Opinion ID: 2518323
Heading Depth: 3
Heading Rank: 1

Heading: The District Court's Finding of Intent

Text: ¶ 27 The district court's equitable distribution turned on its factual finding that Parduhn and Buchi did not intend the insurance policy on Buchi's life to be partnership property and therefore did not intend that the proceeds from the policy would go to the partnership or to Parduhn as the surviving partner. Instead, the district court found that the partners intended that the deceased partner's heirs would receive the proceeds. In making this finding, the district court relied on a number of subsidiary facts, including the following: (1) both the partnership and its assets (but not the policies) were sold to Blackett Oil; (2) Parduhn and Buchi's business dealings, including the buy-sell agreement, evinced an intent to allow the deceased partner's heirs to receive the insurance proceeds; (3) Parduhn and Buchi put partnership assets to personal use and otherwise treated the partnership casually; and (4) had Buchi lived long enough for the partners to have conducted an accounting, each partner would have received his policy and could choose to continue or discontinue coverage without claim from the past partner. These findings collectively supported the district court's ultimate finding of intent, upon which it based its equitable distribution. ¶ 28 Parduhn lodges six challenges to the district court's finding of intent. First, he argues that the district court erroneously concluded that Blackett Oil purchased both the partnership and its assets. Second, he argues that there was no support in the trial record for the subsidiary finding that he and Buchi treated the partnership casually. Third, he argues that, because we held the buy-sell agreement unenforceable in Parduhn I, the district court erred in relying on it as evidence of the partners' intent. Fourth, he argues that the district court impermissibly effected a nontestamentary transfer of the insurance proceeds to the Buchi survivors. Fifth, he argues that the district court, prior to Parduhn I, incorrectly found that the partners had implicitly amended their buy-sell agreement in 1989, simply by purchasing more insurance, to raise the insurance coverage to $300,000 on Buchi's life, and that the district court on remand therefore erred in using the amended agreement to determine the partners' intent. [5] Finally, Parduhn attacks as mere speculation the district court's finding that the partners in an accounting ... would have ... divided [the insurance policies] fairly and equitably between the parties had Buchi lived longer. Parduhn's first two challenges are appropriately characterized as challenges to findings of fact. The remaining challenges raise issues of law. We address each challenge in turn.
¶ 29 Parduhn asserts that two of the district court's subsidiary factual findings are unsupported by any evidence in the record. Specifically, he argues that the district court improperly relied on the Buchi survivors' erroneous contention that Blackett Oil purchased the partnership and all its assets. He also argues that there is no basis in the trial record for the district court's finding that he and Buchi treated the partnership casually. We treat these arguments as claims that these subsidiary factual findings are clearly erroneous. See 438 Main St. v. Easy Heat, Inc., 2004 UT 72, ¶ 68, 99 P.3d 801 (noting that clearly erroneous findings are against the clear weight of the evidence). ¶ 30 As already noted, Parduhn's attacks on the district court's subsidiary findings are really attacks on the district court's ultimate finding of intent. To successfully challenge that ultimate finding, Parduhn should have marshaled all of the remaining evidence supporting it and then demonstrated why that evidence is legally insufficient to support [it] even when viewing it in a light most favorable to the court below. Chen, 2004 UT 82 at ¶ 76, 100 P.3d 1177 (internal quotations omitted). He has not done so. While he presents, in an addendum to his brief, most of the documents on which the district court relied in making its finding of intent, he does not explain why the district court erred in interpreting that evidence as it did. To appropriately marshal evidence, parties must provide a precisely focused summary of all the evidence supporting the findings they challenge. Id. at ¶ 77. This summary must correlate all particular items of evidence with the challenged findings and then convince us that the trial court erred in the assessment of that evidence to its findings. Id. Indeed, parties challenging factual findings must fully embrace the adversary's position and play devil's advocate. Harding v. Bell, 2002 UT 108, ¶ 19, 57 P.3d 1093 (internal quotations omitted). ¶ 31 Rather than meeting this high burden, Parduhn simply presents those facts that militate against the district court's finding of intenta strategy we have previously found to be insufficient. Chen, 2004 UT 82 at ¶ 78, 100 P.3d 1177. It does not matter that Parduhn's claim is that no evidence supports the subsidiary findings he challenges, see Wilson Supply, Inc., 2002 UT 94 at ¶ 22, 54 P.3d 1177, or that the district court ignored its promise to only consider evidence presented at trial. Even assuming the truth of those claims, the fact remains that Parduhn's challenge is ultimately to the district court's finding of intent, and he marshals none of the plenteous evidence supporting that finding. [6] ¶ 32 Our approach does not render subsidiary findings of fact unreviewable. To the contrary, were we to find so many subsidiary findings clearly erroneous that there were no longer sufficient subsidiary facts to support an ultimate factual finding, we would not hesitate to hold the ultimate factual finding clearly erroneous. However, marshaling evidence in support of the ultimate finding is a prerequisite to that analysis, and Parduhn failed to adequately comply with the marshaling requirement. We accordingly reject Parduhn's arguments regarding those two subsidiary findings of fact.
¶ 33 Parduhn's remaining challenges to the district court's finding of intent are appropriately characterized as legal challenges. First, Parduhn challenges the propriety of the district court's reliance on the terms of the buy-sell agreement in reaching its conclusion with respect to intent. Specifically, he argues that, because we held that agreement unenforceable in Parduhn I, the district court could not subsequently rely on it as an indication of the partners' intent. He suggests that allowing the agreement to serve as evidence of intent is tantamount to enforcing an unenforceable agreement. ¶ 34 We see no reason why a contract, valid or invalid, cannot act as an indicator of intent in an equitable distribution proceeding. Even if a written agreement is invalid for purposes of enforcement, it may still be considered as evidence of the intent behind the agreement. See Bennett Leasing Co. v. Ellison, 15 Utah 2d 72, 387 P.2d 246, 247 (1963) (looking to an invalid contract to determine the rental value of a car). Accordingly, regardless of a buy-sell agreement's enforceability, a district court may look to such an agreement to determine the parties' intent as to the distribution of insurance proceeds. Moreover, contrary to Parduhn's assertion, doing so is not the same as enforcing the agreement. ¶ 35 Parduhn next argues that the district court's reliance on the buy-sell agreement effected an impermissible nontestamentary transfer. He claims that, because there is no longer a buy-sell agreement, there is no longer an instrument capable of routing the insurance proceeds past Buchi's estate to the Buchi survivors. To support his argument, Parduhn cites Utah Code section 75-6-201 and interprets that provision to require that transfers bypassing a decedent's estate be effectuated by a written instrument. We disagree. Section 75-6-201 merely states that the probate code does not invalidate certain nontestamentary transfers. It does not invalidate other arrangements by negative implication. Utah Code Ann. § 75-6-201 editorial bd. cmt. (1993). Moreover, even assuming that section 75-6-201 requires a written instrument to effectuate a nontestamentary transfer, the underlying insurance policy on Buchi's life would suffice. Parduhn assumes that our conclusion in Parduhn I that he lacked an insurable interest, 2002 UT 93 at ¶ 16, 61 P.3d 982, rendered the insurance policy invalid. Section 31A-21-104, however, explicitly states that an insurance policy is not invalid because the policyholder lacks insurable interest; the district court merely distributes the proceeds equitably rather than awarding them to the designee. Utah Code Ann. § 31A-21-104(5) (emphasis added). In short, section 31A-21-104(5) explicitly authorizes nontestamentary equitable distributions to persons or entities not designated as policy beneficiaries. Accordingly, we hold that the district court's equitable distribution of the insurance proceeds was based on a proper nontestamentary instrument and was distributed in accordance with Utah law. ¶ 36 We find Parduhn's claim that the district court inappropriately speculated as to what the partners would do with the proceeds in an accounting similarly unpersuasive. We hold that a judge in an equitable proceeding may draw reasonable inferences with respect to the parties' likely course of action in a given situation. See, e.g., Miller v. Hall, 65 Cal.App.2d 200, 150 P.2d 287, 290 (1944) (speculating regarding what the partners of a dissolved partnership would have done in an accounting). ¶ 37 Because Parduhn failed to marshal the evidence supporting the district court's finding of intent, and because we reject Parduhn's legal challenges to that finding, we affirm the district court's finding of intent. We now consider Parduhn's remaining claims.