Widdison v. Widdison , 770 Utah Adv. Rep. 28 ( 2014 )

2014 UT App 233_________________________________________________________
THE UTAH COURT OF APPEALS
JAMIE WIDDISON,
Petitioner and Appellee,
v.
JANAE A. WIDDISON,
Respondent and Appellant.
Memorandum Decision
No. 20130464-CA
Filed October 2, 2014
Third District Court, Salt Lake Department
The Honorable Todd M. Shaughnessy
No. 034903241
Janae A. Widdison, Appellant Pro Se1
Suzanne Marelius, Attorney for Appellee
JUDGE J. FREDERIC VOROS JR. authored this Memorandum
Decision, in which JUDGE MICHELE M. CHRISTIANSEN and SENIOR
JUDGE PAMELA T. GREENWOOD concurred.2
VOROS, Judge:
¶1 Janae A. Kirkham (Wife) and Jamie Widdison (Husband)
divorced in 2003.3 Husband petitioned to modify the divorce
decree, arguing in part that he should be allowed to claim the tax
1. Larry A. Kirkham filed an entry of appearance on behalf of
Appellant after this matter was submitted to the court for
disposition.
2. The Honorable Pamela T. Greenwood, Senior Judge, sat by
special assignment as authorized by law. See generally Utah R. Jud.
Admin. 11-201(6).
3. Though Wife no longer uses the last name Widdison, we retain
the case name Widdison v. Widdison here for consistency with lower
court proceedings.
Widdison v. Widdison
exemption for the couple’s youngest child. The parties met with the
domestic commissioner in his chambers. That conversation does
not appear in the record. But the minute entry summarizing the
meeting states that Wife refused to agree to the modification, that
she “had no explanation for her position, particularly where it
would cost her nothing,” and that Husband’s modification requests
appeared “imminently capable of settlement but for [Wife’s]
inexplicable position.”
¶2 After a half-day trial, the trial court issued findings and
signed Husband’s proposed modification order. The order
awarded Husband the tax exemption for the youngest child for
2009, 2010, 2011, and 2012 and gave Husband the right to buy
Wife’s use of the exemption in 2013. The trial court directed Wife
“to file the amended tax returns prepared by [Husband] for those
years.” The order also crafted a new system for determining which
parent would provide health insurance for the youngest child. The
trial court also found that Wife’s “continued opposition [to the
proposed modification] was unreasonable” and thus awarded
Husband attorney fees.
¶3 Wife filed a thirteen-page written objection to the trial
court’s findings. Her objection contains, by our count, seventy-two
entries alleging errors, omissions, and inconsistencies in the trial
court’s findings. Wife objected to many findings that were essential
to the trial court’s conclusions. For example, Wife disputed the
court’s characterization of her employment and salary, Husband’s
salary, and the cost of Husband’s medical insurance. Wife also
objected to the trial court’s finding that she “has medical benefits
available for herself and dependents at no cost from the healthcare
clinic where she works.” The trial court entered its findings as
proposed. A handwritten note on the final page of the findings
reads, “The court has considered and hereby overrules [Wife’s]
objections to the foregoing findings of fact and conclusions of law.”
¶4 Wife appeals from the trial court’s findings and from the
modification order. We conclude that the trial court’s findings do
not adequately support the decision to award Husband the tax
20130464-CA 2 2014 UT App 233Widdison v. Widdison
exemptions or its decision to modify the original decree’s health-
insurance provisions. We therefore vacate the trial court’s order
with respect to the tax exemption and health-insurance issues and
remand for further proceedings. We also conclude that Wife’s
opposition to the proposed modification was not unreasonable.
Accordingly, we also vacate the trial court’s award of attorney fees.
I. Tax Exemptions
¶5 Wife contends that the trial court erred by modifying the
divorce decree to allow Husband to claim a tax exemption for their
youngest child. Wife argues that the trial court made no factual
findings to support its conclusion that Husband “would realize a
greater benefit from the exemption” than Wife would. Husband
responds that “changed circumstances and equities” justified the
modification. Husband also maintains that Wife “could not show
that she would suffer financial harm” from the modification,
because the ruling prescribed that “she would be fully
indemnified” for any losses due to the exemption shift.
¶6 The Utah Rules of Civil Procedure require that “[i]n all
actions tried upon the facts without a jury or with an advisory jury,
the court shall find the facts specifically and state separately its
conclusions of law thereon.” Utah R. Civ. P. 52(a). A trial court’s
findings “should be sufficiently detailed and include enough
subsidiary facts to disclose the steps by which the ultimate
conclusion on each factual issue was reached.” Rucker v. Dalton, 598
P.2d 1336, 1338 (Utah 1979). When a trial court fails to make
findings on a material issue, we assume the court “found them in
accord with its decision, and we affirm the decision if from the
evidence it would be reasonable to find facts to support it.” State v.
Ramirez, 817 P.2d 774, 787 (Utah 1991) (citation and internal
quotation marks omitted). But we will vacate for further findings
when “the ambiguity of the facts makes this assumption
unreasonable.” Id. at 788.
¶7 At trial, Husband’s counsel asked Wife, “[D]o you think if
we can shift the exemption to [Husband] and not hurt you a bit,
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that would be a good idea?” Wife responded, “I think [shifting the
exemption to Husband] would hurt me a lot because of the
different exemptions that I take.” Wife specifically raised three tax
issues that she felt Husband’s proposal failed to address—the Child
Tax Credit, the Earned Income Credit, and the head-of-household
designation:
If I [retain the exemption], then of course I get the
child tax credit, along with the earned income credit,
and I get to file as head of household; and the benefit
comes back into the house so it also benefits the
minor child. If [Husband] takes [the exemption], then
I can no longer file head of household. So that
changes my tax bracket or the tax that I owe, because
I would be filing single, which is the highest tax
bracket there is.
The trial court made no findings on these additional possible tax
burdens. Instead, the trial court’s amended order of modification
requires Husband to “pay any difference in taxes owed by [Wife]
resulting from the shifting of the exemption for these years.” The
trial court’s findings address the tax consequences of the exemption
in a single sentence: “[Husband] would realize a greater benefit
from the exemption for [2009, 2010, and 2011] than [Wife].”
¶8 Wife submitted her original tax returns during discovery. At
trial, Husband testified that he provided these returns to a tax-
preparation company to use in preparing modified returns for Wife
for 2009, 2010, and 2011, thus disclosing the content of the returns.
The object apparently was to demonstrate that allowing Husband
to claim the exemptions would result in a lower total tax liability.
Wife argues that Husband’s preparation and submission of her
amended returns without her signed consent violated the Internal
Revenue Code. See 26 U.S.C. §§ 6103, 6713, 7216 (2012); see also
Internal Revenue Serv., Revenue Procedure 2008-35 (July 21, 2008),
http://www.irs.gov/irb/2008-29_IRB/ar13.html (explaining that
generally “a taxpayer’s consent to each separate disclosure or use
20130464-CA 4 2014 UT App 233Widdison v. Widdison
of tax return information must be contained on a separate written
document”).4
¶9 Those concerns aside, the trial court’s findings on the tax-
exemption issue are insufficient. As Wife indicated, the tax
implications of the exemption shift described in the trial court’s
modification may be complex. If a taxpayer “qualif[ies] to file as
head of household,” her “tax rate usually will be lower than the
rates for single or married filing separately.” Internal Revenue
Serv., Dep’t of the Treasury, Publication 501: Exemptions, Standard
Deduction, and Filing Information, 8 (2013), available at
http://irs.gov/pub/ irs-pdf/p501.pdf. But a taxpayer may file as head
of household only if a “qualifying person lived with [her] in the
home for more than half the year.” Id. Though a child of divorced
parents is typically “the qualifying child of the custodial parent,”
in certain circumstances “the child will be treated as the qualifying
child of the non-custodial parent.” Id. at 14. Wife expressed concern
that the exemption shift would jeopardize her head-of-household
status, which in turn could trigger an IRS audit and subject her to
fines. The trial court’s findings do not address these concerns.5
Instead, it responded to these concerns by assuring Wife that
Husband would pay any tax difference for the years in question.
4. Wife also asserts that she refused to sign the modified returns
and that she had “never been given notice [of] the actual signing of
these forms . . . , but knows through communicating with the IRS
[that her modified returns] were filed with [Husband’s modified
returns].” If this allegation is true, we note the impropriety—and
possible illegality—of filing Wife’s amended returns without her
signed consent.
5. The trial court’s findings also left unresolved Wife’s concerns
about the loss of the Earned Income Credit and the Child Tax
Credit. See Internal Revenue Serv., Dep’t of the Treasury,
Publication 596: Earned Income Credit (EIC) (2013), available at
http://irs.gov/pub/irs-pdf/p596.pdf; Dep’t of the Treasury,
Publication 972: Child Tax Credit (2013), available at
http://irs.gov/pub/irs-pdf/p972.pdf.
20130464-CA 5 2014 UT App 233Widdison v. Widdison
¶10 But Wife’s unresolved questions concerning the actual tax
consequences of her filing amended returns place that assurance in
doubt. Even if the modified tax returns that Husband prepared for
Wife correctly calculated the tax difference due to the exemption
shift, Husband’s obligation to pay Wife the difference would not
protect Wife against the possibility of an audit or fines. In short, we
conclude that the tax consequences of the exemption shift may well
be more complex than Husband’s questioning or the court’s
findings reflect. The trial court’s findings do not contain “enough
subsidiary facts to disclose the steps by which the ultimate
conclusion on each factual issue was reached.” Rucker, 598 P.2d at
1338. We therefore vacate this portion of the trial court’s order and
remand for further findings.
II. Health Insurance
¶11 Wife next contends that the trial court failed to adequately
address the issue of health insurance in its amended order. Wife
argues that the Widdisons’ original divorce decree required
Husband to maintain health-insurance coverage and that the trial
court erred by neglecting to make findings on Husband’s failure to
do so.
¶12 The Widdisons’ original divorce decree required Husband
to “maintain medical and dental insurance for the benefit of the
children as long as it is available through his employment at a
reasonable cost.” The decree deducted Wife’s share of the
children’s health-insurance premium from Husband’s child-
support obligation.
¶13 At trial, Husband stated that after hearing from Wife’s
attorney that Wife could obtain health insurance at no cost through
her employer, he removed their youngest child from his health-
insurance plan. The record gives no indication that Husband’s
child-support obligation was adjusted to remove the health-
insurance deduction. In short, it appears that Husband continued
to offset Wife’s insurance-premium contribution against his child-
support obligation even though Wife, not Husband, provided the
health insurance.
20130464-CA 6 2014 UT App 233Widdison v. Widdison
¶14 The trial court’s findings provide a plan for Husband and
Wife going forward. The court ordered Husband and Wife “to
make full, complete disclosure by March 1st of every year of all
information concerning the availability of health and dental
benefits available for the [dependent] child for the next year.”
Husband and Wife are then required to “jointly determine which
parent has the most affordable and adequate coverage for the
minor child and that parent will maintain the coverage for that
insurance year.” But the findings do not address Husband’s
removal of their youngest child from his health-insurance plan.
Furthermore, the findings do not indicate whether Husband will be
required to compensate Wife for the corresponding underpayment
of child support during the period in which their youngest child
relied on Mother’s health-insurance benefits.
¶15 Husband acknowledged removing their youngest child from
his health-insurance plan, an apparent violation of the original
divorce decree. The trial court failed to address Wife’s arguments
with respect to this issue. Because the “ambiguity of the facts”
makes it unreasonable to assume that the trial court found the facts
in accord with its decision, the court’s failure to make findings on
this issue constitutes reversible error. See Ramirez, 817 P.2d at 788.
We vacate the trial court’s divorce-decree modifications with
respect to health-insurance coverage and remand to allow the trial
court to make additional findings on this issue.
III. Attorney Fees
¶16 Finally, Wife contends that the trial court abused its
discretion by awarding Husband attorney fees. Husband responds
that the trial court’s attorney-fee award “was correct and must be
affirmed.”
¶17 Under Utah law, a prevailing party generally cannot recover
attorney fees “unless authorized by statute or contract.” Faust v.
KAI Techs., Inc., 2000 UT 82, ¶ 17, 15 P.3d 1266. The application of
a statute to the facts “presents a mixed question of fact and law.”
Olsen v. Olsen, 2007 UT App 296, ¶ 7, 169 P.3d 765 (citation and
internal quotation marks omitted). We review the trial court’s
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“findings for clear error and its conclusions of law for correctness,
affording the court some discretion in applying the law to the
facts.” Id. (citation and internal quotation marks omitted).
¶18 Utah Code section 30-3-3 allows trial courts to award
attorney fees in divorce and modification proceedings. See Utah
Code Ann. § 30-3-3 (LexisNexis 2013). The relevant provision
states, “[I]n any action to establish an order . . . in a domestic case,
the court may order a party to pay the . . . attorney fees . . . of the
other party to enable the other party to prosecute or defend the
action.” Id. § 30-3-3(1). But attorney-fee awards under subsection
(1) “must be based on the usual factors of need, ability to pay, and
reasonableness.” Connell v. Connell, 2010 UT App 139, ¶ 28, 233
P.3d 836; see also Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 49,
176 P.3d 476. Although the decision to award attorney fees in
domestic actions generally falls within the “trial court’s sound
discretion,” the “[f]ailure to consider these factors is grounds for
reversal on the fee issue.” Wilde v. Wilde, 969 P.2d 438, 444 (Utah Ct.
App. 1998).
¶19 Here, the trial court found that “the Domestic Relations
Commissioner was correct . . . that the case should have been
settled” prior to trial and that Wife’s “continued opposition [to
Husband’s proposed modification] was unreasonable.” After
concluding that Husband “ha[d] substantially prevailed on all
disputed issues,” the trial court awarded Husband all “fees and
charges incurred from May 1, 2012 forward.” However, the
ambiguities attending shifting the tax exemption, explained above,
cast doubt on the conclusion that Wife’s “continued opposition was
unreasonable.” The financial impact of the exemption shift may be
more complex than Husband, the commissioner, and the trial court
indicated. And even if the exemption shift were financially neutral,
Wife’s consideration of other factors, such as the stress and
inconvenience of a possible IRS audit, makes her “continued
opposition” at least reasonable.
¶20 Moreover, the record does not reflect that the trial court
considered the “usual factors” of Husband’s need, Wife’s ability to
pay, and the reasonableness of his fee request. See Connell, 2010 UT
20130464-CA 8 2014 UT App 233Widdison v. Widdison
App 139, ¶ 28; Wilde, 969 P.2d at 444. We therefore vacate the trial
court’s attorney-fee award and remand for further considerations
in light of the foregoing.
¶21 In summary, we vacate the trial court’s award of attorney
fees. We also vacate the trial court’s modification order with
respect to the tax-exemption shift and health insurance and remand
to allow the trial court to enter additional findings on these issues.
20130464-CA 9 2014 UT App 233