IN THE UTAH COURT OF APPEALS

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Noel C. Gardner,

Petitioner and Appellant,

v.

Mary E. Gardner,

Respondent and Appellee.

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OPINION

Case No. 20100520‐CA

F I L E D

(December 28, 2012)

  2012 UT App 374

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Third District, Salt Lake Department, 914900261

The Honorable Paul G. Maughan

Attorneys: Michael K. Mohrman, Tracy C. Schofield, and Mitchell S. Maio, Salt

Lake City, for Appellant

Kim M. Luhn and Paul H. Liapis, Salt Lake City, for Appellee

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Before Judges McHugh, Voros, and Roth.

ROTH, Judge:

¶1 Petitioner Noel C. Gardner (Husband) appeals the district court’s denial of his

petition to modify his divorce decree as well as its decision not to hold Respondent

Mary E. Gardner (Wife) in contempt for violating a hold harmless provision within the

divorce decree. We reverse and remand.
1

The mortgage payment was due on the first of each month. However, the first

fifteen days of each month were treated as a grace period and a late fee was not

assessed unless the payment was made after that time.

20100520‐CA 2

BACKGROUND

¶2 Husband and Wife married in 1984. Husband filed for divorce in 1991, and the

final decree of divorce was entered in 1994. As part of the property division, Wife was

awarded the marital home. At the time of the entry of the divorce decree, Husband and

Wife were unable to refinance the mortgage, so the decree made Wife responsible for

the mortgage debt and included a hold harmless provision, ordering Wife to “assume

and pay and hold [Husband] harmless from . . . the . . . mortgage on the [marital]

home.”

¶3 Shortly after the divorce, apparently out of concern that Wife would not be

timely in making the mortgage payments, Husband began making the monthly

payments himself, deducting that amount from his monthly alimony obligation. Wife,

however, moved the district court to order Husband to pay his full alimony obligation

directly to her. The district court granted Wife’s motion and “order[ed Husband] to pay

the alimony . . . directly to [Wife], pursuant to the terms of the [divorce decree]”

because “[Wife] . . . [is] obligated to pay the mortgage payment.” Thereafter, Husband

continued to pay his full alimony obligation to Wife and did not again pay the

mortgage.

¶4 Over the next decade, Wife paid the mortgage without incident. Beginning at the

end of 2007, however, Wife became chronically late in making her mortgage payments.

From December 2007 to December 2009, 18 of 25 payments were untimely, being made

after a grace period allowed under the promissory note, and at least 15 of those

untimely payments incurred late fees.1 Of those late payments, 8 were more than 30

days past due, the latest being 45, 58, 76, and 86 days late. The most untimely payments

were made between June 2008 and January 2009. Specifically, the June 2008 payment

was made on July 3, 32 days late; the July payment was made on August 15, 45 days

late; the August payment was not made until October 16 and was 76 days late; the

September and October payments were not made until November 26 and 28 and were

86 and 58 days late, respectively; the November payment was made on November 28,

27 days late; and the December payment was made on January 8, 38 days late. The
20100520‐CA 3

January 2009 payment was made on January 12 and was the first payment in over a

year that did not incur a late fee. Wife later explained that, during that time, she was

unaware that she had missed her June 2008 payment, and as a result her July payment

was credited towards the June payment, her August payment was credited towards her

July payment, and so on until the January 2009 payment. According to Wife, this rolling

arrearage resulted in all of her payments being past due until she managed to bring her

payments current several months later.

¶5 During this same period, from October 2008 to January 2009, the credit limits on

several lines of credit available to Husband were, according to him, substantially

reduced or suspended entirely, resulting in a reduction of available credit from

approximately $450,000 to $3,700, a decrease of over 99%. Husband’s credit rating was

also reduced by more than 100 points.

¶6 In December 2008, Husband filed a petition to modify the divorce decree,

asserting that “there ha[d] been a substantial and material change in circumstances . . .

which was not contemplated at the time the [divorce] decree was entered.” Husband

claimed that the changed circumstances included Wife’s failure to make timely

mortgage payments, which he alleged had resulted in substantial damage to his credit.

Other changed circumstances alleged by Husband included a change in Husband’s

family circumstances as well as a change in Wife’s economic status. Husband requested

that the court modify the divorce decree to require that Wife “immediately refinance the

home mortgage loan to secure the removal of [Husband’s] name from the loan

obligation” or to allow Husband to “be granted authority to sell the home.” Husband

requested attorney fees as well.

¶7 Husband also moved for an order to show cause, requesting that the district

court hold Wife in contempt for violating the divorce decree’s hold harmless provision

by failing to make timely mortgage payments. As relief, Husband again requested

either that Wife be ordered to refinance the mortgage or that he be permitted to sell the

marital home. Husband also requested damages in the form of attorney fees as well as

“additional damages caused by [Wife’s] failure to comply with the court’s order to hold

[Husband] harmless on the mortgage debt.”

¶8 The district court scheduled a trial in February 2010 to resolve both the order to

show cause and Husband’s petition to modify the divorce decree. On the morning of
20100520‐CA 4

trial, before the presentation of evidence, the court explained that it perceived “the

central issue [to be] what it means to hold harmless” in the context of a divorce decree,

which the court characterized as “a legal determination” that would “dramatically

shape the way this case goes” and be dispositive of the issues before it. The court

acknowledged that “there are no cases in Utah that define hold harmless,” but it

rejected Husband’s offer that the parties submit memoranda on the issue based on case

law from other jurisdictions. Instead, the court proceeded to “make a legal ruling on

what it means . . . to hold harmless in a divorce proceeding.”

¶9 The district court began its interpretation of the hold harmless provision by

concluding that the type of harm and damages alleged by Husband due to Wife’s

failure to make timely mortgage payments were “extraordinarily speculative.” These

included “damages for the alleged reduction in [Husband’s] credit rating, the alleged

reduction in the credit limit on his credit cards, the alleged suspension of his home

equity line of credit, the alleged loss of his ability to refinance his home, [and] for the

attorney fees incurred in this matter.” The court indicated that, because it considered

those damages to be so conjectural, it interpreted the hold harmless provision only to

“require[] [Wife] to hold [Husband] harmless from the payment of the first mortgage,”

meaning that Wife was only required to protect Husband from “damages actually

suffered . . . for late payments, foreclosure costs, penalties, interest, and for monies paid

by [Husband that] he was not obligated or planning to pay.” The court reasoned that if

Husband had been required to cover any such costs as a result of Wife’s late payments,

he could “pursue a remedy of contempt or a remedy of reimbursement for the then

actually incurred damages that [he] would have incurred by his payment of the

mortgage or the late fees.” The district court found, however, that Wife “ha[d] corrected

all late and delinquent payments,” that “no foreclosure proceedings or [collection]

actions [had been brought by the lender] against [Husband] or [Wife],” and that

Husband “ha[d] not paid any monies for mortgage payments, late fees, foreclosure

demands, penalties, or interest” on the mortgage. The court therefore concluded that

Husband “ha[d] not been damaged in any manner” proscribed by the hold harmless

provision and, thus, was not entitled to an award of damages. Accordingly, the district

court concluded that “[Wife] ha[d] held [Husband] harmless” under the divorce

decree’s hold harmless provision and could not be held in contempt for violating the

divorce decree.
20100520‐CA 5

¶10 The parties agreed that the district court’s interpretation of the hold harmless

provision disposed of the contempt issue, making it unnecessary to consider any of the

evidence they had come prepared to present at trial. However, on Husband and Wife’s

motion, the district court admitted the parties’ exhibits to complete the record for

purposes of appeal.

¶11 Later that day, the parties realized that the court had made no decision

concerning Husband’s petition to modify the divorce decree. When this remaining issue

was brought to the court’s attention, it concluded that based on its interpretation of the

hold harmless provision, Wife’s late mortgage payments did “not constitute a material

or substantial change in circumstances that would justify . . . revisiting” the divorce

decree. The district court therefore denied Husband’s petition to modify.

¶12 In support of its decision denying Husband’s petition to modify and declining to

hold Wife in contempt, the district court made several factual findings. In particular, the

court found that Wife “failed to pay the June 2008 mortgage payment and it became a

thirty (30) day rolling arrearage until it was paid in full in December 2008.” The court

further found “that [Wife] was occasionally late in [making the] monthly payments

thereafter until November 2009 when all payments and fees were paid on the

mortgage” and that “as of February . . . 2010, [Wife] has corrected all late and

delinquent payments and that the mortgage is current.” Husband objected to the

accuracy of these factual findings, but the court denied Husband’s objection.

¶13 Husband appeals the district court’s decision that Wife could not be held in

contempt for violating the divorce decree’s hold harmless provision as well as its denial

of his petition to modify the divorce decree. In appealing these decisions, Husband also

challenges the court’s underlying findings of fact.

ISSUES AND STANDARDS OF REVIEW

¶14 Husband first challenges the district court’s decision that Wife should not be

held in contempt for violating the hold harmless provision of the divorce decree. “The

decision to hold a party in contempt of court rests within the sound discretion of the

[district] court and will not be disturbed on appeal unless the . . . court’s action is so

unreasonable as to be classified as . . . a clear abuse of discretion.” Marsh v. Marsh, 1999
20100520‐CA 6

UT App 14, ¶ 8, 973 P.2d 988 (citation and internal quotation marks omitted). In this

case, the district court’s decision was based on its interpretation of the decree’s hold

harmless provision. Interpretation of a divorce decree presents a question of law, which

is reviewed for correctness. See Mitchell v. Mitchell, 2011 UT App 4, ¶ 5, 248 P.3d 65

(explaining that “[w]e interpret a divorce decree according to established rules of

contract interpretation,” and thus interpretation of a divorce decree presents a question

of law that is reviewed for correctness (citation and internal quotation marks omitted));

see also Café Rio, Inc. v. Larkin‐Gifford‐Overton, LLC, 2009 UT 27, ¶ 21, 207 P.3d 1235 (“We

review a district court’s interpretation of a written contract for correctness, granting no

deference to the court below.” (footnote citation omitted)).

¶15 Husband also challenges the district court’s denial of his petition to modify the

divorce decree on the basis that there had not been a substantial, material change in

circumstances. “The determination to modify a divorce decree is generally reviewed

under an abuse of discretion standard. However, questions about the legal accuracy of

the [district] court’s statements present issues of law, which we review for correctness.”

Wall v. Wall, 2007 UT App 61, ¶ 7, 157 P.3d 341 (citation and internal quotation marks

omitted).

¶16 Finally, Husband challenges the factual findings made by the district court in

support of its decisions declining to hold Wife in contempt and denying his petition to

modify. “We review challenges to findings of fact for clear error. A [district] court’s

factual determinations are clearly erroneous only if they are in conflict with the clear

weight of the evidence, or if this court has a definite and firm conviction that a mistake

has been made.” Henshaw v. Henshaw, 2012 UT App 56, ¶ 10, 271 P.3d 837 (mem.)

(citations and internal quotation marks omitted).

ANALYSIS

I. The District Court Erred in Its Interpretation of the Divorce Decree’s Hold Harmless

Provision, and Its Contempt Decision Based on that Interpretation Is Therefore

Erroneous.

¶17 The issue before the district court on the order to show cause was whether Wife

should be held in contempt for violating the divorce decree’s hold harmless provision,
2

In responding to Husband’s position on appeal, Wife’s argument, similar to the

district court’s reasoning, focuses on Husband’s “extraordinarily speculative” damages,

which, she asserts, justify the district court’s interpretation of the hold harmless

provision. However, interpretation of the hold harmless provision is a question of law

that must be decided based on the plain language of the divorce decree. Nonetheless,

we will address this aspect of the court’s decision later in our analysis. See infra Section

I.B.

20100520‐CA 7

which ordered Wife to “assume and pay and hold [Husband] harmless from . . . the . . .

mortgage on the home.” A decision on the order to show cause required the district

court to interpret the hold harmless provision to determine the scope of its protection.

The district court decided that the hold harmless provision required only that Wife

protect Husband from making actual payments toward the mortgage and did not

require her to make timely payments in order to protect him from other fiscal injury,

such as damage to his credit. On appeal, Husband argues that the district court

erroneously interpreted the hold harmless provision. We agree.2

A. Interpretation of the Hold Harmless Provision

¶18 As the district court noted, the scope of a hold harmless provision in a divorce

decree, requiring one person to hold another harmless on a debt for which they are

jointly responsible, has not been addressed under Utah law. In particular, the question

of whether fiscal injury, such as damage to credit, is a type of harm that falls within the

scope of a hold harmless provision is a matter of first impression. This issue has been

addressed in other jurisdictions, however, and we find particularly useful the reasoning

of the Tennessee Court of Appeals in Long v. McAllister‐Long, 221 S.W.3d 1 (Tenn. Ct.

App. 2006).

¶19 In Long, the divorce decree awarded the marital home to the husband and

ordered him “to hold [the wife] harmless” from the parties’ joint mortgage obligation,

as well as from other debts on which they were jointly obligated. Id. at 6. Following the

entry of the divorce decree, the husband failed to make timely payments on these

obligations. Id. The wife sought to have the husband held in contempt for violating the

decree’s hold harmless provisions, arguing that his “repeated failure to make timely

payments ‘had a deleterious and harmful effect’ on her credit and had damaged her

credit standing.” Id. On the husband’s motion, the trial court dismissed the wife’s
20100520‐CA 8

contempt petition, reasoning that the hold harmless provision did not require the

husband to make timely payments. Id. at 7.

¶20 The Tennessee Court of Appeals reversed. Id. at 14. The court reasoned that “a

hold harmless agreement is nothing more or less than an indemnity agreement,” the

purpose of which is to “shift[] . . . the entire burden of liability from one person to

another.” Id. at 10. The court then identified two types of indemnity agreements, one

providing “indemnity against loss” and the other providing “indemnity against

liability.” Id. at 11. The court explained that “[i]n the context of an agreement to

indemnify against loss, the liability of the indemnitor does not accrue until the

indemnitee has actually paid an obligation for which the indemnitee has been found

liable” and “the indemnitor’s liability [is limited] to the amount the indemnitee was

actually required to pay.” Id. An agreement to indemnify against liability, on the other

hand, “requires the indemnitor to pay certain sums of money or to perform other acts

that will prevent harm or loss to the indemnitee.” Id. (emphasis added). In other words,

in an agreement indemnifying against loss, “the indemnity is against the consequences

of the event if it should happen,” while in an agreement indemnifying against liability,

the promise is that “the event shall not occur.” Id.

¶21 The court in Long acknowledged that “[a] hold harmless agreement such as the

one involved in this case . . . is generally classified as an indemnity against liability”

agreement. Id. Nonetheless, the court looked to the language within the divorce decree

itself to determine whether the hold harmless provisions were intended to indemnify

against liability or against loss. Id. at 9, 11. The court concluded that the hold harmless

provisions, which simply required the husband “to hold [the wife] harmless for the”

mortgage and other debts, constituted an agreement to indemnify more broadly against

liability rather than simply against loss. Id. at 6, 11–12. The court explained that “[t]he

plain language of the agreement required [the husband] not only to pay these debts but

also to hold [the wife] harmless should he fail to do so,” and his obligation to hold the

wife harmless from these debts “arose before the parties’ creditors required [the wife] to

pay the debts that had been assigned to” him. Id. at 12. Accordingly, the court

concluded that the hold harmless provisions “required [the husband] to pay these debts

in a timely manner in order to prevent [the wife] from being harmed,” and the harm

from which she was to be protected reasonably encompassed the “risk[ of] adverse

effects on her credit rating.” Id. The court then remanded the case to the district court to

determine whether the husband should be held in contempt for violating the divorce
20100520‐CA 9

decree. Id. at 14. See also Hawkins v. O’Brien, No. M2008‐02289‐COA‐R3‐CV, 2009 WL

2058802 at *10–11 (Tenn. Ct. App. July 15, 2009) (explaining that, consistent with the

decision in Long, the hold harmless “provision in the marital dissolution agreement

requiring [the wife] to indemnify and hold [the husband] harmless clearly places the

responsibility on [the wife] to timely pay the debt on the vehicle to avoid it going into

default” and “[a]lthough [the husband] ha[d] not yet made any payments on the note,

[the wife] violated the order by not making timely payments and allowing the note to

go into default” (internal quotation marks omitted)).

¶22 Other courts have reached similar conclusions about the reach of hold harmless

provisions in divorce decrees. For example, in Eaton v. Grau, 845 A.2d 707 (N.J. Super.

Ct. App. Div. 2004), the divorce decree required the husband “to indemnify and hold

the [w]ife harmless from any and all further obligations from ownership of the [marital

home].” Id. at 709–11 (emphasis omitted) (internal quotation marks omitted). The

husband failed to make timely mortgage payments, and the property fell into

foreclosure. Id. at 710. The wife petitioned to enforce the divorce decree, alleging that

the husband’s failure to make timely payments damaged her credit and prevented her

from qualifying for a mortgage on a new home. See id. at 710, 712. The court “read the

obligation to ‘hold harmless’ in [the] case to protect against both [the wife’s] liability to

third parties and actual losses sustained by her to the extent she herself paid off some of

the mortgage debt and thus had a right of subrogation against [the husband].” Id. at 712.

Nonetheless, the court specifically recognized that “if the party who is supposed to

make the monthly payment [on a joint debt] defaults, not only will the other party be

responsible for the amount due, plus late charges, but his or her credit rating could be

significantly damaged.” Id. at 711. The court thus explained that “there may be other

compensable fiscal injury encompassed by the ‘hold harmless’ clause at issue in this

case, such as damage to [the wife’s] credit rating or other harm related to her fiscal

reputation,” yet it declined to “define [the] outer parameters [of the hold harmless

provision] because” on the record before it, the wife had “proven no such harm.” Id. at

713; see also id. at 710, 713 (identifying several “other events” that could have “adversely

affect[ed the wife’s] credit,” other than the husband’s failure to pay the mortgage).

¶23 Similarly, in Lemery v. Lemery, No. FA0710962, 2001 WL 1160797 (Conn. Super.

Aug. 27, 2001), the divorce decree required the wife to “pay the mortgage [on the

marital home] and hold the [husband] harmless therefrom.” Id. at *1. The wife was “late

in making the mortgage payments on a substantial number of occasions,” and the
20100520‐CA 10

husband’s credit rating was damaged, though he had “suffered no monetary loss.” Id.

In the absence of Connecticut case law, the court looked to the legal definition of the

phrase “hold harmless,” which means “‘to absolve (another party) from any

responsibility for damage or other liability arising from the transaction,’” id. at *2

(quoting Black’s Law Dictionary (7th ed. 1997)). Based on this definition, the court

concluded that “the [husband] ha[d] been damaged by the [wife’s] failure to pay the

mortgage in a timely manner” and that she was therefore in contempt for violation of

the hold harmless provision. Id. And in Slavick v. Slavick, No. FA980331705, 2002 WL

450948 (Conn. Super. Ct. Mar. 7, 2002), the divorce decree required the husband to

“indemnify and hold the [wife] harmless regarding” several credit card debts. Id. at *1

(internal quotation marks omitted). The husband failed to make timely payments, and

as a result the wife’s checking account was garnished, she was assessed returned check

fees, and she suffered damage to her credit rating. Id. at *1–2. The court reasoned “that

if the [wife] can prove damage to her credit rating or other harm related to her fiscal

reputation, it constitutes ‘harm’ from which the [husband] must protect her.” Id. at *3.

The court thus determined that the financial injuries suffered by the wife were

“consequences[ that] by any interpretation[] constitute ‘harm’ caused . . . by the acts or

omissions of the husband.” Id. at *4. “For that reason, the court [found] . . . the

[husband] . . . in contempt of the order of the court that he hold the [wife] harmless

from [the] credit card debt.” Id. See also In re Marriage of Beals, 149 Wash. App. 1016, No.

62151‐3‐I, 2009 WL 583396 at *2, 1 (Wash. Ct. App. Mar. 9, 2009) (per curiam)

(concluding that “the commissioner did not extend or reduce any right or obligation

beyond the scope originally intended” by the decree “[b]y ordering [the husband] to

make timely payments of the mortgage” where the husband was required by the

divorce decree to “hold the [w]ife harmless from all liability [from] . . . the . . .

mortgage” but had “made nearly every payment late” and “as a direct result” the wife’s

“credit ha[d] been ruined” (internal quotation marks omitted)).

¶24 The hold harmless provision at issue in this case does not differ in any material

respect from those interpreted in the cases we have just examined. See generally Long v.

McAllister‐Long, 221 S.W.3d 1, 10–12 (Tenn. Ct. App. 2006) (reasoning that “[a] hold

harmless agreement . . . is generally classified as an indemnity against liability”

agreement). As acknowledged in Long, a divorce decree is interpreted “according to

established rules of contract interpretation” and its effect is determined by its plain

language, Mitchell v. Mitchell, 2011 UT App 41, ¶ 5, 248 P.3d 65 (mem.) (citation and

internal quotation marks omitted). See also Long, 221 S.W.3d at 9, 11. The hold harmless
20100520‐CA 11

provision in the Gardners’ divorce decree orders Wife “to assume and pay and hold

[Husband] harmless from . . . the . . . mortgage.” As recognized in Lemery, to “hold

harmless” means “[t]o absolve (another party) from any responsibility for damage or

other liability arising from the transaction,” Black’s Law Dictionary 800 (9th ed. 2009). See

Lemery, 2001 WL 1160797 at *2 (looking to the definition of “hold harmless” to interpret

a hold harmless provision in a divorce decree). By requiring absolution from “any

responsibility for damage or other liability,” Black’s Law Dictionary 800 (9th ed. 2009)

(emphasis added), the definition of “hold harmless” indicates that Wife must “prevent

harm or loss to” Husband regardless of whether he has “actually paid an obligation for

which [Wife] has been found liable,” see Long, 221 S.W.3d at 10–12. In addition, the hold

harmless provision requires Wife to both “pay” the mortgage and to “hold [Husband]

harmless” from the mortgage. Thus, Wife’s obligation to hold Husband harmless

plainly extends beyond simply making mortgage payments so that Husband does not

become obligated to make the payments himself; it also requires Wife to fulfill the

parties’ joint obligations under the mortgage so as to prevent other fiscal injury that

might foreseeably befall Husband, such as the kind of damage to his credit that could

result from payments that are chronically late. See id. at 12 (“The plain language of the

agreement required [the husband] not only to pay these debts but also to hold [the wife]

harmless should he fail to do so.” Accordingly, “his ‘hold harmless’ obligation arose

before the parties’ creditors required [the wife] to pay the debts that had been assigned

to [the husband].”). Thus, based on the plain language of the decree, we conclude that

the hold harmless provision here indemnifies against liability and not simply against

loss.

¶25 In contrast, the district court interpreted the hold harmless provision to require

that Wife hold Husband harmless only from making actual payments toward the

mortgage. The court thus concluded that because Husband “ha[d] not paid any monies”

toward the mortgage, “he ha[d] not been damaged in any manner” proscribed by the

hold harmless provision. By interpreting the hold harmless provision in this way, the

court essentially construed it as indemnifying Husband only against actual monetary

loss. Further, the court ordered that if Wife “fails to make . . . payments . . . and if

[Husband] determines that mortgage payments . . . have not been made[, he may make]

. . . those payments to protect himself.” (Emphasis added.) In effect, the court interpreted

the hold harmless provision as a “hold yourself harmless” provision. The result of the

court’s interpretation is fundamentally inconsistent with the language of the provision
3

Similarly, “harm” is defined as “[i]njury, loss, damage,” and “material or

tangible detriment,” and “injury” is defined in relevant part as “[a]ny harm or

damage.” Black’s Law Dictionary 784, 856 (9th ed. 2009).

20100520‐CA 12

itself, which orders Wife to “assume and pay and hold [Husband] harmless from . . . the

. . . mortgage on the home.”

¶26 We conclude that the plain language of the hold harmless provision requires

Wife to indemnify Husband not just against loss but also against liability. Thus, the

hold harmless provision requires Wife not only to pay the mortgage but also to make

timely payments so as to protect Husband from fiscal injury, such as damage to his

credit. Such fiscal injury is therefore a cognizable harm that falls within the scope of the

hold harmless provision here.

B. Extraordinarily Speculative Damages

¶27 The district court’s interpretation of the hold harmless provision was based

almost entirely on its assessment that Husband’s damages were “extraordinarily

speculative,” i.e., that Husband could not assign a monetary value to or quantify the

damage to his credit. The court’s reasoning in this respect raises the question of whether

Husband must prove quantifiable damages in order to prove that Wife violated the

hold harmless provision, or whether it is sufficient for him to simply demonstrate that

he suffered harm or injury as a result of Wife’s failure to make timely mortgage

payments to prove such a violation. Further, the issue of whether Wife has violated the

hold harmless provision has been raised in the context of a contempt proceeding. Thus,

the court’s decision also raises the question of whether Husband must prove

quantifiable damages in order for Wife to be held in contempt for violating the hold

harmless provision. We will address each of these issues in turn.

¶28 As we have discussed, to “hold harmless” is to absolve another party from

“damage or other liability.” Black’s Law Dictionary 800 (9th ed. 2009). This definition of

“hold harmless” on which we have relied uses the term “damage” rather than

“damages.” Id. The words “damage” and “damages” are terms of art, each with a

particular meaning. “Damage” is harm or “[l]oss or injury to a person or property,”3

while “damages” are “[m]on[ies] claimed by, or ordered to be paid to, a person as

compensation for loss or injury.” Id. at 445. Because the definition of “hold harmless”
20100520‐CA 13

uses the term “damage,” meaning harm or “[l]oss or injury,” id., a violation of a hold

harmless provision occurs if harm or injury is shown, without the necessity of

quantifying that harm by assigning it a monetary value.

¶29 Such an interpretation is consistent with the notion that hold harmless provisions

typically indemnify against liability, which “requires the indemnitor to pay certain

sums of money or to perform other acts that will prevent harm or loss to the

indemnitee,” as opposed to indemnifying against loss, which requires the indemnitor to

compensate the indemnitee for amounts actually paid and limits “the indemnitor’s

liability . . . to the amount the indemnitee was actually required to pay.” See Long v.

McAllister‐Long, 221 S.W.3d 1, 11 (Tenn. Ct. App. 2006) (emphasis added). This

conclusion is likewise consistent with the cases we have examined, which generally

have recognized or expressed a willingness to recognize fiscal injury, such as damage to

credit, as a harm that falls within the scope of a hold harmless provision, without

requiring that such harm be quantified or even quantifiable. For example, in Long, the

court concluded that the husband’s obligation to hold the wife harmless from certain

debts “required [him] to pay the[] debts in a timely manner in order to prevent [her]

from being harmed.” 221 S.W.3d at 12. The court noted that “[r]eceiving dunning letters

and risking adverse effects on her credit rating are among the types of harm that

entitled [the wife] to ask the trial court to enforce [the husband’s] obligations to pay the

debts the marital dissolution agreement required him to pay.” Id.; see also Hawkins v.

O’Brien, No. M2008‐02289‐COA‐R3‐CV, 2008 WL 2058802 at *10–11 (Tenn. Ct. App. July

15, 2009) (relying on Long to conclude that “the provision in the marital dissolution

agreement requiring [the wife] to indemnify and hold [the husband] harmless clearly

places the responsibility on [the wife] to timely pay the debt on the vehicle to avoid it

going into default” and that “[a]lthough [the husband] had not yet made any payments,

[the wife] violated the order by not making timely payments and allowing the note to

go into default” (internal quotation marks omitted)). And in Lemery v. Lemery, No.

FA0710962, 2001 WL 1160797 (Conn. Super. Ct. Aug. 27, 2001), the court concluded that

the wife had violated the divorce decree’s hold harmless provision by being repeatedly

late in making the mortgage payments. Id. at *1–2. The court reasoned that even though

the husband had “suffered no monetary loss” he “ha[d] been damaged by [her] failure

to pay the mortgage in a timely manner” because his credit rating had been reduced

significantly as a result. Id. See also Eaton v. Grau, 845 A.2d 707, 713 (N.J. Super. Ct. App.

Div. 2004) (“[T]here may be other compensable fiscal injury encompassed by the ‘hold

harmless’ clause at issue in this case, such as damage to [the wife’s] credit rating or
4

Given the nature of disputes concerning the violation of a divorce decree, it is

probably not surprising that many of the cases we have examined occurred in the

context of contempt proceedings. See generally Long v. McAllister‐Long, 221 S.W.3d 1,

9–12 (Tenn. Ct. App. 2006); Slavick v. Slavick, No. FA980331705, 2002 WL 450948 at *1–4

(Conn. Super. Ct. Mar. 7, 2002); Lemery v. Lemery, No. FA0710962, 2001 WL 1160797 at

*1–2 (Conn. Super. Ct. Aug. 27, 2001); Hawkins v. O’Brien, No. M2008‐00289‐COA‐R3‐

CV, 2009 WL 2058802 at *9–12 (Tenn. Ct. App. July 15, 2009).

20100520‐CA 14

other harm related to her fiscal reputation.”); Slavick v. Slavick, No. FA980331705, 2002

WL 450948 at *3 (Conn. Super. Ct. Mar. 7, 2002) (“Although there is no law that

specifically states what financial damage to a party is covered by a ‘hold harmless’

provision, generally, it is a compensable fiscal injury. . . . [I]f the plaintiff can prove

damage to her credit rating or other harm related to her fiscal reputation, it constitutes

‘harm’ from which the defendant must protect her.”).

¶30 Accordingly, because the hold harmless provision here protects Husband from

“damage” rather than “damages” and indemnifies against liability and not just against

loss, Husband need not quantify or assign a monetary value to the harm or injury he

has suffered to prove that Wife violated the hold harmless provision by failing to make

timely mortgage payments. Nonetheless, Husband must still prove that he suffered real

injury or harm as a result of Wife’s conduct, as opposed to a harm that is merely

conjectural or speculative, though that harm need not be specifically quantifiable.

¶31 The issue of whether Wife violated the hold harmless provision in this case has

arisen in the context of a contempt proceeding.4 “[D]isobedience of any lawful

judgment, order or process of the court” is a “contempt[] of the authority of the court.”

See Utah Code Ann. § 78B‐6‐301(5) (LexisNexis 2012). “To find contempt [for violation

of a court order], the court must find . . . that the contemnor knew what was required,

had the ability to comply, and willfully and knowingly failed and refused to do so.”

Marsh v. Marsh, 1999 UT App 14, ¶ 10, 973 P.2d 988 (citation and internal quotation

marks omitted). Thus, a finding of contempt primarily requires a determination that a

court order has been violated. By its nature, such a determination does not require a

showing of harm or injury, quantifiable or not, because the core concern in a contempt

proceeding is the challenge to judicial authority. See Utah Code Ann. § 78B‐6‐301

(describing “acts or omissions in respect to a court or its proceedings [that] are

contempts of the authority of the court”). That does not mean that resulting harm or
20100520‐CA 15

injury is entirely irrelevant; instead, harm is a factor that the court may take into

account in deciding whether contempt has occurred and in shaping an appropriate

response rather than a prerequisite to determining that a party has disobeyed a court

order. See generally Utah Power & Light Co. v. Richmond Irrigation Co., 13 P.2d 320, 324

(Utah 1932) (“It . . . appears that there is no merit in the contention that the [district]

court erred in failing to find loss or injury to the plaintiff, as a condition precedent to

finding the defendants guilty of contempt.”). And harm may be a particularly pertinent

factor in the determination of whether actions, such as making late payments on a joint

debt, amount to violation of an order that requires one party to hold the other harmless.

¶32 Once the court finds a person in contempt, it may then elect to impose an

appropriate sanction. In this regard, the court may decide to compensate the person

aggrieved by another’s contemptuous conduct for the resulting loss. See Utah Code

Ann. § 78B‐6‐311 (providing that a person aggrieved by contemptuous conduct may be

awarded “a sum of money sufficient to indemnify . . . and to satisfy [that person’s] costs

and expenses”). Such a compensatory award for expenses incured may include an

award of reasonable attorney fees. See id.; Foreman v. Foreman, 176 P.2d 144, 151 (Utah

1946). In addition, other sanctions may be imposed against the contemnor, such as

payment of a fine or incarceration. See Utah Code Ann. § 78B‐6‐310. The decision of

whether to impose a sanction, however, as well as the choice of sanction, is not

mandatory but is left to the court’s discretion. Shipman v. Evans, 2004 UT 44, ¶¶ 39–40,

100 P.3d 1151, abrogated on other grounds by Utahns For Better Dental Health—Davis, Inc. v.

Davis Cnty. Clerk, 2007 UT 97, 175 P.3d 1036. See also Utah Code Ann. § 78B‐6‐310 (“If

the court finds the person guilty of the contempt, the court may impose” one or a

combination of sanctions. (emphasis added)); id. § 78B‐6‐311 (providing that the court

“may order the person proceeded against” in a contempt proceeding to pay a

compensatory award to a person aggrieved by the contemptuous conduct (emphasis

added)).

¶33 In his motion to hold Wife in contempt for violating the divorce decree, Husband

requested damages in the form of attorney fees as well as other “additional damages

caused by her failure to comply with the court’s order to hold [Husband] harmless on

the mortgage debt.” To the extent that Husband seeks monetary compensation for his

fiscal injury, any award of damages must be based on something more than mere

speculation. See Pingue v. Pingue, No. 95CAF02006, 1995 WL 768535 at *10 (Ohio Ct.

App. Nov. 6, 1995) (“Though we agree the record clearly reflects the credit standing of
20100520‐CA 16

[the wife] was damaged by [the husband’s] failure to perform his obligations under the

[divorce decree], the amount of damages resulting therefrom was purely speculative.”);

Hawkins, 2009 WL 2058802 at *11–12 (concluding that although the wife violated the

hold harmless provision in the divorce decree when she failed to make timely payments

on the vehicle and allowed the note to go into default, the court erred in simply

awarding the husband the $10,000 balance on the note because he had not actually had

to pay any of the debt). But here a monetary award that simply quantifies the value of

the damage to his credit is not the only remedy Husband seeks. For example, Husband

has requested an award of attorney fees. Although it may be difficult to quantify the

damage to his credit, it would not be difficult to determine the amount of attorney fees

Husband has incurred due to Wife’s violation of the hold harmless provision. In

addition, Husband has requested other remedies, such as refinance or sale of the house,

which are designed to avoid the potential for late payments altogether. The

determination of whether remedies like these are appropriate under the circumstances

seems largely independent of Husband’s ability or inability to assign a monetary value

to the injury to his credit.

¶34 In summary, we conclude that the hold harmless provision requires Wife to

indemnify Husband against liability and not simply against loss. Thus, the hold

harmless provision requires Wife to make timely mortgage payments to prevent fiscal

injury to Husband, such as damage to his credit. Under the circumstances of this case,

in order to prove that Wife violated the hold harmless provision, Husband must show

that Wife’s failure to make timely mortgage payments has caused him real harm or

injury. Proof of such harm or injury is sufficient to show that Wife violated the hold

harmless provision, which may in turn be a sufficient basis for Wife to be held in

contempt of court. Husband need not quantify that harm, either for the purpose of

showing that Wife violated the hold harmless provision or for the purpose of showing

that Wife acted in contempt of court. But the court may certainly consider the quality of

the evidence presented by Husband to determine whether Wife’s untimely payments

amount to contempt and, if so, to determine the appropriate remedy.

¶35 Although we have concluded that fiscal injury, such as damage to credit, is a

harm or injury that may fall within the scope of a hold harmless provision and need not

be quantifiable, Husband must nonetheless prove causation, i.e., that Wife’s failure to

make timely mortgage payments caused his fiscal injury. See, e.g., Eaton v. Grau, 845

A.2d 707, 713 (N.J. Super. Ct. App. Div. 2004). Thus, to prove that Wife violated the
20100520‐CA 17

hold harmless provision, Husband must show that the damage to his credit was caused

by Wife’s failure to make timely mortgage payments. The opportunity to prove such

causation is the precise relief sought by Husband. He anticipates that Wife will “argue

that her failure to pay the mortgage timely had not been the cause of [his] losses,” and

he seeks the opportunity to present evidence to the district court to prove that the

damage to his credit was caused by Wife’s untimely payments. In ruling as it did, the

district court denied the parties the opportunity to adjudicate this issue on the merits.

We accordingly remand for that purpose.

¶36 If on remand the district court determines that Wife violated the hold harmless

provision, it must next determine whether Wife should be held in contempt. See

generally Marsh v. Marsh, 1999 UT App 14, ¶ 10, 973 P.2d 988 (“To find contempt, the

court must find from clear and convincing proof that the contemnor knew what was

required, had the ability to comply, and willfully and knowingly failed and refused to

do so.” (citations and internal quotation marks omitted)). If the district court decides to

hold Wife in contempt for violating the divorce decree’s hold harmless provision, it

may then determine an appropriate sanction or remedy.

II. The District Court Abused Its Discretion in Denying Husband’s Petition To Modify

the Divorce Decree.

¶37 Husband next argues that the district court erred in denying his petition to

modify the divorce decree on the basis that there had not been a substantial, material

change in circumstances. Based on its interpretation of the hold harmless provision, the

court concluded that Wife’s failure to make timely mortgage payments did “not

constitute a material or substantial change of circumstances that would justify the

[c]ourt in revisiting the provisions of the” divorce decree. We have concluded, however,

that the court erred in its interpretation of the hold harmless provision. Because the

court’s denial of Husband’s petition to modify was based solely on its erroneous

interpretation of the hold harmless provision, the court must reconsider this issue on

remand.

¶38 In addition, a determination of whether Wife violated the hold harmless

provision is not by itself dispositive of Husband’s petition to modify. “On a petition for

a modification of a divorce decree, the threshold requirement for relief is a showing of a

substantial change of circumstances occurring since the entry of the decree and not
20100520‐CA 18

contemplated in the decree itself.” Wall v. Wall, 2007 UT App 61, ¶ 11, 157 P.3d 341

(citation and internal quotation marks omitted). “If a change in circumstances is

reasonably contemplated at the time of divorce[, then it] is not legally cognizable as a

substantial change in circumstances . . . .” Id. (alteration in original) (citation and

internal quotation marks omitted). “[A] material change in circumstances [is]

contemplated in a divorce decree [if] there . . . [is] evidence, preferably in the form of a

provision within the decree itself, that the [district] court anticipated the specific

change.” Id. ¶ 12 (citation and internal quotation marks omitted).

¶39 Here, the primary issue presented by the petition to modify is whether Wife’s

failure to make timely mortgage payments constitutes a substantial and material change

in circumstances that was not contemplated by the divorce decree. Although the proper

interpretation of the divorce decree’s hold harmless provision and a determination as to

whether Wife’s failure to make timely mortgage payments violated that provision are

certainly relevant to Husband’s petition to modify, those issues do not fully resolve the

issue of whether Wife’s failure to make timely mortgage payments was contemplated

by the divorce decree and whether that conduct is a substantial and material change.

¶40 In addition, Husband’s petition to modify is not confined to the issue of whether

Wife violated the hold harmless provision but also alleges other changed circumstances

as a basis for relief, such as the increased complexities of his current family situation

and Wife’s improved economic status. Because the district court relied entirely on its

interpretation of the hold harmless provision as its basis for denying Husband’s petition

to modify, these matters were left unaddressed.

¶41 Thus, for these reasons, the district court’s reliance on the hold harmless

provision as the sole basis for denying Husband’s petition to modify was error.

Accordingly, we reverse the district court’s denial of Husband’s petition to modify and

remand for further consideration of the petition consistent with this decision.

III. The District Court’s Factual Findings Are Clearly Erroneous.

¶42 As a final matter, in denying Husband’s petition to modify and declining to hold

Wife in contempt for violating the divorce decree’s hold harmless provision, the district

court made a few factual findings that Husband challenges on appeal, arguing that

those findings are clearly erroneous. The district court purported to resolve the
20100520‐CA 19

contempt and modification issues as a matter of law but nonetheless made the

challenged factual findings, likely as background for its legal ruling. However, as a

result of our decision here, the issues raised by the contempt proceeding and Husband’s

petition to modify cannot be resolved simply as a matter of law. Thus, these factual

issues will be relevant to the decisions the district court must make on remand, and for

that reason we address the findings here. See State v. Low, 2008 UT 58, ¶ 61, 192 P.3d 867

(explaining that appellate courts have discretion to address issues that may arise on

remand).

¶43 Before we review the district court’s factual findings, however, we emphasize

that our review is limited to pointing out inconsistencies between the court’s findings

and the evidence available to us in the record. By highlighting these inconsistencies, we

do not intend to make substitute factual findings. Indeed, “[t]he appellate court is

entrusted with ensuring legal accuracy and uniformity and should defer to the [district]

court on factual matters.” Willey v. Willey, 951 P.2d 226, 230–31 (Utah 1997). So if this

court determines that the district court’s factual findings are insufficient or clearly

erroneous, “[i]t is inappropriate in most instances for . . . [the] court to disregard the

[district] court’s findings of fact . . . and to assume the task of weighing evidence and

making its own findings of fact.” Id. at 230. Rather, this court should “normally

remand[] the matter to the [district court] . . . . to make . . . [additional or] new findings

because of its unique position to weigh the evidence.” Id. (citation omitted).

¶44 It appears that the evidence in the record was reviewed by the district court to

some limited extent. But as we have discussed, the court purported to make its

decisions to dismiss the petition to modify and decline to hold Wife in contempt as a

matter of law, based on its interpretation of the hold harmless provision. As a result, the

court did not receive evidence and seems to have treated the factual circumstances

simply as a background to its legal determination. In fact, the bulk of the evidence in the

record on these issues was simply admitted for purpose of this appeal and, as a

consequence, has yet to be scrutinized or evaluated in an evidentiary hearing or trial. It

is therefore particularly important that our evaluation of the evidence in the record

should not be binding on remand. Rather, on remand the district court must consider

the facts anew, which will necessarily require the parties to present the evidence they

were prepared to present on the day of trial, and the district court must be free to

consider all the relevant evidence and make appropriate factual findings. Having
20100520‐CA 20

established the limited scope and effect of our analysis, we turn to our review of the

district court’s factual findings.

¶45 The district court found that Wife “failed to pay the June 2008 mortgage payment

and it became a thirty (30) day rolling arrearage until it was paid in full in December

2008.” The court further found “that [Wife] was occasionally late in monthly payments

thereafter until November 2009 when all payments and fees were paid on the

mortgage” and “as of February . . . 2010, [Wife] has corrected all late and delinquent

payments and that the mortgage is current.”

¶46 In finding that Wife inadvertently failed to pay her June 2008 mortgage payment,

which resulted in a 30 day rolling arrearage, the court in effect determined that Wife

had only missed one payment and that the following late payments between June 2008

and December 2008 were only late as a result of that single missed payment, which

caused Wife to be continuously one payment behind. The trial court also in effect

determined that Wife’s payments during that time period would otherwise have been

timely if those payments had been credited for the month in which they were made.

However, the evidence in the record of Wife’s payment history shows that the trial

court’s reasoning only applies to the June and July payments: the missed June payment

was made on July 3, and would have avoided a late fee if credited as the July payment,

yet it was 32 days late for the June payment; the July payment was made on August 15,

which would have avoided a late fee as the August payment, yet it was 45 days late for

the July payment. The August payment, however, was not made in September, which

would have been the case if Wife were simply a month behind in her payments due to

the missed June payment. Rather, Wife’s next payment was made on October 16, so if

considered to be the August payment it was 76 days late, and even if intended as the

September payment, it would have been over 30 days late. Similarly, the September

payment was not made until November 26, and the October payment was not made

until November 28; these payments were 86 and 58 days past due, respectively. Thus,

even if Wife intended those payments to be for October and November, they would

have been just shy of or over 30 days late. The November 2008 payment was actually

made on November 28, essentially resolving the rolling arrearage caused by the missed

June payment; but that payment was itself 27 days late. The December payment was

made on January 8, 38 days late. The January payment itself was made on January 12,

and it was the first payment in over a year that was made without incurring a late fee.
20100520‐CA 21

¶47 Thus, contrary to the district court’s factual findings, Wife did not bring her

mortgage payments current until January 2009, not December 2008. Also, it appears that

Wife resolved the rolling arrearage in November 2008 rather than in December 2008.

Having resolved the rolling arrearage in November, Wife’s late payments in November

and December were no longer attributable to the rolling arrearage but were simply late.

Further, even accounting for the 30 day rolling arrearage that resulted from the missed

June payment, the August, September, and October payments were each made late

enough to be more than or just shy of 30 days past due. Thus, Wife’s failure to make

timely mortgage payments from June 2008 to December 2008 is not attributable simply

to a rolling arrearage.

¶48 The district court further found “that [Wife] was occasionally late in monthly

payments [from December 2008] until November 2009 when all payments and fees

were paid on the mortgage” and “as of February . . . 2010, [Wife] has corrected all late

and delinquent payments and . . . the mortgage is current.” At the time of trial, the

parties agreed that Wife had brought her mortgage payments current as of February

2010. It is also true that throughout 2009 Wife was more timely in making her mortgage

payments than she had been throughout 2008. But nonetheless, in 2009, five payments

were past due, three of those being 35, 28, and 38 days past due. Thus, more than a third

of Wife’s payments in 2009 were past due, and most of those were over or just shy of 30

days past due. While the district court’s description of Wife’s mortgage payments

during 2009 as being “occasionally late” is not entirely untrue as a general statement, it

perhaps unduly minimizes the significance of the number and nature of the late

payments. In addition, Wife did not bring her mortgage payments current by

November 2009, as the court concluded; rather, the November 2009 payment was made

38 days late in December, and the December payment was also late. Thus, it appears

that the mortgage payments were not brought current again until February 2010.

¶49 Overall, our review of the evidence available in the record indicates that the

district court’s factual findings do not accurately characterize Wife’s 2008 and 2009

payment history because those findings fail to recognize that for two years most of

Wife’s mortgage payments were late, even significantly late. Indeed, from December

2007 to December 2009, 18 of 25 payments were untimely and made far enough past

due to incur a late fee, and of those late payments, 8 were more than 30 days past due,

with one being over 60 days late, and another nearly 90 days past due.
20100520‐CA 22

¶50 Wife does not attempt to defend the accuracy of these findings but instead

argues that any errors are harmless. According to Wife, the district court emphasized

that the untimely and delinquent payments had been resolved by the day of trial and

that no foreclosure proceedings had been initiated against Wife or Husband. She thus

argues that “[i]t was clearly important to the [district] court that the problem had been

fixed and that [Husband] did not have to pay out any monies as a result of the

delinquencies, however many there were.” Wife also argues that Husband’s damages

“are too speculative” to substantiate contempt proceedings and are also “clearly

insufficient to establish a material and substantial change of circumstances” so as to

justify modification of the divorce decree, which she suggests makes the accuracy of the

court’s findings irrelevant. However, Wife’s position relies on the correctness of the

district court’s interpretation of the hold harmless provision. We have concluded that

the court erred in its interpretation, and therefore Wife’s argument is left without its

foundation. Further, based on our review of the evidence available in the record, the

district court’s factual findings fail to accurately express the full extent of Wife’s failure

to make timely mortgage payments, which in turn may have obscured and unduly

minimized the damage that may have been done to Husband’s credit. The extent of

Wife’s failure to make timely mortgage payments and the extent of the harm caused to

Husband are material to the issues the district court will consider on remand. Thus, we

disagree with Wife’s position that the errors in the district court’s factual findings are

harmless. We therefore conclude that the district court’s factual findings are

inconsistent with the evidence in the record before us and should be reconsidered in

light of all the pertinent evidence presented on remand.

CONCLUSION

¶51 We conclude that the district court erroneously interpreted the divorce decree’s

hold harmless provision and, consequently, erred in deciding that Wife could not be

held in contempt for violating the divorce decree. We further conclude that the district

court abused its discretion in denying Husband’s petition to modify the divorce decree

because its decision was also based on its erroneous interpretation of the hold harmless

provision. Finally, we conclude that the district court’s factual findings are inconsistent

with the information available in the record. Thus, the district court must consider the

facts anew to make factual findings on remand consistent with all the evidence

presented.
20100520‐CA 23

¶52 Accordingly, we reverse and remand for proceedings consistent with this

opinion.

____________________________________

Stephen L. Roth, Judge

‐‐‐‐‐

¶53 WE CONCUR:

____________________________________

Carolyn B. McHugh, Judge

____________________________________

J. Frederic Voros Jr., Judge