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Tag: marital estate

Does an ex-spouse have claims to properties purchased during the marriage but name is not on deed, deed states married man and no mention of the property or distribution in the divorce?

I can answer this question in the context of the law of Utah, which is the jurisdiction where I am licensed to practice divorce and family law. To learn the answer to the question for another state, you would need to consult the law of that jurisdiction and/or consult with an attorney who is licensed in that state.

If your question is, “Do I have a claim to property my spouse purchased during the marriage but did not disclose the existence of during the divorce proceedings (meaning that I discovered its existence only after the decree of divorce was entered by the court)?”, then the answer is (in Utah):

Yes, you may have a claim. Now that means you have an argument for an award of some or all of (or a money judgment for some or all of the value of) that undisclosed property to you. You do not have an automatic right to any such award, but you may have a strong argument for it. If you want to pursue your claim, you should almost always pursue as soon as you possibly can. Delays in asserting and prosecuting a claim can weaken your claim.

Utah Rules of Civil Procedure, Rule 26.1 provides, in pertinent part:

(f) Sanctions. Failure to fully disclose all assets and income in the Financial Declaration and attachments may subject the non-disclosing party to sanctions under Rule 37 including an award of non-disclosed assets to the other party, attorney’s fees or other sanctions deemed appropriate by the court.

Note: separate property usually remains separate property in a divorce. Separate property has three (which is basically two) different forms in a marriage: 1) property one owned (and “property” in this sense includes money you owned) before marriage (premarital property) and 2) property purchased with separate property funds. Separate property also includes money or property you obtained during the marriage if you obtained it by gift from someone other than your spouse and it also includes money or property you inherited during the marriage. So if, while married, you inherited a house from your parent, that house would be your separate property. Now one can convert (the legal term is “transmute”) separate property into marital property (by transferring title from yourself to you and your spouse jointly, or by spending money you inherited by adding a room to the marital home, or by spending your inheritance on a fancy cruise for you and our spouse—you get the idea), but if the separate property is not transmuted, it usually (usually) remains your separate property, although Utah law permits a court to award separate property to the other spouse, if circumstances warrant it.

Elman v. Elman (245 P.3d 176, 2002 UT App 83 (Utah Court of Appeals 2002):

¶ 18 Generally, trial courts are . . . required to award premarital property, and appreciation on that property, to the spouse who brought the property into the marriage. See Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App.1990); see also Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988).

¶ 19 However, separate property is not “totally beyond [a] court’s reach in an equitable property division.” Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct.App.1990). The court may award the separate property of one spouse to the other spouse in “‘extraordinary situations where equity so demands.’” Id. (quoting Mortensen, 760 P.2d at 308); see also Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah Ct.App.1993) (“‘Exceptions to this general rule include whether … the distribution achieves a fair, just, and equitable result.’” (quoting Dunn v. Dunn, 802 P.2d 1314 at 1320)).

And there are these authorities too:

“The general rule is that equity requires that each party retain the separate property he or she brought into the marriage, including any appreciation of the separate property.” Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App.1990). Such separate property can, however, become part of the marital estate if (1) the other spouse has by his or her efforts or expense contributed to the enhancement, maintenance, or protection of that property, thereby acquiring an equitable interest in it, or (2) the property has been consumed or its identity lost through commingling or exchanges or where the acquiring spouse has made a gift of an interest therein to the other spouse. (Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988) (citation omitted)).

Premarital property, gifts, and inheritances may be viewed as separate property, and in appropriate circumstances, equity will require that each party retain separate property brought to marriage; however, the rule is not invariable. Burke v. Burke, 733 P.2d 133 (Utah 1987).

A material misrepresentation or concealment of assets or financial condition as a result of which alimony or property awarded is less or more than otherwise would have been provided for is a proper ground for which the court may grant relief to the party who was offended by such misrepresentation or concealment, absent other equities such as laches or negligence…. However, before relief can be granted, it must be determined that the alleged misrepresentation or concealment constitutes conduct, such as fraud, as would basically afford the complaining party relief from the judgment. (Clissold v. Clissold, 30 Utah 2d 430, 519 P.2d 241, 242 (1974) (citations omitted), overruled in part on other grounds by, St. Pierre v. Edmonds, 645 P.2d 615, 619 n. 2 (Utah 1982); accord Boyce v. Boyce, 609 P.2d 928, 931 (Utah 1980) (noting that “[c]learly, a court should modify a prior decree when the interests of equity and fair dealing with the court and the opposing party so require”); Reid v. Reid, 245 Va. 409, 429 S.E.2d 208, 211 (1993) (ruling that “[o]nce the amount of spousal support is determined, the statutes and case law specifically limit the divorce court’s authority to retroactively modify that amount, absent fraud on the court ”) (emphasis added).

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

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

Clark v. Clark – 2023 UT App 111

THE UTAH COURT OF APPEALS

SUSAN JEANNE CLARK,

Appellee,

v.

RICHARD LEE CLARK,

Appellant.

Opinion

No. 20210713-CA

Filed September 28, 2023

Fourth District Court, Heber Department

The Honorable Jennifer A. Brown

No. 184500153

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

Julie J. Nelson, Attorney for Appellee

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

MICHELE M. CHRISTIANSEN FORSTER and RYAN D. TENNEY

concurred.

OLIVER, Judge:

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

BACKGROUND

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ISSUES AND STANDARDS OF REVIEW

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

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

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

ANALYSIS

I. Pretrial Disclosures

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

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

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

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

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

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

II. Dissipation

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

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

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

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

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

III. Marital Property

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

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

A.        Mooring Drive

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

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

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

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

B.        The Harley-Davidson

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

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

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

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

C.        $30,000 Offset

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

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

. . . erred”).

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

CONCLUSION

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


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

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

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

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

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

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

By Quinton Lister, legal assistant

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

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

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

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

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

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

Financial Declaration (utcourts.gov)

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Brown v. Brown – 2020 UT App 146 – marital vs. non-marital assets

2020 UT App 146
THE UTAH COURT OF APPEALS
JERRY V. BROWN, Appellant, v. YVONNE A. BROWN, Appellee.

Opinion
No. 20190543
Filed October 29, 2020

Fourth District Court, Provo Department
The Honorable Derek P. Pullan
No. 154403120

Julie J. Nelson, Troy L. Booher, and Alexandra Mareschal, Attorneys for Appellant

Ron W. Haycock Jr., S. Spencer Brown, and Scarlet R. Smith, Attorneys for Appellee

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

ORME, Judge:

¶1        Jerry V. Brown appeals the district court’s determination in this divorce proceeding that his dental practice was marital property and that his ex-wife, Yvonne A. Brown, was therefore entitled to half its value. Jerry[1] also appeals the district court’s award of $96,409.72 to cover pre-decree expenses Yvonne incurred over nearly a two-year period while the divorce was pending. We reverse in part, affirm in part, and remand for revision of the divorce decree.

BACKGROUND

¶2        In 1986, Jerry purchased a dental practice and building. By 1996, he had completely paid off the purchase price. During a portion of this ten-year period, Jerry was married to his first wife, with whom he had four children. After Jerry and his first wife divorced, Jerry and Yvonne married in 1996. Yvonne had also been married previously and brought three children into the marriage. In 1999, Jerry and Yvonne had a child together. They divorced in 2011 but remarried approximately one year later.

¶3        Soon after their first marriage to each other, Yvonne began working at the practice. After about a month, however, Jerry and Yvonne decided that it was not a good fit. They determined that Yvonne should stay home and care for their blended family from then on, but she occasionally filled in at the practice on an emergency basis. Regardless of the hours Yvonne worked, the practice paid her a monthly salary, depositing her paycheck into Jerry and Yvonne’s joint bank account.

¶4        During both his marriages to Yvonne, Jerry kept the practice’s accounts separate from the couple’s joint accounts. Jerry testified that he did not “at any time . . . put personal funds from [his] personal account or [their] marital accounts into [the practice].” And Yvonne testified that Jerry was “controlling with finances” and threatened to fire his employees if they discussed the practice’s finances with her. Yvonne’s sister, who worked at the practice, testified that Jerry kept the finances “quiet” and would not discuss them with Yvonne. She further testified that whenever Yvonne would “come to the office, he’d empty the cashbox and walk across the street and deposit all of the money into the bank.”

¶5      In addition to drawing his regular salary, Jerry paid expenses attributable to the marriage, such as the couple’s mortgage payments, vehicle payments, insurance bills, travel expenses, and other obligations, using funds from the practice’s account. Jerry also deposited $6,000 from the practice’s account into the couple’s joint account each month, which Yvonne used to pay household expenses. But because Yvonne did not have access to any other bank accounts, if she needed extra money, she “had to ask for it, and usually it became very heated because [Jerry] controlled all of [the] finances.”

¶6        In 2002, Jerry and Yvonne built an $860,000 home that came with a $5,722 monthly mortgage obligation. Around this time, Jerry also renovated the practice’s building and financed it solely by a loan secured by the building, which resulted in a $4,000 monthly payment that he paid from the practice’s revenue. Yvonne testified that the practice’s new debt affected the family’s lifestyle, income, activities, and travel. She further explained that they “had to make a lot of sacrifices financially at the time to offset [the] income” that stayed in the practice instead of being used to supplement the available marital funds. And around 2004 or 2005, Jerry attempted to open a second office to expand the practice, which proved unsuccessful. This investment, too, was funded solely by the practice.

¶7        After the couple’s first divorce and their subsequent remarriage in 2012, Yvonne began attending school to become an esthetician and eventually obtained her master’s degree in that field. Jerry paid for her schooling from the practice’s revenue. In 2013, Yvonne opened a spa at the practice, for which Jerry added three rooms to the practice’s building. This new spa company was a separate entity from the practice and had a separate bank account. Jerry testified that he spent “well over $200,000” of the practice’s revenue on spa equipment to help Yvonne get established.

¶8      In June 2015, the couple separated again. Around this time, Yvonne started another spa company in a different location and moved all the equipment that Jerry had purchased with funds from the practice to this new location. After this separation, Jerry and Yvonne continued to engage in financial transactions. Jerry had refinanced the practice’s building in May 2015 and obtained $200,000, which he was solely responsible for repaying, and gave half—$100,000—to Yvonne. For a time, he continued to deposit $6,000 a month into a bank account for Yvonne. Jerry also kept making monthly payments of $2,200 on a laser he had purchased in 2015 for Yvonne’s business until it was paid off in March 2019, even though Yvonne had agreed to make the payments. Jerry also continued to help Yvonne by investing over $120,000 in her new spa company. Jerry testified that he did this because he was “hoping that [they] might be able to work things out because [finances were their] biggest problem,” and he hoped that those issues would be resolved if her business became profitable.

¶9 In June 2017, Jerry and Yvonne realized that reconciliation was no longer a possibility and decided to divorce once again. Jerry made two more deposits of $6,000 in June and July into a personal account for Yvonne, and in August he deposited another $4,500. From September through December he deposited only $2,500 a month, and he did not deposit any money from January through July 2018. The court then ordered Jerry, starting in August 2018, to pay Yvonne temporary alimony in the amount of $1,607 per month,[2] which Jerry paid until trial in April 2019.

¶10 After trial, the court entered its findings of fact and conclusions of law, dividing the marital estate and deciding other issues pertinent to the divorce. Only two parts of those findings and conclusions, which were later folded into the divorce decree, are relevant to this appeal. First, the court ruled that “[b]ecause marital funds were expended for the benefit of [the practice, it] was converted from Jerry’s separate property to marital property.” The court based this ruling on its finding that

[o]n two occasions, Jerry decided to use income from [the practice] to reinvest in the practice. First, in 2004 or 2005 Jerry opened a second dental office. . . . Opening that office required capital. Accordingly, through [the practice], Jerry secured a loan. The monthly payment on the loan was $2,000. The . . . office was a failed venture. . . . Jerry used income from [the practice] to pay for this failed expansion, thereby decreasing the funds he routinely pulled from [the practice] to pay marital expenses as he routinely had done.

Second, in 2003 during the first marriage Jerry decided to renovate the [practice’s building]. The renovation required capital. Jerry used available funds from [the practice] as well as a loan to pay for the renovation. . . . The monthly payment was $4,000. This monthly obligation left less money for Jerry to pull from [the practice] to pay for marital expenses as he routinely had done. According to [Yvonne], the renovation debt reduced the family income and [a]ffected “what we did and how we traveled.”[3]

¶11 Second, the court ruled that Yvonne was entitled to $96,409.72 in “pre-decree reasonable monthly expenses.” The court based this amount on the extent to which Yvonne’s reasonable expenses from June 2017 until April 2019—found by the court to be $9,464.45 per month—exceeded her monthly income, i.e., the amounts Jerry made available to her, her own earned income, and the amount she received from the sale of a laser. Specifically, it found that

[Yvonne’s] monthly shortfall—for which she should have had access to marital funds but did not—can be calculated.

  • For the two months from June and July 2017, [Yvonne’s] monthly income was $8,839.92, her earned income plus the $6,000 Jerry paid to her. Her monthly expenses exceeded her income by $624.53 each month, for a total shortfall of $1,249.00.
  • For August 2017, [Yvonne’s] monthly income was $7,339.92, her earned income plus the $4,500 Jerry paid to her. Her monthly expenses exceeded her income by $2,124.53, the total shortfall for that month.
  • For the four months from September to December 2017, [Yvonne’s] monthly income was $5,339.92, her earned income plus the $2,500 Jerry paid to her. Her monthly expenses exceeded her income by $4,124.53 each month, for a total shortfall of $16,489.12.
  • For the seven months from January to July 2018, [Yvonne’s] monthly income was $2,839.92, her earned income. Her monthly expenses exceeded her income by $6,624.53 each month, for a total shortfall of $46,371.71.
  • For the ten months from August 2018 to April 2019, [Yvonne’s] income was $4,446.92, her earned income plus the $1,607 paid to her by Jerry. Her monthly expenses exceeded her income by $5,017.53 each month, for a total shortfall of $50,175.30.
  • Prior to the decree, [Yvonne] sold one of the lasers for $10,000.00 and used this money to pay her monthly expenses.

¶12      Jerry appeals.

ISSUES AND STANDARDS OF REVIEW

¶13 Jerry raises two issues. First, he asserts that the district court erred when it determined that the practice had become a marital asset. “[W]hether property is marital or separate is a question of law,” which we review for correctness. Liston v. Liston, 2011 UT App 433, ¶ 5, 269 P.3d 169.

¶14 Second, Jerry contends that the district court erred in ordering him to pay Yvonne $96,409.72 in expenses incurred by her during the pendency of the divorce proceeding that were not covered by her income and marital funds. We review property decisions and alimony awards with considerable deference, reversing only where the district court has exceeded the sound exercise of its discretion. See Hartvigsen v. Hartvigsen, 2018 UT App 238, ¶ 4, 437 P.3d 1257.

ANALYSIS

  1. The Practice

¶15 Jerry argues that the district court erred in concluding that the practice—which was unquestionably his separate property at the outset of his marriage to Yvonne—became a marital asset based solely on the fact that practice funds were frequently used to cover family expenses and, at times, the amount of this marital subsidy was reduced to help expand the practice. “The presumption is that marital property will be divided equally while separate property will not be divided at all.” Lindsey v. Lindsey, 2017 UT App 38, ¶ 32, 392 P.3d 968. “Married persons have a right to separately own and enjoy property, and that right does not dissipate upon divorce.” Id. “The general rule is that equity requires that each party retain the separate property he or she brought into the marriage, including any appreciation of the separate property.” Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct. App. 1990). “However, separate property is not totally beyond a court’s reach in an equitable property division.” Elman v. Elman, 2002 UT App 83, ¶ 19, 45 P.3d 176 (quotation simplified). Utah law has identified three circumstances that support an award of separate property to the other spouse. Lindsey, 2017 UT App 38, ¶ 33. These circumstances are: (1) “when separate property has been commingled” with marital property; (2) “when the other spouse has augmented, maintained, or protected the separate property”—otherwise known as the contribution exception; and (3) “in extraordinary situations when equity so demands.” Id.

¶16 Here, the court did not rule that the practice had been commingled[4] with marital property, or that this was an extraordinary situation. Rather, it concluded that the contribution exception applied. The contribution exception may be satisfied in three ways: (1) “when one spouse brings assets into the marriage and the other spouse’s prudent investment of those assets substantially increases their value”; (2) “when marital funds are expended or marital debt is incurred for the benefit of one spouse’s separate property”; or (3) potentially, “when one spouse works for a business owned by the other spouse but is not paid a wage or salary.” Id. ¶ 35 (quotation simplified).

¶17      Here, the first contribution variant does not apply because it is undisputed that Yvonne did not play a role in investing the practice’s assets to substantially increase their value. The third variant is likewise inapplicable because although Yvonne did work at the practice for a time, she was paid a monthly salary for that work and, indeed, she was paid that salary even when she did not work. Rather, the court relied on the second variation of the contribution exception when it ruled, “Because marital funds were expended for the benefit of [the practice, it] was converted from Jerry’s separate property to marital property.” This determination was erroneous because it is clear from the record that no marital funds were ever used to benefit the practice; the flow of funds was only in the opposite direction.

¶18      To reach its conclusion, the court determined that money that stayed within the practice became marital property simply because Jerry, having previously been more amenable to using money from the practice to pay for family expenses, reduced the amount of those transfers to help fund expansion of the practice. The court reasoned that the practice was converted to a marital asset because funds that were normally diverted from the practice to cover family expenses were instead retained to build the practice. This premise does not satisfy the contribution exception because the practice was at all times a separate asset, and the flow of money went in only one direction: from the practice’s accounts to the personal and joint accounts of Yvonne and Jerry. Once this money left the practice and entered these accounts, that money then became marital property.[5] Cf. Keiter v. Keiter, 2010 UT App 169, ¶ 19, 235 P.3d 782 (“[E]arned income from employment or from rendering professional services during a marriage falls within the usual definition of marital property.”).

¶19 But this one-way flow did not convert the source of that money, i.e., the practice, into a marital asset. The practice therefore never lost its separate character because no money from a marital source was ever used for the benefit of the practice, even though the converse was true. Cf. Schaumberg v. Schaumberg, 875 P.2d 598, 603 (Utah Ct. App. 1994) (holding that because husband used a marital loan to “maintain and augment” a business asset, that “changed [the asset’s] character from a personal asset to a marital asset”). And this is true even though Jerry at times reduced the amount of money that left the practice to help fund the family’s expenses. Given that Yvonne’s work at the practice was financially compensated—indeed, overcompensated—the only way that the practice in this case could have become a marital asset is if money from Yvonne’s and Jerry’s personal and joint accounts had been regularly used to shore up the practice or the parties took out a marital debt to fund the practice. See Lindsey, 2017 UT App 38, ¶ 35. Cf. Keiter, 2010 UT App 169, ¶ 24 (holding that a husband’s personal and medical practice’s accounts were “inextricably commingled” and both were marital assets because the husband deposited his salary into both accounts and paid for business and personal expenses from both accounts) (quotation simplified). Here, in contrast, the court explicitly found, with our emphasis, that “Jerry decided to use income from [the practice] to reinvest in the practice.” Thus, the practice retained its separate character because the money that became a marital asset after leaving the practice never returned to the practice. Nor were other marital assets used to subsidize the practice.

¶20 Yvonne claims that Keiter, 2010 UT App 169, requires affirmance of the district court’s decision. There, the husband’s income from his medical practice, which income was a marital asset, see id. ¶ 19, “would be deposited along with his separate earnings into his personal account [and] medical practice account . . . [t]hen, both business and personal expenses would be paid from those accounts,” id. ¶ 24. Given this routine, the Keiter court determined that both accounts were marital assets because “they were ‘inextricably commingled’ with both separate and marital income.” Id. Yvonne claims that the same scenario is present here because Jerry “deposited some income into his joint account with [her], some into a personal bank account, and some into [the practice’s] account [and] paid family expenses from each account.” But the critical difference between Keiter and the case at hand is that in Keiter the husband’s salary was deposited into the medical practice’s and the marital account, thus commingling the practice’s account with marital funds, and he then used the funds from both accounts to pay for both business and personal expenses, thereby using marital funds to support and improve his separate property. That is classic commingling, a theory that the district court here correctly avoided. See supra ¶ 16 & note 4.

¶21      Unlike in Keiter, Jerry never deposited his salary—marital income—into the practice’s account, which would have thereby “inextricably commingled” marital funds with separate funds. See Keiter, 2010 UT App 169, ¶ 24 (quotation simplified). Furthermore, Jerry never used marital funds to pay for business expenses, as was the case in Keiter. Rather, Jerry’s salary left the practice’s account and entered his personal account or a marital account and was never used to cover the practice’s expenses, which the district court specifically found when it stated that only the practice’s own assets were used to expand the practice. And while personal expenses were often covered with additional funds from the practice’s account, this was a one-way flow—no marital funds were ever used to pay for business expenses. The district court therefore erred in treating the practice as a marital asset and awarding Yvonne a portion of the value of the practice.

  1. Pre-decree Expenses

¶22 Jerry next argues that the district court exceeded its discretion by ordering him to “reimburse [Yvonne] for almost all of her claimed expenses during the twenty-two-month[6] pendency of their separation.”

¶23 “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. “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.” Id.

¶24 Here, the district court ruled that, “[p]ursuant to the rule articulated in Dahl, [Yvonne]—like Jerry—was entitled to access marital funds to pay her reasonable monthly expenses incurred while the divorce was pending.” The court then ordered Jerry, who effectively had control of the marital funds, to pay Yvonne for her expenses insofar as they exceeded the income she earned plus amounts Jerry advanced while the divorce was pending. The net amount, with a further offset for the value of a laser she sold for $10,000, amounted to $96,409.72.

¶25      Jerry argues that the district court improperly applied our Supreme Court’s holding in Dahl. In that case, the Court held that the district court erred in requiring the wife, who was not living in the marital home and had no access to the marital estate during the pendency of the divorce, to repay her ex-husband money that he had paid her from the marital estate during the course of the divorce proceedings for her living expenses. Id. ¶ 125. The Court ruled that because these funds came from the marital estate and were used to pay the wife’s pre-decree living expenses, she was not obligated to repay the money. Id. ¶¶ 128–129.

¶26      Jerry argues that Dahl does not apply to this case and does not “stand for the proposition that the spouse with access to the marital estate must pay all of the other spouse’s living expenses during the pendency of the divorce.” This argument reflects a misunderstanding of Dahl. The point of Dahl is not that only one spouse may have “access to the marital estate” but that both do, and both are entitled to rely on it to cover their “reasonable and ordinary living expenses” pending entry of the divorce decree.[7] Id. ¶ 126.

¶27 It is true that Dahl is on a slightly different footing than this case. In Dahl, our Supreme Court held that the wife did not have to repay the money she received from the marital estate, rather than, as here, directing that the marital estate would cover the shortfall in her expenses.[8] The Court in Dahl explicitly stated, “Prior to the entry of a divorce decree, all property acquired by parties to a marriage is marital property, owned equally by each party,” and “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.” Id. (emphasis added). It further elaborated that “allowing both spouses equal access to marital funds during the pendency of a divorce promotes the goal of a fair, just, and equitable distribution of marital property.” Id. (emphasis added) (quotation otherwise simplified). Thus, Dahl stands for the proposition that both spouses are entitled to equal access to the marital estate to fund their reasonable and ordinary living expenses pending the divorce. In accordance with this proposition, the district court appropriately ordered the marital estate to reimburse the shortfall in Yvonne’s pre-decree living expenses with reference to the expense level it deemed reasonable, to the extent those expenses exceeded her earned income, asset sale, and the diminishing amounts Jerry made available to her.[9] At this point, while Jerry might be signing the check, the adjustment is conceptually made from the marital estate—not from funds that are his own separate property. See supra note 8.

¶28 Jerry further argues that the district court’s award should have been offset by the $100,000 he gave Yvonne in May 2015, the value of the equipment he bought for her spa business, the $120,000 he additionally contributed to her business, and other money that he transferred to her from the practice’s accounts. This argument is unavailing. First, the equipment assisted Yvonne in earning an income and paying her bills. That earned income reduced the amount of Yvonne’s monthly shortfall. The cost of that equipment cannot, years later, be used as an offset against Yvonne’s pre-decree living expenses, especially where Yvonne’s earned income already offset those expenses. Second, because the majority of these transactions occurred before the couple’s decision in 2017 to seek a divorce, it was not unreasonable for the court to ignore these transactions when making its award for living expenses after that decision was made, as Yvonne was still entitled to the benefit of the marital estate to help cover those living expenses, as was Jerry, up until the divorce decree was entered.[10]

¶29 The court did, however, make a simple calculating error when it ruled that “[f]or the ten months from August 2018 to April 2019, [Yvonne’s] income was $4,446.92, her earned income plus the $1,607 paid to her by Jerry. Her monthly expenses exceeded her income by $5,017.53 each month, for a total shortfall of $50,175.30.” Both parties agree that the time period actually amounted to nine months, not ten. Thus, the award corresponding to that period should be reduced by $5,017.53. On remand, the district court needs to adjust its pre-decree expense award accordingly.

CONCLUSION

¶30 The district court erred in concluding that the practice had become a marital asset because no marital funds were used to enhance the practice and the practice had not otherwise lost its character as a separate asset. Beyond a simple calculating error and the apparent oversight detailed in note 10, however, the court did not exceed its discretion in its pre-decree expense ruling that required the marital estate to cover the shortfall in Yvonne’s reasonable living expenses, as found by the court, because Yvonne had an equal right to the marital estate to pay those expenses.

¶31 We remand to the district court to amend its decree to incorporate appropriate changes, in accordance with this opinion.

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

 

 

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

[2] Following trial, the district court found that this amount was too low “because Jerry had significantly understated his income” and ruled that Jerry’s actual ability to pay was $2,687 per month. The court established this amount as alimony going forward. The court’s alimony determination is not at issue in this appeal.

[3] In view of the brief hiatus between the parties’ two marriages, corresponding to only one year in a twenty-three-year period when the parties were otherwise married, in adjudicating their second divorce, the district court essentially evaluated their circumstances as though they were parties to a single continuous marriage. In this atypical circumstance and on the facts of this case, this approach seems entirely reasonable, the parties appear to have acquiesced in it during the course of this proceeding, and neither party challenges it on appeal.

[4] We agree that the practice never became a marital asset under the theory of commingling because Jerry kept the practice’s accounts and the couple’s personal accounts separate at all times. No money ever came back to the practice once it entered the parties’ personal and joint accounts. Thus, it is clear that the practice was never commingled with marital property, even though practice funds were made available, when Jerry saw fit, to subsidize the marital estate.

[5] The district court considered Jerry’s historical use of business funds to pay marital expenses in calculating alimony.

[6] Jerry refers to this period as twenty-two months but it is clear that the time frame in question is actually twenty-three months. This is calculated from the time the couple separated in June 2017 up until trial in April 2019. When including June 2017 and April 2019 in the calculation, this is a twenty-three month period.

[7] Pursuant to Dahl, the marital estate must pay for the “reasonable and ordinary living expenses” of each party during the pendency of their divorce proceedings. Dahl v. Dahl, 2015 UT 79, ¶ 126, 459 P.3d 276. While Yvonne’s expenses during the relevant period may seem high, Jerry has made no claim that these expenses, as found by the district court, were unreasonable in light of the marital standard of living.

[8] Jerry characterizes the district court’s order to reimburse Yvonne for her monthly expenses as requiring him to pay it. But Jerry mischaracterizes what the court actually did. Conceptually, it did not order him to pay all her expenses but ordered the marital estate to cover Yvonne’s expenses, an estate in which Yvonne had equal share and to which she should have had equal access. See id. Jerry further argues that he should have to pay only half, at most, of the court’s pre-decree expenses award. This argument is unavailing, however, because Jerry took control of the marital estate to continue to cover his own expenses but deprived Yvonne of that same benefit. Thus, Jerry is required to cover the shortfall in Yvonne’s living expenses from the marital estate, to which he deprived Yvonne access while their divorce was pending.

[9] As explained above, see supra ¶ 11, once the decision was made to divorce, Jerry initially channeled $6,000 in marital funds per month to Yvonne, leaving a shortfall of only a little over $600 per month. When that allowance dropped to zero for seven months in 2018, the monthly shortfall increased by more than tenfold, to over $6,600.

[10] There is, however, an expense that Jerry calls to our attention that is on a different footing, namely the $2,200 monthly payment for a laser that he continued to make even after the couple’s June 2017 decision to divorce, and which he continued to pay until March 2019, as specifically found by the district court. It is undisputed that Yvonne agreed to make those payments, but she did not do so. The court did not circle back and deal with these payments when determining its award of pre-decree expenses to Yvonne, even though the court allowed an offset for the $10,000 Yvonne realized upon sale of another laser that Jerry financed, which surely seems analogous. Jerry’s argument that he should have had a further offset for half of the payments made for this laser during the relevant period is persuasive. (As explained above, and as consistent with the district court’s approach, this offset would be only for the payments made between the time the couple decided to divorce in June 2017 and the time Jerry paid off the laser in March 2019.) On remand, the court should deal with this loose end and further adjust the award for Yvonne’s pre-decree expenses as may be appropriate.

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Spouse abused me emotionally, so I get more money in divorce now, right?

My spouse abused me emotionally, so I get more money in divorce now, right?

Strongly believing or feeling that “I deserve” an unequal division of the marital estate does not mean that you do legally deserve any such thing or that the court will agree with you. That is not how divorce law works. There are exceptions to this rule, but they are very rare.

You need to understand first that courts generally do not divide and distribute the marital estate (“marital estate” is the term for the property and assets acquired during the marriage) to reward or to punish a spouse.

The presumption is that the marital estate will be divided equally, unless there is some extenuating, exceptional circumstance that would warrant an unequal division and distribution (such as showing that one spouse inexcusably diminished the value of the estate and/or dissipated marital assets during the marriage to the detriment of the other spouse).

Rarely, if ever, is an unequal division of the marital estate made merely because the other spouse was physically or emotionally abusive or engaged in “unethical behavior.” If the court does make an unequal division of the marital estate based upon physically or emotionally abuse and/or unethical behavior, such misconduct would usually need to be 1) first, shown to be severe or chronic and 2) second shown to warrant/justify an unequal distribution of the marital estate property.

Meet and talk with a knowledgeable attorney to find out what the specific law is on this subject in your jurisdiction to find out what the law is where your divorce action is or will be filed.

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

https://www.quora.com/Divorce-attorneys-If-one-party-deserves-more-in-divorce-distribution-maybe-due-to-abuse-unethical-behavior-from-partner-etc-then-how-does-opposing-attorney-react-Do-they-give-as-deserved-or-still-fight-to-keep-for/answer/Eric-Johnson-311

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