Earhart v. Earhart ( 2015 )

2015 UT App 308THE 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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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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¶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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¶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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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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¶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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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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