Thursday, August 8, 2013

Four Types of Non-Compliance-Based Attorney Fees Awards and Fault and Non-Compliance Cannot be Factors in Property Distribution

Goggin v. Goggin, 2013 UT 16, Utah Supreme Court, March 15, 2013

Husband and Wife Divorced.  Wife was awarded her all her attorney fees and receiver costs based on Husband’s actions of avoiding discovery and failing to comply with court orders.  Court did not distinguish between the fees awarded.  Wife also received a disproportionate distribution of property based on Husband’s dissipation of assets. Husband appealed.

The Supreme Court found that any fees that were related to failure to provide discovery, or fees incurred to enforce the order were appropriate.  The Supreme Court enumerated the four reasons a court can award fees for non-compliance: (1) Fees incurred enforcing an order, (2) Fees incurred under Rule 37 for the failure to comply with discovery, (3) Inherent Powers to reimburse parties for costs incurred defending bad faith actions, and (4) Inherent powers to sanction attorneys and litigants for bad behavior (i.e. Rule 11 sanctions).  However, the awards can never exceed the actual cost incurred by the innocent party. The Court Affirmed any award that was based on Husband’s bad acts, but Reverses any award for Wife’s out of pocket expenses in excess of reasonable attorney fees.

The trial court also found that Husband had dissipated marital assets, however instead of simply awarding wife her portion of the dissipated asset; the trial court awarded her the entire amount of the dissipated asset.  The Supreme Court Reversed and ordered that court equitably divide the marital estate, without considering Husband’s fault.   

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