Nielsen v. Nielsen

----ooOoo----

Laree R. Nielsen,
Plaintiff and Appellee,

v.

Robin A. Nielsen and Rod Nielsen,
Defendants and Appellants.

MEMORANDUM DECISION
(Not For Official Publication)

Case No. 981667-CA

F I L E D
February 17, 2000
  2000 UT App 37 -----

Fourth District, Provo Department
The Honorable Steven L. Hansen

Attorneys:
Shawn D. Turner, Salt Lake City, for Appellants
Robert L. Moody, Provo, for Appellee

-----

Before Judges Greenwood, Davis, and Orme.

DAVIS, Judge:

"On appeal from a bench trial, we view the evidence in a light most favorable to the trial court's findings . . . ." Lake Philgas Serv. v. Valley Bank & Trust Co., 845 P.2d 951, 953 n.1 (Utah Ct. App. 1993). Further, it is well settled that "[w]e do not reverse a trial court's findings of fact unless they are clearly erroneous," and "[w]e review a trial court's conclusions of law for correctness." Young v. Young, 979 P.2d 338, 342 (Utah 1999). Moreover, "[w]hen challenging a trial court's findings, '[a]n appellant must marshal the evidence in support of the findings and then demonstrate that despite this evidence, the trial court's findings are so lacking in support as to be "against the clear weight of the evidence."'" Id. (citations omitted; second alteration in original).

Defendants argue that the trial court erred in determining the amount Robin owes for past due child support and alimony. The trial court determined that Robin owed Laree a total of $76,137.99.(1) This amount included $11,616.44 for incomplete payment of Laree's share of Robin's retirement funds and $64,521.55 for child support and alimony arrearages. The court based the $11,616.44 retirement funds figure on a May 15, 1987 judgment (1987 judgment) of $13,815.74,(2) less a payment made by Rod on Robin's behalf totaling $10,288.93, plus post-judgment interest on the remaining balance of $3,526.81 at the rate of 12% per annum, which interest totaled $8,089.63 as of February 1998. The court based the $64,521.55 amount for child support and alimony arrearages on a February 1, 1988 judgment (1988 judgment) of $8,000;(3) amounts accruing as of December 1987 at $100 per month for alimony and $100 per month per child (until each child reached the age of eighteen); plus interest on the total unpaid balance each month at a rate of 7.23% per annum.

Defendants first contend the court made mathematical errors in calculating the amount of child support and alimony in arrears. Defendants point to their illustration which shows that the total alimony and child support due from July 1984 to July 1998 was $44,000--i.e., $17,600 for alimony and $26,400 for child support--in contradistinction to the $64,521.55 determined by the trial court. This discrepancy, however, is partially accounted for. First, defendants examine only the obligation as determined in the divorce decree and the May 1987 decree modification as of the date the modification was entered. The court's findings, however, take into account the 1988 judgment when the court found that Robin owed $8,000 alimony and child support for the period from August 1986 to November 1987. The discrepancy occurs because, according to defendants' illustration, the change of his child support obligation (from $200 to $400 per month) began on June 1, 1987, whereas under the decree modification, the change was actually effective July 18, 1986. The 1988 judgment and the trial court's determination here both account for the correct effective date of the modified decree. Defendants' illustration is simply inaccurate.

Second, defendants' illustration also differs from the trial court's determination because the illustration does not account for interest on the unpaid alimony and child support. This interest has accrued since December 1987 and partially accounts for the discrepancy between the trial court's determination and the principal alone in defendants' illustration. See Utah Code Ann. § 15-1-4 (1999) (authorizing interest on judgments); id. § 30-3-10.6(1)(a) (1998) (providing that "[e]ach payment or installment of child or spousal support under any child support order . . . is, on and after the date it is due . . . a judgment"); Stroud v. Stroud, 758 P.2d 905, 906 (Utah 1988) (holding that interest accrues on child support arrearages until paid); Hoagland v. Hoagland, 852 P.2d 1025, 1029 (Utah Ct. App. 1993) (holding that interest accrues on unpaid alimony arrearages).

Nonetheless, it appears that although interest is appropriate, the method by which the court calculated the interest is in error. Regarding the 1987 judgment, the court correctly applied the 12% interest rate that was effective at the time the judgment was entered.(4) See Utah Code Ann. § 15-1-4(3)(b) (1999) ("The postjudgment interest rate in effect at the time of the judgment shall remain the interest rate for the duration of the judgment."). Regarding both the 1987 and 1988 judgments, however, the court erred by compounding the interest. See Estate Landscape & Snow Removal Specialists, Inc. v. Mountain States Tel. & Tel. Co., 793 P.2d 415, 420 (Utah Ct. App. 1990), rev'd on other grounds, 844 P.2d 322 (Utah 1992). Accordingly, although the court made no mathematical errors, we conclude the methodology it employed in arriving at the $76,137.99 total judgment was flawed and reverse the judgment in this respect. On remand, the court should recalculate the total judgment without compounding the interest.

Defendants next argue that the 1987 and 1988 judgments had expired and therefore the court erred by including them in its determination of the amount Robin owes Laree. We conclude the 1987 and 1988 judgments were properly renewed. This action was commenced March 7, 1995, at which time the statute of limitations on the 1987 and 1988 judgments had not expired. See Utah Code Ann. § 78-12-22(1) (1996) (providing that an action may be brought upon a judgment or decree within eight years). Assuming the complaint was insufficient to state a cause of action to renew the 1987 and 1988 judgments, the court granted Laree's motion to amend the complaint to renew the judgments at trial February 9, 1998.(5) See Utah R. Civ. P. 15(b). Although this was done after expiration of the limitations period, such amendment relates back to the filing of the original complaint. See Utah R. Civ. P. 15(c); Sulzen v. Williams, 977 P.2d 497, 501 (Utah Ct. App. 1999). Consequently, the 1987 and 1988 judgments were renewed and the court did not err in including the amounts Robin owed to Laree from those judgments as part of the judgment in this case.

We also reject defendants' argument that the trial court erred in finding that Robin did not prove an entitlement to the $3,500 insurance proceeds which would be offset against his arrearages. We review for clear error the trial court's rejection of defendants' claim because it was not persuaded by the evidence. See Sorenson v. Kennecott-Utah Copper Corp., 873 P.2d 1141, 1144 (Utah Ct. App. 1994). The trial court found there was insufficient evidence that Robin owned the car when the accident occurred. Although title to the automobile remained in Robin's name, this finding is supported by the divorce decree that awarded ownership to Laree and testimony that indicated Robin was sent the check by the insurance company only because the name on the title had not been changed. See Lake Philgas Serv., 845 P.2d at 957 (holding that name on registration and title "establishes only a presumption of ownership, rebutted by legally relevant evidence presented at trial and deemed credible by the court"). Because the court's finding is supported by the evidence, and it is not clearly erroneous, we will not disturb it on appeal.(6)

Defendants also challenge the court's determination that the original decree's intent was that the household items accompany the house for the childrens' benefit and thus Robin was not entitled to an offset for the value of such personal property retained by Laree. This court reviews the trial court's interpretation of a prior judicial decision for correctness. See State v. Montoya, 887 P.2d 857, 858 (Utah 1994).

In awarding personal property, the divorce decree provided with respect to Robin, "Defendant is awarded all household furniture and furnishings, personal effects and clothing and personal effects and clothing of the minor children residing immediately with him and all other personal property in his possession." This paragraph awards four categories of property to Robin: (1) the household furniture and furnishings; (2) his personal effects and clothing; (3) the childrens' personal effects and clothing; and (4) other property in his possession. By its plain language, the decree places no conditions or restrictions on Robin's right to the personal property. The modified divorce decree provided only that Laree may occupy the home and did not transfer title of the household furniture and furnishings to Laree. It cannot be said that based on the decree and modification Robin held title to the household furniture and furnishings only so long as he resided in the house and had custody of the children. The trial court, however, made no findings as to the value of the property at the time Laree received it. Consequently, we reverse and remand for further proceedings to determine the value of the household goods when received by Laree to be credited against the arrearages owed Laree.(7)

Finally, we turn to defendants' argument that the court erred in imposing a constructive trust, determining that Rod thus held only a legal interest for Robin's benefit, and quieting title to the home in Laree. This court reviews the imposition of a constructive trust for an abuse of discretion and "will only conclude the trial court abused its discretion if the ruling was 'beyond the limits of reasonability.'" Tolman v. Winchester Hills Co., 912 P.2d 457, 462 (Utah Ct. App. 1996) (citation omitted). "A constructive trust is an equitable remedy to prevent unjust enrichment in the absence of any express or implied intention to form a trust." Id. First, defendants have not demonstrated that because Laree was not a party to the quitclaim deed, she may not enforce a constructive trust. "[A] constructive trust may arise 'where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it . . . .'" Parks v. Zions First Nat'l Bank, 673 P.2d 590, 599 (Utah 1983) (quoting Restatement of Restitution § 160 (1937)) (omission in original). In Parks, the court relied on a Delaware case in which the court found there was a constructive trust in favor of a husband when his wife transferred property in which the husband had an interest to her relative before her death. See id. (citing Adams v. Jankouskas, 452 A.2d 148 (Del. 1982)). Notwithstanding that the husband in Adams, like Laree, was not a party to the transfer, the Parks court agreed that the trial court properly imposed a constructive trust where equity required. See id. at 599-600. We conclude that the trial court here did not abuse its broad discretion in determining that equity required the imposition of a constructive trust transferring title from Rod to Robin.(8)

Further, defendants incorrectly assert that Laree's action for constructive trust is barred by the three year statute of limitations in Utah Code Ann. § 78-12-26(3) (1996), as an action based on fraud. Unlike Laree's claim based on fraudulent conveyance, for which the court granted partial summary judgment in favor of defendants, her claim for constructive trust sounds in equity and therefore falls within the catch-all, four year statute of limitations in Utah Code Ann. § 78-12-25(3) (1996). See American Tierra Corp. v. City of W. Jordan, 840 P.2d 757, 761 (Utah 1992). The trial court found that Laree first discovered the conveyance to Rod on May 15, 1991, pursuant to her application for a loan, a factual finding that defendants do not dispute on appeal. See Sevy v. Security Title Co., 902 P.2d 629, 634 (Utah 1995) ("We hold that the issue of when a claimant discovered or should have discovered the facts forming the basis of a cause of action is a question of fact, and the fact finder's conclusion cannot be overturned on appeal unless it is clearly erroneous."). Although the record shows Laree may have had constructive notice of the deed when it was recorded, defendants have failed to marshal any evidence that she had actual or constructive notice of the facts which would justify imposing the constructive trust before May 15, 1991. See id. ("The discovery rule is an exception to the general rule, and it delays the running of the limitation period '"until the discovery of facts forming the basis for the cause of action."'") (citations omitted); see also Baldwin v. Burton, 850 P.2d 1118, 1195-97 (Utah 1993) (holding that although deed was recorded, limitations period commenced when claimant should have acquired knowledge that transfer was fradulent). Because defendants have not shown the limitations period commenced before May 15, 1991, we cannot say that Laree's claim for constructive trust, filed within four years on March 7, 1995, was barred.

In sum, we affirm the trial court's judgment except to the extent that it incorrectly calculated the interest and failed to properly value Robin's household furniture and furnishings, on which points we reverse and remand. On remand, the court should recalculate the total owed to Laree, make factual findings as to the value of said personal property when received by Laree, offset the same against amounts due Laree, and recalculate its judgment accordingly.

Affirmed in part, reversed in part, and remanded for further proceedings.
 
 
 
 

______________________________
James Z. Davis, Judge -----

WE CONCUR:
 
 
 
 

______________________________
Pamela T. Greenwood,
Presiding Judge
 
 
 
 

______________________________
Gregory K. Orme, Judge

1. The court found that Robin had made no payments for child support or alimony since November 1987.

2. Laree obtained this judgment when she successfully petitioned to modify the divorce decree, based on the changed circumstances that Robin was incarcerated. The judgment for the retirement funds was ordered because Robin had liquidated the fund of which Laree was entitled to one-half. The modification also awarded Laree custody of the children, lowered Robin's child support obligations to $100 per month per child ($400), and lowered his alimony obligation to $100 per month.

3. The court found that Robin made no objection to this judgment at the time it was rendered. This judgment represented $6,400 for child support due from August 1986 to November 1987 at $400 per month--i.e., $100 per child per month--and $1,600 alimony due during the same period at $100 per month.

4. The record is unclear as to how Laree arrived at the 7.23% per annum interest rate in preparing the exhibit on which the court relied. On remand the court should verify whether this rate correctly applies to the 1988 judgment and the child support and alimony arrearages accruing during the years thereafter.

5. Defendants argue the court abused its discretion in allowing amendment under Rule 15(b), Utah Rules of Civil Procedure, because amendment would prejudice defendants, who were unprepared to argue items of payment or set-off or show that the judgments were in error. However, the court specifically found that defendants were not prejudiced by the amendment. See Fibro Trust, Inc. v. Brahman Fin., Inc., 974 P.2d 288, 292 (Utah 1999). Although the pretrial order was not signed by the trial court, it was signed by counsel for plaintiff and defendants and put Robin on notice of Laree's intention to pursue the judgments, especially by listing such judgments both as part of Laree's claims and as uncontested facts. Consequently, the court acted within its discretion in permitting the amendment.

6. We further reject defendants' contention that the unsigned pretrial order bound the court to conclude that Robin owned the vehicle and was therefore entitled to an offset for the insurance proceeds. The language in the order indicates only that Laree received the insurance proceeds; it does not stand for the proposition that Robin owned the vehicle or was otherwise entitled to the proceeds.

7. We reject Laree's contention that Robin's offset claims are barred by the statute of limitations. Even if Robin would be barred from asserting such claims as a plaintiff in a separate action, under Rule 13(i), Utah Rules of Civil Procedure, he may nonetheless "utilize a counterclaim, normally barred by the statute of limitations, to offset a plaintiff's claim, but only to the extent the claims equal each other," so long as the claims coexisted. Coulon v. Coulon, 915 P.2d 1069, 1072 (Utah Ct. App. 1996); see Jacobsen v. Bunker, 699 P.2d 1208, 1210 (Utah 1985).

8. Defendants did not appeal the propriety of the implementation of the trust which in effect transferred his interest in the home back to Robin and then awarded Robin's interest to Laree by quieting title, essentially relieving Laree from the need to execute on her judgment. Notwithstanding, should recalculation of amounts due Laree show Robin's entitlement to net affirmative relief, the same should be ordered.