Earhart v. Earhart ( 2015 )


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    2015 UT App 308
    THE UTAH COURT OF APPEALS
    MELINDA EARHART,
    Appellant,
    v.
    TIM EARHART,
    Appellee.
    Opinion
    No. 20140827-CA
    Filed December 31, 2015
    Third District Court, Salt Lake Department
    The Honorable Su J. Chon
    No. 104905767
    Brian E. Arnold and Lauren Schultz, Attorneys
    for Appellant
    Andrew W. Gilliland, Attorney for Appellee
    JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
    which JUDGES GREGORY K. ORME and J. FREDERIC VOROS JR.
    concurred.
    CHRISTIANSEN, Judge:
    ¶1      Melinda Earhart appeals from the district court’s decision
    to modify a divorce decree, arguing that the district court abused
    its discretion in determining that her former husband’s income
    had substantially changed, that the change was unforeseeable,
    and that the new level of income was likely to continue for the
    foreseeable future. We affirm.
    Earhart v. Earhart
    BACKGROUND
    ¶2      Melinda Earhart and Tim Earhart married in May 2006
    and divorced in September 2011. 1 Tim adopted Melinda’s
    daughter, and the Earharts had three children together. During
    the marriage, Tim was an owner and chief executive officer of a
    business. In the divorce decree, the parties stipulated that Tim’s
    monthly income was $22,000, or $264,000 per year. The decree
    required Tim to pay $4,000 in monthly alimony for five years,
    $3,200 in monthly child support until the children turned
    eighteen or graduated from high school, $3,935.41 per month for
    the mortgages encumbering Melinda’s residence until it was
    sold, 2 and $1,528.01 per month for Melinda’s vehicle lease. Tim
    was further required to pay for insurance and maintenance for
    the vehicle, and to pay for a fixed period of the lease for a
    replacement vehicle equivalent to a Lexus LX570 once the
    existing lease expired. He was also required to pay for
    private school and college tuition for the four children. His
    financial obligations under the divorce decree amounted to
    approximately $15,000 per month. 3
    ¶3      In August 2012, Melinda filed a motion seeking an order
    for Tim to show cause for not fully paying his financial
    obligations. Tim then filed a petition to modify the divorce
    decree from which the obligations flowed. At the hearing, Tim
    testified that approximately one month after entry of the decree,
    1. Because the parties still share a last name, we refer to them by
    their first names for clarity, with no disrespect intended by the
    apparent informality.
    2. The parties agreed not to sell the house “until the housing
    market recovers.” Melinda was awarded possession of the house
    but each party was awarded a 50% equity interest in it.
    3. Melinda was also awarded 25% of the gross profit of Tim’s
    business, and the business was required to pay all of her tax
    liability each year.
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    Earhart v. Earhart
    his business had suffered the unforeseen loss of its primary
    client. As a result, Tim had changed his employment focus from
    client-billable work to attracting new clients as a “rainmaker”.
    He also testified that shortly after losing the major client, his
    lender (his father) had converted the outstanding loans to shares
    in the business to become a 40% owner of the business. Because
    time spent seeking new clients could not be billed to a client, and
    because the business had to hire employees or retain
    independent consultants to complete work for existing clients,
    Tim and his father (as the new shareholder) agreed to cap Tim’s
    annual income at $180,000, down from the $264,000 he had
    previously earned. Tim testified to this reduction as follows:
    Q      So according to your billable rate right now,
    if you weren’t doing what you’re doing, could you
    make $22,000 a month?
    A       If I was a billable resource?
    Q       Yes.
    A       Yes.
    Q    All right. So then are you voluntarily under-
    employed?
    A       I am not voluntarily under-employed.
    Q    Are you voluntarily not making as much
    money as you really could?
    A     No. I am not. As we explained yesterday,
    we changed the way the company operates and we
    had to do that because of the volatility of the
    industry and the way we had proven with two
    previous clients, we couldn’t sustain the business.
    Q     Okay. According to your billable rate, you
    could make $22,000 a month?
    A       Yes. I could. And I could also be in the same
    situation I was in where I could be thrown out [by]
    a client and not have any billable rate.
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    Earhart v. Earhart
    ¶4     The district court found credible Tim’s testimony
    regarding the change in his rate of pay and the evidence he
    presented in support of it. The court further found that the
    change in income was not contemplated at the time of the
    divorce decree and that it was likely to continue for the
    foreseeable future. Accordingly, the district court reduced Tim’s
    monthly alimony obligation from $4,000 to $3,000, reduced his
    monthly child support obligation from $3,200 to $2,348, and
    eliminated the requirement that he pay a vehicle lease for
    Melinda. Melinda appeals from that modification.
    ISSUES AND STANDARDS OF REVIEW
    ¶5      Melinda first challenges the district court’s finding that
    Tim’s monthly income had fallen from $22,000 to $15,000 despite
    his testimony that his billable rate had not changed. In her view,
    his income potential had not actually changed, and the district
    court therefore lacked the power to modify the amount of
    alimony and child support specified by the divorce decree. A
    district court’s determination regarding whether a substantial
    change of circumstances has occurred is presumptively valid,
    and our review is therefore limited to considering whether the
    district court abused its discretion. Young v. Young, 
    2009 UT App 3
    , ¶ 4, 
    201 P.3d 301
    .
    ¶6     Melinda next contends that the district court
    inappropriately based the modified alimony award on her needs
    at the time of the modification rather than her needs at the time
    of the decree of divorce. To the extent that this contention
    presents a legal question, an appellate court generally reviews
    properly preserved questions of law for correctness. See Davis v.
    Davis, 
    2011 UT App 311
    , ¶¶ 6–7, 
    263 P.3d 520
    ; Utah R. App. P.
    24(a)(5) (requiring an appellant’s brief to either provide a citation
    to the record showing that an issue was preserved or to
    articulate grounds for reviewing an unpreserved issue).
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    Earhart v. Earhart
    ¶7     Melinda also asserts that the district court lacked the
    power to remove the vehicle lease obligation contained in the
    original decree. She argues the district court incorrectly
    characterized that obligation as part of alimony rather than as a
    property settlement. We review the district court’s decision to
    modify the decree for an abuse of discretion. See Young, 
    2009 UT App 3
    , ¶ 4; see also Burt v. Burt, 
    799 P.3d 1166
    , 1170 (Utah Ct.
    App. 1990); Tsoufakis v. Tsoufakis, 
    382 P.2d 412
    , 413 (Utah 1963).
    ANALYSIS
    I. Change of Circumstances
    ¶8     Melinda first contends that the district court abused its
    discretion by determining that a substantial change of
    circumstances had occurred. Specifically, she asserts that
    because Tim admitted that his billable rate had not changed, his
    loss of income was attributable to voluntary underemployment
    rather than to a true change of circumstances. Melinda concludes
    that the district court’s findings were inadequate to support its
    implicit determination that Tim’s income had changed due to
    circumstances outside his control: “Therefore, the court’s
    findings were not sufficient to support its finding.”
    ¶9      Utah courts have long recognized that “voluntary
    impoverishment is not a ground for reduction of alimony.”
    Callister v. Callister, 
    261 P.2d 944
    , 949 (Utah 1953); see also, e.g.,
    Rayner v. Rayner, 
    2013 UT App 269
    , ¶¶ 7–8, 
    316 P.3d 455
    ; Hall v.
    Hall, 
    858 P.2d 1018
    , 1024–26 (Utah Ct. App. 1993). However,
    here, the district court did not find that Tim had voluntarily
    begun to earn less than he was capable of earning. Nor did Tim
    admit, as Melinda asserts, to “$22,000.00 a month in gross
    income.”
    ¶10 Under cross-examination, Tim was asked, “According to
    your billable rate, you could make $22,000 a month?” He replied,
    “Yes. I could. And I could also be in the same situation I was in
    where I could be thrown out [by] a client and not have any
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    billable rate.” Melinda frames this as Tim’s admission that he
    could be earning $22,000 per month. But such a framing takes
    Tim’s statement out of context. Tim testified that his business
    lacked the clientele necessary to support that level of
    remuneration and that he had had to spend time attracting new
    clients. Thus, while his billable rate may not have changed, the
    actual number of hours he was able to bill at that rate fell.
    ¶11 The district court found that Tim’s annual income had
    fallen from $264,000 to $180,000. While it is true that the district
    court did not explicitly state that the loss of income was
    involuntary, the court did find that Tim’s testimony “was
    credible with respect to the change in his business model,” that
    the change in clientele and income was unforeseeable, and that
    “his documentary evidence supported that his income is capped
    at $180,000.00.” 4 We read this as a finding by the district court
    that Tim’s testimony regarding involuntariness was more
    credible than Melinda’s evidence of voluntariness. Cf. Hall, 
    858 P.2d at 1025
     (“Unstated findings can be implied if it is reasonable
    to assume that the trial court actually considered the
    controverted evidence and necessarily made a finding to resolve
    the controversy, but simply failed to record the factual
    determination it made.”).
    ¶12 Melinda also asserts that Tim “did not meet his burden of
    proving his self-employment income by simply stating he was
    capped [at] $180,000.00.” She highlights her own “evidence of
    the transfer of monies, and deposits into [Tim’s] personal
    account that totaled on average $27,034.14 a month over a
    twenty-three (23) month period.” She also notes Tim’s statement
    that the draft version of his 2013 income tax return could not be
    relied upon because it was still subject to change. But the mere
    existence of contradictory evidence relating to a question of fact
    does not render the factfinder’s ultimate decision to believe one
    4. Melinda did not object, before the district court, to the absence
    of a more explicit involuntariness finding.
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    account over another, or one portion of testimony over another,
    without adequate support. See State v. Black, 
    2015 UT App 30
    ,
    ¶ 19, 
    344 P.3d 644
     (“The existence of a conflict in the evidence
    does not render the totality of the evidence insufficient. It is the
    role of the factfinder to examine and resolve such conflicts.”).
    ¶13 Here, the district court found that Tim’s company had lost
    a major client, that the company’s records showed a cessation of
    payments from that client, and that Tim “became a rainmaker
    for [the company] and his billable hours were reduced
    significantly as he pursued new business opportunities.” The
    district court found that some of the deposits made to Tim’s
    personal account could not properly be characterized as income
    because they included contributions from his roommate for
    “housing, food, and other household expenses.” The court
    further found that Melinda had “provided no testimony or
    evidence rebutting [Tim’s] testimony about his personal tax
    records.” The district court concluded that there had been “a
    substantial change of circumstances that was not anticipated at
    the time the Decree [was entered] in that [Tim’s] income was
    reduced by $7,000 per month from $22,000 per month [as] set
    forth in the Decree to $15,000 per month,” and that “[s]uch
    change is not temporary in nature.”
    ¶14 While there is admittedly evidence in the record that
    would support contrary findings, we conclude that adequate
    evidence supports the district court’s findings, which in turn are
    adequate to support its conclusion that an unforeseen and
    involuntary change of circumstances had occurred. Accordingly,
    the district court did not abuse its discretion in determining that
    modification of the divorce decree was warranted.
    II. Modification of Alimony Award
    ¶15 Melinda next contends that “the alimony award must be
    based on the needs of [the] petitioner at the time of [the] decree
    of divorce and not [at the time of] the petition to modify.” She
    argues that after the district court determined that modification
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    Earhart v. Earhart
    was appropriate, it should have considered her financial needs
    as originally established rather than reevaluating them. This
    position seems inconsistent with the very rationale of a court’s
    continuing jurisdiction in divorce cases. See 
    Utah Code Ann. § 30-3-5
    (8)(i)(i) (LexisNexis 2013) (“The court has continuing
    jurisdiction to make substantive changes and new orders
    regarding alimony based on a substantial material change in
    circumstances not foreseeable at the time of the divorce.”). But
    we need not decide this issue today.
    ¶16 “Issues that are not raised at trial are usually deemed
    waived.” 438 Main St. v. Easy Heat, Inc., 
    2004 UT 72
    , ¶ 51, 
    99 P.3d 801
    . This preservation requirement is “based on the premise that,
    in the interest of orderly procedure, the trial court ought to be
    given an opportunity to address a claimed error and, if
    appropriate, correct it.” Wohnoutka v. Kelley, 
    2014 UT App 154
    ,
    ¶ 3, 
    330 P.3d 762
     (citation and internal quotation marks omitted).
    Melinda does not identify any point in the record demonstrating
    that she presented the alleged error—that her needs assessment
    should not have been based on her current expenses—to the
    district court. See Utah R. App. P. 24(a)(5) (requiring an
    appellant’s brief to address preservation or exceptions to the
    preservation requirement). Nor has our review of the record
    revealed any such presentation. See Wohnoutka, 
    2014 UT App 154
    , ¶ 6 (“An appellate court should not be asked to scour the
    record to save an appeal by remedying the deficiencies of an
    appellant’s brief.”). For these reasons, we do not consider
    Melinda’s claim in this regard.5
    5. In any event, Melinda’s argument that a payor spouse should
    not be allowed to “shirk [his] financial responsibilities and
    unilaterally get rid of the obligations that create the need” relies
    on a finding that the payor spouse intentionally caused the
    shortfall. But the district court here implicitly determined that
    Tim did not intentionally cause his income reduction. This court
    has previously held that, when a payor spouse suffers an
    (continued…)
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    III. Vehicle Lease Provision
    ¶17 Melinda contends that the district court erred in
    amending the vehicle lease provision set forth in the original
    divorce decree. That provision required Tim to pay $1,528.01 per
    month for the lease payment on the vehicle driven by Melinda,
    to pay for a similar vehicle from the expiration of the lease until
    September 2016, and to pay all insurance and maintenance costs
    associated with the vehicles. The district court found that
    “[b]ecause of [Tim’s] change in income and based on the Court’s
    determination of alimony and child support with respect to both
    parties’ financial declarations, there are no extra monies to
    provide for a similar type of vehicle.” The court therefore
    ordered the substance of the provision removed from the
    divorce decree.
    ¶18 Melinda argues that property divisions, unlike alimony,
    are not readily modifiable absent “compelling findings.” She
    relies on two cases decided by the Utah Supreme Court, both of
    which discussed real property. The supreme court held that “the
    outright abrogation of the provisions of [a property settlement
    agreement] is only to be resorted to with great reluctance and
    for compelling reasons.” Land v. Land, 
    605 P.2d 1248
    , 1251
    (Utah 1980). “Where a disposition of real property is in
    question, . . . courts should properly be more reluctant to grant a
    modification.” Foulger v. Foulger, 
    626 P.2d 412
    , 414 (Utah 1981).
    This is because, “[i]n the interest of securing stability in titles,
    modifications in a decree of divorce making disposition of real
    property are to be granted only upon a showing of compelling
    reasons arising from a substantial and material change in
    circumstances.” 
    Id.
    (…continued)
    unintentional reduction in income, splitting or sharing the pain
    of the shortfall is an appropriate goal for alimony modification.
    See Hansen v. Hansen, 
    2014 UT App 96
    , ¶¶ 8, 13, 
    325 P.3d 864
    .
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    Earhart v. Earhart
    ¶19 This claim fails for a number of independent reasons.
    First, the Utah authorities cited (and the rationale explained
    therein) concern only real property, not personal property such
    as a vehicle, and therefore do not clearly extend to personal
    property. Second, the provision at issue here requires Tim to pay
    amounts owed under a lease and therefore relates to a contract
    obligation rather than to property ownership in the classic sense.
    And third, even if the authorities cited applied to personal
    property and the provision at issue concerned personal property,
    the district court’s conclusion that “there [has] been a substantial
    change of circumstances with respect to [Tim’s] income,” which
    we affirm supra ¶ 14, appears to satisfy any requirement that
    property settlement modifications “are to be granted only upon
    a showing of compelling reasons arising from a substantial and
    material change in circumstances.” See Foulger, 626 P.2d at 414.
    ¶20 Melinda also argues that there is a discrepancy between
    the district court’s findings. She notes that the court found that
    Tim has “approximately $4,080.00 left over monthly” and
    therefore decided to award modified alimony of $3,000.00. She
    asserts that this left $1,080.00 per month, contradicting the
    court’s finding that “[b]ecause of [Tim’s] change in income and
    based on the Court’s determination of alimony and child
    support with respect to both parties’ financial declarations, there
    are no extra monies to provide for a similar type of vehicle.” Tim
    responds that the remaining $1,080.00 per month would be
    insufficient to satisfy the vehicle lease provision’s requirement
    that he pay the lease of $1,528.01 per month plus associated
    insurance and maintenance costs, and that Melinda did not seek
    modification of the provision to require him to pay for a less
    expensive lease.
    ¶21 While the court could have modified the vehicle lease
    provision rather than eliminating it entirely, Melinda never
    asked the district court to do so or to explain any discrepancy
    between the rulings. Because Melinda did not present her
    challenge to the district court in such a way that the court had an
    opportunity to rule on it, the challenge is unpreserved.
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    Earhart v. Earhart
    Wohnoutka v. Kelley, 
    2014 UT App 154
    , ¶ 4, 
    330 P.3d 762
     (“An
    issue is preserved for appeal only if it was presented to the trial
    court in such a way that the trial court had an opportunity to
    rule on it.” (brackets, citation and internal quotation marks
    omitted)).
    CONCLUSION
    ¶22 The district court’s findings adequately supported its
    conclusion that the circumstances had substantially changed,
    and the court therefore did not abuse its discretion in
    determining that modification of the divorce decree was
    appropriate. Melinda did not preserve her challenge to the
    district court’s decision to reevaluate her financial need at the
    time of the modification. She has also failed to show that the
    district court abused its discretion by eliminating the vehicle
    lease provision.
    ¶23   Affirmed. 6
    6. Tim requests an award of attorney fees incurred on appeal. “A
    party seeking to recover attorney’s fees incurred on appeal shall
    state the request explicitly and set forth the legal basis for such
    an award.” Utah R. App. P. 24(a)(9). Because Tim does not set
    forth any legal basis for or authority in support of his attorney-
    fee request, we deny it.
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Document Info

Docket Number: 20140827-CA

Judges: Christiansen, Orme, Voros

Filed Date: 12/31/2015

Precedential Status: Precedential

Modified Date: 11/13/2024