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.   

Full opinion available at: http://www.utcourts.gov/opinions/supopin/Goggin1316031513.pdf

Limiting Healthcare to Homeopathic Remedies Against the Other Parent’s Wishes = Sole Custody to Other Parent.

Clarke v. Clarke, 2012 UT App. 328, Utah Court of Appeals, November 23, 2012

At trial, Mother was awarded sole legal and physical custody of the parties minor children, was awarded 100% equity in the marital home, and husband was found in contempt.  Father appealed.

Father asserted that he was the primary caregiver and that the Court did not give proper weight to Mother’s conviction for custodial interference.  However, the Court of Appeals affirmed the trial court’s award of custody finding that Father’s antipathy to scientific medicines and his refusal to have the children immunized caused the court concern for the safety and health of the children.  Further, the Court made no finding as to which parent was the primary caregiver.  Parents worked opposite schedules and cared for the children while the other was at work.  Father could not show that the trial court abused its discretion in awarding Mother sole custody.

Court awarded Mother all the equity in the marital home to reimburse her for the inheritance she received and used to pay of Father’s premarital debt which Father agreed he should repay.  The Court affirmed the award and found that Mother should not lose the benefit of her inheritance simply because it was inverted into Father’s debt.

The Court found that there was adequate grounds for the finding of contempt, however, the Court reversed and remanded the calculation of attorney fees to be limited only to the fees accrued for the contempt hearing and not amounts accrued prior to contemptuous conduct.

Full opinion available at:  http://www.utcourts.gov/opinions/appopin/clarke112312.pdf

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

Placing Property in Joint-Tenancy Does Not Always Mean Marital Property

Poll v. Poll, 2011 UT App 307, Utah Court of Appeals September 9, 2011

Husband and Wife were married in April 2005.  Wife had substantial amount of money in trust which she used to purchase the parties’ home.  Both parties were listed on the deed.  At divorce the trial court awarded the home in its entirety to wife because of her separate investment in the home.  Husband appealed.

The Court of Appeals found that under Bradford, a transfer of otherwise separate property to joint tenancy with the grantor’s spouse is generally presumed to be a gift and, when coupled with an evident intent to do so, effectively changes the nature of the property to marital property.  In this case, Wife lacked the evident intent to transfer the property to marital property.  The parties made substantial efforts to keep all their accounts separate, which bolstered Wife’s testimony that she had not intent of making the house a gift to the marital estate or to husband.  Affirmed.

Full opinion available at:  http://www.utcourts.gov/opinions/appopin/poll090911.pdf

Property Division is to be Equitable not Equal and Alimony Must have a Conclusion

Boyer v. Boyer, 2011 UT App 141 (Utah Court of Appeals, May 5, 2011)

Husband and Wife divorced.  Husband was awarded his retirement and the business.  He was further awarded a majority of the debt and was ordered to pay alimony.  Wife appealed the property division claiming she should be awarded a portion of the business and Husband’s retirement.  She also appealed the alimony award arguing that the Court failed to consider husband’s fault, (Husband had given wife a STD) and wife’s health.  Wife also appealed the Court’s prospective downward adjustments to alimony.

The Court of Appeals affirmed the property division, finding that while not equal as to the individual parts was equitable when evaluating the entire award.  As to alimony, The Court of Appeals found that there was no need to analyze Wife’s health, because that is not one of the statutory factors.  The Court did not have to analyze fault because it is an optional factor (“Court may consider fault”).  However, the Court remanded the award for further findings as to the prospective downward adjustments (which the Court of Appeals found would be appropriate and consistent with rehabilitative alimony, the trial simply needed to categorize the alimony award).  The Court of Appeals further remanded for findings as to the date of conclusion of alimony. 

Full Decision available at  http://www.utcourts.gov/opinions/appopin/boyer050511.pdf

Passage of Time Itself is not Enough to Invalidate a Divorce Agreement and Post Separation Mortgage Payments Entitle Payor to More Equity

Jacobsen v. Jacobsen, 2011 UT App 161 (Utah Court of Appeals, May 19, 2011).

Parties signed a “divorce agreement” in May 2001 and filed for divorce until 2005. The Trial court upheld the agreement. The trial court also awarded Husband a disproportionate portion of the equity because of his use of inheritance and separate income to retire the mortgage after separation. Wife Appealed.

The Court of Appeals found that Wife had marshaled much of the evidence, but failed to illustrate the “fatal flaw.” It is not enough to merely present all the evidence; the appellant must demonstrate why the evidence is insufficient. The Court also found that the passage of time does not invalidate the agreement.

The Court of appeals further found husband’s payments from post separation income and separate property used to retire the mortgage entitled him to a disproportionate amount of equity.

Wife appealed on several other grounds, but failed to preserve some issues and her other arguments were simply not supported by the evidence.

Full Decision available at http://www.utcourts.gov/opinions/appopin/jacobsen051911.pdf

Trial Court has Discretion to Determine the Weight of the Evidence

Richins v. Richins, 2010 UT App. 253, (Memorandum Decision, Utah Court of Appeals September 16, 2010).

Trial Court determined wife’s income based on a loan application The Court of Appeals determined that the trial court has discretion in assigning weight to various pieces of evidence.  In this case, the trial court gave more weight to the 2004 loan application (which on cross, Wife testified that she agreed with everything in the application), than to either a 2003 loan application in which Wife listed a lower income and her handwritten unsigned, and undated document created by Wife in anticipation of litigation.  The trial court has discretion to determine the weight of the evidence, and can only be overturned if it is clearly erroneous, the Court of Appeals Affirmed the trial court’s findings; particularly in light of the trial court’s additional findings that Wife had repeated lied to get what she wanted.

The Court additionally found that dividing the marital estate exactly in half meets the requirement that property distribution be equitable.

Lastly, because Husband was awarded attorney fees at trial and because he prevailed on appeal, his request for attorney fees for the appeal was granted.

Full Decision available at http://www.utcourts.gov/opinions/mds/richins091610.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

Divorce: Taking Decision Under Advisement = Sufficient Judicial Participation

Brough v. Brough, 2009 UT App. 344, (Utah Court of Appeals, November 27, 2009).

At trial, the district court directed Husband and Wife to prepare proposed Findings of Fact and Decrees. Both did, and the district court took the matter under advisement. The judge adopted wife’s Findings and Decree. Husband appealed claiming that the district court judge did not adequately participate in the proceedings.

The Court of Appeals affirmed the trial court, and found that the trial court’s actions of taking the matter under advisement and asking both parties to prepare proposed orders was sufficient participation. The district court also made notes regarding its initial view of the case. The notes demonstrate that the trial court agreed initially with Wife’s position and found Husband’s position to be “ridiculous.”

Court also found the actions of the parties changed premarital property to marital property and subject to distribution. Husband argues also that the ante-nuptial agreement reserved his property as separate. However, this agreement was made with the understanding that wife was not associated with that property; conversely, during the marriage she became substantially associated to that property.

Finally, the Court that the award of attorney fees was also correct for two reasons: Wife’s financial need and Husband’s ability to pay, and because Wife had substantially prevailed on her claims at trial; and on appeal as well. The Court remanded the matter for the trial court to determine adequate costs for appeal.

Full Decision available http://www.utcourts.gov/opinions/mds/brough112709.pdf

Failure to Marshal=Dismissal; Inheritance=Separate Property; Encouragement≠Enhancement; Repository≠Comingling; Forgery=Unjust Enrichment;

Kimball v. Kimball, 2009 UT App. 233, (Utah Court of Appeals, August 27, 2009).

Prior to the case analysis, the Court summarized the marshaling requirement. In short, when marshaling the evidence the appellant must provide all evidence in support of the trial court’s ruling, and then must identify which evidence carries the “fatal flaw.” Failure marshal results in dismissal. When reviewing the property distribution, the Court that although husband had encouraged wife to wait for a better offer on her inherited stock (which resulted more money for wife), such encouragement was not sufficient enhancement to overcome the separate property presumption on inheritance. Similarly, placing of proceeds from the sale of stock into a marital account does not automatically change separate property into marital property. Particularly if the property is adequately traced out and removed from the joint account. Husband forged several checks drawn against the stock account and could not prove that he was not unjustly enriched (because he cashed the checks without wife’s permission, the trial court inferred that he was enriched). Finally, Husband requested payment of his attorney fees. Wife argued that he had no need because his family had paid for his attorney (in divorce, to be entitled to attorney fees, one must show need, the other’s ability to pay, and reasonableness of the fees). The trial court agreed with Wife, however it made inadequate findings. The Court of Appeals reversed and remanded this issue. Moreover, the appellate court directed that the trial court found need and ability to pay, the court need only find what award would be reasonable, not that the fees incurred are reasonable.

Full Decision available at http://www.utcourts.gov/opinions/appopin/kimball082709.pdf

Divorce: Failure to Supply Transcript= No Appellate Review, AND Separate Property with Appreciation Thereon Should be Awarded to its Owner

Thompson v. Thompson, UT App. 10, (Utah Court of Appeals, April 16, 2009).

Husband appealed trail court’s equitable division of premarital 401(k) and premarital portion invested in the home.

The Utah Court of Appeals first laid out the procedure for property distribution: (1) the court must categorize the asset (is it marital or separate property?); (2) if the property is separate property, the property and the appreciation is awarded to the owner unless the other party meets one of the exceptions (the exceptions are: enhancement, maintenance, or protection of asset, (b) commingling, (c) to obtain a just and equitable result); (3) if it is a marital property each spouse receives a roughly equal share. The court should detail the steps it took in making the distribution.

Home—yet again the Court was deprived of the opportunity to make a decision on this issue be because Husband failed to provide a transcript. Affirmed on this issue.

401(k)—Like other separate property, if a retirement account is separate property it should be awarded to the owner with appreciation thereon. Therefore, the Court Reversed and Remanded this issue to determine the appreciation on the separate property and ordered the trial court to award the premarital contribution with its appreciation to Husband.

Full Decision available at http://www.utcourts.gov/opinions/appopin/thompson041609.pdf

Divorce: Failure to Present Adequate Evidence on Property Results in Remand.

Child v. Child, UT App. 97, (Utah Court of Appeals, Memorandum Decision, April 9, 2009).

Procedural History: This matter was before the Court of Appeals in September of 2008 (2008 UT App 338).  At that time, the Court of Appeals described the strict evidence marshalling standard that applies to issues of fact on appeal.  The appellant must marshal all the evidence and show that even in when viewed in a light most favorable to the appellee, it is legally insufficient.  The Court of Appeals also found that a portion of the property was premarital and summarily awarded it to the Husband.

Wife appealed this issue and the Supreme Court reversed the appellate court and remanded because there was inadequate evidence to make any finding as to the ownership of the property in question.  (see Child v. Child, 2009 UT 17).

The Appellate Court specially ruled that a party [is presumed to retain] his separate property brought into the marriage, as well as any appreciation thereon.  To rebut this presumption the other party must show that it has done something to establish one of the exceptions (enhancement, maintenance, or protection of the property). See Dunn and Mortensen.

 

The Court of Appelas remanded the matter for further findings as to the ownership of the property.

Full Decision available at http://www.utcourts.gov/opinions/mds/child040909.pdf

Divorce: Trial Court’s Failure to Make Adequate Findings on Property and Attorney Fees Results in Remand.

Jensen v. Jensen, UT App. 1, (Utah Court of Appeals, January 2, 2009).

Trial Court awarded Wife half of the increase in value of Husband’s premarital business interest.  The Court also awarded Wife attorney fees.  Husband appealed.  The Utah Court of Appeals reversed and remand finding, that the trial court failed to make an express finding of ownership of the business (required by Stonhocker); second, the court had erred when it awarded wife 50% of the total business’ increase in value, since Husband only owned 50% of the business the Court could only award Wife half of his 50% share of the increase in value, instead; third, however, since the business was separate property and because wife had not made any significant specific contribution specific to the business (i.e. did not assist in running the business) that she was not entitled to any portion of the increase.

As to attorneys fees, the court failed to make proper findings regarding Wife’s need, Husband’s ability to pay, and Reasonableness of the fees, as required by Stonehocker.  As such the award of fees was also reversed and remanded.

Full Decision available at http://www.utcourts.gov/opinions/appopin/jensen010209.pdf

Custody: Joint-Custody Cannot Be Ordered Unless One of the Parties Submits a Parenting Plan

Trubetzkoy v. Trubetzkoy, 2009 UT App. 77, ---P.3d---, (Utah Court of Appeals, March 19, 2009).

Sergei Trubeztkoy was awarded joint-legal custody of the parties’ minor children, and a larger portion of the marital estate. Leslie Smith Trubetzkoy (Wife) appealed the trial court’s decisions as to custody, parent-time, the accounting of the business, and grounds for divorce. The Court of appeals affirmed the property distribution and the grounds for divorce, but reversed and remanded the trial court decision on custody.

The Court found that before a trial court can award joint-legal custody either or both parties must submit a proposed parenting plan. Without a parenting-plan the trial court cannot award joint-custody of the children. If a parenting plan has been submitted, then the court should then evaluate the best interests of the children. Addtionally, the court found that the statutory parent-time schedule is presumed to be in the best interests of the children. The burden is on the party attempting to deviate from the statute. Mother failed to justify the deviation. While the property distribution was disproportionate it was not disproportionate enough to be an abuse of discretion. Wife’s final request was for the Court to change the grounds of divorce from irreconcilable differences to adultery. The Court denied this request because it was based solely on Wife’s preference.

Full Decision available at http://www.utcourts.gov/opinions/appopin/trubetzkoy031909.pdf

Divorce: Give the Court Sufficient Evidence. Otherwise, Your Award Could Be Overturned.

Leppert v. Leppert ---P.3d ---, 2009 UT App. 10, (Utah Court of Appeals, January 16, 2009).

The parties were awarded a bifurcated divorce in 2004. A temporary support order was in place from 2004 until 2006 when husband requested that the court modify the temporary order, which resulted in trial. The parties appealed on several grounds.

Wife appealed the trial court findings as to imputed income, alimony, division of property, and division of debt. Husband appealed the trial court's decision to separate the debts as to the date of separation instead of the date of divorce.

Imputation of Income: The Court relied on the trial court's extensive findings as to wife's employability and estimated hourly rate. Because of the findings, the Court chose not to disturb the trial court's order as to imputation of income.

As to alimony, division of personal property, royalty payments, and division of debt, the Court found that the trial court failed to make adequate findings. Because of the lack of findings, the Appellate Court reversed the awards and remanded the issues for further findings.

Attorney fees: The Court remanded the award and noted that courts must base and award of attorney fees on the need of the moving party, the ability of the other to pay, and the reasonableness of the requested amount. The Court also remanded the issue of attorney fees because of the lack of findings of the trial court.

Full Decision available at http://www.utcourts.gov/opinions/appopin/leppert011509.pdf