus, there is no evidence to suggest that any interest James might have in the house qualifies as James’s separate property. See Keiter v. Keiter, 2010 UT App 169, ¶ 22, 235 P.3d 782 (“Generally, premarital property, gifts, and inheritances may be viewed as separate property, and the spouse bringing such separate property into the marriage may retain it following the marriage.” (cleaned up)).
¶27 But there is ample evidence that any interest James and Brandy had in the house was marital property. Brandy and James both signed the real estate purchase agreement. As the district court explicitly noted, they both entered into the agreement with the expectation that they were purchasing the house together and that they would have a mortgage together. They picked the lot, they paid a $1,000 deposit, they selected the design, and they chose the finishings. The two factors that the district court pointed to as indicating that the house was not marital property were that James was the only one on the deed and that Father paid for the house in its entirety. But neither of these circumstances is sufficient to transform whatever interest James and Brandy have in the house from marital property to separate property.
¶28 First, that Brandy was never on the deed to the house in no way indicates that any interest James and Brandy might have in the house was somehow not marital property. In fact, just the opposite is true. “[A] marital asset is defined functionally as any right that has accrued during the marriage to a present or future benefit.” Jefferies v. Jefferies, 895 P.2d 835, 837 (Utah Ct. App. 1995). By having his name entered into the warranty deed and having his name placed on the title, James obtained the house in fee simple. See Utah Code Ann. § 57-1-12(2) (LexisNexis 2020). And because he obtained title during the marriage—and because the house was not a gift or inherited—whatever interest he had in the house became marital property. See Marroquin, 2019 UT App 38, ¶ 14 (defining marital property as “all property acquired during marriage” (cleaned up)). In other words, once James acquired title, Brandy acquired title because the acquisition took place during the marriage, and there was no exception (i.e., gift or inheritance) indicating otherwise.
¶29 Second, that Father paid for the house also fails to render “nonmarital” any interest James and Brandy might have in it. As our case law makes abundantly clear, “marital property ordinarily includes all property acquired during marriage, whenever obtained and from whatever source derived.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 31, 392 P.3d 968 (cleaned up); accord Marroquin, 2019 UT App 38, ¶ 14; DeAvila, 2017 UT App 146, ¶ 15; Dunn v. Dunn, 802 P.2d 1314, 1317–18 (Utah Ct. App. 1990). That James and Brandy used someone else’s money to purchase the house does not—standing alone—make their interest in the house nonmarital property. Most people, when they purchase a home, use someone else’s money (usually a lender’s) to do it—indeed, Father providing the money to purchase the house looks somewhat like just such a loan. And granted, the source of money by which the house was acquired would potentially render James’s interest in the house nonmarital if Father had gifted the money to James alone or if it represented James’s inheritance. But that’s not what happened here. As already noted, the record does not support a conclusion that the money was a gift to James or part of his inheritance, and the district court did not conclude otherwise.
¶30 On this note (i.e., that Father paid for the house while James and Brandy made a minimal contribution), the district court, citing Jefferies v. Jefferies, 895 P.2d 835 (Utah Ct. App. 1995), and Dunn v. Dunn, 802 P.2d 1314 (Utah Ct. App. 1990), concluded, “These cases suggest that marital property is not just any property obtained, but property that is obtained through the efforts of the marriage, and suggests that a windfall to one party or the other may not necessarily be marital property.” From this “suggestion” that it perceived in these two cases, the district court concluded that James and Brandy did not contribute sufficiently to the house to make any interest they might have in it marital property.
¶31 But obtaining property “through the efforts of the marriage” is not the defining condition that makes property marital; rather, it is the mere acquisition of property during marriage. As this court has often repeated, “marital property ordinarily includes all property acquired during marriage, whenever obtained and from whatever source derived.” Lindsey, 2017 UT App 38, ¶ 31 (cleaned up). Our case law nowhere mentions “the efforts of the marriage” as being necessary to making property so acquired marital. Thus, acquisition—from whatever source—during the marriage is the hallmark condition that renders property marital, not the maintenance or growth of that property by the efforts of the parties. To be clear, our case law employs the modifier “ordinarily” to account for the situation where property acquired by “gift or inheritance during the marriage,” see DeAvila, 2017 UT App 146, ¶ 15, remains separate property unless it has been transformed to marital property by commingling or the contribution of the non-receiving spouse, see Keyes v. Keyes, 2015 UT App 114, ¶ 28, 351 P.3d 90 (stating that “separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse” unless it loses “its separate character . . . through commingling or if the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property” (cleaned up)). Thus, the district court’s misstep here was in applying the concept of “the efforts of the marriage” as a condition for all property acquired during the course of a marriage to become marital, when our case law has limited that concept to the efforts of the non-receiving spouse in transforming separate property into marital property.
¶32 In sum, we reverse the district court’s determination that the couple’s property interest in the house, insofar as they had an interest, was not marital. The extent to which Brandy and James even have an interest in the property is an issue that will be decided in the separate lawsuit. See supra note 5. But to the extent they are adjudicated to have an interest in the house, that interest is marital property subject to equitable distribution between them.
II. The Award of Attorney Fees
¶33 On appeal, James asserts that the district court erred in awarding Brandy attorney fees because it did not make a detailed factual analysis of either Brandy’s financial need for assistance or James’s ability to pay and because the district court took into account whether Brandy prevailed on her claims. These challenges raise different legal theories from the ones James raised below with regard to Brandy’s attorney fees request.
¶34 “Parties are required to raise and argue an issue in the [district] court in such a way that the court has an opportunity to rule on it.” State v. Johnson, 2017 UT 76, ¶ 18, 416 P.3d 443 (cleaned up). “When a party fails to raise and argue an issue in the district court, it has failed to preserve the issue, and an appellate court will not typically reach that issue absent a valid exception to preservation.” Issertell v. Issertell, 2020 UT App 62, ¶ 21, 463 P.3d 698 (cleaned up). “As to preservation, our case law draws a distinction between new ‘issues’ (like distinct claims or legal theories) and new ‘arguments’ in support of preserved issues (such as the citation of new legal authority).” Hand v. State, 2020 UT 8, ¶ 6, 459 P.3d 1014.
¶35 Here, James is clearly trying to raise new issues. Below, James did not challenge the court’s analysis regarding Brandy’s financial need or his ability to pay. In fact, James explicitly challenged only the inclusion of fees associated with a protective order, the exclusion of certain reimbursements Brandy had received, the court’s handling of rule 54(d) of the Utah Rules of Civil Procedure as it applies to costs, and the exclusion of the costs James had paid for a custody evaluation. Nowhere did he assert that the court should not award Brandy attorney fees due to his or Brandy’s financial situation. In short, the legal theories he raised below in challenging Brandy’s attorney fee request were entirely different from the legal theories he attempts to raise now. He simply never gave the district court an opportunity to rule on the theories he now advances.
¶36 Because James failed to raise the same challenges to Brandy’s request for attorney fees that he is attempting to raise on appeal, his current challenges are unpreserved, and James does not ask us to apply any of the traditional exceptions to our preservation requirement.[7] On that basis, we decline to review the merits of James’s unpreserved challenges to the award of attorney fees.
CONCLUSION
¶37 Having concluded that to the extent the couple had a property interest in the house, the interest was marital, we reverse and remand for further proceedings consistent with this opinion. And we uphold the award of attorney fees to Brandy because the legal theories advanced on appeal were not preserved.
[1] Because the parties share the same last name, we refer to them by their given names.
[2] Brandy asserted that the cashier’s check was funded with commingled monies from her and James. See infra ¶ 15. James admitted that money from Brandy’s income may have gone into the account from which the cashier’s check was drawn.
[3] James’s name is identical to Father’s, with the exception of the suffix.
[4] James acted as agent for Father for the purchase of a different “property six houses away.” Indeed, the record contains another real estate purchase contract under Father’s name and address (as opposed to James and Brandy’s) that was signed by James. The record contains at least one piece of correspondence addressed to Father at this address.
[5] The court spoke in conditional terms about the extent of interest in the house—as do we—because Father has filed a pending quiet title action asserting his interest in the property.
[6] Brandy prevailed on various claims related to custody and child support.
[7] James argues that the court plainly erred in awarding attorney fees. But after his brief was submitted, this court held “that plain error review is not available in ordinary civil cases.” See Kelly v. Timber Lakes Prop. Owners Ass’n, 2022 UT App 23, ¶ 44, 507 P.3d 357. Accordingly, the plain error exception to our preservation rule does not apply to this situation.
James also argues that “rare procedural anomalies . . . prevented [him] from fully providing the [district court] the legal arguments and evidence to support the denial of Brandy’s request for attorney fees.” The “rare procedural anomaly” James identifies is the court’s statement that it was “very familiar with the state of the law with respect to attorneys fees under 30-3-3” such that it did not need “further briefing on this matter.” James argues that precluding him “from putting forth evidence and appropriate briefing rises to the level of an anomaly in the proceedings.” But we see no procedural anomaly that would have prevented James from raising the issue in a post-judgment motion, just as he did with his other challenges to the award of attorney fees.
Mary C. Corporon and Kristen C. Kiburtz, Attorneys for Appellant
Marco C. Brown and A. Leilani Whitmer, Attorneys for Appellee
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion, in which JUDGES DIANA HAGEN and RYAN D. TENNEY concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 Todd D. Horne appeals the district court’s denial of his motion to set aside the stipulated decree of divorce entered in his divorce from Rebecca A. Horne. Because we determine that Todd did not preserve the challenge he raises on appeal, we affirm.
BACKGROUND
¶2 Todd and Rebecca were married in 2014 and have one child together. Rebecca is a lawyer and initiated divorce proceedings based on allegations that Todd sexually assaulted her while she was sleeping. According to Rebecca, Todd admitted to her that he had done this on several occasions.
¶3 According to Todd, between June and September 2019, as the parties were contemplating divorce, Rebecca told him “multiple times that she intended to report him to authorities and that he would be charged criminally for felony sexual assault, that his name would be listed on the sex offender’s registry, that he would lose his job and his reputation along with it, and that he would go to jail or prison … if he contested at all what she wrote in the divorce documents.” Rebecca filed for divorce on September 27, 2019. Todd hired an attorney on October 15, and that day, the attorney filed an appearance with the court. According to Todd, Rebecca was “livid” when she learned he had hired an attorney. That same day, Rebecca filed a police report alleging that Todd had sexually assaulted her. According to Todd, Rebecca then “pressured him to sign” the divorce settlement she had drafted and to discharge his attorney. Todd complied. Rebecca then informed the police that she “no longer wish[ed] to pursue criminal charges” and requested that they close the case. The final decree of divorce was signed in November.
¶4 Seven months later, in June 2020, Todd filed a motion in district court to set aside the divorce decree pursuant to rule 60(b)(6) of the Utah Rules of Civil Procedure. The grounds Todd asserted as a basis for setting aside the decree were that Rebecca “extort[ed] and blackmail[ed]” him “until he signed the stipulation, by advising him that she would make and pursue a false police report against him.” He asserted that he agreed to the stipulation only as a result of this “duress” and that the resulting orders in the decree of divorce “as to child custody and as to property division, child support, and alimony were grossly unjust.”
¶5 The district court denied Todd’s motion after determining it was untimely under rule 60(b). Although Todd’s motion had relied on rule 60(b)(6)—“any other reason that justifies relief”—which requires that the motion be filed “within a reasonable time,” the court determined that the reasons Todd actually asserted to justify setting aside the decree fell under rule 60(b)(3)—“fraud … , misrepresentation or other misconduct of an opposing party”—which requires that the motion be filed “not more than 90 days after entry of the judgment or order.” Utah R. Civ. P. 60(b)–(c). Accordingly, because Todd filed his motion more than ninety days after entry of the decree of divorce, the court declined to set it aside. Todd now appeals.
ISSUE AND STANDARD OF REVIEW
¶6 Todd argues that the district court should have determined that his motion was based on rule 60(b)(6) of the Utah Rules of Civil Procedure rather than rule 60(b)(3) because the court’s failure to weigh the equities of the stipulation was an independent ground for relief. “A district court’s determination that a motion is a rule [60(b)(3)] motion rather than a rule 60(b)(6) motion is a conclusion of law, which we review for correctness.” Yknot Global Ltd. v. Stellia Ltd., 2016 UT App 132, ¶ 13, 379 P.3d 36. However, “[w]e generally do not address unpreserved arguments raised for the first time on appeal.” Gowe v. Intermountain Healthcare, Inc., 2015 UT App 105, ¶ 7, 356 P.3d 683.
ANALYSIS
¶7 Rule 60(b) of the Utah Rules of Civil Procedure allows a party to be relieved of a judgment for several different reasons. See Utah R. Civ. P. 60(b). Subsection six of the rule provides that a party may be relieved from a judgment for “any other reason that justifies relief” from the operation of the judgment. Our supreme court has explained that this “catch-all” provision of rule 60(b) “is meant to operate as a residuary clause.” Menzies v. Galetka, 2006 UT 81, ¶ 71, 150 P.3d 480 (quotation simplified). Because rule 60(b)(6) permits a court to relieve a party from judgment only if the party alleges “any other reason justifying relief from the operation of the judgment,” it “may not be relied upon if the asserted grounds for relief fall within any other subsection of rule 60(b).” Id. (quotation simplified); see also id. (“[T]he grounds for relief under 60(b)(6) are exclusive of the grounds for relief allowed under other subsections.”). In fact, rule 60(b)(6) is to be “sparingly invoked and used only in unusual and exceptional circumstances.” Id. (quotation simplified). A movant may not “circumvent[ ] the time limit applicable to motions based on reasons listed in subparagraphs (1), (2), and (3) by repackaging the claim as one under subparagraph (6).” Thompson v. Wardley Corp., 2016 UT App 197, ¶ 18, 382 P.3d 682.
¶8 To the district court, Todd argued that he was “coerced under duress and extorted into signing the settlement documents” and that this “duress” provided a basis under rule 60(b)(6) to be relieved of the custody and property division provisions in the decree. As noted, the district court rejected Todd’s argument and determined that duress fell under rule 60(b)(3). See Utah R. Civ. P. 60(b)(3) (identifying “fraud … , misrepresentation or other misconduct of an opposing party” as a ground supporting a motion to set aside). In other words, his “motion, though ostensibly based on subparagraph (6), was in substance merely a repackaged motion for relief under subparagraph (3).” See Thompson, 2016 UT App 197, ¶ 18, 382 P.3d 682. Todd does not renew his argument that duress falls under rule 60(b)(6).
¶9 Instead on appeal, Todd argues that although Rebecca’s alleged fraud and duress justified setting the decree aside, he also alleged an “independent ground” under rule 60(b)(6), not fully considered by the district court, that would have allowed relief from the decree: that because “the District Court did not comply with its non-discretionary statutory obligation to consider the best interests of the child and the reasonableness and fairness of the property distribution” in signing the stipulated decree, the decree should be set aside. See Utah Code Ann. § 30-3-5(1) (LexisNexis 2019) (outlining the court’s discretion to make “equitable orders relating to the children, property, debts or obligations, and parties” in a decree of divorce); id. § 30-3-10(2) (outlining the court’s responsibility to “consider the best interest of the child” in determining custody and parent-time). Rebecca, however, contends that Todd did not raise this specific argument below and it was therefore not preserved for appellate review. We agree.
¶10 This court’s preservation requirement is well-settled. “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 that issue.” Wolferts v. Wolferts, 2013 UT App 235, ¶ 19, 315 P.3d 448. “To provide the court with this opportunity, the issue must be specifically raised by the party asserting error, in a timely manner, and must be supported by evidence and relevant legal authority.” Id. (quotation simplified).
¶11 Here, the district court was not given the opportunity to rule on the argument Todd now asserts on appeal—that before entering the stipulated decree of divorce, the court failed to exercise its duty to independently assess whether the parties’ stipulation was equitable and provided for the best interests of the child. While Todd did assert below that the custody award was inequitable and not in the child’s best interests, these assertions were framed as the undesirable results of Rebecca’s duress, not as an independent ground for relief under rule 60(b)(6). Todd did not assert, as he now does, that the district court erred in accepting the stipulation without ensuring it was fair and in the best interests of the child. In fact, so far as we can tell, Todd made no mention of district court error, focusing his arguments entirely on Rebecca’s actions.
¶12 In his reply memorandum on the motion to set aside, Todd vaguely stated that “the underlying order represents an extreme departure from the legal norm not otherwise supported by findings as to why such should be the case.” But “a party may not claim to have preserved an issue for appeal by merely mentioning an issue without introducing supporting evidence or relevant legal authority.” Pratt v. Nelson, 2007 UT 41, ¶ 15, 164 P.3d 366 (quotation simplified). This statement—and similar statements peppered throughout his pleadings below—was not specific enough to alert the district court that it needed to consider the court’s own entry of an allegedly inequitable decree as a basis to set aside. In that same reply, Todd broadly discussed a variety of cases where courts had considered grounds to fall under rule 60(b)(6). His discussion included general assertions about fairness, but he never clearly articulated the impact of fairness on the rule 60(b)(6) inquiry. Todd never focused on a specific “independent ground” as a basis to set aside the decree but instead attempted to analogize different aspects of his case to aspects of other cases where rule 60(b)(6) was invoked. To the extent that fairness was discussed, the concept was used to urge the court to be flexible and liberal in granting relief under rule 60(b) and to show that Todd had a meritorious defense as required to prevail under rule 60(b). The arguments about fairness were never articulated in such a way that the court would have understood Todd was asserting that the district court’s own alleged error in accepting an unfair stipulation was an independent ground for relief.
¶13 Additionally, Todd did not support the argument with “evidence and relevant legal authority.” See Wolferts, 2013 UT App 235, ¶ 19, 315 P.3d 448 (quotation simplified). He did not engage in any discussion of the parameters of the court’s obligation to examine a stipulation for fairness or the best interests of the child before adopting its provisions in a decree of divorce. Instead, he asserted that the provisions were unfair as a result of the duress to which he was subjected. Indeed, the primary argument on which Todd focused the district court’s attention was that the decree of divorce should be set aside because it was the result of “duress and blackmail” and that duress should fall under the catchall provision of rule 60(b)(6) rather than the fraud, misrepresentation, or other misconduct provision of rule 60(b)(3).
¶14 Moreover, it is apparent that the district court did not, in fact, understand Todd to be making the argument he now makes on appeal. Cf. Pratt, 2007 UT 41, ¶ 24, 164 P.3d 366 (concluding that even though an argument was untimely and the court did not have the benefit of the other party’s response, it was “preserved for appeal when the district court was given notice of the issue … and when the court in response to such notice made a specific ruling on the issue” (emphasis added)). Instead, the court construed Todd’s arguments about unfairness as a response to Rebecca’s assertion that he lacked a meritorious defense and discussed concerns about unfairness only in the context of addressing that issue.[1]
¶15 In short, simply expressing concerns about the fairness of the decree of divorce and whether it provided for the child’s best interests did not present the “independent ground” of district court error in such a way that the district court had an opportunity to rule on whether any alleged court error justified setting aside the parties’ decree of divorce. See Wolferts, 2013 UT App 235, ¶ 19, 315 P.3d 448. Accordingly, the question of whether that independent ground could support a motion to set aside under rule 60(b)(6) is not preserved for our review.[2]
CONCLUSION
¶16 Because Todd has not preserved the argument he raises on appeal and has not argued that any exception to the preservation rule applies in this case, we decline to review it. We therefore affirm the district court’s determination that the grounds for Todd’s motion to set aside fell under rule 60(b)(3) of the Utah Rules of Civil Procedure and that his motion was therefore untimely.
[1] In addition to asserting that Todd’s motion was untimely, Rebecca argued that he lacked a meritorious defense because he could not prove that the terms of the settlement were unfair.
[2] Todd does not assert that any exception to our preservation rule applies to his argument. See generally State v. Johnson, 2017 UT 76, ¶ 47, 416 P.3d 443 (“When an issue has not been preserved in the trial court, but the parties argue that issue on appeal, the parties must argue an exception to preservation for the issue to be reached on its merits.”).
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
You must study each, but that does not mean you must devote the same amount of time to each.
You must first study the statute to know what the statute provides and to see how you construe the statute before you see whether your construction and application of the statute mirrors that of the appellate courts.
Then you need to spend most of your time reviewing the appellate court decisions (case law) to ensure that you correctly understand how the appellate courts construe and apply the statute, so that you can see whether your particular client and case are helped or hindered by both the statute and the appellate courts’ construction and interpretation and application of the law.
If all you did was study appellate case law, however, then you would be doing yourself and your client a disservice. If you don’t do that, then if all you do is take the appellate courts’ decisions as gospel, you may end up perpetuating and erroneous construction and application of a statute to your client’s/cause’s detriment. There are many instances in the past and there will be many instances to come where a sharp attorney realizes that the appellate courts have misconstrued and/or misapplied the statute. So you have to read the statute first and do your best to understand its meaning and application yourself.
Utah Family Law, LC | divorceutah.com | 801-466-9277