Court Opinion

ID: 9547115
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:41:58.407158+00
Date Added: 2024-06-11T15:17:20.938406
License: Public Domain

JACKSON, Judge
(dissenting):
I respectfully and loyally dissent.
Loyal to the majority, but not to their opinion, I flag their decision as being at the forefront of judicial activism. I regret that I could not dissuade my colleagues from breaking new ground with the invention of “equitable restitution.” The opinion manufactures a divorce remedy that is (1) outside our statutory scheme;1 (2) without precedent in the pronouncements of the Utah Supreme Court; (3) not requested by the appellant;2 (4) forced on the trial courts for further development; (5) not needed to do justice to the parties in this case and may, in fact, work inequity.
EQUITABLE RESTITUTION OR SUPPORT
In Petersen v. Petersen, 737 P.2d 237 (Utah App.1987), this court held that an advanced degree is not marital property subject to division upon divorce, even where this achievement has been made possible through the assistance of the other spouse. We have, nonetheless, acknowledged that there may be situations where equity demands an extraordinary award of nonterminable rehabilitative or reimbursement alimony in order to compensate a spouse who “endure[s] substantial financial sacrifices or defer[s] her own education to help” the other spouse in obtaining an advanced degree. Rayburn v. Rayburn, 738 P.2d 238, 241 (Utah App.1987). This might occur where: (a) the parties mutually endeavor to increase one spouse’s earning capacity, but at the time of trial the spouse who has benefitted from the parties’ endeavors is merely on the threshold of a substantial increáse in earnings, Petersen, 737 P.2d at 242 n. 4; or (b) there is insufficient marital property from which to make a compensatory award to the contributing spouse. See Gardner v. Gardner, 748 P.2d 1076, 1081 (Utah 1988). In such cases, the spouse who has made substantial financial sacrifices and contributions to increase the earning capacity of the other spouse is entitled to recompense for those contributions that are beyond the duty of support normally associated with marriage, less any benefits received. See, e.g., Roberto v. Brown, 107 Wis.2d 17, 318 N.W.2d 358 (1982); Mahoney v. Mahoney, 91 N.J. 488, 453 A.2d 527 (1982).
Decisions from other jurisdictions involving compensation of the spouse who has contributed to the attainment of an ad*80vanced degree have generally involved four factors:
[F]irst, they share the loss of the husband’s foregone earnings during the period of investment; second, the wife provides the financial capital to enable her husband to forego those earnings; third, she may forego opportunities to further the development of her own earning capacity; fourth, and most significantly, they both expect to gain a return on the full costs of the investment through continuation of the marriage. Thus, the working spouse predicates her sacrifice of income and personal educational advancement on the expectation of future returns to her from sharing in her husband's enhanced earning capacity.
Krauskopf, Recompense for Financing Spouse’s Education: Legal Protection for the Marital Investor in Human Capital, 28 Kan.L.Rev. 379, 380 (1980).
The extraordinary award fashioned by the majority in this case is inappropriate for several reasons. First, Mrs. Martinez did not provide the financial capital that enabled her husband to attain his college and advanced degree. Instead, Dr. Martinez provided the bulk of the family’s financial support, in addition to paying for his education. This is not the classic “working spouse/student spouse” situation necessitating an extraordinary award. See, e.g., Hubbard v. Hubbard, 603 P.2d 747 (Okla.1979); Haugan v. Haugan, 117 Wis.2d 200, 206, 343 N.W.2d 796, 799-800 (1984); Roberto, 318 N.W.2d 358.
Second, no evidence was presented that Mrs. Martinez deferred her own career or education in order to advance the education of her husband. Both parties had only high school educations at the time of marriage. Mrs. Martinez testified at trial that she wanted to continue her own education someday but had not yet begun doing so, even though her employer would pay three-fourths of her school costs and would allow her to continue working.
While Mrs. Martinez raised the children and performed the household responsibilities, Dr. Martinez provided the family’s primary financial support in the form of his inheritance monies, funds from student loans (which the trial court required him to repay), and proceeds from his G.I. Bill. Mrs. Martinez worked part-time during three of the seventeen years of their marriage. Her nominal total earnings of approximately $2,300 were applied to family living expenses. During the marriage, the family took modest vacations, purchased two homes, furniture and furnishings, and two automobiles. Equity simply does not demand an extraordinary remedy in this case because no extraordinary injustice is present.
Even if Mrs. Martinez had made substantial financial contributions or educational sacrifices in order to further her husband’s education and career, there are other reasons why the creation of a new hybrid award of equitable restitution is not warranted in this case. Unlike the hypothetical case contemplated by this court in Petersen, 737 P.2d at 242 n. 4, in which the spouse with an advanced degree is only on the threshold of reaping an enhanced income at the time of the parties’ divorce, Dr. Martinez was already earning a gross annual income of $100,000. He is not merely at the threshold of significant earnings; he is already standing in the parlor. In addition, the parties here accumulated real and personal property from which a compensatory property award could be made: $34,-561 equity in a home; three vehicles worth $3,995; an IRA account valued at $2,000; stocks of unknown value; and household furnishings valued at $6,500. The presence of both substantial earnings and accumulated property at the time of the divorce provides an adequate basis for rendering an extraordinary remedy, if Mrs. Martinez is entitled to recompense.
On the facts presented in this case, there are additional reasons why I believe the majority’s disposition of this appeal is misguided: (1) equity can be achieved under current alimony and property distribution statutes and case law; (2) an award of equitable restitution coupled with the majority’s generous alimony and child support awards is double-dipping; and (3) an award of equitable restitution, in effect, treats the *81professional education as “property” subject to division upon dissolution of a marriage.
First, in fashioning an award of alimony, the trial court must consider the financial condition and needs of the recipient spouse,3 the ability of that spouse to be self-supporting, and the ability of the other spouse to pay. Paffel v. Paffel, 732 P.2d 96,100-01 (Utah 1986); Jones v. Jones, 700 P.2d 1072, 1075 (Utah 1985).
Dr. and Mrs. Martinez were married for approximately seventeen years. The trial court found that Dr. Martinez incurs expenses associated with his employment of approximately $7,000 per year, leaving approximately $93,000 annually or $7,750 per month. Mrs. Martinez earned approximately $1,033 per month and estimated that she required $2,050 per month to meet the expenses for herself and the three children. Under the temporary support order, she had been receiving $1,100 per month in child support. She sought additional monies to make up the difference between her net earnings and expenses and to provide her with the means to make major house repairs. In the event that a professional degree was not viewed as a marital asset, she sought an alimony award not subject to termination upon remarriage.
The trial court stated that it considered the large disparity between the parties’ respective earning abilities and the fact that the wife’s resources were inadequate to meet her needs. However, I agree with Mrs. Martinez that the trial court failed to apply these factors correctly in that the award of $400 per month alimony, nonter-minable for three years and continuing for a period of five years, is so low as to constitute a clear and prejudicial abuse of discretion. Mrs. Martinez earns $1,033 gross income per month. The alimony awarded by the trial court, plus her net monthly earnings of $846, provides her with approximately $1,246 with which to meet her monthly expenses, excluding sums awarded for child support. In contrast, Dr. Martinez enjoys approximately $7,750 gross monthly income. Considering the disparate earning capacities, the trial court’s alimony award was insufficient and inequitable in that it failed to provide the parties with a comparable standard of living.
Second, based on Dr. Martinez’s earnings at the time of trial, the majority has increased total child support from $900 to $1,800 and increased the duration and amount of alimony to a permanent award of $750 per month. An award of equitable restitution on top of the already generous awards of alimony and child support fashioned by the majority is duplicative and not necessary to achieve equity.
Finally, an advanced degree is the memo-rialization of an individual’s “attainment of the skill, qualification and educational background which is the prerequisite of the enhanced earning capacity.” Wehrkamp v. Wehrkamp, 357 N.W.2d 264, 266 (S.D.1984); cf. Petersen, 737 P.2d at 240 (quoting In re Marriage of Graham, 194 Colo. 429, 574 P.2d 75 (1978) (en banc)). The value of an advanced degree lies in the potential for increased earnings made possible by the degree and by other factors *82and conditions of employment. If the advanced degree itself does not fall within the classification of marital “property” subject to distribution upon divorce, then neither should an individual’s enhanced earning capacity. Hodge v. Hodge, 337 Pa.Super.Ct. 151, 486 A.2d 951 (1984); Wehrkamp, 357 N.W.2d at 266; Stern v. Stern, 66 N.J. 340, 331 A.2d 257 (1975).
The majority declares that:
The function of equitable restitution is to enable a spouse to share the newly obtained earning capacity of a former spouse who has achieved that capacity through the significant efforts and sacrifices of the requesting spouse which were detrimental to that spouse’s development. It is nothing more than an equitable sharing of the rewards of both parties’ common efforts and expectations.
By creating a divisible interest in Dr. Martinez’s enhanced earning capacity, this court has awarded a nonterminable property interest in a medical degree which goes beyond the compensation approved in Petersen. The majority has not limited its award to Mrs. Martinez’s contributions toward her husband’s medical education costs; it has taken the further step of providing financial recompense for lost expectations. I would reject any compensation formula based on future earning capacity. The factors and variables involved in the valuation of an enhanced earning capacity are as speculative as those involved in an attempt to value an advanced degree; such speculation can only lead to inequity.
Provision for Mrs. Martinez’s needs is best dealt with through a generous but fair distribution of property and award of alimony,4 not through the creation of a distinctly new form of cleverly disguised marital property for which there is no precedent.
CHILD SUPPORT
Both husband and wife have a duty to support their children. Utah Code Ann. §§ 78-45-3, -4 (1987). “Child support awards should approximate actual need, and, when possible, assure the children a standard of living comparable to that which they would have experienced if no divorce had occurred.” Peterson v. Peterson, 748 P.2d 593, 596 (Utah App.1988).
The trial court found that Dr. Martinez earned approximately $7,750 gross income per month. Dr. Martinez testified that his earnings were established under a two-year employment contract, that he was in the 50% tax bracket, and that he had no tax shelter. The trial court also found that Mrs. Martinez earned approximately $1,033 gross income per month. Mrs. Martinez testified to net monthly earnings of $846 plus nominal royalties from an oil well. She anticipated a reduction in her earnings as a result of her voluntary cutback in working hours. Mrs. Martinez calculated monthly living expenses for herself and the three children at $2,050. This was the only evidence of the dollar amount of the children’s monthly need for support. The majority has elected to disregard that evidence because they think the figure was too low. Having rejected the only evidence of the children’s need, the majority makes its own independent estimate.
Using their own estimate of need and the parties’ gross monthly incomes, the majority has awarded $600 per month per child for a total of $1,800.5 Their action fails to *83account for the effects on each party of: (1) tax rate changes under the 1986 Tax Reform Act;6 (2) their award of the tax exemptions for all the children to Mrs. Martinez; (3) the disposition of the home mortgage debt as discussed below; (4) their increase of alimony from $400 to $750 per month; and (5) their equitable restitution award in an amount to be determined by the trial court.
I would remand this case on the child support issue for the taking of further evidence and a current determination of the children’s need and the ability of both parents to pay child support, to be considered with the other appropriate adjustments in the parties’ incomes and liabilities.
HOME MORTGAGE
The parties stipulated at trial that their jointly-acquired home had a current market value of $63,000 and an equity of $34,561. The stipulated figures reveal the existence of a home mortgage obligation in the sum of $28,439. However, neither the trial court nor counsel identified this sizeable debt in the distribution of debts and property. Nor do the trial court’s written Findings of Fact specify who must assume the $28,439 mortgage obligation and make the payments. The record reveals that Mrs. Martinez had been making a $309 monthly mortgage payment and the court stated that each party was to assume and discharge those debts that they have been paying.
Paragraph 19 of the written Findings of Fact states that the “[pjlaintiff [Mrs. Martinez] should be awarded the exclusive use and occupancy of the parties’ residence subject to a lien in favor of Defendant for the sum of $17,528.00 ...” The Decree of Divorce reiterates this language and awards plaintiff “exclusive use and occupancy,” subject to a lien in defendant’s favor. The court’s oral ruling was: “[t]he Court will award to the the [sic] Plaintiff the home of the parties, subject to a lien for defendant’s share of the equity in the amount of one-half of the net equity.”
The court’s allocation of the parties’ financial obligations includes no reference to $28,439 of mortgage debt. Mrs. Martinez was required to pay specified debts and obligations totalling $8,179.73. The $28,-439 was not specified and does not appear in the record. Dr. Martinez was required to pay specified debts and obligations total-ling $26,169.04. If Mrs. Martinez must assume and pay the house mortgage, her post-divorce debt responsibility is $36,-618.73, $10,449.69 more than his.
Conclusion of Law C provides that, “[i]n order to make the distribution ... [of marital property] as equal as possible, Plaintiff should be awarded the real property ... subject to a lien in favor of Defendant for one-half of the present equity therein, that being for the sum of $17,678.” Although *84the stated objective is equality of distribution, the requirement that Mrs. Martinez assume and pay the mortgage would burden her by an additional $14,219.50 (½ of $28,439), despite the parties’ widely disparate disposable income and the fact that Mrs. Martinez must support herself and the children on less than $2,200 per month. Since the court failed to specifically identify the home mortgage, the court also failed to include the amount of $28,439 in the equity calculation. Thus Mrs. Martinez became personally responsible to pay the major debt of the parties.
The trial court’s inclusion of the home mortgage in Mrs. Martinez’s debt burden as part of the property and debt distribution is an abuse of discretion, even without looking at the gross disparity of income. The home mortgage matter alone justifies a remand.
CONCLUSION
The majority has fixed the amount of alimony and child support to be paid. This action deprives the trial court, on remand, of any flexibility to adjust the debts, property, alimony, and support awards and to fashion an overall award package that harmonizes all the variables. The trial court’s discretion will be so restricted that an equitable outcome will be impossible. This case should instead be remanded for retrial on the alimony, child support and property distribution issues.

. The majority acknowledges the existence of our divorce statutes in remanding the child support and alimony issues. The majority states: (a) "On remand, the trial court shall enter its order for child support in accordance with Utah Code Ann. § 30-3-5.1 (1987),” i.e., raise the total amount of child support from $900 to $1,800 per month; (b) ”[W]e award permanent alimony in the sum of $750 per month subject to the provisions of Utah Code Ann. § 30-3-5 (1987)," i.e., increase alimony from the $400 awarded by the trial court. However, no statute is cited as the basis for equitable restitution. Our divorce statutes and case law authorize only the distribution of property and an award of support for the benefit of the spouse and children. Utah Code Ann. §§ 30-3-1 to -10.6 (1987).

. Mrs. Martinez argued both at trial and on appeal that a professional degree is a property interest subject to division upon divorce. Since equitable restitution was not a part of Utah law until this majority opinion was crafted, the trial was not conducted and the evidence was not presented under that theory.

. In determining the "need” of the recipient nonstudent spouse, the trial court is not limited to considering only the low living expenses incurred during the time that the other spouse studied to obtain an advanced degree. The Utah Supreme Court recently stated in Gardner, a case also involving an advanced degree, that alimony should "equalize the parties’ respective standards of living and maintain them at a level as close as possible to the standard of living enjoyed during the marriage." Gardner, 748 P.2d at 1081; accord Boyle v. Boyle, 735 P.2d 669, 671 (Utah App.1987); Petersen, 737 P.2d at 239; Olson v. Olson, 704 P.2d 564, 566 (Utah 1985); Higley v. Higley, 676 P.2d 379, 381 (Utah 1983). Although Gardner involved a marriage in which the parties enjoyed a high standard of living for many years prior to the divorce, the language of Gardner was clearly aimed at preventing the divorced spouse of a high income earner from suffering a major decline in standard of living following a divorce. This language should not be construed as prohibiting a trial court from making an award that raises the recipient spouse’s standard of living from what it was during the marriage where, as here, the student spouse experiences a major increase in earnings just prior to the marriage’s termination. In other words, the "need” of the recipient spouse in this situation is not necessarily what he or she managed to live on during the lean school years.

. Unlike the majority’s award of equitable restitution, an alimony award can be modified, in appropriate circumstances, under the court's exercise of continuing jurisdiction. Utah Code Ann. § 30-3-5(3) (1987). This is particularly important in the situation presented here, where Dr. Martinez is working under a contract of limited duration.

. The majority opinion interchanges the terms "adjusted gross income” and "gross income” in comparing the amount of child support awarded by the trial court with an award calculated under guidelines from Colorado and Wisconsin, even though the terms have markedly different meanings. Although the majority disclaims reliance on the child support guidelines from other jurisdictions, they do, in fact, rely upon the potentially greater amounts available in other jurisdictions in order to justify an award of $600 per month per child.
The problem with this analysis is that the guidelines adopted by other jurisdictions are irrelevant for purposes of an award in Utah. *83Child support guidelines utilize different approaches to allocate economic responsibility for children of divorced parents depending upon varying public policy. See generally Cassetty, "Emerging Issues in Child Support Policy and Practice,” in The Parental Child Support Obligation: Research, Practice and Policy 3 (J. Cas-setty ed. 1983).
As the majority opinion demonstrates, the recommended amount of child support under other jurisdictions’ guidelines may radically differ because of differences in the underlying policy goals adopted by a given state. The guidelines of some states, such as Wisconsin, do not adjust for the income of the custodial parent. This is obviously inconsistent with Utah’s adoption of a public policy which holds both parents responsible for the support of their children. For these reasons, whether the support guidelines in other states would afford a higher level of support should not be a factor in making an equitable award in Utah.

. The Tax Reform Act of 1986 will have a significant impact on Dr. Martinez’s disposable income, assuming ongoing gross income in the $100,000 range. He testified at trial that he had to set aside one-half of his income to pay taxes. . For 1988 and later tax years, there are two basic tax rates for individuals, 15% and 28%. In addition, the law effectively creates a third rate of 33% on income above certain levels. Thus, portions of Dr. Martinez’s income will be taxed at 15%, 28%, and 33% rather than all at 50%. Moreover, Utah income tax laws have changed in the interim. Counsel in divorce actions would be well advised to provide the trial court with complete information regarding the tax implications of the property distribution, alimony, child support and dependency exemption-arrangements being proposed. The combined disposable income available to the severed family can often be increased by prudent tax planning during a divorce.