Bradford v. Bradford
Annotate this Casepublication in the Pacific Reporter.
IN THE UTAH COURT OF APPEALS
----ooOoo----
George R. Bradford,
Plaintiff and Appellee,
v.
Andrea O. Bradford and
James A. Demita,
Defendants and Appellants.
OPINION
(For Official Publication)
Case No. 981745-CA
F I L E D
December 16, 1999
1999 UT App
373
-----
Fourth District, Provo Department
The Honorable Steven L.
Hansen
Attorneys:
Howard Chuntz, Orem, for
Appellants
Thomas R. Patton, Provo,
for Appellee
-----
Before Judges Greenwood, Bench, and Billings.
GREENWOOD, Associate Presiding Judge:
¶ 1.
Mr. George K. Bradford filed
for divorce from his wife, Mrs. Andrea O. Bradford, on June 10, 1997. In
the same complaint, he alleged Mrs. Bradford had fraudulently conveyed
a property interest in the couple's home to her son, Mr. James A. Demita,
a named defendant. This appeal thus arises from two related cases tried
together by agreement of the parties and the trial court. Mrs. Bradford
appeals the trial court's order setting aside her conveyance of her interest
in the home to Mr. Demita and the trial court's order awarding the home
entirely to Mr. Bradford. We affirm the order setting aside the conveyance,
but reverse the award of the home to Mr. Bradford and remand for further
proceedings regarding property division between Mr. and Mrs. Bradford.
RELEVANT FACTS
¶ 2.
The Bradfords were married
in June 1985. Each had been married once before, and each had at least
one child from the prior marriage. No children were born of their marriage
to each other.
¶ 3.
During their marriage, the
couple lived in Mr. Bradford's home located in Spanish Fork, Utah. Mr.
Bradford was raised in this home, which his grandfather and father both
owned before him. Before marrying Mrs. Bradford, he received title to the
home from his father as a gift. Several improvements were made to the home
during the couple's marriage, including a repaired roof and septic system,
the addition of a new furnace, and plumbing work connecting the home to
the city's water supply. Mr. Bradford paid for these improvements with
funds he received before the marriage as part of a settlement with Geneva
Steel. Mrs. Bradford's only contribution to the improvements consisted
of making phone calls and arranging for the work to be done. The undisputed
present estimated value of the home is $180,000.
¶ 4.
In 1989, approximately four
years after they married, Mr. Bradford transferred the home by way of warranty
deed to himself and his wife as "joint tenants with full rights of survivorship
and not as tenants in common." Three years later, however, Mr. Bradford
filed for divorce and asked that the home and real property be awarded
to him. That action was dismissed in 1993 after the parties reunited.
¶ 5.
The couple continued to
have marital difficulties, and Mr. Bradford threatened divorce many times.
Nevertheless, in 1996, the couple engaged in a joint business venture with
Mrs. Bradford's son, Mr. Demita, to develop property, upon which the home
was located. Mr. Demita was to receive twenty-five percent of the profits
for his assistance in developing the property. At the time of this business
arrangement, Mr. Demita was living with the Bradfords and had done so rent-free
since December 1995.
¶ 6.
In July 1996, shortly after
the property venture began, Mr. Bradford arrived home to find several engineers
in the house. He was upset with the slow progress of the project and had
an argument with Mrs. Bradford. This time, the argument was severe, and
the couple again discussed divorce.
¶ 7.
On August 8, 1996, Mrs.
Bradford transferred her interest in the home by way of quit claim deed
to her son, Mr. Demita. She later claimed this transfer was for "estate
planning purposes." Mr. Demita gave Mrs. Bradford $10 as consideration
for the property transfer. Neither Mrs. Bradford nor Mr. Demita told Mr.
Bradford about this transaction, and Mrs. Bradford continued to live in
the home. Mr. Bradford discovered the existence of the quit claim deed
several months later when his daughter went to the County Recorder's Office
to verify Mr. Demita's representations that the home and property had been
rezoned for development. She found the quit claim deed and discovered the
property, in fact, had not been rezoned.
¶ 8.
On June 10, 1997, soon after
he learned about the deed to Mr. Demita, Mr. Bradford filed a complaint
for divorce against Mrs. Bradford and included Mr. Demita as a party to
the action. After a bench trial, the court awarded Mr. Bradford a divorce.
The trial court also found that the transfer between Mrs. Bradford and
Mr. Demita was fraudulent and set aside the conveyance. In awarding the
subject property, the trial court concluded the house and real property
were not partitionable and would have to be refinanced or sold if awarded
to both Mr. Bradford and Mrs. Bradford. The court thus awarded the home
and the real property to Mr. Bradford. In addition, the court awarded Mrs.
Bradford alimony in the amount of $600 a month and divided equally the
remaining marital property, including bank accounts, an IRA account, retirement
funds, and the cash value of an insurance policy.
¶ 9.
Mrs. Bradford moved the
trial court to amend its findings of fact and conclusions of law, but the
court denied her motion. Mrs. Bradford and her son then filed this appeal.
ISSUES AND STANDARDS OF REVIEW
¶ 10.
This case involves three
critical issues. First, did Mrs. Bradford's conveyance of her joint tenancy
interest in the home constitute a fraudulent transfer? Because this issue
involves both questions of law and of fact, we review the trial court's
findings of fact for clear error. See Jeffs v. Stubbs, 970 P.2d 1234, 1244 (Utah 1998). "In contrast, we review a trial court's conclusions
as to the legal effect of a given set of found facts for correctness."
Id. (citing State v. Pena, 869 P.2d 932, 936 (Utah 1994)).
Nevertheless, "[w]e may still grant the trial court discretion in its application
of the law to a given fact situation." Id.
¶ 11.
Second, if the transfer
was fraudulent, and therefore void, was the nature of the property marital
or separate? This issue primarily presents a question of law; therefore,
we review the trial court's legal conclusions concerning the nature of
property for correctness. See Jefferies v. Jefferies, 895 P.2d 835, 836 (Utah Ct. App. 1995) (considering whether 401(k) plan is
marital property).
¶ 12.
Third, did the trial court
properly award the subject property entirely to Mr. Bradford? In deciding
this question, we acknowledge that "[t]rial courts have considerable discretion
in determining alimony and property distribution in divorce cases, and
will be upheld on appeal unless a clear and prejudicial abuse of discretion
is demonstrated." Howell v. Howell, 806 P.2d 1209, 1211 (Utah Ct.
App. 1991).
ANALYSIS
I. Fraudulent Conveyance
¶ 13.
We first address the fraudulent
conveyance issue. The trial court concluded the transfer was fraudulent
under the Uniform Fraudulent Transfer Act, see Utah Code Ann. §§
25-6-1 to -13 (1998), and declared the transfer void.
¶ 14.
A fraudulent transfer in
Utah first requires a creditor-debtor relationship. Essentially, a fraudulent
transfer occurs when a debtor transfers substantially all his or her assets
to another to defraud a creditor or avoid a debt. A "creditor," according
to section 25-6-2(4), "means a person who has a claim." A "'claim' means
a right to payment, whether or not the right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured." Utah Code
Ann. § 25-6-2(3) (1998) (emphasis added); see also Zuniga
v. Evans, 87 Utah 198, 206, 48 P.2d 513, 516 (1935) (holding persons
having tort claim against grantor that was not reduced to judgment at time
of conveyance are "creditors").
¶ 15.
Although no Utah cases directly
address whether a husband or wife becomes a creditor of his or her spouse
when contemplating divorce, the Oregon Supreme Court's statement on the
subject is helpful to our analysis:
In Weber v. Rothchild,
15 Or. 385, 388-89, 15 P. 650, 2 Am. St. Rep. 162 (1887), we held that
a person in the position of plaintiff may maintain a suit to set aside
a transaction which may defeat her recovery and rights in a contemplated
suit for divorce. This rule prevails in other jurisdictions that have considered
the matter.
We conclude, as did the
trial court, that the conveyance by deed of April 14, 1972, was obtained
by fraud to hinder or prevent plaintiff's recovery of [defendant's] equitable
interest in the fourplex, in the divorce suit, and is therefore set aside
and held to be void.
Adamson v. Adamson, 541 P.2d 460, 466 (Or. 1975) (citations omitted).
¶ 16.
In this case, the trial
court determined that "[p]ursuant to Utah Code Ann. § 25-6-2(4) and
§ 25-6-5 Mr. Bradford is a creditor of Mrs. Bradford in that he has
a claim to the real property which Mrs. Bradford deeded to her son, Mr.
Demita." The trial court based this conclusion on the fact that Mr. Bradford
had threatened divorce just weeks before Mrs. Bradford made the transfer.
That conclusion is consistent with the Oregon Supreme Court's analysis
in Adamson, which we adopt. In our view, the trial court correctly
concluded Mr. Bradford was, indeed, a creditor of Mrs. Bradford, given
that his claim to the house--although not reduced to judgment in a divorce
proceeding--had arisen through recent threats of divorce. We note this
conclusion is consistent with our supreme court's admonition to construe
the statute liberally "to reach all artifices and evasions designed to
rob the Act of its full force and effect." Butler v. Wilkinson,
740 P.2d 1244, 1260 (Utah 1987); see also Givan v. Lambeth,
10 Utah 2d 287, 291, 351 P.2d 959, 962 (1960) ("'[A]ll statutes made against
fraud should be liberally and beneficially expounded to suppress the fraud.'")
(quoting Twyne's Case, 76 Eng. Rep. 809 (1601)).
¶ 17.
Having concluded Mr. Bradford
is a creditor of Mrs. Bradford, we next examine whether Mrs. Bradford made
a fraudulent transfer of her joint tenancy interest to her son. According
to Utah's Fraudulent Transfer Act, "A transfer made . . . by a debtor is
fraudulent as to a creditor, whether the creditor's claim arose before
or after the transfer was made . . . , if the debtor made the transfer
. . . (a) with actual intent to hinder, delay, or defraud any creditor
of the debtor." Utah Code Ann. § 25-6-5(1) (1998).
¶ 18.
A creditor who claims a
debtor transferred property with actual intent to defraud under section
25-6-5(1)(a) must establish that claim by clear and convincing evidence.
See Territorial Sav. & Loan Ass'n v. Baird, 781 P.2d 452, 462 (Utah Ct. App. 1989). Nevertheless, "[f]raudulent intent is ordinarily
considered a question of fact, and 'may be inferred from the presence of
certain indicia of fraud or "badges of fraud."'" Id. at 462 (quoting
Dahnken, Inc. v. Wilmarth, 726 P.2d 420, 423 (Utah 1986)) (other
citations and footnotes omitted). Utah's statute codifies those factors
historically considered by the common law as indicia or badges of fraud
in section 25-6-5(2), which states:
To determine
"actual intent" under Subsection (1)(a), consideration may be given, among
other factors, to whether:
(a) the transfer
or obligation was to an insider;[(1)]
(b) the debtor retained
possession or control of the property transferred after the transfer;
(c) the transfer or obligation
was disclosed or concealed;
(d) before the transfer
was made or obligation was incurred, the debtor had been sued or threatened
with suit;
(e) the transfer was of
substantially all the debtor's assets;
. . .
(h) the value of the consideration
received by the debtor was reasonably equivalent to the value of the asset
transferred . . . .
See also Paxton v.
Paxton, 80 Utah 540, 553, 15 P.2d 1051, 1056 (1932) (holding conveyances
between near relatives, calculated to prevent creditor from realizing on
claim, are subject to rigid scrutiny); Givan, 351 P.2d at 962 (holding
transactions among close relatives receive close scrutiny but close relationship
does not necessarily mean transaction is invalid).
¶ 19.
The trial court used these
factors in concluding Mrs. Bradford had actual intent to defraud Mr. Bradford.
Specifically, the trial court found "that the transfer was concealed from
Mr. Bradford, Mrs. Bradford continues to live in the house as before, Mr.
Bradford had threatened Mrs. Bradford with divorce a matter of weeks before
the transfer, and the transfer was substantially all of the assets that
Mrs. Bradford believed that she had."
¶ 20.
We, too, conclude these
badges of fraud are adequate to show actual intent by Mrs. Bradford to
fraudulently convey her interest to her son. Accordingly, we affirm the
trial court's findings (including those denominated as conclusions) that
the transfer was fraudulent and void. See Utah Code Ann. §
25-6-8(1)(a) (1998).
II. Nature of Property
¶ 21.
Our conclusion that the
transfer is void necessarily restores the joint tenancy title to the home
in Mr. and Mrs. Bradford. Nevertheless, Mr. Bradford argues the property
should be treated as separate property because he inherited it, brought
it into the marriage, and maintained and improved it. The trial court,
he contends, was therefore correct in awarding the subject property to
him despite its joint tenancy status.
¶ 22.
Utah law provides that a
spouse may transfer his or her interest in separately acquired property
into the marital estate. See Utah Code Ann. § 30-2-3 (1998).
A transfer of otherwise separate property to a joint tenancy with the grantor's
spouse is generally presumed to be a gift, see 41 C.J.S. Husband
and Wife § 103(a), at 397 (1991) (citing Kramer v. Kramer,
709 S.W.2d 157, 159 (Mo. Ct. App. 1986)), and, when coupled with an evident
intent to do so, effectively changes the nature of that property to marital
property. See Mortensen v. Mortensen, 760 P.2d 304, 307-08
(Utah 1988); see also Bonnell v. Bonnell, 344 N.W.2d 123,
126 (Wis. 1984) (stating spouse may transfer separate property into marital
estate and "separate property transferred into joint tenancy becomes part
of the marital estate"); cf.Jesperson v. Jesperson, 610 P.2d 326,
328 (Utah 1980) (finding trial court did not abuse discretion in awarding
home held in joint tenancy to wife when "there was no intention by [wife]
to create a one-half property interest in [husband], nor any expectation
by [husband] that he had received a one-half property interest").
¶ 23.
In Mortensen, our
supreme court considered how property inherited during a marriage should
be divided upon divorce. After examining the law in other jurisdictions,
the court announced that, as a general rule, "property acquired by one
spouse by gift and inheritance during the marriage [should be awarded]
to that spouse, together with any appreciation or enhancement of its value."
Mortensen, 760 P.2d at 308;(2) see
also Haumont v. Haumont, 793 P.2d 421, 424 (Utah Ct. App. 1990)
("[E]quity [generally] requires that each party retain the separate property
he or she brought into the marriage."). This rule applies
unless (1) the other
spouse has by his or her efforts or expense contributed to the enhancement,
maintenance, or protection of that property, thereby acquiring an equitable
interest in it, . . . or (2) the property has been consumed or its identity
lost through commingling or exchanges or where the acquiring spouse
has made a gift of an interest therein to the other spouse.
Mortensen, 760 P.2d at
380 (emphasis in original).
¶ 24.
In this case, the record
is clear, and the trial court found, that Mr. Bradford conveyed his interest
in the home to himself and his wife as "joint tenants with full rights
of survivorship and not as tenants in common." According to the trial testimony,
Mr. Bradford intended at that time to give a one-half interest in the home
to his wife.(3) Nothing in the trial court's
findings or the record indicates otherwise. We therefore conclude the transfer
of Mr. Bradford's separate property to his wife as a joint tenant with
himself effectively transformed the subject property from Mr. Bradford's
separate property into marital property.
III. Property Award
¶ 25.
Our determination regarding
the property's nature does not end our inquiry, for we must also decide
whether the trial court properly awarded the home, even though marital
property, entirely to Mr. Bradford.
"We afford the trial
court 'considerable latitude in adjusting financial and property interests,
and its actions are entitled to a presumption of validity.' Accordingly,
changes will be made in a trial court's property division determination
in a divorce action 'only if there was a misunderstanding or misapplication
of the law resulting in substantial and prejudicial error, the evidence
clearly preponderated against the findings, or such a serious inequity
has resulted as to manifest a clear abuse of discretion.'"
Thomas v. Thomas, 375
Utah Adv. Rep. 23, 25 (Utah Ct. App. 1999) (quoting Watson v. Watson,
837 P.2d 1, 5 (Utah 1992) (quoting Naranjo v. Naranjo, 751 P.2d 1144, 1146 (Utah Ct. App. 1988))).
¶ 26.
Generally, in a divorce
proceeding "[e]ach party is presumed to be entitled to all of his or her
separate property and fifty percent of the marital property." Id.
(alteration in original) (citations and additional quotation marks omitted).
This presumptive rule of thumb, however, does not supersede the trial court's
broad equitable power to distribute marital property, regardless of who
holds title. SeeFinlayson, 874 P.2d at 849 ("'Both this court and
the Utah Supreme Court have long held that once a court has determined
something is marital property, the court may distribute it equitably, notwithstanding
which party's name appears on the title.'" (Citation omitted.)); Haumont,
793 P.2d at 424 n.1 ("[T]he trial court may, in the exercise of its broad
discretion, divide the property equitably, regardless of its source or
time of acquisition."); Naranjo, 751 P.2d at 1146 ("There is no
fixed formula upon which to determine a division of properties in a divorce
action."). A trial court may elect to distribute marital property unequally
when the circumstances and needs of the parties dictate a departure from
the general rule (e.g., to enable one party to fulfill an alimony or child
support obligation). See Thomas, 375 Utah Adv. Rep. at 25;
see also Burke v. Burke, 733 P.2d 133, 135 (Utah 1987) (holding
trial courts should be guided by general purpose of property division,
"which is to allocate the property in a manner which best serves the needs
of the parties and best permits them to pursue their separate lives");
Newmeyer v. Newmeyer, 745 P.2d 1276, 1279 n.1 (Utah 1987) ("In determining
whether a certain division of property is equitable, . . . the relative
abilities of the spouses to support themselves after the divorce are pertinent
to an equitable . . . division of the fixed assets of the marriage.");
Cox v. Cox, 877 P.2d 1262, 1269-70 (Utah Ct. App. 1994) (affirming
award to husband of marital home previously owned by husband but conveyed
to wife in joint tenancy just before marriage; trial court found marriage
was of short duration, no children were born, and couple married later
in life).
¶ 27.
An unequal division of marital
property, however, is only justified when the trial court "memorialize[s]
in commendably detailed findings" the exceptional circumstances supporting
the distribution. Thomas, 375 Utah Adv. Rep. at 25; see also
Haumont, 793 P.2d at 425 (holding property division must be supported
by adequate factual findings). In this case, the trial court's only finding
justifying the award of the home to Mr. Bradford was that "the house and
property is in fact not partitionable as it contains a residence, road
and river frontage. If an interest were to be conveyed the house would
have to be refinanced or sold."(4) This
finding is insufficient, by itself, to support an award of the marital
home entirely to Mr. Bradford. Trial courts often order a sale of marital
property and equitably divide the proceeds between the parties. See,
e.g., Workman v. Workman, 652 P.2d 931, 933 (Utah 1982). A trial
court may also allow one spouse to "buy out" the other spouse's interest
in marital property. See, e.g., id. The trial court made
no adequate finding explaining why either of these two remedies was not
appropriate for the parties in this case. Accordingly, we reverse the trial
court's award of the marital home solely to Mr. Bradford.
¶ 28.
Nevertheless, our role is
not to supplant the trial court's function in making a property distribution;
the trial court is in a much better position to determine a proper remedy.
Moreover, an award of the subject property in this case has an integral
relationship to the trial court's other orders concerning alimony and other
property. We therefore remand this case to the trial court to determine
these matters in light of our conclusion that the subject property is marital,
not separate, property.
______________________________
Pamela T. Greenwood,
Associate Presiding Judge
-----
¶ 29.
WE CONCUR:
______________________________
Russell W. Bench, Judge
______________________________
Judith M. Billings, Judge
1. The relevant portion of the Act includes in its definition of an "insider" a person who is "a relative of the debtor." Utah Code Ann. § 25-6-2(7)(a)(i) (1998).
2. Although the subject property in Mortensen was inherited during the couple's marriage, subsequent courts have applied the Mortensen ruling to property inherited before marriage. See, e.g., Finlayson v. Finlayson, 874 P.2d 843, 847 (Utah Ct. App. 1994) ("'"[E]ach party should, in general, receive the real and personal property he or she brought to the marriage or inherited during the marriage."'" (Quoting Mortensen, 760 P.2d at 306.) (Alteration in original.) (Other citations omitted.)).
3. Mr.
Bradford testified as follows:
Q: What do you remember
about [your discussion with your daughter concerning the joint tenancy]?
Did you ever have a concern that [Mrs. Bradford] would get all of the property
if you died first?
A: No, I didn't.
Q: You never worried about
that?
A: Well, I signed it expecting
that--her name on there expecting that she would only get half of it.
Q: And that was your intention,
wasn't it?
A: Yes.
4. We note,
also, that the parties at one time, at least, contemplated development
and sale of the property and had enlisted Mr. Demita's assistance in doing
so.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.