Opinion ID: 855368
Heading Depth: 2
Heading Rank: 2

Heading: the divorce court overstepped the bounds

Text: OF ITS DISCRETION IN FAILING TO ESTIMATE THE MAXIMUM AMOUNT OF ASSETS THAT DENNIS MAY HAVE DISSIPATED AND IN FAILING TO CONSIDER WHETHER HE WAS ENTITLED TO A SETOFF OR CREDIT FOR THE SEPARATE PROPERTY HE CONTRIBUTED TO THE RIVERBEND PROPERTY ¶42 In making its marital property distribution, the divorce court considered several setoffs and credits to which Dennis claimed he was entitled. The court granted two of them, crediting Dennis with a one-half share of the value of a horse and a one-half share of the value of a horse trailer. But Dennis argues that the divorce court overstepped its discretion when it declined to award him any other credits or setoffs, arguing that “it is legally erroneous for a court to use contempt sanctions as a basis for dividing the marital estate.” ¶43 First, Dennis argues that the court exceeded its discretion in crediting Tammy with the full amount of the assets he dissipated.35 Second, he claims that the court erred when it failed to 34 As discussed above, Tammy’s award consisted of the sum of fees and costs related to the appointment of a receiver, hiring expert forensic accountants, attorney fees, and out-of-pocket costs. Accordingly, we note that it is entirely possible that the court did not award any additional amount to Tammy based upon Dennis’s breach. In that case, on remand, the court should clarify that no portion of the award was based upon the breach. 35 In the “summary of arguments” section of his brief, Dennis suggests that the court also exceeded its discretion in crediting Tammy with the full amount of Ryan’s House. Specifically, after summarizing his argument related to the dissipated assets, Dennis (continued...) 18 Cite as: 2013 UT 16 Opinion of the Court credit him with the amounts he contributed to the purchase of the Riverbend Property and the construction of the home on that property. And third, he argues that the court exceeded its discretion in declining to credit him for the labor and services he performed for the Riverbend and Sundowner businesses while the divorce was pending. ¶44 “The trial court in a divorce action is permitted considerable discretion in adjusting the financial and property interests of the parties, and its actions are entitled to a presumption of validity.”36 Thus, we will not disturb a court’s distribution of marital property 35 (...continued) asserts that “[t]he court made the same error regarding the $203,421 proceeds from the sale of Ryan’s [H]ouse.” But the remainder of Dennis’s brief contains no argument or discussion related to Ryan’s House. Indeed, he mentions Ryan’s House only two additional times: once in a table purporting to show how the divorce court distributed the marital property and once in a table showing how Dennis believes the divorce court should have distributed the property. Instead, Dennis’s argument regarding Ryan’s House first appears in the final ten lines of his reply brief. Unsurprisingly, Tammy did not respond to this issue in her brief. Rule 24(a)(9) of the Utah Rules of Appellate Procedure requires that a brief’s “argument shall contain the contentions and reasons of the appellant with respect to the issues presented.” Indeed, “[t]o satisfy rule 24(a)(9), the argument must provide meaningful legal analysis.” Wilson v. IHC Hosps., Inc., 2012 UT 43, ¶ 121, 289 P.3d. 369 (internal quotation marks omitted). “Under this rule, a party’s argument may be disregarded if it offers little more than a disjointed array of facts . . . coupled with conclusory statement[s] unsupported by analysis or authority.” Neff v. Neff, 2011 UT 6, ¶ 65, 247 P.3d 380 (alteration in original) (internal quotation marks omitted). Moreover, the content of reply briefs is “limited to answering any new matter set forth in the opposing brief.” UTAH R. APP. P. 24(c). “And we may refuse, sua sponte, to consider inadequately briefed issues.” State v. Lee, 2006 UT 5, ¶ 22, 128 P.3d 1179. Because Dennis provided no argument in his opening brief to show that the divorce court erred in awarding the proceeds of Ryan’s House to Tammy, we decline to consider this issue. 36 Argyle v. Argyle, 688 P.2d 468, 470 (Utah 1984). 19 GOGGIN v. GOGGIN Opinion of the Court “unless it is clearly unjust or a clear abuse of discretion.”37 Accordingly, a party who appeals from a marital property division has the burden to prove that either (1) “there was a misunderstanding or misapplication of the law resulting in substantial and prejudicial error”; (2) “the evidence clearly preponderated against the finding”; or (3) “such a serious inequity has resulted as to manifest a clear abuse of discretion.”38 This is a “heavy burden,” and “we can properly find abuse only if no reasonable person would take the view adopted by the trial court.”39 We consider each of Dennis’s claims below. A. The Court Overstepped Its Discretion When It Awarded Tammy the Full Amount of the Dissipated Assets ¶45 The divorce court found that Dennis had dissipated the assets of the Riverbend Property and the Sundowner Property “in an inappropriate, untoward, self-serving manner . . . and in direct contravention of the Court’s multiple Orders.” But the court declined to award Dennis any amount of setoff or credit for his share of the funds he dissipated. Specifically, after noting that “generally each party is presumed entitled to all of his or her separate property and fifty percent of marital property,” the court awarded Tammy the entire dissipated amount, finding that “it would be unjust and inequitable to award [Dennis] any amount of setoff or credit for these dissipated funds based upon [his] deceitful, bad faith, contemptuous conduct and application of the unclean hands doctrine.” Further, the court noted that, because it had no way to determine whether Dennis had successfully hidden dissipated funds from Tammy’s experts, it was impermissible to calculate prejudgment interest. And “[w]ithout prejudgment interest or some adjustment, [Tammy] is denied the benefit and use of the dissipated marital funds over time and bears the burden of the depreciating value of the amount owed over time.” ¶46 Dennis argues that the court exceeded its discretion in failing to “award” the dissipated funds equally to Dennis and Tammy. In other words, Dennis argues that although he dissipated 37 Gardner v. Gardner, 748 P.2d 1076, 1078 (Utah 1988). 38 Burnham v. Burnham, 716 P.2d 781, 782–83 (Utah 1986) (internal quotation marks omitted). 39 Goggin I, 2011 UT 76, ¶ 26, 267 P.3d 885 (internal quotation marks omitted). 20 Cite as: 2013 UT 16 Opinion of the Court marital funds, half of those funds were his, and accordingly, he should only be accountable to Tammy for her share. We agree. ¶47 Section 30-3-5(1) of the Utah Code permits courts to issue “equitable orders” relating to marital property in divorce cases. In making its equitable distribution of property, the court should generally consider a variety of factors, including “whether the property was acquired before or during the marriage; the source of the property; . . . the parties’ standard of living;” and their “respective financial conditions.”40 Generally, “[e]ach party is presumed to be entitled to all of his or her separate property and fifty percent of the marital property.”41 And “in appropriate circumstances[,] equity requires that each party recover the separate property brought into or received during the marriage.”42 ¶48 But the court is “not expected to view each item of marital property in isolation and divide each separately.”43 Instead, the court “is permitted to look at the marital property in its entirety and to apportion it in a manner that best facilitates ‘a clean break’ between the parties and achieves a result that equitably divides the marital property as a whole.”44 The appropriate distribution of property “var[ies] from case to case,” and “[t]he overriding consideration is that the ultimate division be equitable—that property be fairly divided between the parties, given their contributions during the marriage and their circumstances at the time of the divorce.”45 The 40 Burke v. Burke, 733 P.2d 133, 135 (Utah 1987). 41 Hall v. Hall, 858 P.2d 1018, 1022 (Utah Ct. App. 1993) (internal quotation marks omitted). 42 Burke, 733 P.2d at 135; see also Preston v. Preston, 646 P.2d 705, 706 (Utah 1982) (holding that the husband was entitled to a credit for costs he paid for the construction of the marital home, because “the evidence was uncontradicted that [the amount] came from the husband’s sale of assets he owned prior to the marriage, and only the balance from his earnings during the marriage”). 43 Boyer v. Boyer, 2011 UT App 141, ¶ 10, 259 P.3d 1063. 44 Id. 45 Newmeyer v. Newmeyer, 745 P.2d 1276, 1277–78 (Utah 1987); see also Burnham, 716 P.2d at 782 (“The problem is of such a nature as not to be susceptible of solution by any exact formula; indeed the authorities frequently say that for that reason each case must be (continued...) 21 GOGGIN v. GOGGIN Opinion of the Court court should also “consider whether there are exceptional circumstances that overcome the general presumption that marital property [should] be divided equally between the parties.”46 Indeed, the court “is vested with plenary power to distribute marital property according to the demands of justice.”47 ¶49 Further, “the marital estate is [generally] valued at the time of the divorce decree or trial.”48 But “where one party has dissipated an asset, hidden its value or otherwise acted obstructively, the trial court may, in the exercise of its equitable powers, value a marital asset at some time other than the time the decree is entered, such as at separation,”49 “or may otherwise hold one party accountable to the other for the dissipation of marital assets.”50 Thus, when a court finds that a spouse has dissipated marital assets, the court should calculate the value of the marital property as though the assets remained.51 As a result, when the court conducts its equitable distribution of the marital property, the other spouse should receive a credit for his or her share of the assets that were dissipated.52 ¶50 In this case, the divorce court faced a difficult situation. To ensure that Tammy received her fair share of the marital estate, the court was charged with determining the amount of assets that Dennis had dissipated. But the court was aware that Dennis had acted obstructively and hidden at least some of the assets that he had dissipated. And because Dennis consistently refused to respond to 45 (...continued) determined upon its own facts.” (internal quotation marks omitted)). 46 Boyer, 2011 UT App 141, ¶ 10 (alteration in original) (internal quotation marks omitted). The court may not consider “marital misconduct” in making the property division, however. Jesperson v. Jesperson, 610 P.2d 326, 328 (Utah 1980); Read v. Read, 594 P.2d 871, 872 (Utah 1979) (stating that “the purpose of [a property] settlement should not be to impose punishment upon either party”). 47 Jackson v. Jackson, 617 P.2d 338, 340 (Utah 1980). 48 Jacobsen v. Jacobsen, 2011 UT App 161, ¶ 39, 257 P.3d 478 (internal quotation marks omitted). 49 Parker v. Parker, 2000 UT App 30, ¶ 13, 996 P.2d 565 (internal quotation marks omitted). 50 Thomas v. Thomas, 1999 UT App 239, ¶ 19, 987 P.2d 603. 51 See Parker, 2000 UT App 30, ¶ 13. 52 See id. ¶ 15. 22 Cite as: 2013 UT 16 Opinion of the Court discovery requests and comply with the court’s orders to provide an accounting, the court was forced to determine the value of the dissipated assets solely with information provided by Tammy’s experts. To make matters worse, neither Tammy’s experts nor the court had any way to determine whether the accounting they pieced together was complete, or whether Dennis had been successful in his efforts to completely hide certain assets or transactions. ¶51 Ultimately, the court declined to credit Dennis with any share of the dissipated assets “based upon [his] deceitful, bad faith, contemptuous conduct and application of the unclean hands doctrine.” Thus, it seems that the court awarded Tammy the full amount of dissipated assets as a contempt sanction against Dennis. ¶52 But there is no place for contempt sanctions in an equitable distribution of marital property. Under the Contempt Statute, a court may order a party to pay for the “actual loss or injury” he caused.53 And although a court has considerable discretion in determining whether to sanction a party, it does not have discretion to impose a sanction beyond the actual injury caused by the contemptuous behavior.54 Moreover, it does not have discretion to distribute marital property in a way that is designed to punish a party’s contemptuous behavior. ¶53 As discussed above, when considering how to equitably distribute dissipated marital assets, a court must begin by determining the amount of dissipated assets. A court is not relieved of this duty simply because a spouse engages in contemptuous behavior or fails to comply with discovery orders. Instead, we conclude that when a spouse’s behavior prevents the court from determining the precise amount of dissipated assets, the court should estimate, to the best of its ability, the upper limit of the amount of assets that the spouse may have dissipated. The court should then use this amount to value the marital estate and distribute the marital property. This approach ensures that the court can distribute the marital property equitably and without rewarding obstructionist or contemptuous behavior. ¶54 Thus, we conclude that the divorce court exceeded its discretion when it declined to award Dennis any amount of setoff or credit for his share of the assets he dissipated. Accordingly, we 53 UTAH CODE § 78B-6-311. 54 See supra ¶ 36. 23 GOGGIN v. GOGGIN Opinion of the Court remand this issue for further proceedings consistent with this opinion. B. The Court Overstepped Its Discretion When It Failed to Consider Whether Dennis Was Entitled to a Setoff or Credit for the Separate Property He Contributed to the Riverbend Property ¶55 Dennis argues that the court erred in failing to consider whether he was entitled to a setoff or credit for the separate property he contributed to the purchase and development of the Riverbend Property. We agree. ¶56 In its Collateral Order, the Collateral Court found that the Riverbend Property was marital property, “subject to equitable distribution by the divorce court.”55 But applying the doctrine of res judicata to the Collateral Order, the divorce court stated that, “having adopted” the Collateral Order, it “w[ould] not revisit the issue of the marital character or title of the [Riverbend Property] nor w[ould it] revisit the separate property of both parties that was put into” the property. Thus, with respect to Dennis’s claim that he was entitled to credits for the amounts he contributed to purchase and develop the Riverbend Property, the court seems to have determined that the issue had already been settled. Accordingly, the divorce court awarded each party one-half of the value of the Riverbend Property. ¶57 But it appears that the divorce court misunderstood the effect of the Collateral Order. At issue in the Collateral Action was whether the Riverbend Property was part of the marital estate even though it was titled in the name of one of Dennis’s corporate entities. Thus, the Collateral Court’s determination that the property was marital permitted Tammy to claim a portion of it. But the Collateral Court did not purport to decide the extent of either party’s claim. Instead, the Collateral Court explicitly reserved that task for the divorce court. In other words, the Collateral Court determined that the Riverbend Property was marital property subject to equitable distribution, but it did not determine the amount to which each party was entitled. 55 We ultimately affirmed this finding in Goggin I, noting that “[i]t will be within the divorce court’s sole discretion to determine the extent of [Tammy’s] claim in conducting its equitable distribution of the marital assets.” 2011 UT 76, ¶ 41. 24 Cite as: 2013 UT 16 Opinion of the Court ¶58 The divorce court was correct to accept the Collateral Court’s determination that the Riverbend Property was marital property. But the divorce court erred in assuming that the marital nature of the property necessarily required it to divide the property equally. As discussed above, generally, each party to a divorce is entitled to half of the marital property.56 But “in appropriate circumstances[,] equity requires that each party recover the separate property brought into or received during the marriage.”57 So although the Riverbend Property was marital property, the divorce court should have considered whether Dennis was entitled to a credit or setoff for the separate property he contributed to it. Accordingly, we conclude that the divorce court erred in declining to consider whether Dennis is entitled to a setoff or credit for his financial contributions to the Riverbend Property, and we remand with instructions for the divorce court to make this determination. C. The Court Did Not Overstep Its Discretion When It Declined to Award Dennis a Setoff or Credit for His Managerial Contributions to the Riverbend or Sundowner Properties ¶59 Before the Collateral Court, Dennis sought a “setoff or credit for labor and services performed” on the Riverbend and Sundowner Properties while the divorce was pending. Specifically, Dennis sought a salary for the managerial efforts he contributed to the businesses, and rent for the businesses’ “occupation of Dennis’s separate property.” But citing both his contemptuous behavior and the doctrine of unclean hands, the court denied Dennis’s claim. The court noted that it was not the historical business practice for Dennis to receive a salary or rent, and that “to award such a claim would reward [Dennis] for much of the reprehensible conduct [he] engaged in . . . which would be unjust and inequitable.” Specifically, the court found that Dennis’s “reprehensible conduct cannot be separated from the services provided to both businesses that under normal circumstances would be entitled to recognition.” We agree. ¶60 The doctrine of unclean hands expresses the principle that “a party [who] comes into equity for relief . . . must show that his . . . conduct has been fair, equitable, and honest as to the particular controversy in issue.”58 In other words, a party will not be permitted to take advantage of his own wrongdoing or claim the benefit of his 56 See supra ¶ 48. 57 Burke, 733 P.2d at 135. 58 27A AM. JUR. 2D Equity § 98 (2012). 25 GOGGIN v. GOGGIN Opinion of the Court own fraud.59 We have “long recognized” this doctrine, noting that “he who seeks equity must do equity.”60 Similarly, we have held that “[i]t is inherent in the nature and purpose of equity that it will grant relief only when fairness and good conscience so demand,” and that “equity does not reward one who has engaged in fraud or deceit in the business under consideration, but reserves its rewards for those who are themselves acting in fairness and good conscience, or as is sometimes said, to those who have come into court with clean hands.”61 ¶61 In this case, Dennis’s request for salary and rent was a request for equitable relief. And it is well established that Dennis did not come to court with “clean hands.” The court was well within its discretion to apply the doctrine of unclean hands and deny Dennis the equitable relief he sought. Accordingly, we conclude that the court acted within its discretion when it declined to award Dennis any credit for his services.