Separate Property Can Become Marital Property Simply if the Other Spouse’s Contribution of Income to the Marriage

Henshaw v. Henshaw, 2012 UT App. 56, Utah Court of Appeals, February 24, 2012

Husband and Wife were divorced.  Wife was awarded half of the equity in a ranch and adjoining property that Husband inherited and paid for with inherited money.  In the time leading up to trial, Husband went through 3 attorneys and file a motion to recuse the judge in order to extend the time until trial.  The trial court found that he violated rule 11.  Husband appealed the property distribution and the Rule 11 findings.

The Court of Appeals declined to disturb the trial court’s finding that Wife contributed to the maintenance of the ranch and that Wife’s parents loaned the parties money to cover their needs and allow them to purchase the additional land and maintain the ranch.  As to the classification of the adjoining property as marital property, Husband failed to properly marshal the evidence and as such, the Court refused to overturn the trial court’s decision.  Further, because of Wife’s contribution of income and contributions to the ranch, it was not an abuse of discretion to award her 50% of the value of the premarital property.  However, the Court found that the Ranch could not be ordered sold because it was already sold.  The Court affirmed the trial court’s division of the value and remanded the issue to determine Wife’s remedy.

Further, Husband’s actions of attempting to delay the proceedings properly resulted in Rule 11 Sanctions.

Full opinion available at: http://www.utcourts.gov/opinions/appopin/henshaw022412.pdf  

Detailed and Unchallenged Expert Testimony is Sufficient Basis for Trial Court Findings

Liston v. Liston, 2011 UT app 433, December 22, 2011

Husband appealed the Decree which found wife’s credit card accounts and Husband investment accounts to be marital property. The trial court further awarded wife a sum of money for her ½ interest in water rights associated with the marital home. Husband Appealed.

Court of Appeals affirmed the trial court’s finding that Wife’s detailed and specific explanation that the credit card expenses were marital expenses was more credible when compared to Husband’s lack of explanation of the credit card expenses.  Indeed, Husband’s testimony that he had no idea of what expenses were on the Credit Cards displayed his ignorance on the issue.

Husband had a sizeable investment account to which he added funds that he claimed were from his mother.  The combined amounts were then placed in an account held solely in Wife’s name, then the entire amount (including Wife’s investments) were transferred into an account held in Husband’s deceased mother’s name.  Upon distribution, the Court described how it determined that Husband original investment in the account along with other token investments and interest thereon was Husband’s separate property. The remainder, including the portion that allegedly came from Husband’s mother, the Court found to be marital.   The Court of Appeals affirmed the trial court based on the trial court’s detailed findings and reliance on the CPA report.

Husband argued that the water rights were resolved in the parties’ partial stipulation.  As part of the stipulation husband was awarded the marital home and water rights “appurtenant thereto.”  An unchallenged expert testified that three of the four shares were not appurtenant to the home, but could be sold separately.  Court affirmed the trial court based on the expert’s unchallenged testimony.

Full opinion available at: http://www.utcourts.gov/opinions/appopin/liston122211.pdf

Only the Commingled Portion of Premarital Property is Distributed and A Negative Inference is Drawn Against a Non-Producing Party Who Should Have the Records

Keiter v. Keiter, 2010 UT App. 169, (Utah Court of Appeals June 24, 2010).

In the Decree of Divorce, the trial court determined that a piece of separate real property was commingled with marital property and equitably distributed the entire piece of real property.  Husband Appealed. 

The piece of property was held as a portion of Husband’s defined benefit plan that he began contributing to before the marriage.  During the marriage, Husband made several payments on the land.  Husband failed to show the court where the money for these payments had come from.  The Court found that a negative inference about missing documentation is to be drawn against the party who should have possession of the records.  Because Husband failed to produce the records, Husband could not support his claim that the property was premarital and not subject to distribution. 

Therefore, the Court affirmed the finding that the property was commingled.  However, the Court found that the entire property was not subject to distribution and remanded the case for the trial court to distribute only the commingled portion, reserving the premarital portion to Husband.

Full Decision available at  http://www.utcourts.gov/opinions/appopin/keiter062410.pdf

Failure to Submit to Corporate Formalities Will Subject Husband and Wife to Corporate Debt.

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Olson v. Olson, UT App. 22, (Utah Court of Appeals, February 4, 2010).

When Parties divorced, they had significant business debt.  Parties had so commingled the business and personal debts and assets that the business was simply and alter ego of the parties.  The trial court divided the business debt between the parties and ordered Husband to pay wife $1000 per month after the sale of the home.  Wife appealed those issues and many others including the valuation of the marital home, and the exclusion of her expert. 

The Court of appeals declined to rule on a number of the wife’s issues because she did not adequately brief the issues; she failed to show preservation, standard of review, and failed to cite relevant authority.  

The Court of Appeals affirmed all trial court findings.  The parties business failed to be a corporation in all respects. As to alimony, the tying of alimony to the sale of the home was property and shows that she is living rent free and that when they sell the home she will have need.  The court appropriately based the valuation of the home on Husband’s testimony as a knowledgeable owner.  The trial court appropriately excluded Wife’s expert because she had not provided an expert report from him.  A trial court can strike an expert’s testimony when the proponent failed to file an expert report and failed to list him on her witness list as and expert.

Full Decision available at http://www.utcourts.gov/opinions/appopin/olson020410.pdf