Dahl v. Dahl , 345 P.3d 566 ( 2015 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2015 UT 23
IN THE
S UPREME C OURT OF THE S TATE OF U TAH
CHARLES DAHL,
Petitioner and Appellee,
v.
KIM DAHL,
Respondent and Appellant.
KIM DAHL,
Appellant,
v.
MARLETTE ENTERPRISES, LLC; C. ROBERT DAHL,
DAHL FAMILY IRREVOCABLE TRUST ; and CHARLES DAHL,
Appellees.
Nos. 20100683, 20111077
Filed January 30, 2015
Fourth District, Provo Dep’t
The Honorable James R. Taylor
The Honorable Lynn W. Davis
Nos. 064402232, 090402989
Attorneys:
Steve S. Christensen, Craig L. Pankratz, Samuel J. Sorensen,
Salt Lake City, Sara Pfrommer, Park City,
for petitioner and appellant
Rosemond G. Blakelock, Ryan D. Petersen, Provo,
for respondent and appellee
JUSTICE PARRISH authored the opinion of the Court, in which
ASSOCIATE CHIEF JUSTICE NEHRING , JUDGE TODD M. SHAUGHNESSY,
and JUDGE W. BRENT WEST concurred.
JUSTICE DURHAM authored an opinion concurring in part and
dissenting as to Part III.C.2.d.
Having recused themselves, CHIEF JUSTICE DURRANT and
JUSTICE LEE did not participate herein; DISTRICT JUDGES
TODD M. SHAUGHNESSY and W. BRENT WEST sat.
DAHL v. DAHL
Opinion of the Court
JUSTICE PARRISH , opinion of the Court:
INTRODUCTION
¶1 These interrelated cases arise from the marriage dissolution
of Dr. Charles Dahl and Ms. Kim Dahl. On appeal of the divorce
case, Ms. Dahl challenges the district court’s substantive rulings on
alimony, child custody, and distribution of the marital estate. She
additionally challenges the district court’s rulings on judicial bias,
evidentiary issues, and attorney fees. Ms. Dahl also appeals the
outcome of a separate, but related, lawsuit involving marital assets
contained in the Dahl Family Irrevocable Trust (Trust). Although
these cases came before this court separately, we consolidate them,
sua sponte for the purposes of appeal and remand, based on our
conclusion that the Trust should have been joined as a party to the
divorce action.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 Due to the complex factual and procedural history of these
cases, we provide only a brief overview of the underlying facts here.
We will discuss the relevant facts in more detail below as they relate
to our resolution of the various issues.
¶3 Dr. Charles Dahl and Ms. Kim Dahl were married for
nearly eighteen years. Dr. Dahl is a practicing cardiologist. Ms.
Dahl earned a master’s degree in education and worked as an
interior designer and school counselor prior to her marriage to Dr.
Dahl. During the couple’s marriage, Ms. Dahl was the primary
caregiver to the couple’s two children, D.D. and C.D.,1 and did not
work outside the home.
¶4 Dr. Dahl filed for divorce on October 24, 2006. Following
years of pretrial proceedings, the divorce court conducted a bench
trial over fourteen nonconsecutive days, beginning in September
2009. The divorce court issued its Findings of Fact and Conclusions
of Law on April 5, 2010, and the Decree of Divorce was entered July
20, 2010.
¶5 The divorce proceedings were extremely contentious. The
parties fiercely disputed custody of their children, Ms. Dahl’s right
to temporary and permanent alimony, and the proper distribution
1
D.D. and C.D. were six and eleven years old, respectively, at the
time the divorce action was initiated.
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Opinion of the Court
of the marital estate. The discovery process was rife with abuses on
both sides, which delayed trial. The pretrial disclosure process was
similarly fraught and ultimately resulted in the exclusion of most of
Ms. Dahl’s trial exhibits and expert witnesses. The district court
aptly described the pretrial proceedings as a “train wreck.”
¶6 On appeal of the divorce action, Ms. Dahl asserts several
claims of error: (1) that the district court judge, Judge Taylor, was
biased against her; (2) that the district court abused its discretion in
various evidentiary rulings; (3) that the district court abused its
discretion when it failed to award Ms. Dahl temporary and
permanent alimony; (4) that the district court unfairly divided the
marital assets in favor of Dr. Dahl; (5) that the district court erred in
not considering joint custody of the couple’s children; and (6) that
the district court erred in not ordering Dr. Dahl to pay Ms. Dahl’s
attorney fees. We affirm in part, reverse in part, and remand for
further proceedings.
¶7 Ms. Dahl brought a separate action against the Trust,
Marlette Enterprises, L.L.C., Dr. Dahl’s real estate investment
company, and C. Robert Dahl, Dr. Dahl’s brother who served as the
Trust’s investment trustee (collectively Trust Defendants). In
essence, Ms. Dahl sought a share of the Trust assets, which she
claimed were marital property. Specifically, she sought declaratory
judgment as to the parties’ rights and obligations under the Trust,
arguing that the Trust was null and void, that the Trust was
revocable as a matter of law, that Ms. Dahl was a settlor of the Trust,
and that she was entitled to an accounting from the Trust. The
parties filed cross-motions for summary judgment, and the district
court granted the Trust Defendants’ motion, dismissing Ms. Dahl’s
claims. She asserts that the district court erred when it declared that
she had no enforceable interest in Trust assets. We agree and
therefore reverse.
¶8 Ms. Dahl’s appeals of both the divorce action and the trust
action came before the court of appeals. The court of appeals
certified both appeals to us. We have jurisdiction pursuant to
section 78A-3-102(3)(b) of the Utah Code.
ANALYSIS
I. CONSOLIDATION OF THE DIVORCE
AND TRUST ACTIONS
¶9 As an initial matter, we address Ms. Dahl’s failure to join
the Trust in the divorce action. Despite years of pretrial proceedings
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DAHL v. DAHL
Opinion of the Court
in the divorce action, counsel for Ms. Dahl failed to join the Trust as
a defendant. Then, just weeks before the start of the divorce trial,
Ms. Dahl’s attorneys initiated the separate lawsuit against the Trust.
The divorce court refused to consider the Trust assets in distributing
the marital estate, ruling that the eve of trial was too late to join a
new party and that it could not consider Trust assets that were the
subject of other pending litigation. Given Ms. Dahl’s failure to join
the Trust as a defendant in the divorce action, we do not fault the
divorce court for refusing to consider the Trust assets.
¶10 Courts may “make a legally binding adjudication only
between the parties actually joined in the action.” Hiltsley v. Ryder,
738 P.2d 1024, 1025 (Utah 1987); see also R.M.S. Corp. v. Baldwin, 576
P.2d 881, 883 (Utah 1978) (holding that no judgment could be
entered against a corporation not joined as a party before the court).
Because of Ms. Dahl’s failure to add the Trust as a party, the district
court was correct that it had no power to adjudicate the parties’
rights in the Trust assets.
¶11 The Trust assets included marital property. Without the
power to consider and distribute the Trust assets, the district court
lacked the authority to fully and fairly distribute the marital estate.
Accordingly, the Trust should have been joined as a party to the
divorce action.2 Counsel’s failure to join the Trust prevented the
district court from considering the Trust and its assets and therefore
prevented a complete distribution of the marital estate. But we are
now in a position to consider the Trust and its assets because both
the Trust and divorce cases are before us. And “appellate courts
may raise the issue [of joinder] sua sponte.” Hiltsley, 738 P.2d at 1025.
Accordingly, we hereby consolidate the Trust and divorce cases for
purposes of appeal.3 And we remand both cases to the district court
2
Rule 19(a) of the Utah Rules of Civil Procedure provides in
pertinent part: “A person who is subject to service of process and
whose joinder will not deprive the court of jurisdiction over the
subject matter of action shall be joined as a party in the action if . . . in
his absence complete relief cannot be accorded among those already
parties.” (Emphasis added).
3
Dr. Dahl filed a suggestion of mootness in the divorce action on
February 28, 2013, arguing that Ms. Dahl’s claims to a share of the
Trust assets were mooted by the grant of summary judgment in
favor of the Trust Defendants in the parallel Trust action. Because
(continued...)
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Opinion of the Court
that handled the divorce case and direct it to join the Trust as a party
to the divorce action.
II. THE TRUST ACTION
¶12 On July 31, 2009, Ms. Dahl brought an action seeking a
declaration of her rights in the Trust assets and requesting an
accounting of the Trust’s activities and a copy of the Trust
agreement. Following discovery, both parties moved for summary
judgment. The district court held a hearing on the parties’ cross-
motions on August 31, 2011. At the conclusion of the hearing, the
court instructed counsel for both parties to prepare orders consistent
with their respective positions. Ultimately, the district court granted
summary judgment in favor of the Trust Defendants and signed the
order prepared by their counsel.
¶13 In adopting the order, the district court held that the Trust
was irrevocable and that Ms. Dahl had no enforceable interest in the
Trust assets. Though the Trust agreement contained a choice-of-law
provision, the order did not specify whether the court was
construing the Trust according to Utah or Nevada law. But it
appears to have construed the Trust according to both Utah and
Nevada law.
¶14 On appeal, Ms. Dahl argues (1) that the district court erred
in its choice-of-law analysis, (2) that the court erred when it held that
the Trust was irrevocable and that Ms. Dahl had no enforceable
interest in Trust assets, and (3) that the district court exceeded its
authority when it opined that the statute of limitations had lapsed on
several claims not actually before it.4
¶15 Summary judgment is appropriate when “there is no
genuine issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law.” UTAH R. CIV . P. 56(c).
3
(...continued)
we are reversing the district court in the Trust action and consolidat-
ing these two cases on remand, Ms. Dahl’s claims against the Trust
are not moot.
4
Ms. Dahl also initially argued that the district court erred when
it granted summary judgment in favor of the Trust Defendants on
Ms. Dahl’s alter ego theory without first allowing her to conduct
further discovery. Because Ms. Dahl withdrew this challenge in her
reply brief, we do not address it.
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Opinion of the Court
Accordingly, we review the district court’s grant of summary
judgment for correctness and take “the facts and [any] inferences to
be drawn therefrom in the light most favorable to the nonmoving
party.” Peterson v. Coca-Cola USA, 2002 UT 42, ¶ 7, 48 P.3d 941.
¶16 Because Utah has a strong public policy interest in the
equitable division of marital assets, we will not enforce the choice-of-
law provision contained in the Trust. Instead, we construe the Trust
according to Utah law. We hold that the Trust is revocable under
Utah law and that Ms. Dahl has an interest in the Trust property as
a settlor of the Trust. We further hold that the district court erred
when it purported to adjudicate claims not properly before it. Before
we address Ms. Dahl’s specific claims of error, we first turn our
attention to an inconsistency in the district court’s order granting
summary judgment in favor of the Trust Defendants.
A. The District Court’s November 11, 2011 Order
Is Internally Inconsistent
¶17 The district court adopted the order drafted by counsel for
the Trust Defendants. That order was internally inconsistent. The
order first addressed Ms. Dahl’s request for declaratory judgment
concerning the rights and duties of the parties vis-à-vis the Trust.
After reviewing the law relating to declaratory judgment actions, the
order stated that the court could “refuse to render or enter a
declaratory judgment or decree where a judgment or decree, if
rendered or entered, would not terminate the uncertainty or
controversy” between the parties. It then stated that because a
declaratory judgment would not terminate the parties’ dispute, it
would decline “to undertake the seemingly meaningless task of
declaring the rights and duties of the parties to [the] action.”
¶18 Despite this language, which states that the district court
was declining to order any declaratory relief, the order goes on to do
just that. The order states that the Trust could not be rendered “null
and void” on the basis of the facts presented by Ms. Dahl, that Ms.
Dahl had no legally enforceable interest in the Trust assets, and that
the Trust was irrevocable as a matter of law. Finally, the order states
that Ms. Dahl did not have the right to a general accounting from the
Trust. Because these rulings constitute a declaration as to the
matters in dispute, they are inconsistent with the prior ruling that
the court was declining to declare the rights of the parties in this
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Opinion of the Court
matter.5
¶19 When confronted with an ambiguous order, we will
construe it using the same rules that apply to all legal documents.
Culbertson v. Bd. of Cnty. Comm’rs, 2001 UT 108, ¶ 15, 44 P.3d 642,
overruled on other grounds by Madsen v. JPMorgan Chase Bank, N.A.,
2012 UT 51, 296 P.3d 671. We first “look to the language of the
order,” and “[may] resort to the pleadings and findings.” Id. Our
task is to “interpret an ambiguity [in a manner that makes] the
judgment more reasonable, effective, conclusive, and [that] brings
the judgment into harmony with the facts and the law.” Id.
(alterations in original) (internal quotation marks omitted). And we
will “construe any ambiguities in the order against the prevailing
parties who drafted it.” Id.
¶20 Though purporting to deny declaratory relief, the order
goes into great detail in articulating the parties’ respective rights and
duties as to the Trust. Indeed, it carefully articulates Ms. Dahl’s
various claims and rules on each. And because the order was
drafted by counsel for the Trust Defendants, we construe any
ambiguity in favor of Ms. Dahl. Accordingly, we strike those
paragraphs of the order declining to award declaratory relief as
surplusage that is inconsistent with the order as a whole.
¶21 Having dealt with the inconsistency in the district court’s
order, we turn our attention to Ms. Dahl’s substantive claims.
B. We Construe the Trust According to Utah Law
¶22 Ms. Dahl argues that the district court erred when it
applied Nevada law and construed the Trust as irrevocable. She
argues that construing the Trust as irrevocable under Nevada law
would violate Utah public policy by creating “a serious inequity” in
the distribution of the marital estate. In response, Dr. Dahl argues
that the Trust is irrevocable under both Utah and Nevada law and,
therefore, the Trust’s choice-of-law provision is “not material in this
case.” Dr. Dahl concedes that Ms. Dahl has an enforceable interest
in the Trust assets if we find the Trust to be revocable. While both
5
This case illustrates the potential pitfalls of reliance on orders
drafted by counsel. Such orders do not necessarily reflect the
reasoning of the court and, accordingly, courts should exercise
caution when asking counsel to draft them. Moreover, counsel
should take care to ensure that any order they draft does not
overreach.
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Opinion of the Court
parties agree that application of Nevada law would require us to
hold the Trust irrevocable,6 they disagree as to the result under Utah
law. Accordingly, our first task is to determine which state’s law
governs construction of the Trust.
¶23 Because Utah is the forum state, Utah choice-of-law rules
apply. Waddoups v. Amalgamated Sugar Co., 2002 UT 69, ¶ 14, 54 P.3d
1054. Under Utah choice-of-law rules, we will generally enforce a
choice-of-law provision contained in a trust document, unless doing
so would undermine a strong public policy of the State of Utah. See
UTAH CODE § 75-7-107 & cmt. (“This section does not attempt to
specify the strong public policies sufficient to invalidate a settlor’s
choice of governing law.”); see also Jacobsen Constr. Co. v. Teton
Builders, 2005 UT 4, ¶ 19, 106 P.3d 719 (refusing to allow parties to
“employ choice of law provisions to force forum states to enforce
contractual terms wholly repugnant to local public policy”). Thus,
we will refuse to enforce a settlor’s choice-of-law provision if doing
so would undermine strong public policy goals of this state.
¶24 Section 5.4.6 of the Trust agreement provides:
Governing Law. The validity, construction and effect of
the provisions of this Agreement in all respects shall
be governed and regulated according to and by the
laws of the State of Nevada. The administration of
each Trust shall be governed by the laws of the state in
which the Trust is being administered.
Issues concerning the meaning of trust terms, the legal effect of those
terms, and the status of individuals vis-à-vis the Trust are all matters
of trust construction. See BLACK ’S LAW DICTIONARY 355, 592 (9th ed.
2009) (defining “construction” and “effect”). Conversely, questions
related to the performance of the trustee’s duties and the
management of trust assets are issues of trust administration. See id.
at 49 (defining “administration”); 90 C.J.S. Trusts § 225. The central
6
Surprisingly, both parties rely almost exclusively on Utah law
in their briefing. Throughout both parties’ briefs, only one Nevada
statute—Nevada Revised Statutes section 163.560—is cited, and
neither party adequately briefs the effect of Nevada law on the
Trust’s revocability. Because we conclude that Utah’s public policy
interest in the equitable division of the marital estate requires us to
construe the Trust according to Utah law, we need not determine
whether the Trust would be revocable under Nevada law.
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Opinion of the Court
dispute between the parties in this case concerns the revocability of
the Trust. This is an issue of trust construction to which we would
ordinarily apply Nevada law. But we cannot apply Nevada law
without violating Utah public policy.
¶25 Utah has a long-established policy in favor of the equitable
distribution of marital assets in divorce cases. See UTAH CODE § 30-
3-5(1) (authorizing Utah courts to enter “equitable orders relating to
the children, property, debts or obligations, and parties” in a
divorce); see also Englert v. Englert, 576 P.2d 1274, 1276 (Utah 1978)
(“The import of our decisions implementing [section 30-3-5] is that
proceedings in regard to the family are equitable in a high degree;
and that the court may take into consideration all of the pertinent
circumstances. It is our opinion that the correct view under our law
is that this encompasses all of the assets of every nature possessed
by the parties, whenever obtained and from whatever source
derived.”). We have previously indicated that the purpose of section
30-3-5 of the Utah Code is to empower courts to “enforce, after
divorce, the duty of support which exists between a husband and
wife.” Callister v. Callister, 261 P.2d 944, 948 (Utah 1953). Moreover,
“[t]he overarching aim of a property division, and of the decree of
which it and the alimony award are subsidiary parts, is to achieve a
fair, just, and equitable result between the parties.” Noble v. Noble,
761 P.2d 1369, 1373 (Utah 1988). Thus, by legislative enactment and
our long-standing precedent, Utah has an interest in ensuring that
marital assets are fairly and equitably distributed during divorce
and that divorcing spouses both retain sufficient assets to avoid
becoming a public charge.
¶26 To this end, Utah law presumes that property acquired
during a marriage is marital property subject to equitable
distribution. See Woodward v. Woodward, 656 P.2d 431, 432–33 (Utah
1982) (“The essential criterion is whether a right to the benefit or
asset has accrued in whole or in part during the marriage. To the
extent that the right has so accrued it is subject to equitable
distribution.”). Thus, to the extent that the Trust corpus contains
marital property, Utah has a strong interest in ensuring that such
property is equitably divided in the parties’ divorce action.
¶27 Dr. Dahl admits that at least some of the Trust assets
originated as marital property. For example, Ms. Dahl conveyed her
interest in the couple’s marital home to the Trust via a warranty
deed. In addition, Ms. Dahl claims to have conveyed to the Trust her
interest in Marlette Enterprises and other marital property with a
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Opinion of the Court
value of at least $2 million.7 Because Utah has a strong policy of
equitable distribution of marital assets, we decline to enforce the
Trust’s choice-of-law provision on the grounds that doing so would
deny the district court the ability to achieve an equitable division of
the marital estate. We therefore construe the Trust according to
Utah law.
C. Because the Trust Is Revocable Under Utah Law, Ms. Dahl Has an
Enforceable Interest in the Trust Property
¶28 Having determined that we will construe the Trust
according to Utah law, we turn our attention to whether the Trust is
revocable and, if so, what interest Ms. Dahl has in the Trust assets.
1. The Trust Is Revocable Because Dr. Dahl Reserved an Unrestricted
Power to Amend
¶29 Ms. Dahl argues that the Trust is revocable under Utah law
because Dr. Dahl, as settlor of the Trust, reserved in the Trust
agreement an unrestricted power to amend the Trust.8 We employ
familiar principles of contract interpretation when construing trust
instruments. Makoff v. Makoff, 528 P.2d 797, 798 (Utah 1974). We
begin our analysis with the language of the trust agreement to
ascertain the intent of the settlor. Id. Because we presume that the
settlor knew and intended the legal effect of the language used, we
give the words used in the trust agreement their ordinary and usual
7
Though Dr. Dahl argues that Ms. Dahl received half of the
marital assets in the divorce proceedings, the marital assets contrib-
uted to the Trust were not considered by the district court in the
divorce action. The fact that these assets were contributed to the
Trust does not change their marital quality and Ms. Dahl is therefore
entitled to her fair share of these assets.
8
Ms. Dahl asserts that such an unrestricted power to amend
violates the sole beneficiary rule because Dr. Dahl could simply
amend the Trust to make himself the sole beneficiary. And once he
became the sole beneficiary, Dr. Dahl could give unanimous consent
as settlor and sole beneficiary to dissolve the Trust. See UTAH CODE
§ 75-7-411(1) (“A noncharitable, irrevocable trust may be modified
or terminated upon consent of the settlor and all beneficiaries, even if
the modification or termination is inconsistent with a material
purpose of the trust.”(Emphasis added).). We need not address this
argument because we conclude that the unrestricted power to
amend, by itself, renders the Trust revocable under Utah law.
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meaning. See 76 AM . JUR. 2D Trusts § 33 (2005) (“[T]he words used
in a trust instrument are to be taken in their ordinary and
grammatical sense unless a clear intention to use them in another
sense can be ascertained.”).
¶30 Section 5.5 of the Trust agreement states, “Trust Irrevocable.
The Trust hereby established is irrevocable. Settlor reserves any
power whatsoever to alter or amend any of the terms or provisions
hereof.” (Emphasis added). Dr. Dahl argues that the Trust is
irrevocable because it is entitled “The Dahl Family Irrevocable
Trust” and section 5.5 declares it to be irrevocable.9 Dr. Dahl further
argues that section 5.5 “does not create any right for Dr. Dahl to
unilaterally alter or amend the Trust. Rather, the language simply
reserves the rights of every settlor of an irrevocable trust . . . to
amend, alter or terminate the irrevocable trust if there is consent
from all beneficiaries.” We are unpersuaded.
¶31 A “settlor has power to modify the trust if and to the extent
that by the terms of the trust he reserved such a power.”
RESTATEMENT (SECOND ) OF TRUSTS § 331(1) (1959). The second
sentence of section 5.5 reserves for Dr. Dahl, as settlor, any power to
amend any provision of the Trust. Though Dr. Dahl urges us to
9
Dr. Dahl also relies on section 163.560 of the Nevada Revised
Statutes, entitled “Irrevocable trust not to be construed as revoca-
ble,” to support his assertion that the Trust is irrevocable. Section
163.560 states:
1. If the settlor of any trust specifically declares in the
instrument creating the trust that such trust is irrevo-
cable it shall be irrevocable for all purposes, even
though the settlor is also the beneficiary of such trust.
2. Such trust shall, under no circumstances, be con-
strued to be revocable for the reason that the settlor
and beneficiary is the same person.
Having concluded that Utah law applies, we need not address these
provisions. And in any event, section 163.560 only clarifies that an
otherwise irrevocable trust will not be construed revocable merely
because the settlor is also named as a beneficiary. This section is best
read as abrogating the sole beneficiary rule in Nevada. See De Lee v.
Hicks, 611 P.2d 211, 212 (Nev. 1980) (explaining that the sole
beneficiary rule renders an otherwise irrevocable trust revocable).
It provides no insight as to whether the Trust should be deemed
irrevocable in the first instance.
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DAHL v. DAHL
Opinion of the Court
construe section 5.5 as reserving only those powers to amend that
are consistent with the creation of an irrevocable trust, the plain
language of section 5.5 contains no such limitation. By the terms of
the Trust, Dr. Dahl can modify any and all Trust provisions,
including the provisions that purport to make the Trust irrevocable.
See MARY F. RADFORD ET AL., THE LAW OF TRUSTS AND TRUSTEES § 993
(3d ed. 2008) (“Although the holder of a power to modify may not
directly revoke the trust, he or she may do so indirectly by first
modifying the trust by the insertion of a power to revoke and then
exercising that power.” (footnote omitted)). Such a broadly drafted
provision cannot fairly be read as restricting Dr. Dahl’s power to
amend to only those powers consistent with an irrevocable trust.
Thus, by the Trust’s plain language, Dr. Dahl has reserved an
unrestricted power to amend.
¶32 In In re Estate of Flake, we held that a settlor’s unrestricted
power to amend a trust includes, by definition, the power to revoke
the trust. 2003 UT 17, ¶ 13, 71 P.3d 589, superseded on other grounds,
Patterson v. Patterson, 2011 UT 68, 266 P.3d 828 (“Ordinarily, if a
power to modify is subject to no restrictions, then a reserved power
to amend or modify includes the power to revoke.”). Following our
decision in Flake, the Legislature enacted the Utah Uniform Trust
Code (UUTC), which governs the creation, administration, and
adjudication of trusts in Utah. See UTAH CODE §§ 75-7-101 to -1201;
see also Patterson v. Patterson, 2011 UT 68, ¶ 33, 266 P.3d 828
(discussing the adoption of the UUTC). Modeled on the Uniform
Trust Code, Utah Code section 75-7-605 governs a settlor’s power to
revoke or amend a trust. Consistent with our ruling in Flake, the
comments to section 75-7-605 make clear that an unrestricted power
to amend a trust includes the power to revoke it. UTAH CODE § 75-7-
605 cmt. (“An unrestricted power to amend may also include the
power to revoke a trust.”). And on this point, Utah law is consistent
with the well-established rule from other jurisdictions.10 Because Dr.
10
See, e.g., Rubinson v. Rubinson, 620 N.E.2d 1271, 1280 (Ill. App.
Ct. 1993) (recognizing “the long-settled rule and the plethora of cases
that have held that where the settlor reserves the unrestricted power
to amend a trust, . . . that power may be used to terminate the
trust”); De Lee, 611 P.2d at 212 (“An unrestricted power to modify . . .
an intervivos trust includes the power to revoke the trust . . . .”);
Manice v. Howard Sav. Inst., 104 A.2d 74, 75 (N.J. Super. Ct. Ch. Div.
(continued...)
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Opinion of the Court
Dahl reserved an unrestricted power to amend any and all
provisions of the Trust, we hold that the Trust is revocable under
Utah law. Having so held, we now turn our attention to what rights,
if any, Ms. Dahl has in the Trust assets.
2. Ms. Dahl Has the Right to Withdraw Her Contributions to the
Trust
¶33 Dr. Dahl argues that Ms. Dahl has no enforceable interest
in the Trust because, even if she is a settlor of the Trust, Utah law
prohibits her from withdrawing her assets from an irrevocable trust.
See UTAH CODE § 75-7-605(2). But we have held that the Trust is
revocable under Utah law. Thus, the relevant inquiry centers on Ms.
Dahl’s rights in relation to a revocable trust.
¶34 Any interest retained by Ms. Dahl in the Trust must
necessarily be based on her contribution of property to the Trust.
This is so because Ms. Dahl is not a signatory to the Trust agreement.
Nor is she named as a settlor or trustee. And Ms. Dahl’s status as a
beneficiary of the Trust is dependant on her status as Dr. Dahl’s
spouse. In section 1.2 of the Trust agreement, the beneficiaries are
listed as “the Settlor during his lifetime,” “the Settlor’s spouse,” “the
Settlor’s issue,” and “any charitable or tax-exempt organization that
may be added as a beneficiary.” (Emphasis added). Because Ms.
Dahl is named as a beneficiary only in her capacity as Dr. Dahl’s
spouse, her beneficiary status terminated with the couple’s divorce.
As a result, we must determine the extent to which Ms. Dahl’s
contribution of marital property to the Trust creates an enforceable
interest in the Trust property.
¶35 Though we have not previously addressed this specific
issue, the governing statute is clear. Section 75-7-103(1)(k) of the
Utah Code defines “settlor” as “a person . . . who creates, or
10
(...continued)
1954) (“[A]n unrestricted power to modify includes a power to
revoke the trust.”); Stahler v. Sevinor, 84 N.E.2d 447, 448–49 (Mass.
1949) (holding that an unrestricted power to amend includes the
power to revoke); see also RESTATEMENT (SECOND ) OF TRUSTS § 331
cmt. h (“If the power to modify is subject to no restrictions, it
includes a power to revoke the trust.”); CHARLES E. ROUNDS, LORING :
A TRUSTEE’S HANDBOOK 384 (2002) (“[I]nherent in the right to amend
is the right to insert by amendment into the trust a revocation
provision.”).
13
DAHL v. DAHL
Opinion of the Court
contributes property to, a trust. If more than one person creates or
contributes property to a trust, each person is a settlor of the portion
of the trust property attributable to that person’s contribution . . . .”
¶36 In this case, Ms. Dahl is not acknowledged as a settlor in
the Trust agreement, even though Dr. Dahl admits that Ms. Dahl
contributed property to the Trust. The Uniform Law Comments
relating to the UUTC’s definition of “settlor,” on which the Utah
statute is modeled, directly address such a situation.
Determining the identity of the “settlor” is usually not
an issue. The same person will both sign the trust
instrument and fund the trust. Ascertaining the
identity of the settlor becomes more difficult when
more than one person signs the trust instrument or
funds the trust. The fact that a person is designated as the
“settlor” by the terms of the trust is not necessarily
determinative. . . . Should more than one person
contribute to a trust, all of the contributors will
ordinarily be treated as settlors in proportion to their
respective contributions, regardless of which one
signed the trust instrument.
UTAH CODE § 75-7-103 cmt. (emphasis added).
¶37 A trust is created by the transfer of property by the owner
to another person acting as trustee. See UTAH CODE § 75-7-401(1)(a);
RESTATEMENT (SECOND ) OF TRUSTS § 17(b) (“A trust may be created
by . . . a transfer inter vivos by the owner of property to another
person as trustee . . . .”). Regardless of whether Ms. Dahl is named
as a settlor in the Trust agreement, she indisputably contributed
property to the Trust. And there are no facts to support an inference
that Ms. Dahl knowingly or intentionally forfeited her status as a
settlor. Indeed, Ms. Dahl maintains that she was never given a copy
of the Trust agreement and was unaware of its terms, including the
fact that she was not named a settlor and that her status as a Trust
beneficiary was dependent upon her status as Dr. Dahl’s spouse. Dr.
Dahl admits that Ms. Dahl “had nothing to do with the preparation
of the Trust agreement . . . and did not sign the Trust or any related
documents.” Under these facts, we cannot conclude that Ms. Dahl
relinquished her legal status as a settlor. Accordingly, we hold that
Ms. Dahl remains a settlor of the Trust, regardless of the fact that she
is not so named in the Trust agreement.
14
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Opinion of the Court
¶38 Because Ms. Dahl is a settlor of the Trust, she may revoke
that portion of the Trust funded with either her separate or marital
property. Section 75-7-605(2) of the Utah Code states:
If a revocable trust is created or funded by more than
one settlor:
(a) to the extent the trust consists of community
property, the trust may be revoked by either spouse
acting alone but may be amended only by joint action
of both spouses; and
(b) to the extent the trust consists of property other
than community property, each settlor may revoke or
amend the trust with regard to the portion of the trust
property attributable to that settlor’s contribution.11
By its plain language, section 75-7-605 allows Ms. Dahl, as a settlor
of the Trust, to revoke the Trust as it relates to her contributed
property—either marital or separate. See also RESTATEMENT (THIRD )
OF TRUSTS § 63 cmt. k (2003) (“If a revocable trust has more than one
settlor, . . . each settlor . . . may revoke or amend the trust with
regard to that portion of the trust property attributable to the
settlor’s contribution.”). On remand, the district court should
consider the property contained within the Trust and determine
whether it is fairly characterized as community, marital, or
separate.12 It should then allow Ms. Dahl to revoke the Trust with
11
Subsection (a) appears to apply only to property in community
property states. But subsection (b) allows Ms. Dahl to revoke the
Trust as to any marital or separate property she contributed to it.
For example, Ms. Dahl may revoke the Trust as to the marital home,
which should be withdrawn from the Trust in its entirety and its
value split equitably between Dr. and Ms. Dahl. Alternatively,
should Dr. Dahl wish to retain the marital property in the Trust, the
district court may award an equitable offset of half the property’s
value to Ms. Dahl.
12
We emphasize that the district court’s determination relating
to the nature of the property should be guided by well-established
principles of Utah family law. See Woodward v. Woodward, 656 P.2d
431, 432–33 (Utah 1982) (holding that all property rights acquired
during the pendency of the marriage are marital property). For
example, how the property is titled is of no consequence. For the
(continued...)
15
DAHL v. DAHL
Opinion of the Court
regard to the portion of the Trust property attributable to either her
separate property or any marital property.
¶39 Such a result accords with fundamental principles
governing marital property under Utah law. Were we to decide that
Ms. Dahl had no enforceable interest in the Trust, despite having
contributed marital property to it, the result would be to allow a
spouse to shield marital property from equitable division in the
event of divorce. And that is exactly what Dr. Dahl attempted to do
in this case. He crafted a trust agreement purporting to eliminate
any interest Ms. Dahl had in the Trust property upon the couple’s
divorce. But Utah law does not allow spouses to place marital assets
in revocable trusts and then shield those assets from equitable
property division in the event of a divorce.13
D. The District Court Erred When It Purported to
Rule on Issues Not Before It
¶40 In its November 11, 2011 order, the district court granted
summary judgment in favor of the Trust Defendants on Ms. Dahl’s
request for a determination that the Trust was “null and void.” The
court recognized, correctly, that “null and void” is not a valid cause
of action. It went on to note, “There are no material factual
allegations in the Amended Complaint that accuse the Defendants
of fraud, mistake, duress, undue influence, illegality or otherwise
contend that the trust is violative of public policy or contrary to law
or statute.” Despite the acknowledgment that such claims were not
before it, the order states in a footnote:
12
(...continued)
purpose of equitable distribution, the court must determine whether
the property was acquired during the marriage. Once the court
determines that a particular piece of property is marital, Ms. Dahl
may revoke her contribution of that property in its entirety, and the
court may then divide the property equitably.
13
Were we to construe the Trust as irrevocable, it would create a
serious conflict between trust law and divorce law in Utah. The
question of whether a spouse could create an irrevocable trust in
which he or she placed marital property, thereby frustrating the
equitable distribution of property in the event of a divorce, is not
before us in this case. Accordingly, we take no position on a likely
outcome of such conflict. Rather, we bring the potential pitfalls to
the Legislature’s attention.
16
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Opinion of the Court
However, even if the Plaintiff were to make such a
claim, the statute of limitations has passed on all
causes of action related to those theories. U.C.A. 78B-
2-305 (2010 as Amended) limits actions based on the
grounds of fraud or mistake to three years. 78B-2-307
(2010 as Amended) limits actions based upon a
contract, obligation, or liability not founded upon an
instrument in writing as well as other actions not
detailed in the statute to four years. 78B-2-309 (2010 as
Amended) limits actions based upon any contract,
obligation, or liability founded upon an instrument in
writing, to six years.
¶41 Ms. Dahl argues that it was improper for the district court
to render an advisory opinion on claims not before it. We agree. As
the order concedes, Ms. Dahl did not bring claims of fraud, mistake,
duress, or undue influence as grounds for finding the Trust
voidable. As such, any possible defenses to such claims cannot have
been fully and fairly litigated before the district court. Thus, the
district court’s pronouncement with respect to the validity of such
potential claims can have no preclusive effect. See Macris & Assocs.,
Inc. v. Neways, Inc., 2000 UT 93, ¶ 37, 16 P.3d 1214 (requiring that an
“‘issue must have been competently, fully, and fairly litigated’” to
have preclusive effect).
¶42 In summary, because the district court’s November 11,
2011 order was internally inconsistent, we strike those paragraphs
of the order indicating that it declined to enter a declaratory
judgment as inconsistent with the holding of the court. As to Ms.
Dahl’s substantive claims, we construe the Trust agreement
according to Utah law based on Utah’s long-standing public policy
interest in the equitable division of marital assets upon divorce. We
conclude that Dr. Dahl reserved an unrestricted power to amend the
Trust in the Trust agreement. Under Utah law, this unrestricted
power to amend gave Dr. Dahl the power to revoke the Trust,
thereby rendering the Trust revocable. Because Ms. Dahl
contributed marital property to the Trust, she retains the status of
settlor and may revoke the Trust as to her contribution of both her
separate property and any marital assets. We therefore remand the
trust case, which we have consolidated with the divorce case, to the
divorce court for purposes of equitably distributing those Trust
assets that are marital property. Finally, we vacate that portion of
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DAHL v. DAHL
Opinion of the Court
the court’s November 11, 2011 order purporting to opine on claims
not before it.
III. THE DIVORCE CASE
¶43 We now turn to Ms. Dahl’s appeal in the divorce case. Ms.
Dahl raises multiple claims of error and requests that we reverse and
remand the case for an entirely new trial. First, Ms. Dahl contends
that she is entitled to a new trial because the district judge was
biased against her. Second, Ms. Dahl asserts that the district court
abused its discretion in several of its pretrial evidentiary rulings by
(1) failing to compel discovery, (2) excluding many of Ms. Dahl’s
proposed trial exhibits, and (3) limiting the testimony of Ms. Dahl’s
expert witnesses. Third, Ms. Dahl argues that the district court
abused its discretion when it refused to award Ms. Dahl temporary
or permanent alimony. Fourth, Ms. Dahl argues that the district
court abused its discretion when it failed to divide the couple’s
marital assets evenly and equitably. Fifth, Ms. Dahl asserts that the
district court erred when it refused to allow Ms. Dahl to file an
amended pleading in order to seek joint custody of the couple’s
children. Finally, Ms. Dahl argues that the district court abused its
discretion when it denied her motion for attorney fees. For the
reasons discussed below, we affirm in part, reverse in part, and
remand for further proceedings consistent with this opinion.
A. Judge Taylor Was Not Subject to Disqualification
¶44 On at least three occasions during the proceedings below,
Ms. Dahl asserted that the district judge presiding over the divorce
case, Judge Taylor, was biased against her and should be
disqualified. First, on November 26, 2007, Ms. Dahl filed a motion
to disqualify Judge Taylor, arguing that his comments and actions
during the course of the divorce proceedings created the
“appearance of impropriety and partiality.” Specifically, Ms. Dahl
alleged (1) that Judge Taylor had denied her equal access to the
court by preferentially granting Dr. Dahl’s motions while denying
her motions and (2) that Judge Taylor had indicated bias against Ms.
Dahl and her counsel when he made comments expressing
annoyance with the lack of cooperation between the parties. As
required by rule 63 of the Utah Rules of Civil Procedure, Judge
Taylor certified Ms. Dahl’s motion to the presiding judge of the
Fourth District, who denied the motion.
¶45 Second, on October 21, 2009, Judge Taylor disclosed to the
parties that his wife was scheduled to undergo a surgical procedure
18
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Opinion of the Court
that would be performed by a cardiologist who was a member of the
same medical group that employed Dr. Dahl. Ms. Dahl filed a notice
indicating that she would not waive this potential conflict of interest.
Even though Ms. Dahl had previously filed a rule 63 motion to
disqualify, Judge Taylor submitted the question of the potential
conflict to the presiding judge for review. See UTAH R. CIV . P.
63(b)(1)(C) (“No party may file more than one motion to disqualify
in an action.”). After considering affidavits submitted by the parties
and conducting a telephone conference on the matter, the presiding
judge determined that Judge Taylor need not be disqualified.
¶46 Finally, after the divorce trial concluded, Ms. Dahl argued
that she should be granted a new trial because Judge Taylor was
biased. Specifically, she alleged that she and Judge Taylor had
interacted twenty years previously when she was a witness in a case
in which Judge Taylor was serving as a prosecutor. She further
alleged that Judge Taylor had inappropriately questioned her
commitment to the LDS faith. With respect to the prior interaction,
Ms. Dahl alleged that then-prosecutor Taylor became upset when
Ms. Dahl suggested that the state prosecute LDS Church officials for
failing to report a church member who had engaged in child
molestation. Ms. Dahl maintains that Judge Taylor harbored ill will
toward her on the basis of this previous interaction, which in turn
caused him to question her commitment to the LDS faith during the
divorce trial. Judge Taylor denied Ms. Dahl’s motion for a new trial,
indicating that he had no independent recollection of Ms. Dahl’s
involvement in the case decades prior.
¶47 On appeal, Ms. Dahl continues to assert that Judge Taylor
was biased against her and therefore should have been disqualified
(1) because he made negative comments about her and issued many
rulings adverse to her, (2) because Judge Taylor’s wife was
scheduled to undergo surgery with a member of Dr. Dahl’s medical
group, and (3) because Judge Taylor was biased against her based
on their interactions in the prior case. The question of
disqualification due to judicial bias is a question of law that we
review for correctness, giving no deference to the decision below.
State v. Alonzo, 973 P.2d 975, 979 (Utah 1998). We find no basis for
concluding that Judge Taylor should have been disqualified.
1. Adverse Rulings and Indications of Frustration Are Insufficient
to Demonstrate Judicial Bias
¶48 Ms. Dahl asserts that an objective analysis of Judge
Taylor’s comments and rulings would lead a reasonable person to
19
DAHL v. DAHL
Opinion of the Court
question his impartiality and therefore Judge Taylor should have
been disqualified. In support of her assertion, Ms. Dahl points to
several adverse rulings Judge Taylor made against her and to Judge
Taylor’s statement that “Ms. Dahl and her counsel annoyed him.”
We are not persuaded that these instances suggest judicial bias and
hold that Judge Taylor’s adverse rulings and one-time statement of
frustration are insufficient indications of partiality to require
disqualification.
¶49 A judge should be disqualified when circumstances arise
in which the judge’s “impartiality might reasonably be questioned.”
State v. Gardner, 789 P.2d 273, 278 (Utah 1989). Judges are presumed
to be qualified and a party alleging bias on the part of the judge has
the burden of demonstrating that the judge is not qualified. In re
Affidavit of Bias, 947 P.2d 1152, 1153 (Utah 1997) (Mem. of
Zimmerman, C.J.); see also 46 AM . JUR. 2D Judges § 129 (2008) (“The
law presumes that a judge is unbiased and unprejudiced.”).
Moreover, parties claiming bias must demonstrate that the alleged
bias stems from an extrajudicial source. State v. Munguia, 2011 UT
5, ¶ 17, 253 P.3d 1082 (“In other words, the bias or prejudice must
usually stem from an extrajudicial source, not from occurrences in
the proceedings before the judge.” (emphasis omitted) (internal
quotation marks omitted)); see also 46 AM . JUR. 2D Judges § 131 (2008)
(“[T]he alleged bias and prejudice of a judge must stem from an
extrajudicial source and result in an opinion on the merits on some
basis other than what the judge learned from his or her participation
in the case . . . .”).
¶50 In State v. Munguia, we were asked to determine whether
a judge should have disqualified himself because of negative
comments he made to the defendant in a criminal case. 2011 UT 5,
¶¶ 15–20. In that case, the judge challenged the defendant about
whether he understood who was at fault or whether the defendant
still thought his actions were a good experience for the victims. Id.
Though we acknowledged that “we expect our judges to be patient,
dignified, and courteous to litigants, jurors, witnesses, lawyers, and
others” with whom they interact in an official capacity, we
nonetheless held that a judge’s show of anger or frustration with a
defendant, based on that defendant’s behavior during the
proceedings, was not grounds for disqualification. Id. ¶ 20 (internal
quotation marks omitted).
¶51 In this case, Ms. Dahl claims that Judge Taylor was biased
against her because he stated, “I am candidly annoyed that I’m
20
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Opinion of the Court
getting so many requests for review and objections . . . . It is
counter-productive to getting this case resolved.” On its face, this
statement of frustration arose from the proceedings before Judge
Taylor, not from some extrajudicial source. Furthermore, Judge
Taylor directed his statement to all counsel at trial. He did not
single out any particular litigant or counsel. On these facts, we find
nothing suggesting judicial bias.
¶52 Ms. Dahl also contends that a reasonable person would
question Judge Taylor’s impartiality because of the number of
rulings he made against her. This contention is wholly without
merit. We have repeatedly held that adverse rulings alone are
insufficient to establish the existence of judicial bias. In re Affidavit
of Bias, 947 P.2d at 1154 (“[N]o deduction of bias and prejudice may
be made from adverse rulings by a judge.” (internal quotation marks
omitted)); In re Inquiry Concerning a Judge, 2003 UT 35, ¶ 7, 81 P.3d
758 (per curiam) (“There is neither a factual nor a legal basis . . . for
concluding that a judge who rules against a party on a particular
legal issue is biased against that party.”). To hold otherwise would
expose judges to accusations of bias in every case because every case
necessarily requires rulings adverse to one party or the other. We
therefore hold that Judge Taylor was not subject to disqualification
because there is no evidence in the record of extrajudicial bias.
2. The Scheduled Surgery of Judge Taylor’s Wife Is Not a Sufficient
Basis to Establish Judicial Bias
¶53 We next turn to Ms. Dahl’s allegation that Judge Taylor
should have been disqualified because his wife was scheduled to
undergo cardiac surgery performed by another cardiologist in Dr.
Dahl’s medical practice group. During trial, Judge Taylor disclosed
the upcoming surgery to the parties and requested that both parties
consider waiving any potential conflict. Dr. Dahl agreed, but Ms.
Dahl refused.
¶54 Ms. Dahl argues that she should have been allowed to file
another formal motion to disqualify Judge Taylor but she was
barred from doing so because she had previously filed such a
motion. Rule 63 of the Utah Rules of Civil Procedure allows parties
to move for disqualification of a judge, but it limits parties to one
motion to disqualify in any action.14 UTAH R. CIV . P. 63(b)(1)(C).
14
In supplemental briefing, Ms. Dahl contends that rule 63 of the
(continued...)
21
DAHL v. DAHL
Opinion of the Court
This limitation, however, did not adversely affect Ms. Dahl because
Judge Taylor nevertheless submitted the matter to the presiding
judge for consideration, and the presiding judge determined that
disqualification was not required. Ms. Dahl argues that this was
error because there was a possibility that Dr. Dahl could have
treated Judge Taylor’s wife had he covered rotations for the other
doctors in his practice. We find no error.
¶55 As we have discussed, a judge may be properly
disqualified if a party demonstrates the existence of bias or prejudice
stemming from an extrajudicial source, such as a social or
professional relationship. Munguia, 2011 UT 5, ¶ 17. Ms. Dahl has
identified a potential professional relationship. But a potential
relationship is not enough. And to show an actual professional
relationship, Ms. Dahl would have needed to establish that Dr. Dahl
covered rotations for other doctors in the group and that those
rotations could include treatment of Judge Taylor’s wife.
¶56 Ms. Dahl did not meet her burden. Dr. Dahl submitted an
affidavit in the district court testifying to the following: (1) Dr. Dahl
does not know Judge Taylor’s wife and has never seen her chart;
(2) Judge Taylor’s wife was not a patient of Dr. Dahl; (3) the doctors
at Utah Central Clinic had their own patients and the patients of a
particular doctor are not clients of the clinic; (4) the doctor
performing the surgery on Judge Taylor’s wife, Dr. Hwang,
belonged to a separate group within the clinic and therefore Dr.
Dahl had no financial ties with the surgery; and (5) Dr. Dahl is not
on the Board of Directors of the clinic and has no say in the practices
14
(...continued)
Utah Rules of Civil Procedure limits a party’s ability to ensure a fair
trial. She argues that a judge would have “carte blanche to be biased
once a rule 63 motion has been denied,” because a party can file only
one motion to disqualify a judge. We are not persuaded. A single
motion to disqualify is sufficient in most cases and parties retain the
ability to seek an extraordinary writ in cases where the application
of the rule would create a substantial injustice. Ms. Dahl urges us to
adopt a standard similar to that applied in the federal courts, in
which a judge may be disqualified if there is conduct that manifests
a “deep-seated favoritism or antagonism toward a party.” However,
the manifestation of bias alleged by Ms. Dahl would not establish
judicial bias under that rule either, and we decline Ms. Dahl’s
invitation to adopt a new standard for judicial disqualification.
22
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Opinion of the Court
of other doctors in the clinic. In short, there was no possibility that
Dr. Dahl could be involved in the treatment of Judge Taylor’s wife
or that he could financially benefit from that treatment. Because the
only connection established by the evidence was that Dr. Dahl
worked in the same building as another surgeon who would
perform the surgery on Judge Taylor’s wife, Judge Taylor was not
subject to disqualification.
3. Judge Taylor’s Interaction with Ms. Dahl Twenty-Three Years
Previously Did Not Require Disqualification
¶57 Ms. Dahl’s final alleged basis for judicial bias was an
interaction she had with Judge Taylor twenty-three years previously
in which he had allegedly criticized her religious devotion.
According to Ms. Dahl, Judge Taylor, who was then a prosecutor,
was involved in the prosecution of a man accused of sexually
abusing children. Ms. Dahl was a witness for the prosecution at the
sentencing hearing. The defendant had confessed to his church
leaders, but the leaders had failed to report the abuse to legal
authorities. Ms. Dahl alleges that when she requested that then-
prosecutor Taylor prosecute the church leaders for failure to report,
he compared her to a “son of perdition.” Ms. Dahl asserts that Judge
Taylor continued to harbor ill will toward her and improperly
compared her and Dr. Dahl’s religious devotion.
¶58 Ms. Dahl’s claim is simply not supported by the evidence.
In his order denying Ms. Dahl’s motion for a new trial, Judge Taylor
found:
1. The Court finds that with regard to [Ms. Dahl’s]
claims regarding the [prior] case, that the Court has no
independent recollection of the case because as a
prosecutor, the case was prosecuted 23 years ago.
2. The Court finds that it has no independent
recollection of any involvement with Mrs. Dahl and in
fact Mrs. Dahl apparently had a different name at the
time.
3. The Court finds that the [prior] case was one that
involved child abuse and that [defendant] plead
guilty. The Court recalls that the case was appealed
and that the result was achieved and affirmed.
[Defendant] served a mandatory prison term.
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DAHL v. DAHL
Opinion of the Court
4. The Court finds that it is not aware of what
happened to [defendant] since the time frame set forth
23 years ago, except that [defendant] was sentenced to
prison.
5. The Court finds that it does not even create an
appearance of impropriety. The . . . case from 23 years
ago has absolutely no involvement in this case and
denies the Motion for a New Trial based upon that
claim.
¶59 The fact that the events alleged by Ms. Dahl happened over
twenty years ago, that Ms. Dahl went by a different name at the
time, and that Judge Taylor had no independent recollection of the
events described by Ms. Dahl is ample support for Judge Taylor’s
denial of the motion for disqualification.
¶60 Similarly, the record does not support Ms. Dahl’s claim
that Judge Taylor improperly compared her religious devotion to
that of Dr. Dahl or that he criticized her for failure to adhere to the
principles of the LDS faith. To support her claim, Ms. Dahl
selectively cites the district court’s Findings of Fact and Conclusions
of Law. But the district court’s findings and conclusions as a whole
undermine her position. The court found:
Although [Ms. Dahl] professed, during testimony, a
commitment to the LDS religion, there was
undisputed testimony that she has expressed
frustration with the church to [her daughter, C.D.],
and has acquiesced in [C.D.’s] decision to cease church
activity. [Dr. Dahl] continues to attend with [D.D].
[D.D] was recently baptized. It is not the place or intent
of this Court to judge or compare the level of activity in a
particular religion, except to the extent that disagreement
on this point may impact the family. The evidence does
not demonstrate any disagreement or conduct that
makes a meaningful difference in the family.
(Emphasis added). Despite the fact that the district court expressly
declined to compare the religious activity of either party, Ms. Dahl
still maintains that the court improperly compared her religious
devotion to that of Dr. Dahl. But that suggestion is simply not
supported by the facts. The court’s observation of the parties’
religious practices and its conclusion that those practices had no
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Opinion of the Court
bearing on its custody determination were not improper.15 Ms. Dahl
has therefore failed to demonstrate that disqualification was
warranted.
¶61 In summary, Judge Taylor was not subject to
disqualification in this case because Ms. Dahl has failed to
demonstrate the existence of bias or prejudice stemming from an
extrajudicial source.
B. The District Court Did Not Abuse Its Discretion in Its Pretrial
Evidentiary Rulings
¶62 Ms. Dahl next argues that the district court abused its
discretion by (1) denying Ms. Dahl’s motions to compel discovery,
(2) excluding many of Ms. Dahl’s proposed trial exhibits, and
(3) limiting the testimony of two of Ms. Dahl’s expert witnesses. We
find no abuse of discretion. Rather, the rulings were appropriate
because Ms. Dahl’s counsel failed to comply with basic rules of
procedure.
1. The District Court Did Not Abuse Its Discretion in Denying
Ms. Dahl’s Motions to Compel Discovery
¶63 Discovery in this case was highly acrimonious. The district
court aptly described the discovery process as “a train wreck” in
which it was forced to intervene on numerous occasions. As a
general rule, we grant district courts a great deal of deference in
matters of discovery and review discovery orders for abuse of
discretion. Green v. Louder, 2001 UT 62, ¶ 37, 29 P.3d 638.
Accordingly, we “will not find abuse of discretion absent an
erroneous conclusion of law or where there is no evidentiary basis
for the trial court’s ruling.” Id. (internal quotation marks omitted).
¶64 On appeal, Ms. Dahl argues that the district court abused
its discretion in two ways. First, Ms. Dahl alleges that Dr. Dahl’s
responses to her requests for written discovery were deficient and
that the district court should have granted her August 8, 2007
motion to compel further discovery. Second, Ms. Dahl argues that
the district court should have compelled Dr. Dahl to supplement his
discovery responses prior to trial so that she would not be forced to
15
See UTAH R. JUD . ADMIN . 4-903(5)(E)(vi) (explaining that a
custody evaluation must consider “religious compatibility with the
child”).
25
DAHL v. DAHL
Opinion of the Court
litigate her case with out-of-date information. We address each of
Ms. Dahl’s claims in turn.
a. Ms. Dahl Has Not Adequately Briefed Her Argument that the
District Court Should Have Granted Her Motion to Compel
¶65 The scheduling order adopted by the district court was
drafted by Ms. Dahl’s counsel. It set a deadline for fact discovery of
September 1, 2007 and limited the parties to a total of twenty-five
interrogatories, including subparts; four depositions for custody fact
witnesses; and six depositions for financial fact witnesses. Ms. Dahl
served her first and only set of interrogatories and requests for
production of documents on June 1, 2007, just three months prior to
the discovery deadline. According to Ms. Dahl, she never received
a response from Dr. Dahl, prompting her to file her August 8, 2007
Motion to Compel Discovery Responses.
¶66 The commissioner considered Ms. Dahl’s motion at a
hearing on October 23, 2007. At that hearing, the commissioner
ordered the parties to make their files available for opposing counsel
to copy. On appeal, neither party’s brief provides argument or
citations to the record relating to this hearing. Instead, both parties’
briefs refer to a July 17, 2007 hearing in which Ms. Dahl alleged that
Dr. Dahl’s discovery responses were deficient. But a review of the
record reveals that the July 17, 2007 hearing actually involved two
different motions to compel that had been filed against Marlette
Enterprises and Dr. Charles M. Dahl, M.D. PC, Dr. Dahl’s
professional corporation. Indeed, there is no suggestion in the July
17 hearing that Ms. Dahl was complaining about the adequacy of the
discovery responses filed by Dr. Dahl in his personal capacity. Ms.
Dahl’s challenge on appeal concerns only the August 8, 2007 motion
to compel, which was filed against Dr. Dahl in his personal capacity.
In short, the parties’ briefing refers to a hearing on the wrong
motions to compel and fails to direct the court to the portions of the
record that address the challenged motion.
¶67 We have repeatedly stated that “[a]ppellate courts are not
a depository in which [a party] may dump the burden of argument
and research.” ASC Utah, Inc. v. Wolf Mountain Resorts, L.C., 2013 UT
24, ¶ 16, 309 P.3d 201 (alterations in original) (internal quotation
marks omitted); see also Allen v. Friel, 2008 UT 56, ¶ 9, 194 P.3d 903.
The record in this case spans over twelve thousand pages. Ms. Dahl,
as the appellant, bears the burden of directing our attention to those
portions of the record that support her claim that the district court
abused its discretion when it denied her motion to compel discovery.
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See UTAH R. APP. P. 24(a)(9) (requiring citations to “parts of the
record relied on”); ASC Utah, 2013 UT 24, ¶ 16. Even if Dr. Dahl’s
discovery responses were unsatisfactory, we cannot conclude that
the district court abused its discretion based on Ms. Dahl’s briefing,
and we decline to undertake the gargantuan task of sifting through
the record in this case to make Ms. Dahl’s argument for her.
b. The District Court Did Not Abuse Its Discretion When It
Denied Ms. Dahl’s Motion to Compel Supplementation of
Discovery
¶68 Ms. Dahl’s second claim of error is that the district court
abused its discretion when it denied her motion to compel Dr. Dahl
to supplement his discovery responses prior to trial. On July 31,
2009, Ms. Dahl filed a Motion to Compel Supplementation of
Discovery Requests. In her supporting memorandum, Ms. Dahl
argued that Dr. Dahl’s responses to her June 1, 2007 discovery
requests were incomplete. Ms. Dahl also argued that Dr. Dahl had
failed to supplement his discovery responses since December 19,
2007, when he first responded to her initial discovery requests.
¶69 Relying on rule 26(e) of the Utah Rules of Civil Procedure,
Ms. Dahl argued in the trial court that Dr. Dahl had an ongoing duty
to supplement his discovery requests. Rule 26(e)16 requires parties
to supplement any disclosures or responses if two conditions are
met. First, a party must supplement if the party learns that the
information disclosed in its initial disclosures or in response to prior
interrogatories, requests for production, or requests for admission
“is in some material respect incomplete or incorrect.” UTAH R. CIV .
P. 26(e)(1)–(2) (2009). Second, this duty to supplement arises only if
the corrective information has not already been made known to the
other parties. Id. The district court denied Ms. Dahl’s motion to
compel supplementation because it was filed “too late” and because
it was “not specifically focused enough to be characterized as
supplementation.” We agree.
¶70 As the district court noted in its September 15, 2009 hearing
on the matter, Ms. Dahl did not notify Dr. Dahl that she considered
his discovery requests to be deficient until July 21, 2009. The court
specifically noted that Ms. Dahl’s counsel had received Dr. Dahl’s
16
Rule 26(e) has been redesignated as rule 26(d) in the current
Utah Rules of Civil Procedure. We will refer to the 2009 version of
the rules since those rules governed this case.
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discovery responses in December 2007, but waited until July
2009—less than two months before the September 2009 trial date—to
request supplementation or to challenge the sufficiency of the
responses. And counsel offered no explanation for the long delay.
We cannot conclude that the district court abused its discretion
when it found that Ms. Dahl’s motion was “too little too late.”
¶71 Moreover, rule 26 does not require a wholesale update to
every discovery response. Parties must supplement only if they
discover their initial responses were incomplete or incorrect in some
important way and that the corrective information was not already
known to the other party. Dr. Dahl claims that all documentation
was produced as required, either through his initial discovery
responses or through responses to various subpoenas. And Ms.
Dahl has not identified any specific documents introduced at trial
demonstrating that Dr. Dahl’s initial responses were incomplete or
that counsel did not have the appropriate corrective information.
Instead, she makes only generalized allegations that the information
was “out of date” by the time of trial. On these facts and this
briefing, we cannot conclude that the district court abused its
discretion. Accordingly, we affirm.
2. The District Court Did Not Abuse Its Discretion When It Limited
the Number of Exhibits Ms. Dahl Was Allowed to Introduce at Trial
¶72 At a June 17, 2009 pretrial conference, the district court
ordered the parties to exchange “an actual schedule of the people
[they planned] to call and the exhibits [they planned] to use” no later
than two weeks before the first day of trial. The court explained that
the parties were to “carefully contemplate who they [were] actually
going to call” and cautioned the parties against simply listing
multitudes of potential witnesses. The court also repeatedly
emphasized that the parties were to exchange the “actual exhibits”
they planned to use at trial.
¶73 The exhibit list submitted by Ms. Dahl’s counsel failed to
comply with the court’s order. Nor did it comport with any
reasonable standards of pretrial disclosure. The exhibit list
encompassed the entire universe of potential exhibits and was
accompanied by a CD containing digital copies of over 8,000
documents. For example, the first exhibit listed was “[a]ny and all
documents exchanged by the parties as potential exhibits in this
matter on August 31, 2009, to the extent that they are admissible.”
Other listed exhibits included “[a]ny and all documents maintained
in the Court’s file”; “[a]ll affidavits filed in this matter”; “[a]ll email
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communications and other written communications between the
parties”; “[a]ny and all admissible information, received pursuant to
Subpoena Duces Tecum or other discovery method in the above-
entitled matter”; and “[a]ny rebuttal exhibits.” The list was so broad
and overinclusive as to be meaningless. It failed to identify any
particular exhibit by an identifying number or a particularized
description and made no effort to link the general categories of
documents to the electronic documents contained on the CD. In
short, the exhibit list failed to identify any single document with
enough particularity to allow the court or opposing counsel to
identify it as one Ms. Dahl planned to introduce at trial.
¶74 At the final pretrial motion hearing on September 15, 2009,
the court considered Dr. Dahl’s objections to Ms. Dahl’s exhibit list.
The court noted the problems with the exhibit list, stating:
I thought my direction to you was clear. It’s the same
direction I give to every litigant who prepares for trial.
I tell them to prepare a list of the actual exhibits, one
by one that they intend to introduce and you’ve given
me a list that says all the documents maintained, all
the affidavits, all the records relied upon, all the
marital communications. That’s completely
unworkable. I’m not going to allow you to simply
dump all your discovery on my desk and tell me to
sort it out.
¶75 The court thereafter struck the exhibit list and ordered
counsel to resubmit a list that would identify particular documents
that he would use with particular witnesses. In response, Ms. Dahl’s
counsel filed an amended exhibit list on September 22, 2009, the first
day of trial.17 The amended list, though improved, continued to
include designations such as “[a]ny and all documents exchanged by
the parties as potential exhibits in this matter on August 31, 2009, to
the extent they are admissible.” The court again expressed its
displeasure at counsel’s failure to specifically identify which exhibits
he planned to use at trial, citing the need to give all parties fair
notice. But the court reserved its ruling on the amended exhibit list
until the next scheduled trial day.
17
The trial was conducted over fourteen nonconsecutive days
between September and November 2009.
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¶76 On the next trial date, the court noted that counsel for Ms.
Dahl had yet to submit an acceptable witness or exhibit list. By
October 7, the fifth day of trial, counsel continued to attempt to
introduce exhibits that had not previously been disclosed to the
court or opposing counsel. The district court properly refused to
allow these exhibits. On October 23 and November 4, counsel for
Ms. Dahl filed supplemental exhibit lists, which identified particular
documents, but did not identify which witness would be used to
introduce the documents. Because Ms. Dahl’s counsel failed to
submit a proper exhibit list, the district court was confronted with
the daunting task of determining, on a document-by-document basis
during the course of trial, which exhibits had been previously
produced. If a document had been previously produced to opposing
counsel, the trial court admitted it. If not, the court excluded it.
¶77 Ms. Dahl argues that the district court abused its discretion
when it excluded most of her exhibits based on counsel’s failure to
submit a proper exhibit list. Specifically, Ms. Dahl argues that the
district court’s pretrial order requiring that the parties exchange
witness lists and exhibits was unclear because it did not specify a
particular format for the lists. We disagree. The district court’s
order clearly directed the parties to designate particular documents
to be used with particular witnesses and to exchange those
documents with opposing counsel. And even if the district court’s
order were unclear, counsel was given numerous opportunities to
rectify the situation and failed to do so. The district court would
have been justified in refusing to exclude all of Ms. Dahl’s exhibits
based on her failure to submit a proper exhibit list prior to the start
of trial. And it appropriately exercised its discretion when it
excluded all documents except those that the parties stipulated had
been previously disclosed during discovery.
3. The District Court Did Not Abuse Its Discretion When It Limited
the Testimony of Ms. Dahl’s Expert Witnesses
¶78 Ms. Dahl argues that the district court abused its discretion
when it limited the testimony of two of her expert witnesses, Dr.
Barden and Dr. Mejia. Ms. Dahl timely designated Drs. Barden and
Mejia as experts prior to trial.18 Although the district court allowed
18
Ms. Dahl also designated two other expert witnesses, Mr.
Thayer and Mr. Brough. Although the district court also excluded
(continued...)
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these two experts to testify, it limited the scope of their testimony to
the reports and affidavits the experts had filed earlier in the
litigation. Ms. Dahl asserts that this limitation was an abuse of
discretion. We disagree.
¶79 Rule 26(a)(3) of the Utah Rules of Civil Procedure governs
expert testimony.19 For each expert witness whom a party expects
to testify, the party is required to submit a written report prepared
by the expert. UTAH R. CIV . P. 26(a)(3)(B) (2009). In relevant part,
the rule requires:
The report shall contain the subject matter on which
the expert is expected to testify; the substance of the
facts and opinions to which the expert is expected to
testify; a summary of the grounds for each opinion; the
qualifications of the witness, including a list of all
publications authored by the witness within the
preceding ten years; the compensation to be paid for
the study and testimony; and a listing of any other
cases in which the witness has testified as an expert at
trial or by deposition within the preceding four years.
Id. Though counsel for Ms. Dahl filed what were styled as expert
witness reports for Drs. Barden and Mejia, neither report complied
with the requirements of rule 26.
¶80 The expert report for Dr. Barden consisted of a mere four
pages, contained no summary of Dr. Barden’s qualifications or list
of his publications, and identified the proposed subject matter of his
testimony only in the most cursory way. For example, Dr. Barden’s
expert report proposed that he would “testify regarding the
importance of proper methodology and responsible behavior in
child custody investigations, evaluations, and litigation.” As
grounds for Dr. Barden’s opinion, the report cited Dr. Barden’s
“education, knowledge, training, and experience in the fields of
clinical, child-clinical, and forensic psychology.” As the district
court noted, the expert report was “far less than adequate” to inform
18
(...continued)
their testimony, Ms. Dahl does not challenge that ruling on appeal.
19
In 2012, rule 26(a)(3) was redesignated as rule 26(a)(4) in the
current Utah Rules of Civil Procedure. For consistency, we refer to
the 2009 version throughout.
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the court or opposing parties as to the scope and content of Dr.
Barden’s testimony.
¶81 The expert report for Dr. Mejia was similarly deficient. The
report was less than two pages and contained only vague
descriptions of Dr. Mejia’s proposed testimony. The report failed to
include a list of Dr. Mejia’s publications or of previous cases in
which he had testified.
¶82 Despite these shortcomings, the district court allowed Drs.
Mejia and Barden to testify, but limited their testimony to that
consistent with reports they had filed previously in the litigation.
Given Ms. Dahl’s failure to provide the kind of proper notice of
expert testimony contemplated by rule 26, the district court did not
abuse its discretion in limiting these experts’ testimony in this way.
¶83 Pretrial discovery and disclosure are basic skills that we
expect all attorneys to possess. Our already overworked district
court judges should not be required to provide remedial instructions
to counsel on how to properly conduct discovery, designate trial
exhibits, or prepare expert reports. Our courts rely heavily on the
competence and diligence of counsel. The evidentiary rulings Ms.
Dahl complains of were largely the result of her counsel’s inability
to follow basic rules of procedure and properly manage discovery.
Accordingly, we conclude that the district court did not abuse its
discretion in its pretrial evidentiary rulings.
C. The District Court Did Not Abuse Its Discretion in Denying Ms.
Dahl’s Requests for Both Temporary and Permanent Alimony
¶84 Ms. Dahl next challenges the district court’s denial of her
requests for temporary and permanent alimony. We review a
district court’s alimony determination for an abuse of discretion and
“will not disturb [its] ruling on alimony as long as the court exercises
its discretion within the bounds and under the standards we have
set and has supported its decision with adequate findings and
conclusions.” Connell v. Connell, 2010 UT App 139, ¶ 5, 233 P.3d 836
(internal quotation marks omitted). We conclude that although Ms.
Dahl may have qualified for an award of both temporary and
permanent alimony, the district court did not abuse its discretion in
refusing to make such an award because Ms. Dahl’s counsel
repeatedly failed to provide the credible financial documentation
necessary for the district court to make an adequate finding as to Ms.
Dahl’s financial need.
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1. The District Court Did Not Abuse Its Discretion in Denying Ms.
Dahl’s Request for Temporary Alimony
¶85 Ms. Dahl made several requests for temporary alimony in
the years between the initial divorce filing and the trial. In a motion
for order to show cause filed shortly after Dr. Dahl petitioned for
divorce, Ms. Dahl moved the court for an order to show why, among
other requests, “[Dr. Dahl] should not be ordered to pay temporary
alimony in the amount of $9,300 per month.” Ms. Dahl attached as
an exhibit to her motion a list of her alleged monthly living expenses,
which totaled just over $11,000. But Ms. Dahl failed to include any
financial documentation to substantiate these alleged expenses. In
his response to Ms. Dahl’s motion, Dr. Dahl refuted nearly every
expense and instead argued that reasonable living expenses for Ms.
Dahl would total approximately $6,000 per month.
¶86 At the hearing on Ms. Dahl’s first request for temporary
alimony, the commissioner determined that Ms. Dahl’s declaration
was not sufficiently detailed and did not have enough evidentiary
support for him to comply with the rules, statutes, and case law
governing alimony awards. The commissioner also found that Ms.
Dahl’s alleged $11,000 in monthly expenses had been “based on the
assumption that she would be awarded custody of the minor
children.” Because Dr. Dahl had since been awarded temporary
custody of the children, the commissioner found that Ms. Dahl’s
expenses, “were no longer relevant to the temporary circumstances
of the parties.” Citing to Whitehead v. Whitehead, 836 P.2d 814 (Utah
Ct. App. 1992), superseded by statute on other grounds, UTAH CODE
§ 78B-12-112, and to rule 101 of the Utah Rules of Civil Procedure,
the commissioner held that “the Court is unable to consider [Ms.
Dahl’s] requests . . . based on the inadequate information [she]
provided to the Court.”
¶87 Two months later, Ms. Dahl filed an affidavit in support of
her request for temporary alimony. The affidavit, however, did not
include any verification of the expenses she claimed, nor did it
include any verification of her current financial condition or need.
Instead, Ms. Dahl attached a 2005 tax return and an appraisal of the
marital home in which she was no longer living. The commissioner
again found the evidence insufficient to support an alimony award
and ordered Ms. Dahl to file a financial declaration that complied
with rule 101(d) of the Utah Rules of Civil Procedure.
¶88 A third hearing on this issue was held, but Ms. Dahl had
not yet complied with the court’s prior order that she provide a
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Opinion of the Court
financial declaration. The commissioner again, relying on the Rules
of Civil Procedure, the Utah Code, and relevant case law, declined
to award temporary alimony. The matter was then raised in the
district court at a hearing just four days later. The district court
ordered Ms. Dahl to comply with the commissioner’s order for a
financial declaration.
¶89 Ms. Dahl made a third attempt at documenting her
financial need a month and a half later when she filed a “Verified
Financial Declaration.” In contrast to her first declaration, where she
testified to just over $11,000 in monthly expenses, she testified to
over $40,000 in monthly expenses in addition to $281,428.62 in legal
fees and an additional $148,000 in projected fees. But Ms. Dahl again
failed to provide verification of any of these expenses. She provided
no proof of income, no bills, no checks, no lease agreement, no bank
statements. In short, she provided absolutely no evidence to support
the claimed expenses. The commissioner again ruled that Ms. Dahl
had failed to provide sufficient evidence to support an alimony
award under Utah law. Specifically, he stated that he was unable to
make the necessary factual findings due to a lack of credible
evidence. When the district court reviewed and ruled on the
commissioner’s recommendation, Ms. Dahl had still not complied
with the commissioner’s order for a financial declaration, and the
district court therefore adopted the commissioner’s findings. The
district court expressed dismay with the fact that Ms. Dahl had
originally attested to $11,000 in monthly expenses for herself and her
two children and had subsequently attested to $40,000 in monthly
expenses for herself alone. The district court found that “those two
amounts [could not] be reconciled” and that Ms. Dahl’s financial
declaration was therefore not credible. Thus the court declined to
award Ms. Dahl temporary alimony.
¶90 Nearly a year after the divorce petition had been filed, Ms.
Dahl filed another motion for temporary alimony, accompanied by
a new affidavit. In this affidavit, Ms. Dahl claimed expenses of
$33,166 per month. Again, there was no supporting documentation
for this amount. One day prior to the hearing on the motion, Ms.
Dahl submitted a notice of errata to her affidavit, which finally, after
a year of litigation, included a copy of a rent check, other checks
written for unknown purposes, utility bills, and past-due medical
bills. These bills totaled $2,651.78.
¶91 At the hearing the next day, the commissioner treated this
second motion for temporary alimony as a motion to reconsider the
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court’s prior rulings that no temporary alimony was warranted. The
commissioner denied Ms. Dahl’s motion to reconsider, reasoning
that Ms. Dahl had been given ample opportunity to file an
acceptable affidavit (one year of discovery and at least five hearings),
and that the court’s prior ruling denying temporary alimony was
now the law of the case.
¶92 The district court ultimately adopted the commissioner’s
recommendation on the alimony issue. The district court found that
“[Ms. Dahl’s] [c]ounsel was previously permitted to re-file this
Motion several times” but each time had failed to include the
necessary supporting documents. The court therefore ruled that Ms.
Dahl “had failed to meet her burden of proof” and again denied her
request for temporary alimony. Although the court never granted
Ms. Dahl an official award of temporary alimony, she was awarded
a small number of one-time payments totaling $19,000, and Dr. Dahl
voluntarily gave Ms. Dahl $4,000 a month throughout the entire
course of the divorce proceedings. In total, Ms. Dahl received
$162,000 from Dr. Dahl while the divorce was pending.
¶93 On appeal, Ms. Dahl argues that the district court abused
its discretion in failing to award her temporary alimony. According
to Ms. Dahl, she demonstrated her need for alimony during the
pendency of the divorce proceedings. Alternatively, she argues that
Dr. Dahl’s financial declarations were sufficient to demonstrate her
need. Specifically, she asserts that she provided the court with “at
least five financial declarations, along with several other filings
supporting her need for alimony, providing copies of her verified
statements of income and expenses.”
¶94 The Utah Alimony Statute, UTAH CODE § 30-3-5(8),
articulates seven factors that a court must consider in making an
alimony determination:
(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;
(iv) the length of the marriage;
(v) whether the recipient spouse has custody of minor
children requiring support;
(vi) whether the recipient spouse worked in a business
owned or operated by the payor spouse; and
(vii) whether the recipient spouse directly contributed
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Opinion of the Court
to any increase in the payor spouse’s skill by paying
for education received by the payor spouse or
enabling the payor spouse to attend school during the
marriage.
UTAH CODE § 30-3-5(8)(a).
¶95 The first three factors are a codification of our analysis in
Jones v. Jones, 700 P.2d 1072, 1075 (Utah 1985), and are often referred
to as the Jones factors. A party seeking alimony bears the burden of
demonstrating to the court that the Jones factors support an award
of alimony. See Whitehead, 836 P.2d at 817 (affirming a district court’s
decision to deny an award of alimony where the recipient spouse
“failed to prove her financial needs”); see also Broemer v. Broemer, 109
So. 3d 284, 288 (Fla. Dist. Ct. App. 2013) (explaining that where
former wife sought an award of alimony, she had “the burden to
prove her actual need and the former husband’s ability to pay
alimony”); Hagedorn v. Hagedorn, 822 N.W.2d 719, 722 (S.D. 2012)
(holding that “[t]he party requesting alimony has the burden to
establish that they have a need for support and that their spouse has
sufficient means and abilities to provide for part or all of that need”
(internal quotation marks omitted)); In re Marriage of Robert, 820
N.W.2d 158 (Iowa Ct. App. 2012) (collecting cases from various
jurisdictions that have held that “the party seeking spousal support
bears the burden of proof”).
¶96 To satisfy this burden, a party seeking alimony must
provide the court with a credible financial declaration and financial
documentation to demonstrate that the Jones factors support an
award of alimony. Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 9,
80 P.3d 153 (explaining that before awarding alimony, “the trial
court is required to make adequate factual findings on all material
issues, unless the facts in the record are clear, uncontroverted, and
capable of supporting only a finding in favor of the judgment”
(internal quotation marks omitted)); see also UTAH R. CIV . P. 101(d)(1)
(“Attachments for motions and responses regarding alimony shall
include income verification and a financial declaration.”).20 Failure
20
We note that the type of financial documentation that the
district court ordered Ms. Dahl to provide is now automatically
required under rule 26.1 of the Utah Rules of Civil Procedure.
Indeed, rule 26.1 provides a detailed list of the documents that
(continued...)
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to consider the Jones factors when determining an appropriate
alimony award “constitutes an abuse of discretion.” Paffel v. Paffel,
732 P.2d 96, 101 (Utah 1986). But where a party seeking alimony
fails to satisfy its burden, a district court will generally not abuse its
discretion in declining to award alimony.
¶97 For example, in Whitehead, the court of appeals affirmed a
district court’s decision to deny a request for alimony where the
recipient spouse “failed to provide evidence of her needs” and
where her alleged monthly living expenses were “unsubstantiated.”
836 P.2d at 817. And in Bakanowski, the court of appeals reversed a
trial court’s decision to award alimony, holding that “[t]he trial court
abused its discretion by failing to make adequate findings in
awarding alimony.” 2003 UT App 357, ¶ 17; see also Bell v. Bell, 810
P.2d 489, 492 (Utah Ct. App. 1991) (“[T]he trial court must make
sufficiently detailed findings of fact on each [Jones] factor to enable
a reviewing court to ensure that the trial court’s discretionary
determination was rationally based upon these three factors.”).
¶98 In this case, although Dr. Dahl submitted sufficient
evidence to the court to demonstrate his ability to pay alimony, Ms.
Dahl’s counsel repeatedly failed to comply with the district court’s
order to supply the court with documentation demonstrating the
remaining two Jones factors—Ms. Dahl’s financial need and earning
capacity. When the commissioner denied Ms. Dahl’s initial request
for $11,000 per month in temporary alimony, he indicated that he
would reconsider the request if Ms. Dahl would provide credible
documentation of her financial need. Instead of supplying the court
with the requested documentation, Ms. Dahl submitted a new
declaration, requesting over $40,000 in monthly alimony. The
commissioner and district court found this amount even less
credible. And because Ms. Dahl’s counsel again provided no
evidence to substantiate Ms. Dahl’s alleged monthly expenses or
earning ability, the district court appropriately denied her request
20
(...continued)
parties to a divorce must include in their financial declarations.
While this rule was not in place at the time of the Dahls’ divorce
litigation and is thus not controlling in this matter, the fact that
detailed financial documentation is now automatically required
supports the notion that the district court did not abuse its discretion
in ordering such documentation in this case.
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Opinion of the Court
for temporary alimony. We therefore affirm the district court on this
issue.
2. The District Court Did Not Abuse Its Discretion in Denying
Ms. Dahl’s Request for Permanent Alimony
¶99 Ms. Dahl next argues that, even if she failed to establish her
financial need prior to trial, her trial testimony was sufficient to
demonstrate a need for permanent alimony. Thus, she asserts that
the district court abused its discretion when it denied her request for
permanent alimony. We disagree.
¶100 As outlined above, Ms. Dahl failed to comply with the
district court’s order that she provide credible evidence of her
financial need prior to trial. By the time of trial—after nearly three
years of litigation—Ms. Dahl’s counsel had still not filed an
acceptable financial declaration. This fact was brought to the district
court’s attention when Dr. Dahl’s counsel noted that Ms. Dahl had
not included a financial declaration in her trial exhibit list. When the
district court asked Ms. Dahl’s counsel about this apparent
oversight, counsel responded that Ms. Dahl would be relying on
financial information she had presented over two years earlier, the
same information that the court had already ruled to be insufficient.
¶101 True to her counsel’s word, Ms. Dahl’s trial testimony
mirrored her previously filed financial declarations in that it was
devoid of supporting evidence. Although Ms. Dahl attempted to
admit into evidence a summary of the Dahls’ living expenses, the
district court sustained Dr. Dahl’s objection to its admission because
Ms. Dahl’s counsel had not disclosed the document prior to trial.
And Ms. Dahl failed to introduce any supporting evidence such as
third-party testimony, bank statements, or bills to support her
request. Instead, she relied solely on her recollection of her spending
habits, current expenses, and her ability to work.21
21
Ms. Dahl testified that although she held undergraduate and
graduate degrees and had been employed as a high school counselor
prior to her marriage, she was unable to work in her prior profession
because she had a number of medical problems, including Crohn’s
disease, ulcerative colitis, and interstitial cystitis. With respect to her
spending during the marriage, she testified that she had the
following monthly expenses: $500 for handyman services; $2,500 for
yard and pool maintenance; $2,000 for upkeep of the marital home;
(continued...)
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¶102 In contrast, when Dr. Dahl testified as to his income and
expenses, he presented a financial declaration that had been
produced as part of his pretrial disclosures and that was supported
with financial documents such as bank and credit card statements,
tax returns, and bills.
¶103 In its Findings of Fact and Conclusions of Law, the district
court made specific findings with regard to each of the factors listed
in the Alimony Statute. It first found that Ms. Dahl presented no
credible testimony to establish her current financial need. In
comparing Ms. Dahl’s testimony with that of Dr. Dahl, the district
court found that while Dr. Dahl “based his testimony about family
expenses upon a study of the accounts used to make the payments,”
Ms. Dahl’s testimony “was based upon a general impression or
estimate,” which was “consistent with her characterization of herself
as having an unlimited budget.” Therefore, while the court found
Ms. Dahl’s testimony incredible and unsubstantiated, it found Dr.
Dahl’s testimony “credible and not rebutted by other competent
evidence.”
¶104 As to the second alimony factor, the district court found
that Ms. Dahl was not employable in her prior occupation or as an
interior designer, but found that “[w]hether she is capable of other
employment was not addressed in the evidence.” And in assessing
Dr. Dahl’s ability to provide support, the court found he was capable
of paying $9,193 per month in alimony.
¶105 As to the remaining statutory factors, the court found that
the parties had been married for seventeen years and seven months,
that Ms. Dahl would not have custody of the parties’ minor children,
that Ms. Dahl worked as a school counselor from 1985 to 1992 but
had not worked outside of the home since, and that “there [was] no
21
(...continued)
$400 for gifts; $5,300 for clothes and food; $1,000 for entertainment;
$1,500 to $2,000 for travel; $900 for automobile maintenance ; another
$500 for clothes; $400–$500 for Costco; and $200–$300 for department
store cards. As to her ongoing expenses, Ms. Dahl testified that a
home equivalent to the marital home would cost $8,000 a month to
rent and that she required thousands of dollars for medical expenses,
$4,400 for health insurance, $200 for TV and Internet, and $500 for
maintenance of a cabin at Timber Lake. But she provided no
documentation to substantiate these alleged expenses.
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evidence that [Ms. Dahl] contributed to [Dr. Dahl’s] professional
ability or skill or that she in any way contributed to the cost of his
education.”
¶106 Upon applying the relevant law to these factual findings,
the district court concluded that Ms. Dahl “failed to meet her burden
to establish a basis for a claim for spousal support.” Because Ms.
Dahl did not provide a credible account of her current financial need
as required by the Alimony Statute, the court found it
“impossible . . . to determine what level of spouse support is
presently necessary to result in a standard of living at present that
would approach the previous living condition.” The court thus held
that by “adopt[ing] the trial tactic of relying solely upon [Ms. Dahl’s]
estimate of expenses from the period of marital cohabitation rather
than providing realistic testimony about her current assets, needs
and expenses,” Ms. Dahl had precluded the court from considering
an award of alimony.
¶107 On appeal, Ms. Dahl argues that the district court abused
its discretion in failing to award her permanent alimony.
Specifically, she alleges that (1) she presented the evidence necessary
to demonstrate her need for alimony, (2) the court failed to make the
necessary factual findings, (3) the court failed to specify the time
period it used to make its alimony determination, and (4) the court’s
decision to deny permanent alimony created a substantial inequality.
We address each argument in turn.
a. Ms. Dahl Did Not Satisfy Her Burden of Showing Her
Financial Need
¶108 As the party seeking an award of permanent alimony, Ms.
Dahl bore the burden of providing the district court with sufficient
credible evidence of each factor listed in the Alimony Statute. Ms.
Dahl argues that she “showed that she had expenses and had the
need for an award of alimony” and that her testimony was credible.
But as explained above, Ms. Dahl’s testimony consisted solely of her
recollection of her marital expenses. She provided no financial
declaration, no supporting financial documentation, and no expert
testimony. Nor did she provide testimony about whether she had
any nonmarital property or assets. Ms. Dahl’s unsubstantiated
testimony did not satisfy her burden of showing her financial need.
¶109 Alternatively, Ms. Dahl argues that even if the district court
correctly determined that she failed to establish her financial need,
she should be relieved from this burden because she did not have
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access to the marital records. This argument, however, is
unsupported by the record, which demonstrates that Ms. Dahl had
over a year of discovery, during which time her counsel issued
hundreds of subpoenas to financial institutions to obtain
documentary evidence of the Dahls’ finances. In fact, Ms. Dahl’s
own financial expert, Mr. Brough, submitted an affidavit to the court
over two and a half years prior to trial wherein he stated that he saw
over 20,000 documents from these financial institutions and opined
that thousands more would be produced during discovery. In short,
Ms. Dahl’s argument that she was denied access to the marital
records is without merit. We therefore conclude that Ms. Dahl failed
to meet her burden of showing her financial need—a necessary
prerequisite to an award of permanent alimony.
b. The District Court Made Sufficient Findings as to Each
Statutory Alimony Factor
¶110 Ms. Dahl also argues that the district court failed to make
the necessary factual findings to support its refusal to order alimony.
Specifically, she asserts that the district court failed to consider the
length of the parties’ marriage. But this argument is completely
unsupported by the record. In the district court’s findings of fact
and conclusions of law, the court explicitly acknowledged the length
of the marriage in its discussion of alimony. The district court also
made specific factual findings with regard to the other six statutory
alimony factors. Contrary to Ms. Dahl’s assertion, the district court’s
decision to deny Ms. Dahl’s alimony request was not the result of a
failure to consider the necessary factors. Instead, the court was
hampered primarily by Ms. Dahl’s failure to provide the court with
any credible evidence regarding her financial need. We therefore
hold that the district court made the factual findings necessary to
support its ruling.
c. The District Court Properly Required Evidence of Current
Financial Need in Addition to Evidence of Ms. Dahl’s Prior
Standard of Living
¶111 Ms. Dahl next argues that the district court improperly
required evidence of her current financial need rather than relying
solely on evidence of her standard of living during the marriage. As
Ms. Dahl correctly points out, the primary purpose of alimony is “to
enable the receiving spouse to maintain as nearly as possible the
standard of living enjoyed during the marriage and to prevent the
spouse from becoming a public charge.” Connell v. Connell, 2010 UT
App 139, ¶ 9, 233 P.3d 836 (emphasis added) (internal quotation
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marks omitted). And while the Alimony Statute instructs courts to
“look to the standard of living, existing at the time of separation, in
determining alimony,” it also explains that a district court “shall
consider all relevant facts and equitable principles and may, in its
discretion, base alimony on the standard of living that existed at the
time of trial.” UTAH CODE § 30-3-5(8)(e) (emphasis added).
Therefore, while an alimony award would ideally allow both
spouses to maintain the standard of living enjoyed during the
marriage, the court is nevertheless obligated to support any alimony
award with specific factual findings as to each statutory factor and
is permitted to deviate from the general rule in light of the relevant
facts and equities.
¶112 Contrary to Ms. Dahl’s assertion, the district court in this
case did look to Ms. Dahl’s standard of living during the marriage,
but concluded that because Ms. Dahl had failed to satisfy her burden
of showing her present need, it was “impossible” to determine the
amount of alimony “necessary to result in a standard of living at
present that would approach the previous living condition.” And,
as discussed below, where Ms. Dahl provided no evidence to the
court to suggest that her substantial property award would not be
sufficient to maintain a standard of living similar to that which she
enjoyed during the marriage, the district court did not abuse its
discretion in declining to award Ms. Dahl permanent alimony.
d. Because Ms. Dahl Received a Sizeable Property Award, the
District Court Did Not Create a Substantial Inequality in
Denying Ms. Dahl’s Request for Permanent Alimony
¶113 Ms. Dahl argues that the district court created a substantial
inequality when it failed to award her permanent alimony, even
though it concluded that Dr. Dahl was capable of paying up to
$9,139 per month. Specifically, she contends that without an award
of permanent alimony, Dr. Dahl will be able to continue to “live[] in
luxury,” while Ms. Dahl will live “as a pauper with no income and
a marital property award insufficient to pay even her current
obligations.”
¶114 In Bakanowski, the court of appeals explained that if a
district court considers each of the statutory alimony factors, “we
will not disturb its award absent a showing that such a serious
inequity has resulted as to manifest a clear abuse of discretion.” 2003
UT App 357, ¶ 10, (emphasis added) (internal quotation marks
omitted). In that case, the district court awarded Ms. Bakanowski
$1,000 per month in permanent alimony. Id. ¶ 5. The court of
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appeals reversed the alimony award, concluding that the district
court had “fail[ed] to enter specific findings on [Ms. Bakanowski’s]
financial needs and condition, and the pertinent facts in the record
[were] not clear, uncontroverted, and capable of supporting only a
finding in favor of the judgment.” Id. ¶ 11 (internal quotation marks
omitted). The court of appeals held that it was error for the court to
award alimony in an effort to “simply equalize income” without
considering each of the statutory alimony factors. Id. ¶ 12.
¶115 Here, Ms. Dahl asks us to order the same type of income
equalization that the court of appeals rejected in Bakanowski.
Although the district court in this case attempted to evaluate each
statutory alimony factor, it was prevented from making all the
necessary factual findings due to Ms. Dahl’s failure to provide
credible evidence of her financial need. And without such evidence,
any alimony award would have been merely an attempt to equalize
income.
¶116 In divorce cases where there is insufficient evidence of one
of the statutory alimony factors, courts may impute figures. See, e.g.,
Connell, 2010 UT App 139, ¶¶ 14–20 (imputing husband’s income
from a prior job to determine his ability to pay alimony); Leppert v.
Leppert, 2009 UT App 10, ¶ 12, 200 P.3d 223 (holding that the district
court did not abuse its discretion in imputing an income figure for
wife when the decision was “adequately supported” by the district
court’s findings). In this case, the district court could have similarly
imputed a figure to determine Ms. Dahl’s financial need based either
on Dr. Dahl’s records of the parties’ predivorce expenses or a
reasonable estimate of Ms. Dahl’s needs. But it was not required to
do so because Ms. Dahl received a sufficiently large property award
to support a comfortable standard of living. The district court
awarded Ms. Dahl over $1.5 million in marital property. In light of
this award, it was unnecessary for the district court to impute a
figure for Ms. Dahl’s need. And while it may be true that Ms. Dahl’s
award was “insufficient to pay even her current obligations,” the
obligations referred to consist largely of her attorney fees,22 which,
as explained below, we conclude are unreasonable. Indeed, but for
her unreasonably high attorney fees, Ms. Dahl’s property award was
22
As the district court explained, Ms. Dahl’s attorney fees
constituted “[b]y far the largest debt identified in these proceedings,
the sheer size of the claim threatens to swallow the entire marital
estate.”
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sufficiently large to prevent any “serious inequity” arising from the
district court’s refusal to award permanent alimony.
¶117 In summary, we hold that the district court acted within its
discretion in denying Ms. Dahl’s request for permanent alimony.
Ms. Dahl failed to provide the court with the evidence necessary to
demonstrate her financial need. The record clearly indicates that the
district court was mindful of the statutory alimony factors and made
all of the findings it could based on the evidence before it. Any
harm Ms. Dahl may have suffered by receiving no permanent
alimony was not a result of error on the part of the district court, but
instead was due to her counsel’s failure to present the evidence
necessary to support an award of permanent alimony.23 We therefore
affirm the district court’s decision denying Ms. Dahl’s request for
permanent alimony.
D. The District Court Erred in Part in Its Division
of the Marital Assets
¶118 Ms. Dahl next argues that the district court abused its
discretion in dividing the marital assets by (1) failing to make
adequate findings of fact to support its distribution determination,
(2) distributing the liquid assets inequitably, (3) concluding that Dr.
Dahl’s IRA accounts were not marital property, (4) finding that
certain real property subject to a series of exchanges pursuant to 26
U.S.C. § 1031 was separate property, and (5) failing to consider
commingling of marital assets with Dr. Dahl’s premarital pension
plan. For the reasons discussed below, we affirm in part, reverse in
part, and remand for further proceedings consistent with this
opinion.
¶119 Generally, district courts have considerable discretion
concerning property distribution in a divorce proceeding and their
determinations “enjoy a presumption of validity.” Elman v. Elman,
2002 UT App 83, ¶ 17, 45 P.3d 176. Thus, we will uphold the
decision of the district court on appeal “unless a clear and prejudicial
abuse of discretion is demonstrated.” Keiter v. Keiter, 2010 UT App
169, ¶ 16, 235 P.3d 782.
23
To the extent these deficiencies are due to the negligence of Ms.
Dahl’s counsel, her remedy lies in a civil action for malpractice. But
attorney negligence does not provide a basis for us to sidestep the
legal standard that our statutes and case law prescribe for alimony
determinations.
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1. The District Court Made Sufficient Findings of Fact to Support Its
Distribution of Marital Assets
¶120 Ms. Dahl argues generally that the district court failed to
make adequate findings of fact to support its distribution of marital
assets. Specifically, she claims that the district court did not fully
account for the personal property, such as furnishings, located inside
the marital home. We disagree and hold that the court’s Findings of
Fact and Conclusions of Law are sufficient to support its distribution
of the marital property.
¶121 Before a district court distributes marital assets, it must (1)
“identify the property in dispute and determine whether [it] is
marital or separate property,” (2) “consider whether there are
exceptional circumstances that overcome the general presumption
that marital property be divided equally,” (3) “assign values to each
item of marital property so that [a] distribution strategy . . . can be
implemented,” and (4) distribute the marital assets “consistent with
the distribution strategy.” Stonehocker v. Stonehocker, 2008 UT App 11,
¶ 15, 176 P.3d 476. District courts must then enter findings of fact
establishing that the court’s “judgment or decree follows logically
from, and is supported by, the evidence.” Gardner v. Gardner, 748
P.2d 1076, 1078 (Utah 1988). In reviewing a property distribution,
we will not set aside findings of fact, whether based on oral or
documentary evidence, unless they are clearly erroneous, and we
give due regard to the district court’s superior position from which
to judge the credibility of witnesses. Stonehocker, 2008 UT App 11,
¶ 17.
¶122 The district court in this case properly followed the
approach established in Stonehocker in distributing the marital assets.
First, it identified the items in dispute, ranging from home furniture
and automobiles to businesses and real estate, and determined
whether such property was properly classified as marital property
or separate property. Next, the court adopted a strategy of dividing
the marital assets evenly between Dr. Dahl and Ms. Dahl. In its
Findings of Fact and Conclusions of Law, it itemized the marital
property and determined that the value of the property should be
divided evenly between the parties. The court then assigned values
to the property in dispute based on evidence presented at trial. For
example, the court itemized the items contained in the marital home
and assigned a value. Finally, the district court distributed the
property according to its distribution strategy of dividing the assets
evenly.
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¶123 Based on its thorough evaluation of the marital and
separate property, we hold that the district court made sufficient
findings of fact to support its conclusion regarding the division of
the marital assets. We further hold that the findings were based on
the evidence presented to the district court and were sufficiently
detailed to disclose the steps by which it reached the ultimate
distribution.
2. The District Court Erred in Part in Its Distribution of the Liquid
Assets and Litigation Costs
¶124 Ms. Dahl’s next claims of error concern the district court’s
distribution of specific liquid assets and litigation costs. Ms. Dahl
argues that the district court abused its discretion by (1) ordering
Ms. Dahl to return $162,000 that Dr. Dahl had voluntarily given her
over the course of the divorce proceedings; (2) ordering Ms. Dahl to
pay one-half of the supervision, guardian ad litem, and custody
evaluation costs incurred by the parties; (3) ordering Ms. Dahl to pay
for the trial transcripts; (4) finding that a Visa credit card was marital
debt; and (5) not valuing undisclosed marital assets. On review, we
will uphold the district court’s ruling unless it clearly abused its
discretion. Stonehocker, 2008 UT App 11, ¶ 8. We address each of Ms.
Dahl’s claims of error in turn.
a. The Trial Court Erred in Requiring Ms. Dahl to Refund to the
Marital Estate $162,000 that Dr. Dahl Voluntarily Paid Ms. Dahl
Over the Course of the Divorce Proceedings
¶125 During the pendency of the divorce action, Dr. Dahl
remained in possession of the marital home with access to marital
funds, while Ms. Dahl lived outside the marital home and had no
such access. While the divorce action was proceeding, the district
court ordered Dr. Dahl to pay Ms. Dahl three one-time payments
totaling $19,000, and Dr. Dahl voluntarily paid Ms. Dahl $4,000 per
month. All totaled, Ms. Dahl received $162,000 in payments from
Dr. Dahl during the pendency of the divorce proceeding. During
this period, Dr. Dahl had access to the entirety of the marital funds
and continued to use those funds to pay for his own living expenses
and the expenses of the couple’s children. The district court ordered
Ms. Dahl to repay to the marital estate the $162,000 she had received,
but did not require Dr. Dahl to repay the marital funds he spent
during the years the divorce was proceeding. Ms. Dahl argues that
this was an abuse of discretion. We agree.
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¶126 Prior to the entry of a divorce decree, all property acquired
by parties to a marriage is marital property, owned equally by each
party. See Berger v. Berger, 713 P.2d 695, 697 (Utah 1985) (explaining
that a “marital estate should be valued as of the time of the divorce
decree”). For this reason, it is improper to allow one spouse access
to marital funds to pay for reasonable and ordinary living expenses
while the divorce is pending, while denying the other spouse the
same access. Allowing both spouses equal access to marital funds
during the pendency of a divorce promotes the goal of a “fair, just,
and equitable” distribution of marital property. Noble v. Noble, 761
P.2d 1369, 1373 (Utah 1988).
¶127 This principle is illustrated in In re Marriage of Marriott, a
case in which the Court of Appeals of Illinois was asked to
determine whether money paid by the husband to the wife during
the divorce proceeding was a preliminary distribution of marital
assets. 636 N.E.2d 1141 (Ill. App. Ct. 1994). In that case, the husband
and wife lived in separate housing during the dissolution
proceedings with the husband remaining in the marital home.
Id at 1149. The wife received a lump sum of money from the
husband that she used to pay for living expenses and periodic
temporary maintenance. Id. at 1145. The district court held that the
lump sum was a preliminary distribution of the marital assets. Id.
at 1149. But the Illinois Court of Appeals reversed, reasoning that
the sum was an allowance for living expenses. Id. at 1151. The court
concluded that marital assets used by a spouse who is not living in
the marital home during the pendency of a divorce should not be
treated differently than the marital assets enjoyed by the spouse
living in the marital home so long as the funds are spent on living
expenses. Id.
¶128 Here, like the wife in Marriott, Ms. Dahl lived outside the
marital home during the pendency of the divorce, while Dr. Dahl
remained in the marital home. Similarly, Dr. Dahl remained in
control of the marital funds and marital bank accounts, while Ms.
Dahl had no such access. Indeed, her only access to marital funds
was through the three one-time payments ordered by the court and
the $4,000 payment from the marital estate that Dr. Dahl made
voluntarily. And the record reflects that Ms. Dahl, like the wife in
Marriott, used the money she was given to pay for living expenses
during the pendency of the divorce.
¶129 It was an abuse of discretion for the district court to order
Ms. Dahl to repay the $162,000. This order had the effect of allowing
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Opinion of the Court
one spouse to use marital funds to pay for living expenses during
the pendency of the divorce, while denying such use to the other
spouse. We accordingly reverse.
b. The Trial Court Erred When It Ordered Ms. Dahl to Pay for
One-Half of Certain Litigation Costs
¶130 During the pendency of the divorce, Dr. Dahl paid all of
the costs associated with the divorce action, including $16,475 for the
custody evaluation; $21,600 plus an undetermined amount of fees
for the guardian ad litem; and $60,528.60 for supervised parent time.
The district court determined that these costs were jointly incurred
by the parties and reduced Ms. Dahl’s share of the marital estate by
the value of one-half of the total costs. Ms. Dahl argues that it was
inequitable for the court to reduce her postjudgment share of the
marital estate when Dr. Dahl paid for those costs using marital
funds. Because Dr. Dahl used marital funds to pay for these costs,
Ms. Dahl reasons that both parties’ share in the marital estate was
decreased by equal amounts, and therefore her share should not
have been additionally reduced. We agree.
¶131 As discussed above, “[t]he overarching aim of a property
[distribution] . . . is to achieve a fair, just, and equitable result
between the parties.” Noble, 761 P.2d at 1373. Before the district
court can undertake the distribution, it must determine the value of
the assets. Stonehocker, 2008 UT App 11, ¶ 15. And it is well-settled
that assets should be valued at the time of the divorce decree. Dunn
v. Dunn, 802 P.2d 1314, 1319 (Utah Ct. App. 1990). On review, the
district court’s factual findings as to the value of assets will not be
disturbed unless they are clearly erroneous. Id. at 1317.
¶132 In this case, the district court correctly concluded that the
supervision, guardian ad litem, and custody evaluation costs should
be shared equally by the parties from the marital estate. The district
court also concluded that inasmuch as Dr. Dahl had already paid the
full amounts, Ms. Dahl’s share of the estate must be reduced for her
share of the costs.
¶133 But the district court overlooked the fact that Dr. Dahl had
paid these costs and fees using the marital bank account, which
consisted of marital funds. Because Dr. Dahl paid for the costs using
marital funds, the value of the marital estate was reduced by the
amount of those costs. Thus, when the district court divided the
marital estate, both parties had effectively paid one-half of these
costs. By ordering Ms. Dahl to repay Dr. Dahl one-half of the costs
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from her individual share of the marital estate, the district court in
effect required Ms. Dahl to pay twice. In short, she was required to
bear the entire burden of these costs.
¶134 Such a result constituted clear error. We therefore reverse
the district court’s ruling because Ms. Dahl should not have been
required to pay for one-half of the fees from her share of the estate
when Dr. Dahl used marital funds to pay for the costs during the
litigation.
c. The Trial Court Correctly Concluded that Ms. Dahl Must Pay
for the Trial Transcripts
¶135 Ms. Dahl ordered daily transcripts of the trial proceedings
at a total cost of $35,217.65. The district court granted Ms. Dahl’s
request for transcripts on the understanding that she would, as the
requesting party, be required to bear the cost. On appeal, Ms. Dahl
argues that the district court abused its discretion by requiring her
to pay for the transcripts without making findings of fact regarding
her ability to pay. We disagree.
¶136 Utah courts no longer routinely employ live court
reporters. Instead, trial transcripts are prepared from digital
recordings. During a pretrial motion hearing on September 15, 2009,
Ms. Dahl’s attorney requested that daily transcripts of the trial be
prepared by a live court reporter. The district court offered the
alternative of providing daily copies of the recording disk to
minimize expenses. But Ms. Dahl’s attorney refused the offer and
requested permission to use a live court reporter for daily
transcripts. The district court granted the request, but informed Ms.
Dahl’s attorney that, as the party requesting the live reporter, Ms.
Dahl would be solely responsible for paying all reporter fees. Ms.
Dahl’s counsel agreed.
¶137 Subsequently, Ms. Dahl requested that Dr. Dahl pay for the
reporter costs, but the district court ordered that Ms. Dahl bear the
entire cost. We hold that it was not an abuse of discretion for the
district court to require that Ms. Dahl pay all of the reporter costs.
It was, after all, Ms. Dahl who requested the live reporter and she
persisted in that request even after the district court informed her
that she would be responsible for all the associated costs. The district
court offered the alternative of releasing the audio disk, but Ms.
Dahl’s attorney declined the offer. Under these circumstances, it
was an appropriate exercise of the district court’s discretion to assign
those costs entirely to Ms. Dahl.
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d. The District Court Did Not Abuse Its Discretion by
Concluding that Certain Unsecured Debt Was Marital Debt
¶138 Ms. Dahl’s next claim of error involves the district court’s
distribution of the parties’ unsecured debt. As of July 31, 2009, a
Wells Fargo Visa account had a balance of $24,053. The district court
found that this balance was a marital debt and reduced both parties’
share of the marital estate equally. Ms. Dahl argues that this finding
was erroneous. Specifically, Ms. Dahl argues that the Visa card was
not listed on Dr. Dahl’s 2006 Statement of Income, Expenses, Assets,
and Liabilities report (2006 Report), which was filed near the
inception of the divorce proceeding. Ms. Dahl reasons that, because
the Wells Fargo Visa account was not listed on the 2006 report, any
balance on the account must therefore have been the result of Dr.
Dahl’s postseparation spending.
¶139 Under Utah Code section 30-2-5(1)(b), neither spouse is
personally liable for the separate debts incurred by the other spouse
during the marriage. But both spouses are responsible for family
expenses. UTAH CODE § 30-2-9(1). Nevertheless, there is no fixed
formula for determining the division of debts in a divorce action.
We require only that the district court’s allocation of debt be based
on adequate factual findings. Stonehocker, 2008 UT App 11, ¶ 46.
And we will not disturb those findings absent an abuse of discretion.
Id.
¶140 Here, the district court determined that the Wells Fargo
Visa was marital debt. Ms. Dahl challenges that ruling, asserting
that Dr. Dahl’s failure to testify as to the nature of the debt mandated
the conclusion that it was his separate debt. But during trial, the
district court heard extensive testimony from Dr. Dahl’s expert
witness, Mr. Stoddard, regarding all of Dr. Dahl’s accounts. Ms.
Dahl points to no evidence in the record to refute Mr. Stoddard’s
testimony that the Visa account was a marital debt. We conclude
that Mr. Stoddard’s testimony was sufficient to support the district
court’s finding that the debt was marital. We therefore affirm the
district court’s ruling.
e. Ms. Dahl’s Argument that the District Court Failed to
Equitably Distribute Some Personal Property Is Inadequately
Briefed
¶141 Finally, Ms. Dahl argues the district court abused its
discretion in the distribution of marital property because it did not
consider all of the tangible assets located in the marital home, in
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which Dr. Dahl continues to reside. But Ms. Dahl has failed to point
to any specific items that were excluded from the property
distribution. We have repeatedly stated that “[a]ppellate courts are
not a depository in which [a party] may dump the burden of
argument and research.” ASC Utah, Inc. V. Wolf Mountain Resorts,
L.C., 2013 UT 24, ¶ 16, 309 P.3d 201 (internal quotation marks
omitted) (alternations in original); see also Peterson v. Sunrider Corp.,
2002 UT 43, ¶ 23 n.9, 48 P.3d 918 (“A single, vague sentence without
citation to the record or legal authority is inadequate.”). The record
in this case spans thousands of pages and the assets involved are
valued in the millions of dollars. As appellant, Ms. Dahl bears the
burden of directing our attention to specific facts in the record to
support her contention that the district court abused its discretion.
Ms. Dahl cannot simply assert error without explanation or evidence
and expect this court to reverse the finding of the district court.
Accordingly, we are not persuaded by this inadequately briefed
argument.
3. The District Court Did Not Abuse Its Discretion When It
Concluded That the IRA and SEP IRA Remained Separate Property
¶142 The district court found that a number of Dr. Dahl’s
retirement accounts, including a traditional IRA and a SEP IRA,
were established and funded by Dr. Dahl prior to his marriage to
Ms. Dahl and therefore held that these accounts were Dr. Dahl’s
separate property. Ms. Dahl argues that this holding was erroneous.
Ms. Dahl acknowledges that the IRA accounts were established
before their marriage, but asserts that they lost their identity as
separate property when Dr. Dahl commingled them with marital
funds. Specifically, Dr. Dahl withdrew funds from the IRA to pay
off a home equity loan secured by the marital home and then
replenished the funds using a marital bank account. Ms. Dahl argues
that this action converted the IRAs to marital property. We disagree.
¶143 “Generally, premarital property, gifts, and inheritances [are
considered] separate property, and the spouse bringing such . . .
property into the marriage may retain it” in the event of a divorce.
Keiter v. Keiter, 2010 UT App 169, ¶ 22, 235 P.3d 782 (internal
quotation marks omitted) (internal alterations omitted). But
premarital property may lose its separate character where the parties
have inextricably commingled it with the marital estate, or where
one spouse has contributed all or part of the property to the marital
estate with the intent that it become joint property. Dunn, 802 P.2d
at 1320. Courts look to a party’s actions as a manifestation of a
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spouse’s intent to contribute separate property to the marital estate.
Kimball v. Kimball, 2009 UT App 233, ¶ 28, 217 P.3d 733. On review,
we will uphold the district court’s decision that the IRAs remained
Dr. Dahl’s separate property unless the district court abused its
discretion. Stonehocker, 2008 UT App 11, ¶ 8.
¶144 Ms. Dahl claims that the IRA accounts became commingled
with marital assets. But Dr. Dahl’s IRA accounts never lost their
separate identity. Dr. Dahl withdrew money from his IRA accounts
so that he could pay off a home equity loan secured by the marital
home. After paying off the loan, Dr. Dahl replaced the amounts
withdrawn from the IRA accounts with funds from the marital bank
account. This transaction is best characterized as a loan from Dr.
Dahl to the marital estate, which was in turn repaid with marital
funds. There is nothing about these transactions suggesting that Dr.
Dahl intended to commingle his IRA funds with the marital estate.
And Dr. Dahl’s property did not become so “inextricably
commingled . . . into the marital estate” that the district court was
incapable of tracing it. Dunn, 802 P.2d at 1321.
¶145 We therefore affirm the district court’s conclusion that the
IRA accounts are separate property. The evidence supports the
district court’s conclusion that Dr. Dahl did not intend for the IRA
accounts to become joint property and that the IRA account did not
lose its separate identity simply because Dr. Dahl made a loan from
the account to pay off a home equity loan.
4. The District Court Did Not Abuse Its Discretion When It Found
That the 1031 Property Exchanges Were Separate Property
¶146 Dr. Dahl claimed that four parcels of real property (1031
Properties) were separate property, despite being acquired during
the marriage. The district court concluded that the four parcels were
acquired via a series of exchanges pursuant to section 1031 of the
Internal Revenue Code (1031 exchanges). 26 U.S.C. § 1031. Section
1031 allows a party to exchange one parcel of real property for
another without incurring any tax burden. See id. § 1031(a)(1). (“No
gain or loss shall be recognized on the exchange of property held for
productive use in a trade or business or for investment if such
property is exchanged solely for property of like kind which is to be
held either for productive use in a trade or business or for
investment.”). A spouse can maintain the separate identity of
premarital property by utilizing section 1031 exchanges to avoid
commingling separate property with marital property. For example,
a spouse may use the proceeds of the sale of a house he or she
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inherited to purchase another property through a section 1031
exchange, allowing the new property to retain the same separate
character as the house whose proceeds were used to purchase the
new property. See Smith v. Smith, Nos. CT2003-0008, CT2003-0020,
2004 WL 193041 (Ohio Ct. App. Jan. 22, 2004) (holding that property
subject to a section 1031 exchange remained separate property for
the purposes of distribution in a divorce action).
¶147 Ms. Dahl argues that the district court abused its discretion
when it determined that the properties derived from the sale or
transfer of Dr. Dahl’s separate property through section 1031
exchanges remained Dr. Dahl’s separate property. At trial, Dr.
Dahl’s expert witness, Mr. Stoddard, testified extensively regarding
the acquisition of the 1031 Properties. Relying on Mr. Stoddard’s
testimony, the district court found that the 1031 Properties, aside
from 14 percent of one property, were Dr. Dahl’s separate assets.
Ms. Dahl received credit for one-half of the 14 percent determined
to be marital property, while Dr. Dahl was awarded the remaining
1031 Properties.
¶148 Ms. Dahl challenges this ruling on several grounds. First,
Ms. Dahl argues that the trial exhibits relied on by Mr. Stoddard
were inadmissible. Second, Ms. Dahl claims that Dr. Dahl did not
provide sufficient evidence to prove that the Lamona property, the
initial property sold by means of a 1031 exchange, was entirely Dr.
Dahl’s separate property. Third, Ms. Dahl argues that all of the
subsequent 1031 exchanges could not be properly traced back to the
premarital asset, the Lamona property, due to incomplete evidence.
Finally, Ms. Dahl claims that the funds from the 1031 exchanges had
been commingled with marital assets.
¶149 At heart, Ms. Dahl’s challenge to the district court’s ruling
on the 1031 Properties is a challenge to the sufficiency of the
evidence. Her central assertion is that the district court lacked
sufficient evidence to conclude that the 1031 Properties originated
from premarital assets. A party challenging a district court’s factual
findings on appeal bears a heavy burden of persuasion. See Drake v.
Indus. Comm’n, 939 P.2d 177, 181 (Utah 1997). Our review of such
findings is highly deferential, and we will reverse only if the
findings are clearly erroneous. Id. Moreover, a party challenging
factual findings on sufficiency of the evidence grounds “will almost
certainly fail to carry its burden of persuasion on appeal if it fails to
marshal” the evidence sufficient to overcome “the healthy dose of
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deference owed to factual findings.” State v. Nielsen, 2014 UT 10,
¶¶ 41–42, 326 P.3d 645.
¶150 Ms. Dahl has failed to meet her burden in this case. The
district court made factual findings regarding the source of the 1031
Properties based on testimony from Dr. Dahl and expert testimony
from Mr. Stoddard. Though Ms. Dahl complains that Mr. Stoddard
relied on inadmissible evidence in his testimony, such reliance is
clearly permitted by our rules of evidence. See UTAH R. EVID . 703
(“If experts in the particular field would reasonably rely on those
kinds of facts or data in forming an opinion on the subject, they need
not be admissible for the opinion to be admitted.”). Similarly, Ms.
Dahl argues that Dr. Dahl’s testimony was self-serving and that Dr.
Dahl failed to provide all of the documentation he could have
provided to substantiate his and Mr. Stoddard’s testimony. But a
district court is not precluded from relying on self-serving testimony
and a party need not offer into evidence every document on which
his expert witness relied. See UTAH R. EVID . 705. Thus, Ms. Dahl’s
argument comes down to a challenge to the credibility of Dr. Dahl
and Mr. Stoddard. But it is the district court’s role to judge the
credibility of witnesses and to weigh their testimony. And Ms. Dahl
can point to nothing suggesting that the evidence relied on by the
district court was legally insufficient to support its factual findings.
Accordingly, we affirm.
5. The District Court Did Not Abuse Its Discretion in Ruling on the
Character of Dr. Dahl’s Premarital Pension Plan
¶151 The district court determined that a number of retirement
accounts were established and funded by Dr. Dahl prior to his
marriage to Ms. Dahl, including the Charles F. Dahl M.D. PC Profit
Sharing Trust (Profit Sharing Trust). Because it found that the Profit
Sharing Trust was funded prior to the marriage, the district court
concluded that it remained Dr. Dahl’s separate property. Ms. Dahl’s
final claim of error as to the distribution of marital assets is that the
district court failed to consider commingling of marital assets with
the Profit Sharing Trust. At trial, Dr. Dahl testified that $533.86 was
transferred into his profit sharing plan on a monthly basis. Because
Dr. Dahl testified that he could not recall from which account the
deposits originated, Ms. Dahl argues that Dr. Dahl failed to prove
that this monthly deposit came from nonmarital funds.
¶152 Ms. Dahl’s argument is a challenge to the sufficiency of the
evidence relied upon by the district court. And again, Ms. Dahl has
failed to meet her burden of persuasion. Though Dr. Dahl did
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acknowledge that he could not be certain as to the account from
which the monthly deposit originated, he testified that he believed
the recurring deposit was from a limited real estate partnership that
paid a dividend every month and that this partnership was his
separate property. In the absence of any evidence to the contrary
from Ms. Dahl, we cannot conclude that the district court abused its
discretion in determining that the Profit Sharing Trust was funded
with premarital property and therefore remained Dr. Dahl’s separate
property. Accordingly, we affirm.
E. The District Court Did Not Abuse Its Discretion in Awarding Dr.
Dahl Sole Physical and Legal Custody of the Parties’ Minor Children
¶153 Initially, both Dr. Dahl and Ms. Dahl requested sole legal
and physical custody of the children. Because they were both
seeking sole custody, neither party filed a proposed parenting plan
in accordance with section 30-3-10.8 of the Utah Code, which
requires any party seeking joint legal or physical custody to submit
such a plan. Four months before trial, an independent custody
evaluator submitted a custody evaluation to the court. The
evaluation recommended that Dr. Dahl be awarded sole legal
custody. In regard to physical custody, the evaluator recommended
a variety of possible arrangements, including some joint custody
arrangements. The evaluator did not, however, include among the
options awarding Ms. Dahl sole physical custody.
¶154 One week before trial, Ms. Dahl filed a motion to amend
her counterclaim to seek joint legal and physical custody. She
supported that motion with a proposed parenting plan. The district
court denied her request as untimely, reasoning that the language of
section 30-3-10.8 required that any parenting plan be filed with an
original pleading. Thus, Ms. Dahl could not file a parenting plan
with an amended pleading. Ms. Dahl argues that the district court
misinterpreted section 30-3-10.8 and that she should have been
granted leave to amend her pleadings to request joint custody and
file a parenting plan. Although we agree that the district court
misinterpreted section 30-3-10.8, we nevertheless affirm the district
court’s custody determination on alternate grounds.
1. Parties May File a Parenting Plan with Amended Pleadings
¶155 “In custody matters, appellate courts generally give the
[district] court considerable discretion because the [district] court’s
proximity to the evidence places it in a better position than an
appellate court to choose the best custody arrangement.” Trubetzkoy
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v. Trubetzkoy, 2009 UT App 77, ¶ 6, 205 P.3d 891 (citation omitted).
But this broad discretion “must be guided by the governing law
adopted by the Utah Legislature.” Id. And on matters of statutory
interpretation, we review for correctness. Baird v. Baird, 2014 UT 08,
¶ 16, 322 P.3d 728.
¶156 A district court “may order joint legal custody or joint
physical custody or both if one or both parents have filed a
parenting plan in accordance with Section 30-3-10.8 and it
determines that joint legal custody or joint physical custody or both
is in the best interest of the child.” UTAH CODE § 30-3-10.2(1). Thus,
the statute establishes two prerequisites for a district court’s award
of joint custody: (1) the filing of a parenting plan and (2) a
determination that joint custody is in the child’s best interest.
Section 30-3-10.8 requires that a party requesting joint custody file
his or her parenting plan “at the time of the filing of their original
petition or at the time of filing their answer or counterclaim.”
(Emphasis added).
¶157 In this case, both parties initially sought sole custody of the
children. Therefore, neither party filed a parenting plan with their
original pleading. We must therefore consider whether section 30-3-
10.8 confines requests for joint custody to initial pleadings or
whether the statute allows a party to seek joint custody through an
amended pleading.
¶158 Although this is a question of first impression for this
court, our court of appeals considered a related issue in Trubetzkoy.
In Trubetzkoy, the court of appeals reversed a district court’s award
of joint custody because neither parent had filed a parenting plan.
2009 UT App 77, ¶ 13. The district court in this case relied on the
Trubetzkoy decision in determining that it was precluded from
considering joint custody in the absence of a parenting plan.
Although we agree with the court of appeals that the complete
absence of a parenting plan precludes an award of joint custody, see
UTAH CODE § 30-3-10.2, Trubetzkoy offers no insight into the question
of whether section 30-3-10.8 allows parties to amend their initial
pleadings to later seek joint custody and to file a parenting plan in
connection with those amended pleadings.
¶159 Our primary goal when interpreting statutes is to
effectuate the intent of the Legislature. State v. Watkins, 2013 UT 28,
¶ 18, 309 P.3d 209. Our starting point is therefore the plain language
of the statute. Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50,
¶ 14, 267 P.3d 863. Further, “we interpret[] statutes to give meaning
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to all parts, and avoid[] rendering portions of the statute
superfluous.” Watkins, 2013 UT 28, ¶ 23 (internal quotation marks
omitted) (alterations in original). To do so, “we read the plain
language of the statute as a whole, and interpret its provisions in
harmony with other statutes in the same chapter and related
chapters.” State v. Barrett, 2005 UT 88, ¶ 29, 127 P.3d 682 (internal
quotation marks omitted).
¶160 Section 30-3-10.8 requires that parties seeking joint custody
file a proposed parenting plan “at the time of the filing of their
original petition or at the time of filing their answer or
counterclaim.” Dr. Dahl suggests that this language precludes
parties who initially seek sole custody from amending their
pleadings to seek joint custody, even if they later become convinced
that joint custody would be best for their children. But such a
reading would conflict with other statutory provisions in which the
Legislature has placed a high value on joint custody. The
Legislature has mandated that district courts “shall, in every case,
consider joint custody.”24 UTAH CODE § 30-3-10(1)(b) (2009).
Moreover, custody determinations are equitable in nature and
require the court to consider the best interests of the child “[i]n
determining any form of custody.” Id. § 30-3-10(1)(a). If parties are
unable to amend their pleadings to file a parenting plan, the court’s
equitable mandate to consider the best interests of the child would
be severely impaired.
¶161 A more persuasive construction of section 30-3-10.8 brings
it in line with our relatively liberal standards for amendments to
pleadings. Rule 15(a) of the Utah Rules of Civil Procedure allows a
party to amend a pleading with permission from the district court
and directs that “leave [to amend] shall be freely given when justice
24
In 2012, the Legislature amended subsection 10(1)(b), establish-
ing “a rebuttable presumption that joint legal custody . . . is in the
best interest of the child,” except in a narrow range of cases. UTAH
CODE § 30-3-10(1)(b) (2012). Because we are reviewing the district
court for abuse of discretion, we apply the version of subsection
10(1)(b) that was in force at the time of the court’s ruling. See
Thronson v. Thronson, 810 P.2d 428, 433 (Utah Ct. App. 1991)
(applying the statute that was in place at the time of the district
court’s decision, rather than retroactively applying the new version
of the statute, when reviewing the court under an abuse of discretion
standard).
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so requires.” Surely justice is served by allowing parents, and the
district court, to consider whether joint custody would be in the best
interests of children in a divorce action. Rather than trapping parents
into the custody option they select at the time of their initial
pleading, with no allowance for changed circumstances, a better
reading of section 30-3-10.8 would allow parents to file an amended
pleading to include a parenting plan, if such an amendment satisfies
rule 15. Accordingly, we conclude that the district court erred in its
interpretation of section 30-3-10.8 and that it should have allowed
Ms. Dahl to file a parenting plan in the event that it granted her
motion to amend. However, for the reasons discussed below, we
affirm on the alternate ground that the district court did not abuse
its discretion in denying Ms. Dahl’s motion to amend.
2. The District Court’s Denial of Ms. Dahl’s Motion to Amend Was
Not an Abuse of Discretion
¶162 As noted above, rule 15(a) of the Utah Rules of Civil
Procedure permits litigants to amend their pleadings with
permission of the court and directs that leave “shall be freely given
when justice so requires.” District courts “should liberally allow
amendments unless the amendments include untimely, unjustified,
[or] prejudicial factors.” Daniels v. Gamma W. Brachytherapy, LLC,
2009 UT 66, ¶ 58, 221 P.3d 256. A motion is untimely if it is “filed in
the advanced procedural stages of the litigation process.” Id. ¶ 59
(internal quotation marks omitted). “Motions are prejudicial when
the nonmoving party would have little time to prepare a response
before trial.” Id. “And many other factors, such as delay, bad faith,
or futility of the amendment, may weigh against the [district] court’s
allowing the amendment.” Id. ¶ 58. (internal quotation marks
omitted). “Because a district court is best positioned to evaluate the
motion to amend in the context of the scope and duration of the
lawsuit, we will reverse a denial of leave to amend only if the district
court abused its discretion.” Hudgens v. Prosper, Inc., 2010 UT 68,
¶ 18, 243 P.3d 1275 (internal quotation marks omitted).
¶163 Our review of the record reveals that the district court did
not abuse its discretion in this case by denying Ms. Dahl’s motion for
leave to amend because Ms. Dahl’s motion was untimely and
prejudicial and her proposed amendment would have been futile in
any event. The custody proceedings in this case were highly
contentious. The custody evaluation makes clear that the parties and
their counsel behaved in ways that stymied the custody process and
ultimately delayed its completion. As a result, the custody
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evaluation was not completed until May 2009. On August 31, 2009,
Dr. Dahl filed a motion to exclude consideration of joint custody on
the basis that no parenting plan had been filed. One week before
trial, on September, 9, 2009, Ms. Dahl filed her motion to amend.
¶164 We have consistently refused to establish a bright-line rule
for when a motion to amend under rule 15 is untimely. See Kelly v.
Hard Money Funding, Inc., 2004 UT App 44, ¶ 29, 87 P.3d 734
(collecting cases). But we have recognized that timeliness is
intricately tied to the potential for prejudice to the other parties.
“We have consistently held that a [district] court does not abuse its
discretion when it denies as untimely last minute motions on the eve
of trial.” Tschaggeny v. Milbank Ins. Co., 2007 UT 37, ¶ 17, 163 P.3d
615 (collecting cases). And that consideration is dispositive here.
Despite receiving the child custody evaluation in May, Ms. Dahl
waited nearly four months, until the week before trial, to move to
amend her counterclaim and seek joint custody. Given that the
custody evaluation was not finished until late in the litigation, Ms.
Dahl’s delay might have been excused had she filed quickly after
receiving the evaluation. But she has offered no explanation for
waiting until the eve of trial to seek an amendment, and Dr. Dahl
would surely have been prejudiced had he been required to oppose
joint custody at that late date. On these facts, the district court did
not abuse its discretion when it denied Ms. Dahl’s motion to amend.
¶165 Moreover, our review of the record convinces us that any
error on the part of the district court in denying Ms. Dahl’s motion
to amend was harmless because the evidence does not suggest that
joint custody would have been in the best interests of the Dahls’
children. In denying Ms. Dahl’s motion to amend, the district court
stated:
Frankly, I think it unlikely that I would order joint
custody in this case because I don’t perceive that these
parties are able to effectively cooperate to raise the
children. I’m open to argument and I’ll consider the
best interests [of the children] when I hear all the
evidence but as of right now, I think this is not a
particularly important question because I think it
unlikely that joint custody is going to be the result
here.
And nothing in the evidence offered at trial suggested otherwise.
Indeed, the custody evaluation itself emphasized the need to
minimize interaction between Dr. Dahl and Ms. Dahl in any custody
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Opinion of the Court
arrangement. Given the district court’s stated reservations about the
parties’ ability to cooperate in their children’s best interests and its
determination that “the best interests of the children dictates that
[Dr. Dahl] receive sole legal and physical custody,” any error in
denying Ms. Dahl’s motion to amend was harmless.
F. The District Court Did Not Abuse Its Discretion When It Refused to
Award Attorney Fees to Ms. Dahl
¶166 Ms. Dahl’s final claim of error is that the district court
abused its discretion when it denied her request for attorney fees.
Ms. Dahl’s attorneys submitted a claim for $2,186,568 in attorney
fees, litigation costs, and interest charges through January 31, 2010.25
At trial, Ms. Dahl requested an order that Dr. Dahl be required to
contribute to the payment of her attorney fees and expenses incurred
in the divorce action. The district court denied Ms. Dahl’s request,
finding that Ms. Dahl, through her counsel, had failed to present
evidence of her financial need and because the fees and costs
claimed by Ms. Dahl’s attorneys were unreasonable. The district
court alternatively denied the request on the ground that the fee
arrangement between Ms. Dahl and her attorneys constituted a
prohibited contingency fee agreement in a domestic matter.
¶167 Ms. Dahl argues that the district court abused its discretion
when it denied her request for attorney fees. Specifically, she argues
that her fee arrangement with her attorney was not a prohibited
contingency fee agreement. She also asserts that the district court
allowed Dr. Dahl to pay his own attorney fees out of marital funds,
while denying her the same right. She asks us to order that Dr. Dahl
be required to pay her fees and additionally requests that we award
her the attorney fees she has expended on this appeal.
1. Ms. Dahl Was Not Entitled to an Award of Fees Because She
Failed to Demonstrate Her Financial Need and Her Claimed Fees
Were Unreasonable
¶168 “In Utah, attorney fees are awardable only if authorized by
statute or by contract.” Dixie State Bank v. Bracken, 764 P.2d 985, 988
(Utah 1988). Section 30-3-3(1) of the Utah Code authorizes courts to
award attorney fees and costs in divorce cases if doing so would
“enable the other party to prosecute or defend the action.” “Such an
award must be based on evidence of the receiving spouse’s financial
25
This claim for fees does not include any fees incurred after
January 2010, including fees related to this appeal.
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need, the payor spouse’s ability to pay,26 and the reasonableness of
the requested fees.” Levin v. Carlton, 2009 UT App 170, ¶ 27, 213
P.3d 884 (internal quotation marks omitted). The party requesting
an award of fees has the burden of providing such evidence. Griffith
v. Griffith, 959 P.2d 1015, 1020–21 (Utah Ct. App. 1998). The decision
of whether to award attorney fees pursuant to section 30-3-3 of the
Utah Code rests in the sound discretion of the district court. As
such, we review the district court’s award or denial of fees for abuse
of discretion. Kimball v. Kimball, 2009 UT App 233, ¶ 19, 217 P.3d
733. An award based on insufficient factual findings is an abuse of
discretion and requires remand. Leppert v. Leppert, 2009 UT App 10,
¶ 25, 200 P.3d 223.
¶169 The district court refused Ms. Dahl’s request for fees
pursuant to section 30-3-3 for two reasons. First, the court found, as
a factual matter, that Ms. Dahl had adopted a consistent trial strategy
wherein she declined to provide “competent and complete
evidence” of her financial need. Thus, she failed to meet her burden
of establishing financial need. Second, the court found that the fees
claimed by Ms. Dahl’s attorneys were unreasonable. Thus, she
failed to meet her burden of establishing the reasonableness of the
requested fees. Ms. Dahl asserts that both findings are erroneous.
We disagree.
a. Ms. Dahl Failed to Provide Evidence of Her Financial Need
¶170 When determining the financial need of the requesting
spouse, we “generally look to the requesting spouse’s income,
including alimony received as the result of a divorce decree; the
property received via the property distribution award; and his or her
expenses.” Kimball, 2009 UT App 233, ¶ 46. Parties to a divorce
action often incur debt to retain counsel. While the existence of such
indebtedness may tend to show financial need, id., it is not
determinative if other factors, such as a property award, are present.
¶171 Here, the district court explicitly found that Ms. Dahl
“presented no credible testimony to establish her current financial
need.” Despite explicit direction from the district court that any
claims for spousal support or for access to marital assets would
require evidence of Ms. Dahl’s financial need, she consistently
“provided only a rough estimate of what was available to her in the
26
The parties do not dispute Dr. Dahl’s ability to pay for Ms.
Dahl’s attorney fees.
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years before separation” and declined to provide any specific
evidence of her postseparation finances. In fact, the district court
instructed Ms. Dahl’s counsel on no less than five occasions to
provide a financial declaration that would satisfy the court. But Ms.
Dahl failed to do so. Prior to trial, the district court considered
whether to dismiss Ms. Dahl’s claim for alimony because she had
failed to designate a financial declaration in her pretrial exhibits.
Ms. Dahl’s counsel “confirmed that no financial declaration would
be presented during trial” and that “he intended to rely upon
financial information presented in 2007.”
¶172 Although Ms. Dahl continues to assert that she had no
independent means of paying for her attorney fees and could not
work because of her medical problems, she fails to point to any
evidence refuting the district court’s thoughtful and extensive
findings of fact. And she makes no attempt to explain her failure to
submit a sufficient financial declaration. She does not dispute that
she declined to present a financial declaration at trial and instead
relied on financial information from 2007, then more than two years
out of date. Nor does she dispute the district court’s factual
determination that her testimony at trial was not credible. Instead,
Ms. Dahl merely restates the same arguments she made at trial,
which rely on the very testimony the district court found to be
noncredible.
¶173 Parties challenging the factual findings of the district court
bear a heavy burden of persuasion. See Drake v. Indus. Comm’n of
Utah, 939 P.2d 177, 181 (Utah 1997). Our review of such findings is
highly deferential and we will reverse the district court only if its
findings are clearly erroneous. Id. We give this deference to the
district court “because it stands in a superior position from which to
evaluate and weigh the evidence and assess the credibility and
accuracy of witnesses’ recollections.” Id. Ms. Dahl has not met this
burden. She points to no evidence that would support the
conclusion that the district court’s findings of fact were clearly
erroneous.27
27
Ms. Dahl argues that, once she made a prima facie showing that
she could not work, the “burden should have shifted to Dr. Dahl to
demonstrate [her] earning capacity.” This is a misstatement of the
governing law. The burden of proof rests with the party requesting
(continued...)
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¶174 Finally, Ms. Dahl’s claim of financial need is not persuasive
because she fails to acknowledge the substantial property
distribution she was awarded from the marital assets. The district
court could properly take this distribution into account when
evaluating Ms. Dahl’s financial need. Given Ms. Dahl’s failure to
refute the district court’s factual findings, as well as the substantial
property distribution she was awarded, we cannot conclude that the
district court abused its discretion in declining Ms. Dahl’s request for
fees.
b. Ms. Dahl’s Claim for Attorney Fees and Costs Was
Unreasonable
¶175 The district court also found Ms. Dahl’s claim for more
than $2.1 million in attorney fees and costs was unreasonable. Ms.
Dahl argues that this finding was an abuse of discretion. We
disagree.
¶176 When evaluating the reasonableness of a request for
attorney fees pursuant to section 30-3-3, courts look to a variety of
factors.
Reasonable attorney[] fees are not measured by what
an attorney actually bills, nor is the number of hours
spent on the case determinative in computing fees. . . .
A court may consider, among other factors, the
difficulty of the litigation, the efficiency of the
attorneys in presenting the case, the reasonableness of
the number of hours spent on the case, the fee
customarily charged in the locality for similar services,
the amount involved in the case and the result
attained, and the expertise and experience of the
attorneys involved.
Cabrera v. Cottrell, 694 P.2d 622, 624–25 (Utah 1985); see also UTAH R.
PROF’L CONDUCT R. 1.5(a) (establishing factors to be considered in
determining the reasonableness of an attorney’s fees).
¶177 A review of the district court’s findings of fact and
conclusions of law reveals that the court carefully and thoughtfully
considered the fee affidavit submitted by Ms. Dahl’s attorney,
27
(...continued)
an award of fees. Griffith v. Griffith, 959 P.2d 1015, 1020–21 (Utah Ct.
App. 1998).
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Mr. Christiansen, which detailed the fees requested by all of
Ms. Dahl’s various attorneys. The court made extensive findings of
fact on the issue of attorney fees. It found that the claim for fees and
costs submitted by Mr. Christensen was “extraordinarily large,”
totaling $2,186,568.57 in fees, costs, expenses, and interest charges.
In particular, the court noted that Mr. Christensen’s claim for fees
was “[b]y far the largest debt identified in th[e] proceedings.”
¶178 Ms. Dahl was represented by several different attorneys
and law firms. The court carefully considered the appropriateness
of the hours claimed by each attorney. In considering the
reasonableness of her fee request, the district court found that even
if the hours billed by Ms. Dahl’s first several attorneys were
reasonable, those fees could not fairly be said to have advanced the
litigation because Ms. Dahl opted to start over with new counsel, Mr.
Christensen, in January 2007.
¶179 As for Mr. Christensen and his firm, the district court
found that the hours claimed were “unreasonably large.” For
example, the firm billed 2,981 hours in the ten months from January
through October 2009. Mr. Christensen requested hundreds of
thousands of dollars in fees related to discovery of financial matters.
But the court found, based on Mr. Christensen’s noncompliance with
discovery orders and general lack of preparation for trial, that “the
discovery was not carefully managed or focused, and that the
extremely high fees related to the process were not warranted.”
Additionally, the court found that Mr. Christensen pursued a
strategy involving the “aggressive use of motions to reconsider and
clarify,” which “substantially increased attorney hours and expenses
without materially advancing the case.” More tellingly, the court
found that the “huge, almost impossible hours recorded during the
trial months . . . appear to be an attempt to gain an understanding of
evidence and facts that should have been mastered months earlier.”
In short, the court’s extensive factual findings paint a picture of a
litigation strategy that was inefficient, ineffective, and unjustifiably
costly.
¶180 Ms. Dahl argues that “[t]he complexity of the [marital]
estate itself generated additional legal fees.” But the district court
expressly found that the issues presented in the divorce action were
not particularly unique and could be addressed with “the
application of well established rules of law.”
¶181 The expenses for Ms. Dahl’s expert witnesses were
particularly troubling. As we have previously discussed, Mr.
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Christensen failed to properly designate expert witnesses for Ms.
Dahl and failed to submit expert reports in accordance with the
requirements of rule 26. As a result, her experts’ testimony was
substantially limited. The district court specifically noted that this
failure to properly designate and disclose expert witnesses rendered
their testimony “inconsequential to the final determination of the
case.” Yet, Mr. Christensen requests an award covering these expert
witnesses’ substantial fees, totaling approximately $327,000. We
agree with the district court that these claimed fees for experts who
were never properly disclosed and were thus rendered useless to the
litigation were unreasonable.
¶182 Finally, Ms. Dahl’s briefing has failed to effectively
challenge the factual findings of the district court. The court made
over forty factual findings related to the issue of attorney fees. Yet,
Ms. Dahl’s brief fails to even mention any of the district court’s
specific findings. Instead, her brief relies on generalized statements
that the case was complicated and the marital estate was complex,
necessitating higher fees. Such conclusory allegations are
insufficient to overcome our highly deferential review of the district
court’s findings of fact. See Drake, 939 P.2d at 181.
¶183 In sum, we conclude that the district court did not abuse
its discretion when it declined to award attorney fees to Ms. Dahl.28
The court’s careful and thorough review of her request is apparent
from its extensive findings of fact and conclusions of law. And
despite devoting seventeen pages of her appellate brief to the topic
of attorney fees, Ms. Dahl has failed to marshal any evidence that
would support a finding of clear error. Accordingly, we affirm. We
now turn our attention to whether Ms. Dahl’s fee arrangement with
Mr. Christensen was proper.
28
Ms. Dahl also argues that, even if her claimed fees were
unreasonable, the district court erred when it awarded her no fees
at all. Though we agree that the proper response to a finding of
unreasonable fees might be for the district court to reduce the
requested amount to an “ascertainable, reasonable figure,” see
Kimball v. Kimball, 2009 UT App 233, ¶ 50, 217 P.3d 733, any error in
this case was harmless because the district court denied fees under
section 30-3-3 on the independent basis that Ms. Dahl had failed to
establish her financial need. Because we affirm that holding, Ms.
Dahl would not be entitled to any award of fees, even if such fees
were reasonable.
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2. Mr. Christensen’s Fee Agreement with Ms. Dahl Was Improper
¶184 As an alternative ground for denying Ms. Dahl’s request
for attorney fees, the district court also found that the fee
arrangement between Ms. Dahl and Mr. Christensen amounted to a
prohibited contingency fee agreement. Ms. Dahl argues that this
finding was an abuse of discretion. Mr. Christensen, in briefing,
argues that Ms. Dahl is obligated to pay the entirety of his fee,
“regardless of the outcome” of the case, and that the “fee was
generated by the calculation of the hours worked at the applicable
rate and . . . did not fluctuate based upon the amount of property
[Ms. Dahl] was awarded.”
¶185 The district court rejected this fee arrangement as an
improper contingency fee agreement in which Mr. Christensen
“created, by contract, a mechanism to seize as much as the entire
proceeds awarded to [his] client from the estate to pay the bill when
a recovery was achieved.” In declaring the fee agreement to be
prohibited, the court relied primarily on rule 1.5(d)(1) of our Rules
of Professional Conduct, which prohibits attorneys from “enter[ing]
into an arrangement for . . . any fee in a domestic relations matter,
the payment or amount of which is contingent upon the securing of
a divorce or upon the amount of alimony or support, or property
settlement in lieu thereof.” The court observed that Mr. Christensen
had made no attempt to collect any of his fees and instead “simply
allowed the fees and costs to accumulate with substantial interest.”
It reasoned that the “only logical conclusion” was that Mr.
Christensen’s payment had “always depended upon a recovery in
favor of [Ms. Dahl].”
¶186 We need not determine whether Mr. Christensen’s fee
arrangement constituted a prohibited contingency fee agreement in
a domestic matter because we invalidate the fee arrangement on the
alternate ground that it was prohibited under Utah Code section 38-
2-7(9) and rules 1.8 and 1.5 of the Utah Rules of Professional
Conduct.29 See Bailey v. Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158
29
Following the district court’s determination that Mr.
Christensen had entered into a prohibited contingency fee agree-
ment with Ms. Dahl, Dr. Dahl submitted an informal complaint to
the Office of Professional Conduct (OPC). Following an inquiry, the
OPC concluded that Mr. Christensen did not violate the Rules of
(continued...)
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(holding that an appellate court may affirm a judgment “‘on any
legal ground or theory apparent on the record’”). Specifically, we
hold that Mr. Christensen acquired a prohibited interest in the
subject matter of his representation of Ms. Dahl and that his claimed
fees are unreasonable.30 Accordingly, we invalidate his fee
arrangement with Ms. Dahl and refer Mr. Christensen to the Office
of Professional Conduct.
a. Mr. Christensen Improperly Acquired a Proprietary Interest
in the Subject Matter of the Representation
¶187 Ms. Dahl entered into two separate fee agreements with
Mr. Christensen. The first agreement, dated January 25, 2007,
covered the time in which Mr. Christensen was the owner and
manager of the firm Hirschi Christensen, PLLC. The second
agreement, dated January 21, 2010, but effective November 1, 2009,
was with Mr. Christensen’s new firm, Christensen Thornton, PLLC.
Both agreements contained paragraphs entitled “Liens.” These
paragraphs purported to grant Mr. Christensen’s firms a contractual
lien on the entirety of any award that Ms. Dahl recovered in the
divorce case.
¶188 Specifically, the January 2007 agreement states:
Pursuant to § 38-2-7(2)(a), Utah Code Annotated 2001,
I have a lien in the amount of my unpaid attorney’s
fees, plus interest which attaches to any settlement or
award in your favor and to the proceeds thereof,
pending payment of my bill. This lien attaches to any
29
(...continued)
Professional Conduct. Mr. Christensen offers the OPC’s findings in
defense of his fee arrangement with Ms. Dahl. But the OPC’s
decision not to impose discipline in this instance does not undermine
the district court’s findings and conclusions. Accordingly, we grant
no deference to the OPC’s opinion in this matter.
30
The district court determined that Mr. Christensen’s claimed
fees are unreasonable in the context of determining whether Dr.
Dahl should be required to contribute to Ms. Dahl’s attorney fees.
Though our analysis focuses on whether Mr. Christensen’s fees were
unreasonable under rule 1.5 of the Utah Rules of Professional
Conduct, the legal standard in the two contexts is largely identical.
Thus, the district court’s factual findings are equally relevant to our
analysis here.
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verdict you receive (even if I do not represent you at
the time of judgment or settlement in your case if I
withdraw for good cause or am discharged by you).
You specifically agree to grant an immediate lien on
your portion of the marital home at 4322 N. Vintage
Drive[,] Provo, Utah 84606 pursuant to this paragraph
and agree to grant the above attorney’s lien whether or
not the above cited statute would permit such a lien by
signing this paragraph.
¶189 The language of the January 2010 agreement is even more
sweeping:
By signing this paragraph, you agree to grant
immediately a consensual lien against your present
interest and the interest to be awarded to you in the
action which you have filed in the Fourth District
Court of Utah against Charles Dahl and an Irrevocable
Trust, No. 090402989 (“Trust Action”). You also grant
immediately a consensual lien against your present
interest in all marital assets and against any attorneys’
fee award and support award to be awarded to you in
the divorce action that is the subject of this litigation,
whether or not the above cited statute would grant an
attorney’s lien at this time. At the time divorce is
decreed by the court in a signed order this consensual
lien will merge into an attorney’s lien on all rights to
income and assets awarded to you by the court.
Pursuant to § 38-2-7(2)(a), Utah Code Annotated 2001,
the firm has a lien in the amount of its unpaid
attorney’s fees plus interest which will attach to the
proceeds of your case, including but not limited to all
support payments you are awarded, as well as all
assets and all judgments awarded to you. This lien
will attach whether or not we represent you at the
time the judgment or support is awarded. You
authorize and direct all payments you make to be
made to Christensen Thornton, PLLC balances due
first and then towards the payments due to Hirschi
Christensen, PLLC.
¶190 Mr. Christensen sought to perfect the security interest
purportedly granted in the fee agreements by filing a UCC-1
financing statement on January 10, 2008. That statement described
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the collateral as “all proceeds from case number 064402232 in the
Fourth District Court . . . including, but not limited to all alimony,
property rights, business interests, and 401 K and other retirement
savings and pension awards.” Each of these documents purporting
to grant Mr. Christensen an enforceable interest in any award
granted to Ms. Dahl in the divorce action went into effect long before
the entry of the divorce decree on July 19, 2010.
¶191 The question before us concerns the propriety of Mr.
Christensen’s lien against Ms. Dahl’s interest in the marital estate
prior to the entry of a decree of divorce. Rule 1.8(i) of the Utah Rules
of Professional Conduct prohibits attorneys from acquiring “a
proprietary interest in the cause of action or the subject matter of
litigation the lawyer is conducting for a client.” The rule does allow,
in appropriate circumstances, an attorney to “acquire a lien
authorized by law to secure the lawyer’s fee or expenses.” UTAH R.
PROF’L CONDUCT R. 1.8(i)(1). Mr. Christensen relies on this exception
to defend the liens contained in his retainer agreements with Ms.
Dahl. But such reliance is misplaced.
¶192 The plain language of the rule authorizes only those liens
“authorized by law.” Id. To meet this exception, Mr. Christensen
relies on section 38-2-7(2) of the Utah Code, which grants attorneys
a lien on any money or property owned by the client as security
against unpaid fees. Specifically, section 38-2-7(2) authorizes liens
on property that is the subject of the litigation for which the attorney
was retained. Were this the end of the matter, Mr. Christensen’s
position might be tenable. But section 38-2-7(9) specifically prohibits
liens in domestic relations matters.
¶193 Utah Code section 38-2-7(9) does not authorize an attorney
to acquire a lien in the representation of a client in a domestic
relations matter unless a final order of divorce has been secured. The
statute authorizes attorney liens in divorce actions only when
(a) . . . the domestic relations matter has been
concluded by the securing of a final order of divorce
or the attorney/client relationship has terminated; and
(b) the client has failed to fulfill the client’s financial
obligations to the attorney.
UTAH CODE § 38-2-7(9) (emphasis added).
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¶194 Here, the liens and UCC-1 filing statement went into effect
prior to the entry of the Dahls’ decree of divorce.31 Though section
38-2-7 allows an attorney to take a lien in the subject matter of the
litigation for the purposes of securing payment of his fees,
subsection 9 limits this authorization in domestic relations matters
in which a final order of divorce has yet to be entered. Given this
statutory directive, Mr. Christensen’s liens were not “authorized by
law.” As such, he cannot rely on the exception to rule 1.8(i)’s
prohibition against attorneys acquiring a proprietary interest in the
subject matter of their representation.32
¶195 Other jurisdictions have reached the same conclusion,
refusing to allow attorneys to acquire a proprietary interest in the
marital estate in divorce actions prior to the time that all issues
relating to the use, possession, sale, and distribution of the marital
property are conclusively adjudicated. See In re Fisher, 202 P.3d 1186,
1195–98 (Colo. 2009) (upholding disciplinary action when attorney
took a deed of trust in the marital home); In re May, 538 P.2d 787, 790
(Idaho 1975); Va. State Bar, Legal Ethics Op. 1653 (1995) (“In
summary, as a means to secure payment of legal fees in a divorce
matter, an attorney may not enter into an arrangement with a client
wherein the attorney acquires an interest in the marital property, or
proceeds from the sale thereof, unless a final order or decree has
been entered . . . .”); Mass. Bar Ass’n, Op. No. 91-1 (1991); Me. Bd. of
Overseers of the Bar, Op. 97 (1989) (“[T]he taking of an interest in the
marital property by the attorney inappropriately interjects the
interests of the attorney into the issues in the divorce case, creating
31
The liens contained in the retainer agreement were effective on
January 25, 2007, and November 1, 2009, respectively. The UCC-1
statement was filed on January 10, 2008. The district court did not
enter a final divorce decree until July 19, 2010.
32
Even if Mr. Christensen could acquire a valid interest in the
marital estate to secure his fees, he could do so only by complying
with the heightened demands of rule 1.8(a). Such an action would
be appropriate only if the terms of the transaction were fair and
reasonable to the client, the terms were fully disclosed, the client was
advised to seek outside counsel, and the client gave full and
informed consent. UTAH R. PROF’L CONDUCT R. 1.8(a). We have
serious reservations as to whether this transaction could satisfy rule
1.8(a).
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an unacceptable risk that the judgment of the attorney will be
affected by his acquisition of the interest.”).
¶196 There is good reason to preclude attorneys from acquiring
a lien in the property of a marital estate prior to the entry of a decree
of divorce. The value and distribution of marital property is often
hotly contested by the parties to a divorce. For example, it may be
in the client’s best interest to relinquish her claim to the marital
home as a means of facilitating a favorable settlement. If her
attorney has an interest in the home, the attorney’s interests are then
directly at odds with the client’s. Moreover, marital property still
subject to equitable distribution by the court should remain free
from encumbrances that might serve to hinder the efficient
liquidation and distribution of that property.
¶197 In this case, Mr. Christensen’s attempt to acquire a lien on
the entirety of Ms. Dahl’s share of the marital estate runs afoul of
rule 1.8(i) of the Utah Rules of Professional Conduct and section 38-
2-7(9) of the Utah Code. We accordingly hold that Mr. Christensen’s
retainer agreement with Ms. Dahl constituted a prohibited fee
arrangement.
b. Mr. Christensen’s Fees Were Unreasonable, in Violation of
Rule 1.5(a) of the Utah Rules of Professional Conduct
¶198 Mr. Christensen’s fees not only violated rule 1.8, they were
unreasonable. Rule 1.5(a) of the Utah Rules of Professional Conduct
prohibits an attorney from making arrangement for, charging, or
collecting unreasonable fees or unreasonable expenses. The rule lists
a variety of factors courts should consider when determining the
reasonableness of an attorney’s fee request, including reasonable
assessments of the time and labor involved, the amount in
controversy and the results obtained, the novelty of the legal issues,
the customary fees for similar services, any time constraints imposed
by the circumstances, and the experience and ability of the lawyer
performing services. UTAH R. PROF’L CONDUCT R. 1.5(a).
¶199 At the time of trial, Mr. Christensen claimed Ms. Dahl
owed him over $2.1 million in attorney fees, costs, expenses, and
interest. As discussed above, the district court made extensive
findings of fact regarding Mr. Christensen’s claimed fees. Though
the district court’s analysis was made in the context of considering
reasonableness as a factor in determining whether to require Dr.
Dahl to pay Ms. Dahl’s attorney fees pursuant to section 30-3-3 of the
Utah Code, these factual findings are equally relevant to a
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determination of reasonableness under rule 1.5(a). See Cabrera, 694
P.2d at 624 (recognizing that reasonableness of a fee award
incorporates the standards for reasonableness contained in the Rules
of Professional Conduct).
¶200 The district court’s detailed factual findings persuasively
establish that Mr. Christensen’s fees were unreasonable. The district
court was especially troubled by Mr. Christensen’s testimony that
“the fee arrangement with the lien was structured so that his firm
would receive payment, regardless of any ruling by [the district
court] that the fees were or were not reasonable.” We are similarly
troubled.
¶201 The district court carefully considered Mr. Christensen’s
affidavit in support of his fee request and concluded that the hours
claimed were “unreasonably large.” For example, Mr. Christensen’s
firm billed Ms. Dahl for 1,900 hours in 2007, only 53.3 of which were
accounted for by court appearances and depositions. The district
court noted that “[t]he bill for 2007 was the equivalent of a single,
full time attorney billed at somewhere between $180 and $250 per
hour.” For 2009, the firm billed 2,981 hours through the end of
October. Although the court acknowledged that preparation for trial
can require significant hours, it found that the “huge, almost
impossible hours recorded during the trial months . . . appear to be
an attempt to gain an understanding of evidence and facts that
should have been mastered months earlier.” The district court also
questioned Mr. Christensen’s claim for hundreds of hours spent on
“review” of the case file, finding that “the time attributed to that
activity in his case [was] grossly inappropriate.”
¶202 Moreover, the district court found that the strategy
employed by Mr. Christensen was wholly ineffective at producing
favorable results for Ms. Dahl. For example, Mr. Christensen failed
to provide competent evidence as to Ms. Dahl’s financial need for
alimony or an attorney fee award. As a result of this deliberate and
ill-conceived choice, Ms. Dahl received neither temporary nor
permanent alimony and the district court declined to award her any
attorney fees. Mr. Christensen also employed a litigation tactic
involving “aggressive use of motions to reconsider and clarify.”
According to the unrefuted factual findings of the district court:
Virtually every ruling of the Court or the
Commissioner . . . was followed by a flurry of motions
to challenge, reconsider or delay the impact of the
original decision. These motions served to delay
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Opinion of the Court
compliance with orders of the Court, and rarely
produced important or necessary clarification. They
also substantially increased attorney hours and
expenses without materially advancing the case.
We agree with the district court that these tactics delayed the
proceedings and served only to increase the fees charged to Ms.
Dahl.
¶203 Mr. Christensen’s handling of discovery was similarly
fraught with difficulties. Despite an order closing fact discovery in
January 2009, Mr. Christensen continued to pursue additional
discovery connected with the Dahls’ children well after that date.
In his affidavit, Mr. Christensen claims “hundreds of thousands of
dollars worth of time and fees related to discovery of financial
matters.” Yet, on the eve of trial, Mr. Christensen continued to seek
discovery as to financial matters. We agree with the district court
that “the only possible conclusion is that the discovery was not
carefully managed or focused, and that the extremely high fees
related to the process were not warranted.”
¶204 Finally, we are extremely troubled by Mr. Christensen’s
handling of the pretrial disclosure process. As we have discussed,
despite repeated requests from the district court, Mr. Christensen
failed to properly disclose the exhibits he intended to offer at trial.
As a result, the district court excluded most of Ms. Dahl’s trial
exhibits, leaving Ms. Dahl at a substantial disadvantage. Similarly,
Mr. Christensen failed to properly designate Ms. Dahl’s expert
witnesses or to submit proper expert witness reports. The district
court correctly refused to allow the experts’ testimony, which further
prejudiced Ms. Dahl. And yet, Mr. Christensen’s affidavit seeks over
$327,000 in fees for these experts—experts who did not materially
aid in the resolution of the case because they were not allowed to
testify.
¶205 Taken together, the district court’s factual findings
adequately support its conclusion that Mr. Christensen’s claimed
fees are unreasonable. By charging these unreasonable fees, Mr.
Christensen has violated rule 1.5(a). The issues presented in this
case were not so novel or difficult as to require extraordinary skill on
the part of an attorney. Indeed, most of the fees and expenses seem
to have been driven by Mr. Christensen’s inability to effectively
manage basic discovery and pretrial disclosure procedures. The
marital estate was substantial, but Mr. Christensen’s efforts obtained
no more, and arguably much less, than Ms. Dahl would have been
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Opinion of the Court
entitled to under any circumstances. Mr. Christensen failed to
present evidence that would have entitled Ms. Dahl to both
temporary and permanent alimony. He failed to join the Trust in the
divorce action, despite the fact that the Trust contained marital
property. As a result, the district court declined to award Ms. Dahl
an equitable offset for her share of the property contained in the
Trust.
¶206 In short, for all the thousands of hours billed by Mr.
Christensen in the course of this litigation and his more than $2.1
million bill, the results he obtained for Ms. Dahl could only be
characterized as extremely disappointing from her standpoint.
Indeed, Mr. Christensen’s multimillion dollar bill, if allowed to
stand, will consume the entirety of Ms. Dahl’s property award.
When an attorney proceeds competently, but nonetheless is
unsuccessful for his client, we ascribe no error. But when an
attorney consistently fails to perform basic skills in a competent
manner, and the client is harmed as a result, we will not allow that
attorney to collect patently unreasonable fees. We hold that Mr.
Christensen violated rule 1.8(i) of the Utah Rules of Professional
Conduct and section 38-2-7(9) of the Utah Code by purporting to
acquire an enforceable interest in the subject matter of the
litigation—the marital estate. We further hold that Mr. Christensen’s
fees were unreasonable in violation of rule 1.5(a). We now turn our
attention to the remainder of Ms. Dahl’s arguments relating to
attorney fees.
3. Ms. Dahl Failed to Preserve Her Argument That the District Court
Improperly Allowed Dr. Dahl to Pay for His Attorney Fees from
Marital Assets
¶207 Ms. Dahl asserts that Dr. Dahl was allowed to pay his
attorney fees from marital assets, while she was denied the same
privilege. Though we agree that such a result would be inequitable,
Ms. Dahl has failed to demonstrate that she preserved this argument
for appeal. Generally, we will not consider an issue that was not
preserved in the district court. Baird v. Baird, 2014 UT 08, ¶ 20, 322
P.3d 728. For an issue to be preserved, it must have been presented
to the district court in such a manner that the court had “a
meaningful opportunity to rule” on it. Hill v. Superior Prop. Mgmt.
Servs., Inc., 2013 UT 60, ¶ 46, 321 P.3d 1054. Further, rule 24(a)(5)(A)
of the Utah Rules of Appellate Procedure requires parties to include
a “citation to the record showing that the issue was preserved in the
trial court.”
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¶208 In her brief, Ms. Dahl provides two citations to transcripts
in which Dr. Dahl testified that he paid his attorneys from a Wells
Fargo account ending in 9566. Our own examination of the record
reveals that the district court determined that this account contained
marital funds. Thus, it appears that Ms. Dahl has identified factual
support for her assertion. But there are no indications in Ms. Dahl’s
appellate briefing that she ever objected to Dr. Dahl’s conduct before
the district court. We find no indication that the district court was
ever asked to determine whether Dr. Dahl was, in fact, utilizing
marital resources to pay his attorney fees or that Ms. Dahl requested
a credit for such fees in the property distribution. Without some
indication that the district court was given an opportunity to rule on
Ms. Dahl’s claims, we cannot determine if the court erred. And we
decline to undertake the overwhelming task of searching through
the voluminous record in pursuit of such an indication.
Accordingly, we will not consider this issue.
4. Ms. Dahl Is Not Entitled to Attorney Fees Incurred on Appeal
¶209 Finally, Ms. Dahl requests that we award her attorney fees
and costs associated with this appeal. “Generally, when the trial
court awards fees in a domestic action to the party who then
substantially prevails on appeal, fees will also be awarded to that
party on appeal.” Kimball, 2009 UT App 233, ¶ 52 (internal quotation
marks omitted). We decline to award Ms. Dahl her fees on this
appeal because she was not the prevailing party below and she has
not substantially prevailed on appeal.
5. We Invalidate Mr. Christensen’s Fee Agreements with Ms. Dahl
and Refer Mr. Christensen to the Office of Professional Conduct
¶210 Our review of Ms. Dahl’s claim for attorney fees leaves us
highly troubled. We are particularly troubled by the relative
attention paid to the claim for attorney fees in Ms. Dahl’s appellate
brief. For example, Ms. Dahl’s counsel devoted nearly seventeen
pages of her appellate brief to her request for attorney fees while
devoting less than two pages to Ms. Dahl’s request for joint custody
of her children. While counsel is certainly entitled to pursue an
award of fees on his client’s behalf, the focus on the attorney fees
issue to the exclusion of issues such as custody raises serious
concerns.
¶211 We agree with the district court that Mr. Christensen’s
claimed fees in this matter are staggeringly large and unreasonable
as a matter of law, especially in light of the poor results achieved for
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Opinion of the Court
Ms. Dahl. We are further troubled by Mr. Christensen’s attempt to
obtain an enforceable interest in Ms. Dahl’s share of the marital
estate through liens and a UCC-1 filing statement. The clear
language of rule 1.8 prohibits an attorney from obtaining such an
interest in the subject matter of the litigation. Mr. Christensen
ignored this clear directive, along with the plain language of section
38-2-7(9) of the Utah Code, when he purported to take an immediate
lien on the marital estate. We agree with the district court that the
only reasonable conclusion to draw is that Mr. Christensen intended
to recover his exorbitant fees, regardless of any finding of
reasonability by the court. Because Mr. Christensen’s fee
arrangement with Ms. Dahl violated rules 1.8 and 1.5 of the Utah
Rules of Professional Conduct and section 38-2-7(9) of the Utah
Code, we hereby invalidate the fee agreements and refer Mr.
Christensen to the Office of Professional Conduct for further
disciplinary proceedings. Mr. Christensen may not rely on his
retainer agreements with Ms. Dahl as a basis to collect his fees.33
33
Any legal or equitable obligation owed to Mr. Christensen by
Ms. Dahl is beyond the scope of this opinion inasmuch as any
further attempt by Mr. Christensen to recover fees in this matter
must be accomplished through a separate suit. See McDonald v.
McDonald, 866 P.2d 1253, 1254–55 (Utah Ct. App. 1993) (noting that
an attorney is not a party to the underlying action and must
therefore bring a separate action to recover fees). But our review of
this case leaves us with serious doubts as to the quality of Mr.
Christensen’s representation of Ms. Dahl. We acknowledge that not
all of the facts are before us. But those that are before us evidence a
stunning failure to competently represent Ms. Dahl. For example,
Mr. Christensen’s failure to properly designate expert witnesses and
disclose trial exhibits left Ms. Dahl without any expert testimony
relating to the division of the marital assets. Mr. Christensen’s
failure to conduct effective discovery contributed to Ms. Dahl’s
inability to fully assert her claims to various assets. Counsel’s
approach to Ms. Dahl’s claim for temporary and permanent alimony
is especially troubling. Though it was possible that Mr.
Christensen’s failure to comply with the district court’s orders to
produce a proper financial declaration was compounded by a lack
of cooperation from Ms. Dahl, the record before us suggests the
failure was primarily one of counsel. If so, counsel’s failure likely
(continued...)
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JUSTICE DURHAM , dissenting
CONCLUSION
¶212 Because we conclude that the Trust should have been
joined as a party to the divorce action, we consolidate the trust and
divorce cases and remand the consolidated case to the divorce court
for further proceedings consistent with this opinion. As to the Trust,
we hold that Utah law applies, that the Trust is revocable as a matter
of law, and that Ms. Dahl is entitled to withdraw her share of the
marital property she contributed to the Trust as a settlor. On
remand, the district court should determine what property
contained in the Trust is properly characterized as marital property
and either credit Ms. Dahl with an offset equal to the value of that
property or allow Ms. Dahl to withdraw her share of the property.
¶213 In the divorce action, we first hold that Ms. Dahl has failed
to establish any grounds for finding that Judge Taylor was biased
against her. Second, we conclude that the district court did not
abuse its discretion in its evidentiary rulings. Third, we hold that
the district court did not abuse its discretion when it declined to
award Ms. Dahl either temporary or permanent alimony. Fourth, as
to the district court’s division of the marital property, we affirm in
part, reverse in part, and remand for further proceedings consistent
with this opinion. Fifth, we hold that the district court did not abuse
its discretion when it awarded Dr. Dahl sole legal and physical
custody of the couple’s children. Finally, we hold that the district
court did not err when it declined to award Ms. Dahl her attorney
fees in the divorce action. Further, we invalidate Mr. Christensen’s
fee agreements with Ms. Dahl on the grounds that they violate rules
1.5 and 1.8 of our Rules of Professional Conduct and refer Mr.
Christensen to the Office of Professional Conduct for disciplinary
proceedings arising from these rule violations.
JUSTICE DURHAM , dissenting:
¶214 I agree with almost all of the majority opinion and
compliment the author’s comprehensive treatment of a complex and
challenging case. I cannot agree in the end, however, with the
holding affirming the trial court’s failure to impute to Ms. Dahl some
need for basic living expenses consistent with the parties’ lifestyle
33
(...continued)
cost Ms. Dahl the alimony to which she may otherwise have been
entitled.
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DAHL v. DAHL
JUSTICE DURHAM , dissenting
during the marriage. There is no question that, during their
marriage, Dr. and Ms. Dahl enjoyed considerable wealth and made
commensurate choices about the material quality of their life. There
is also little question, in my mind, that Ms. Dahl, given her age, her
health, and her lack of any employment experience for the last
twenty years, has little or no significant earning capacity, while Dr.
Dahl’s capacity for extremely high earnings continues. The record
reflects that during their separation, Dr. Dahl voluntarily paid Ms.
Dahl over $4,000 per month for her maintenance.
¶215 It is true that Ms. Dahl’s testimony about her expenses
appears to have been unrealistic and exaggerated, as well as
undocumented. Given the overall dismal and inadequate
performance of her counsel, however, I believe the district court
should have afforded Ms. Dahl some leniency, and acknowledged
that all persons have basic needs for housing, food, transportation,
medical expenses, clothing, and the like. In these circumstances, an
imputation of basic expenses predicated on readily available
information about the cost of living in Utah would probably have
yielded an alimony award at least in the vicinity of Dr. Dahl’s
voluntary temporary payments. And given the parties’ historic
lifestyle choices, which Dr. Dahl is free to continue, I believe,
contrary to the majority’s conclusion, that this is a case where the
failure to award alimony runs counter to one of the underlying
policy justifications of bringing the recipient spouse as near the
standard of living enjoyed during the marriage as possible.
¶216 The majority sees the question differently, relying
exclusively as I understand it, on the $1.5 million dollar award from
the marital estate to Ms. Dahl, and the conclusion that this amount
“would enable her to enjoy a very comfortable standard of living.”
It is true that this amount is a considerable sum, but it is not at all
clear to me that Ms. Dahl, who apparently has no income and little
prospect of acquiring any, will be able to enjoy anything like the
marital standard of living, or the continuing standard enjoyed by Dr.
Dahl, as a result of this award. The earnings and capital stemming
from this award will need to cover not just Ms. Dahl’s current living
expenses, but also her retirement needs. A cursory review of
publicly available information reveals that at current interest rates
and withdrawal levels that will allow her funds to see her through,
Ms. Dahl will be lucky to have fifty to sixty thousand dollars a year
on which to live. See, e.g., Jeff Sommer, For Retirees, a Million-Dollar
Illusion, N.Y. TIMES, June 9, 2013, at BU1 (citing a four percent annual
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Cite as: 2015 UT 23
JUSTICE DURHAM , dissenting
withdrawal rate as a “a common, rule-of-thumb drawdown” for a
retirement account). For most people, of course, that amount would
be more than adequate, but it does not remotely compare with the
marital standard of living, or with Mr. Dahl’s postdivorce
expectations. Thus, in this case, I would hold that the district court
abused its discretion in failing to impute basic costs of living even in
the absence of compliance by Ms. Dahl’s counsel with the (perfectly
reasonable) requests of the court. Ms. Dahl’s prospects are
significantly disproportionate to that of her former spouse, and to
the expectations that she should have been entitled to after a long-
term marriage conducted in circumstances of great material comfort.
¶217 I also find that the district court applied the wrong legal
standard to its determination to deny permanent alimony. The court
ruled that “alimony may not be awarded without specific findings
of the need of the recipient spouse.” I disagree with this conclusion
of law. The controlling statute mandates that courts “shall consider”
seven enumerated “factors in determining alimony,” including “the
financial condition and needs of the recipient spouse.” UTAH CODE
§ 30-3-5(8)(a); accord Jones v. Jones, 700 P.2d 1072, 1075 (Utah 1985)
(“financial conditions and needs” of the recipient spouse “must be
considered in fixing a reasonable alimony award”). Although courts
certainly must consider the financial need of the recipient spouse,
among other mandatory factors, the absence of evidence on any one
factor does not require the court to deny an award of alimony. The
lack of evidence of need may certainly affect the court’s alimony
determination, but it is not necessarily dispositive. Because need is
a factor relevant to a holistic alimony determination, rather than a
required element, I would hold that the district court erred when it
ruled that the absence of credible evidence of need required a
complete denial of an alimony award.
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