Starley v. McDowell

Laura E. Starley,
Plaintiff, Appellant,
and Cross-appellee,

v.

Steven D. McDowell,
Defendant, Appellee,
and Cross-appellant.

MEMORANDUM DECISION

(Not For Official Publication)

Case No. 971055-CA

F I L E D

(February 19, 1999)

1999 UT App 046

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Third District, Salt Lake Department
The Honorable Kenneth Rigtrup

Attorneys:
Ellen Maycock, Salt Lake City, for Appellant
John D. Sheaffer, Lori W. Nelson, and Paul M. Halliday, Jr., Salt Lake City, for Appellee

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Before Judges Wilkins, Greenwood, and Billings.

WILKINS, Presiding Judge:

Appellant, Laura E. Starley, appeals the trial court's property distribution, child support order and alimony award in a divorce proceeding. Appellee, Steven D. McDowell, also appeals the trial court's award of attorney fees. We reverse and remand for further findings regarding the status and distribution of the parties' property and the awards of alimony and attorney fees. We affirm the ruling of the trial court on all other issues.

1. Property Division

Starley challenges the trial court's division of property, contending that it was inequitable and not supported by adequate findings of fact. Because trial courts are afforded broad discretion in divorce proceedings, we will not reverse a trial court's distribution of marital assets absent a clear abuse of discretion. See Shepherd v. Shepherd, 876 P.2d 429, 433 (Utah Ct. App. 1994). However, in order to allow appellate courts to conduct meaningful review, the trial court's "distribution must be based upon adequate factual findings and must be in accordance with the standards set by this state's appellate courts." Finlayson v. Finlayson, 874 P.2d 843, 847 (Utah Ct. App. 1994) (citation omitted).

In distributing property in a divorce proceeding, a trial court must consider: the amount and kind of property to be divided; whether the property was acquired before or during the marriage; the source of the property; the health of the parties; the parties' standard of living, respective financial conditions, needs, and earning capacity; the duration of the marriage; the children of the marriage; the parties' ages at the time of marriage and of divorce; what the parties gave up by the marriage; and the necessary relationship the property division has with the amount of alimony and child support to be awarded. Dunn v. Dunn, 802 P.2d 1314, 1322 (Utah Ct. App. 1990) (citation omitted & emphasis added).

The distribution of the property in this case largely hinged on whether the parties' assets were pre-marital or marital, that is, whether the property was acquired, respectively, before or during the marriage. Therefore, the trial court was required to classify the property appropriately, distributing the marital assets equitably between the parties and allowing "each party [to] retain . . . the separate [or pre-marital] property he or she brought into the marriage, including any appreciation of the separate property." Id. (citations omitted). In addition, the trial court was required to consider the exceptions to the general rule that each party retain his or her own pre-marital property including "whether the property has been commingled, whether the other spouse has by his or her efforts augmented, maintained, or protected the separate property, and whether the distribution achieves a fair, just, and equitable result." Id. (citation omitted).

Although the trial court entered extensive findings of fact regarding the parties' property, many of these findings were inconsistent and failed to specifically address whether the parties' assets were pre-marital or marital. For example, in finding 15 of its Supplemental Findings of Fact and Conclusion of Law, the trial court acknowledged that "[n]either party maintained a separate accounting for their premarital assets . . . [and that] separate monies and efforts of both parties have been involved in preserving and enhancing the overall financial circumstance of the parties." However, the trial court then goes on to "recognize premarital contributions," awarding the parties property with the approximate value of their respective pre-marital assets. This finding appears to recognize commingling of the assets and their proceeds, and financial contribution by both from marital income and assets to enhance and preserve what may have been pre-marital property of one, but awards property in a manner inconsistent with this finding. Because of this conflict in the findings, and because the trial court's property distribution is not adequately supported by findings addressing the pre-marital or marital status of the parties' property, we remand this issue to the trial court for appropriate findings and redistribution of property consistent with this opinion.

2. McDowell's Income

Starley further maintains that the trial court erred in failing to enter adequate findings of fact regarding McDowell's gross income for child support purposes. We disagree. Trial courts have broad discretion in calculating income for child support purposes, and we will affirm the trial court's determination absent an abuse of discretion. See Breinholt v. Breinholt, 905 P.2d 877, 881-82 (Utah Ct. App. 1995). McDowell is self-employed and, therefore, his gross income for child support purposes is calculated by "subtracting necessary expenses required for self-employment . . . from gross receipts." Utah Code Ann. § 78-45-7.5(4)(a) (Supp. 1997). At trial, McDowell's income and expenses were analyzed by an experienced CPA who estimated that McDowell's adjusted gross income for 1995 was $76,081. The court explained that although McDowell's income for a particular period may be significantly higher, much of what he earns must be reinvested into his business in order to survive. In addition, the court acknowledged that certain tax exemptions were available to McDowell through his business, ultimately arriving at $80,000 as McDowell's gross income. Thus, we conclude the trial court fully complied with the statutory requirements in calculating McDowell's income and adequately supporting its findings on this issue.

3. Alimony Award

Starley also argues the trial court abused its discretion in failing to support its award of alimony for a period of one year with adequate findings of fact. We agree. On appeal from an award of alimony, we review the trial court's decision for an abuse of discretion. See Griffith v. Griffith, 959 P.2d 1015, 1019 (Utah 1997). It is well settled in Utah that a trial court must consider at least the following factors in awarding alimony: "(i) the financial condition and needs of the recipient spouse; (ii) the recipient's earning capacity or ability to produce income; (iii) the ability of the payor spouse to provide support; and (iv) the length of the marriage." Utah Code Ann. § 30-3-5(7)(a) (1998); see also Thronson v. Thronson, 810 P.2d 428, 435 (Utah Ct. App. 1991). We further stress that the fundamental purpose of alimony "is to enable the receiving spouse to maintain
as nearly as possible the standard of living enjoyed during the marriage . . . ." Paffel v. Paffel, 732 P.2d 96, 100 (Utah 1986).

The trial court in this case based its award of alimony on the "large disparity in the assets awarded to the respective parties [and] the need of plaintiff to adjust her circumstances." The findings are not sufficiently detailed to establish Starley's financial condition and needs, her ability to provide sufficient income for these needs, and McDowell's ability to provide support. In addition, the findings do not address the issue of the parties' standard of living during and after the marriage. Because the trial court failed to consider the requisite factors, we are unable to determine whether the one year alimony award allows Starley to maintain the same standard of living as during the marriage. Therefore, we remand this issue to the trial court for adequate findings and, if necessary, an appropriate adjustment of the alimony award.

4. Child Support

We next address Starley's contention that the trial court abused its discretion by failing to require McDowell to pay half the cost of nanny services and private schooling. Again, we disagree. We will not disturb a trial court's decision regarding child support unless there has been an abuse of discretion. SeeHill v. Hill, 841 P.2d 722, 724 (Utah Ct. App. 1992).

In Utah, each parent is required to "share equally the reasonable work-related child care expenses . . . ." Utah Code Ann. § 78-45-7.16 (1) (1996) (emphasis added). Following this statutory directive, the trial court ordered each party to share equally the expenses of traditional day care and stated that if the parties agreed upon private schooling or nanny services, the costs must be evenly allocated. However, the trial court determined that private school and nanny services were unreasonable luxury expenses which the parties could no longer afford. Starley has offered no evidence to indicate that public education or traditional day care would not adequately meet the children's needs. Thus, we affirm the trial court's decision on this issue.

5. Attorney Fees

Finally, McDowell argues the trial court abused its discretion in awarding attorney fees to Starley. In addition, Starley requests attorney fees on appeal. The decision to award attorney fees in divorce cases is within the sound discretion of the trial court, but the award "must be based on the reasonableness of the requested fees, as well as the financial need of the receiving spouse." Crouse v. Crouse, 817 P.2d 836, 840 (Utah Ct. App. 1991). In addition, when a party who was awarded attorney fees at trial also prevails on appeal, "the party is also entitled to fees reasonably incurred on appeal." Utah Dep't of Social Servs. v. Adams, 806 P.2d 1193, 1197 (Utah Ct. App. 1991).

A trial court's decision to award attorney fees in a divorce action "must be based on evidence of the financial need of the receiving spouse, the ability of the other spouse to pay, and the reasonableness of the requested fees." Marshall v. Marshall, 915 P.2d 508, 517 (Utah Ct. App. 1996) (citation omitted); see also Utah Code Ann. § 30-3-3 (1995). The failure of the trial court to consider any of these factors is grounds for reversal on the issue of attorney fees. See Marshall, 915 P.2d at 517. Although the trial court's award of attorney fees reflected adequate consideration of the requisite factors, the classification and potential redistribution of property will likely alter the court's findings on the fee issue. In other words, it is probable that the trial court's ultimate property distribution will affect Starley's ability to pay her own fees. Therefore, we remand this issue to the trial court for appropriate findings and adjustment of the award of attorney fees based on any redistribution of property and the other relevant factors.

Affirmed in part, reversed in part, and remanded for further proceedings consistent with this decision. On remand, unless both parties and the trial court agree, it is unnecessary to conduct a retrial of the issues remanded. Given that the original trial judge has since left the bench, we presume a new trial judge will be required to hear the matter. We anticipate that a careful review of the prior transcript and argument by counsel for the parties will suffice.
 
 

_____________________________
Michael J. Wilkins,
Presiding Judge

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WE CONCUR:
 
 

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Pamela T. Greenwood,
Associate Presiding Judge
 
 

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Judith M. Billings, Judge