Court Opinion

ID: 9395836
Source: CourtListenerOpinion
Date Created: 2023-05-18 18:13:14.440043+00
Date Added: 2024-06-11T17:19:11.877745
License: Public Domain

2023 UT App 51

               THE UTAH COURT OF APPEALS

                    SHAUN ROBERT ROTHWELL,
                           Appellee,
                              v.
                       JENEA ROTHWELL,
                          Appellant.

                             Opinion
                        No. 20210863-CA
                        Filed May 11, 2023

            Fourth District Court, Provo Department
               The Honorable Sean M. Petersen
                         No. 184401412

        Julie J. Nelson, Mitchell J. Olsen Sr., and Mitchell J.
                  Olsen Jr., Attorneys for Appellant
         Aaron R. Harris, Thomas J. Burns, and Lacee M.
               Whimpey, Attorneys for Appellee

JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion,
in which JUDGES RYAN D. TENNEY and JOHN D. LUTHY concurred.

CHRISTIANSEN FORSTER, Judge:

¶1     This case arises from the same facts and circumstances
outlined in Rothwell v. Rothwell, 2023 UT App 50, which also issues
today. The sole question for our consideration in this case is
whether the district court exceeded its discretion by staying the
property distribution in Shaun and Jenea Rothwell’s divorce case
pending an appeal. We conclude that the district court did not
and, accordingly, affirm the stay.
                         Rothwell v. Rothwell

                          BACKGROUND

¶2     The district court entered the parties’ Decree of Divorce on
June 17, 2021. The court found that the marital estate had a value
of approximately $28.5 million and divided it equally. Jenea was
awarded cash and assets with a total value of $14,226,979. Shaun
was awarded the parties’ marital businesses and other assets and
investments. Following the district court’s ruling in the parties’
divorce case, Shaun filed a notice of appeal and moved the district
court to stay the distribution of the marital estate pending the
appeal. The court granted the stay. Because the parties’ marital
businesses, which were awarded to Shaun, comprised the
majority of the estate’s value, he has retained the bulk of the
parties’ assets while his appeal has been pending. To protect
Jenea’s interest in the marital assets, the district court ordered that
“no assets, liquid or non-liquid, may be disposed of or otherwise
encumbered pending the appeal.” It also required Shaun to
deposit a total of $3.8 million cash with the court—$2.1 million at
the time the stay was entered and additional amounts at the end
of 2021, 2022, and 2023—to account for equalization payments he
was required to make to Jenea.

              ISSUE AND STANDARD OF REVIEW

¶3      “The decision to stay enforcement of a judgment is within
the discretion of the reviewing court,” and we accordingly review
its decision “for an abuse of discretion.” Utah Res. Int’l, Inc. v. Mark
Techs. Corp., 2014 UT 60, ¶ 11, 342 P.3d 779 (quotation simplified).

                             ANALYSIS

¶4     Rule 62 of the Utah Rules of Civil Procedure allows a court
to stay enforcement of an order while an appeal is pending if the
appellant gives a “bond or other security,” Utah R. Civ. P. 62(b),
“in an amount that adequately protects the adverse party against

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                       Rothwell v. Rothwell

loss or damage occasioned by the stay and assures payment after
the stay ends,” id. R. 62(h)(1). The purpose of such security is to
“preserve the status quo pending the outcome of the case.” See
Hunsaker v. Kersh, 1999 UT 106, ¶ 8, 991 P.2d 67 (quotation
simplified) (addressing the purpose of injunctions); see also
Diversified Holdings, LC v. Turner, 2002 UT 129, ¶ 39, 63 P.3d 686
(addressing the purpose of supersedeas bonds). Jenea asserts that
the terms of the security the court ordered Shaun to post do not
adequately ensure payment and distribution of her half of the
marital estate after the stay ends or protect her from loss or
damage resulting from the appeal. 1

1. Jenea also argues that a stay of property distribution is
inappropriate in a divorce action because a divorce judgment
differs from an ordinary judgment. She explains that unlike a
typical judgment for compensatory damages addressed by rule
62, a divorce judgment awards assets that already belonged to the
party before the divorce. She argues that because the “status quo”
during marriage was that “each party already legally owned half
the assets and could use them as they wished,” staying a property
distribution where one party has possession of the majority of the
marital assets does not maintain the “status quo” because it “puts
at least one party in a worse position than they would otherwise
have been” in.
        While we acknowledge that the impact of staying a divorce
decree is somewhat different from the impact of staying a
judgment for compensatory damages and recognize the
unfortunate impact that a stay in this situation has in delaying at
least one of the parties from moving on from the divorce with
no—or at least reduced—financial ties to their ex-spouse, there is
nothing in the plain language of rule 62 that limits its application
to matters involving compensatory damages. In fact, the language
suggests that a judgment for compensatory damages is only one
of any number of judgments that may be subject to a stay. See Utah
                                                     (continued…)

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                       Rothwell v. Rothwell

¶5     With the exception of one unpreserved argument, 2 none of
the arguments Jenea has raised indicate that the terms of the
security were inadequate to ensure she would be paid after the
stay ends. The court’s injunction prohibited Shaun from disposing
of or encumbering any of the marital assets. Given the parties’
large estate, this injunction, coupled with the supersedeas bond,
was adequate to ensure that the assets Jenea was awarded would
be available to her after the stay.

¶6    Jenea suggests that the court’s injunction was inadequate
to protect her interests because the value of the assets could
change over time. But that is always true of assets subject to an

R. Civ. P. 62(h) (outlining a presumptive formula for determining
the amount of a bond for compensatory damages as an exception
to the general rule that security should be “in an amount that
adequately protects the adverse party against loss or damage
occasioned by the stay and assures payment after the stay ends”).
Nevertheless, we observe that it may be desirable for the Supreme
Court’s Advisory Committee on the Rules of Civil Procedure to
consider amending rule 62 to address the unique circumstance of
staying a divorce distribution pending appeal and attempt to at
least mitigate the potential inequity of such a stay.

2. Jenea points out that the stay order did not include a provision
addressing what would happen if Shaun were to die while the
appeal is pending. However, Jenea does not appear to have raised
this argument below, and even if she had, she does not develop
this argument on appeal. We observe that, had Jenea asked for
security to protect her against Shaun’s death, the court could
have, and likely should have, taken steps to secure Jenea’s interest
in the marital estate, such as a lien on the assets that would be
enforceable against Shaun’s heirs. See Wadsworth v. Wadsworth,
2022 UT App 28, ¶¶ 86–90, 507 P.3d 385, cert. denied, 525 P.3d 1259
(Utah 2022). However, Jenea did not ask for such security, and we
therefore do not consider this issue further.

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                       Rothwell v. Rothwell

injunction, and Jenea has failed to persuade us that the mere
possibility that assets may depreciate precludes a court from
entering an injunction to secure a party’s interest in an asset
pending an appeal. She also argues that it was unfair that Shaun
had a disproportionate ability to use and enjoy his share of the
marital estate. While we are sympathetic to Jenea’s situation, we
are ultimately not convinced that one party’s access to assets
during a stay translates to a conclusion that the security provided
for the stay is inadequate to protect the other party. Again, that
will be the situation any time a stay is granted.

¶7      As to the question of whether the bond and injunction
adequately protected Jenea from loss or damage that could result
from an appeal, Jenea points to several “losses” she believes the
stay has failed to prevent: loss of ability to go forward with her
separate life, loss of ownership of assets and monies she was
awarded in the divorce, loss of liquidity, loss of enjoyment, and
loss of value.

¶8     While one of the goals of a divorce decree should be to
allow the parties to go forward with their separate lives, see
Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 79, 507 P.3d 385, cert.
denied, 525 P.3d 1259 (Utah 2022), that point does not impact the
validity of the stay and the adequacy of the security to protect
against loss. As a practical reality, neither party can move forward
with their separate life until this matter is fully resolved.

¶9      As to Jenea’s alleged loss of ownership, loss of liquidity,
and loss of enjoyment, we do not agree that under rule 62, as
written, those are losses against which a stay must guard. Any
stay will prevent at least one party, and likely both parties, from
using or enjoying their property in the way that they would like.
Like Jenea, Shaun is unable to sell or encumber the property. And
if the court had denied Shaun’s request for a stay and required
him to transfer property to Jenea pursuant to the terms of the
divorce decree, this could have permanently deprived him of

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                        Rothwell v. Rothwell

property to which he would be entitled if he prevailed on appeal.
This outcome would have been no more equitable than the short-
term limitation on Jenea’s ability to sell, invest, encumber, or
otherwise use the assets she was awarded. And the losses Jenea
identifies are not permanent—to the extent she prevails on appeal,
she will eventually regain her ownership, use, and enjoyment of
her property. While the value of those assets may be somewhat
affected by the passage of time, it is just as likely that they will
have appreciated as that they will have depreciated.

¶10 Finally, while a loss of value would certainly indicate that
the stay did not adequately protect Jenea, she did not ask the court
to include terms in the stay that would protect against such losses.
On appeal, Jenea suggests that the district court should have
included provisions in its injunction requiring Shaun to protect
and maintain her assets and to refrain from “using” them in a
manner that accelerates their depreciation. She points out, for
example, that there is no requirement that Shaun continue to
insure her real property. She also observes that Shaun has been
able to use her property in a manner that may damage it or cause
wear and tear—for example, by driving the vehicles she was
awarded and letting their son and his friends live in a townhouse
she owns. However, Jenea has pointed us to nothing indicating
that she asked the district court to include restrictions on use
either before or after the stay was entered. So while we observe
that such provisions would have certainly helped to guard Jenea
from losses or damage relating to her property, we cannot say that
the district court exceeded its discretion in failing to include them.

                          CONCLUSION

¶11 Having reviewed Jenea’s arguments, we are not convinced
that the district court exceeded its discretion in granting the stay
on the terms that it did. Accordingly, we affirm.

 20210863-CA                      6                2023 UT App 51