Plaia v. Plaia , 2019 UT App 130 ( 2019 )

2019 UT App 130THE UTAH COURT OF APPEALS
MICHAEL ALLEN PLAIA,
Appellee,
v.
ALINA VICTORIA PLAIA,
Appellant.
Opinion
No. 20170948-CA
Filed July 26, 2019
Third District Court, Silver Summit Department
The Honorable Kara Pettit
No. 144500139
Alina Victoria Plaia, Appellant Pro Se
Dean C. Andreasen and Laura D. Johnson, Attorneys
for Appellee
JUDGE DIANA HAGEN authored this Opinion, in which
JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.
HAGEN, Judge:
¶1 Alina Victoria Plaia appeals the district court’s
enforcement of the stipulation (Stipulation) she entered into with
her ex-husband Michael Allen Plaia in the course of their divorce
proceeding. Alina 1 argues that the Stipulation should be set
aside because it distributes non-marital property—shares in a
company that employed Alina—to Michael as the result of a
mutual mistake and because it inequitably distributes the shares.
Because the district court did not abuse its discretion in
1. Because both parties share the same surname, we refer to them
by their first names with no disrespect intended by the apparent
informality.
Plaia v. Plaia
enforcing the Stipulation and distributing half of the shares to
Michael, we affirm.
BACKGROUND 2
¶2 Michael and Alina married in 2001. In 2009, Alina co-
founded Wide Bridge, Inc., an advisory and financial services
company. In 2010, Alina, Michael, and their two children moved
from New Jersey to Utah, although Alina continued to travel to
New York for her work with Wide Bridge. In 2012, Alina
acquired a company named Luxoft as a client for Wide Bridge.
As compensation for Alina’s work on Luxoft’s initial public
offering (IPO), Luxoft and Alina entered into an engagement
letter, which Alina asserts “provided for a grant of up to 29,412
shares of [Luxoft] to [Alina], the CEO and Co-founder of [Wide
Bridge], subject to other terms and conditions.” 3 Alina assisted
Luxoft with its IPO in June 2013, and she became its Vice
President of Global Communications.
¶3 Of the 29,412 shares, Alina “was issued and received 5,886
. . . in February 2014, pursuant to a restricted share award
agreement.” The restricted share award agreement provided that
the 5,886 shares would vest on June 15, 2014, subject to Alina’s
satisfaction of the “Criteria of Long Service Condition” or “CLS.”
2. “We view the evidence and all the inferences that can
reasonably be drawn therefrom in a light most supportive of the
trial court’s findings.” Baker v. Baker, 866 P.2d 540, 543 (Utah Ct.
App. 1993) (quotation simplified).
3. Alina did not offer into evidence the engagement letter, dated
November 1, 2013. The terms of the engagement letter must be
gleaned from an amended agreement, dated May 12, 2015,
which recited that the engagement letter “provided for a grant of
up to 29,412 shares” of Luxoft to Alina.
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The CLS required Alina’s continued “employment or service as a
consultant” for Luxoft through the vesting date. According to
email correspondence between Luxoft and Alina dated April 1,
2015, the 5,886 shares were delivered in 2014, 4 with the
expectation that Alina would receive the remaining 23,526 shares
between 2015 and 2017.
¶4 In July 2014, Michael filed a petition for divorce in Utah.
Alina subsequently filed for divorce in New Jersey. In her
disclosures of the parties’ marital assets, Alina listed “Luxoft
Holding via Morgan Stanley 29,412 shares at $32 (5,886
vested).” 5
¶5 Each represented by counsel, Alina and Michael entered
into mediation and on October 2, 2014, they signed the
Stipulation, in which the parties agreed as follows:
During the course of the marriage, the parties
acquired an interest in a business known as Wide
Bridge, Inc. with Luxoft as their primary client.
With the exception of the Luxoft shares awarded to
[Michael] herein, [Alina] is awarded all the
parties[’] interest, accounts and assets in Wide
Bridge, Inc. and shall assume, and pay all debt
associated with the parties’ interest in Wide Bridge,
4. There is some ambiguity in the record as to whether the 5,886
shares vested in June 2014 or later in October 2014.
5. In addition to filing a divorce petition in New Jersey, Alina
filed a motion to dismiss the Utah divorce action claiming that
Utah lacked subject matter jurisdiction. The district court
determined that it had jurisdiction over the divorce proceeding,
and Alina does not challenge that ruling on appeal. The New
Jersey court dismissed the New Jersey petition.
20170948-CA 3 2019 UT App 130Plaia v. Plaia
Inc., holding [Michael] harmless therefrom. After
receipt of the Luxoft shares awarded to [Michael],
[Michael] hereby waives all interest in Wide
Bridge, Inc.
The Stipulation further provided that Michael and Alina were to
receive one-half each of 23,526 unvested Luxoft shares and 5,886
vested shares. The Stipulation also equally divided the shares
that Michael owned in his employer’s company but it awarded
Michael all the 2014 distributions Michael received from those
shares. Regarding the shares that Alina and Michael agreed to
divide equally as marital property, the Stipulation provided that
“[e]ach party will sell the shares of stock, stock option and units
awarded to the other party and will ensure the other party
receives documentation of what the shares sold for and the
funds from said sale.”
¶6 Subsequently, Alina sought to set aside the Stipulation on
various grounds, and the divorce proceeded to a bench trial in
2017. At trial, Alina argued that Michael was not entitled to any
of the of 23,526 Luxoft shares that vested after September 1, 2014,
because Michael did not provide any “assistance and or
contribution” to Alina as she continued to acquire shares after
that date. Because she had already stipulated that Michael
would receive one half of all the shares, Alina also argued that
the court should set aside the Stipulation as “she did not realize
she had not yet earned all” of the shares at the time she entered
into the Stipulation. According to Alina, “[a]t the time of the
Stipulation, both parties were under the impression that Alina
had already earned 23,526 shares of unvested stock” but, in
reality, the shares “were not only unvested, they were unearned
altogether.” In support of this contention, Alina testified that she
was required to renegotiate with Luxoft after she entered into
the Stipulation with Michael to receive any more of the 23,526
shares to which she mistakenly believed she was already entitled
and that she still had not received as many shares as she had
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expected to receive by the date of trial. Alina also argued that
“awarding Michael half of 23,526 shares would be unfair and
inequitable, especially in light of the fact that he pocketed 100%
of his 2014 distribution from his employer.”
¶7 After trial, the district court entered findings of fact and
conclusions of law, stating that “no mutual mistake has been
demonstrated to warrant setting aside the [Stipulation]” because
Alina “was not mistaken as to the existence of the [Luxoft] stock
options” and had not presented sufficient evidence to support
her contention that the parties mistakenly believed the unvested
Luxoft shares were marital property or that the parties had not
worked together to secure the shares.
¶8 Based on its findings of fact and conclusions of law, the
district court entered a divorce decree in October 2017. Alina,
now representing herself, appeals.
ISSUES AND STANDARDS OF REVIEW
¶9 Alina argues that the district court erred by enforcing the
Stipulation and awarding Michael one half of the Luxoft shares
in the parties’ divorce decree. “[D]istrict courts have
considerable discretion concerning property distribution in a
divorce proceeding and their determinations enjoy a
presumption of validity. Thus, we will uphold the decision of
the district court on appeal unless a clear and prejudicial abuse
of discretion is demonstrated.” Dahl v. Dahl, 2015 UT 79, ¶ 119
(quotation simplified). The district court’s decision to enforce,
reject, or modify “a stipulation related to property division in a
divorce proceeding is [also] reviewed for an abuse of discretion.”
Jensen v. Jensen, 2008 UT App 392, ¶ 6, 197 P.3d 117. A district
court abuses its discretion in dividing marital property if “the
court misunderstood or misapplied the law, the evidence
presented on property values clearly preponderates against the
findings, or the court’s distribution results in such a serious
20170948-CA 5 2019 UT App 130Plaia v. Plaia
inequity as to constitute an abuse of discretion.” Morgan v.
Morgan, 795 P.2d 684, 689 (Utah Ct. App. 1990).
¶10 Alina contends that the district court abused its discretion
for two reasons: 1) the court incorrectly determined that Alina
and Michael were not mutually mistaken as to whether all the
Luxoft shares were marital property at the time the parties
entered into the Stipulation, and 2) the district court inequitably
awarded Michael one half of the Luxoft shares when he did not
contribute to their vesting. These issues involve factual
determinations and conclusions of law. “A district court’s factual
findings are reviewed deferentially under the clearly erroneous
standard, and its conclusions of law are reviewed for correctness
with some discretion given to the application of the legal
standards to the underlying factual findings.” Erickson v.
Erickson, 2018 UT App 184, ¶ 12, 437 P.3d 370 (quotation
simplified). 6
6. Alina also appeals the district court’s award of parent-time
and child support relating to the parties’ two children. She
contends that the court’s award of parent-time did not accurately
reflect the recommendations of the custody evaluator. Although
the court awarded parent-time and calculated child support in
accordance with the custody evaluator’s recommendations,
Alina objected that the conditions of parent-time were not made
sufficiently clear in the divorce decree. After Alina filed her
opening brief, the district court issued an additional order,
clarifying that it intended to award Michael a minimum of 124
days of parent-time. Alina acknowledges in her reply brief that
this clarification addressed “exactly what [she] asked for the
Court of Appeals to review.” She further concedes that “[a]t this
juncture, she only asks the Court of Appeals to affirm that the
minimum time awarded to Michael should be based on 2/3 of
the amount of non-school overnights during each school year
(continued…)
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ANALYSIS
¶11 In divorce actions, “[i]t is the court’s prerogative to make
whatever disposition of property . . . it deems fair, equitable, and
necessary for the protection and welfare of the parties.” Pearson
v. Pearson, 561 P.2d 1080, 1082 (Utah 1977). And when parties to
a divorce action stipulate to the division of property, “the
governing principle in our law is that contracts between spouses
are enforceable and generally subject to ordinary contract
principles so long as they are negotiated in good faith and do not
unreasonably constrain the divorce court’s equitable and
statutory duties.” Ashby v. Ashby, 2010 UT 7, ¶ 21, 227 P.3d 246(quotation simplified). Alina argues that the district court erred
in enforcing the Stipulation because the parties were mutually
mistaken as to the status of her stock options and the
Stipulation’s distribution of property was inequitable. 7 We
address each argument in turn.
(…continued)
and not to be tied to a particular number, to avoid confusion.”
Because Alina has not appealed the district court’s order
clarifying the decree, we cannot reach this issue.
7. Alina contends that there are three additional reasons that the
district court erred in declining to set aside the Stipulation and in
dividing the marital property. First, she argues that the shares
were actually property of Wide Bridge and therefore not marital
property. Second, she argues that the district court “abuse[d] its
discretion in ordering a sale of Luxoft stock immediately upon
vesting, thereby incurring tax expenses at a personal tax rate
instead of corporate.” Third, she argues that it is impossible for
her to comply with the decree because she did not receive all the
Luxoft shares identified in the Stipulation. Because the first two
arguments were not “presented to the district court in such a
(continued…)
20170948-CA 7 2019 UT App 130Plaia v. Plaia
I. Mutual Mistake
¶12 Alina argues she and Michael mistakenly believed at the
time they entered into the Stipulation that the Luxoft shares
were marital property. 8 “The governing principle in our law is
that contracts between spouses are enforceable and generally
subject to ordinary contract principles so long as they are
negotiated in good faith and do not unreasonably constrain the
divorce court’s equitable and statutory duties.” Ashby v. Ashby,
2010 UT 7, ¶ 21, 227 P.3d 246 (quotation simplified). However,
“when both parties, at the time of contracting, share a
misconception about a basic assumption or vital fact upon which
they based their bargain,” they may be entitled to rescind their
stipulation. See Bergmann v. Bergmann, 2018 UT App 130, ¶ 14,
(…continued)
manner that the court had a meaningful opportunity to rule” on
them, they are unpreserved and we decline to consider them. See
Dahl v. Dahl, 2015 UT 79, ¶ 207. Her third argument regarding
impossibility rests on events allegedly occurring after the entry
of the divorce decree and therefore it must be raised, if at all, in
the context of a petition to modify.
8. To the extent Alina also argues that the Stipulation should be
rescinded under the doctrine of unilateral mistake, see Guardian
State Bank v. Stangl, 778 P.2d 1, 5 (Utah 1989) (holding that a
contract may be rescinded or reformed on the basis of unilateral
mistake when one party is aware of the other party’s mistake
and such mistake is “produced by fraud or other inequitable
conduct by the nonerring party”), this argument is neither
preserved nor supported by citations to evidence in the record,
see State v. Johnson, 2017 UT 76, ¶ 15, 416 P.3d 443 (“When a party
fails to raise and argue an issue in the trial court, it has failed to
preserve the issue, and an appellate court will not typically reach
that issue absent a valid exception to preservation.”).
20170948-CA 8 2019 UT App 130Plaia v. Plaia
428 P.3d 89 (quotation simplified). A party to a stipulation is
entitled to rescind it “when, at the time [a stipulation was] made,
the parties ma[de] a mutual mistake about a material fact, the
existence of which is a basic assumption of the contract.” Deep
Creek Ranch, LLC v. Utah State Armory Board, 2008 UT 3, ¶ 17, 178
P.3d 886 (quotation simplified). But “if the parties harbor only
mistaken expectations as to the course of future events and their
assumptions as to facts existing at the time of [a stipulation] are
correct, rescission is not proper.” Id. (quotation simplified). A
party seeking to rescind a stipulation on the basis of mutual
mistake bears the burden of showing mutual mistake of fact by
clear and convincing evidence. Mabey v. Kay Peterson Constr. Co.,
682 P.2d 287, 290 (Utah 1984).
¶13 Here, Alina contends that she and Michael “were both
under the impression the shares were likely earned by Alina . . .
and [would] vest over 3 years.” In support of this contention,
Alina testified at trial that she and Michael understood that she
would receive “all of the shares” Luxoft had agreed to assign to
her “right after” Luxoft’s IPO, which occurred in June 2013, but
instead, she did not receive any shares until October 2014, after
she had entered into the Stipulation. She further testified that as
a result of her not receiving the entirety of the shares to which
she believed she was entitled, she “went back to Luxoft” in
February 2015 to negotiate her receipt of the remaining 23,526
shares and entered into a new agreement separate from the one
she negotiated with Luxoft during her marriage to Michael.
¶14 After considering Alina’s testimony and other evidence
presented at trial, the district court concluded that Alina was not
entitled to rescind the Stipulation. In reaching this conclusion,
the court acknowledged that Alina “testified to her being
‘mistaken’ or that she didn’t understand, and referenced
continuing discussions with Luxoft,” but the court ultimately
determined that the evidence demonstrated that Alina knew at
the time she entered into the Stipulation, “that the shares . . .
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would vest over time [because] the Stipulation refers to vested
and unvested shares” and the Stipulation also states that “each
party will sell the shares of stock, stock options and units
awarded to the other party as soon as possible.” The court also
relied on the sworn disclosure of marital property that Alina
made in her case information statement in the New Jersey
divorce action—filed August 1, 2014—in which Alina “declared
she had income from Luxoft stock that was ‘vested, not sold,’”
stated that she received stock options annually, and declared
ownership of all 29,412 Luxoft shares. Because Alina was aware
that she would take possession of the remainder of the shares
after separating from Michael, the court concluded that “[n]o
mutual mistake has been demonstrated to warrant setting aside
the parties’ agreement.”
¶15 We agree with the district court that Alina has not shown
by clear and convincing evidence that she is entitled to rescind
the Stipulation due to mutual mistake. Alina testified—in
contrast to her present assertion to the contrary—that she
learned as early as June 2013, when all the shares did not vest
immediately after Luxoft’s IPO, that the Luxoft shares would not
vest all at once. She was also given notice that not all of the
29,412 shares would vest at the same time that she received 5,886
of the shares in June 2014, several months before she stipulated
to the award of one half of all the 29,412 shares to Michael. And
as the district court noted, Alina’s understanding that the
additional shares would not vest until after her separation from
Michael but that she was nevertheless entitled to more shares
annually is also reflected in her sworn declaration in the New
Jersey divorce action where she claimed ownership of all 29,412
shares.
¶16 Alina argues that the shares were not only “unvested” but
“unearned” and that the district court failed to appreciate the
distinction. However, she has not established that, at the time of
the Stipulation, she and Michael mistakenly believed that the
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shares were fully earned and required no post-separation efforts.
Although Alina failed to introduce her original engagement
letter dated November 1, 2013, which “provided for a grant of
up to 29,412 shares,” the restricted share award agreement
relating to the initial 5,886 shares provided that vesting was
subject to Alina’s compliance with the CLS, a condition that
required Alina’s continued “service as a consultant” to Luxoft on
the vesting date of June 15, 2014. Because that agreement pre-
dated the Stipulation, the parties presumably knew that future
vesting would be subject to the CLS condition and thus post-
separation efforts on Alina’s part were a condition of the
remaining shares vesting. This evidence supports the district
court’s conclusion that the parties were not mistaken as to the
status of the remaining 23,526 shares.
¶17 In light of Alina’s testimony, the terms of the agreements
between Alina and Luxoft admitted into evidence, Alina’s sworn
declaration of ownership of the shares, and the discretion given
to the district court’s “application of the legal standards to the
underlying factual findings,” see Erickson v. Erickson, 2018 UT
App 184, ¶ 12, 437 P.3d 370 (quotation simplified), we cannot say
that the district court erred in rejecting Alina’s argument that the
Stipulation was unenforceable based on mutual mistake.
II. Inequitable Division of Marital Assets
¶18 Alina also argues that, because the district court
concluded that Michael was entitled to an award of one half of
the Luxoft shares in accordance with the Stipulation, the court’s
distribution of property was inequitable. She contends that,
except for the 5,886 shares that had vested by the time of the
Stipulation and the couple’s separation, Michael did not and will
not contribute to the vesting of the remaining shares to which
she is entitled and that, because the Stipulation awarded Michael
the entirety of his distribution from shares he owned in 2014, the
Stipulation awards Michael more of the marital property than is
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equitable. “In the division of marital property, the trial court has
wide discretion, and, while the appellate court is not
necessarily bound by its findings, the findings are presumed
valid and will not be disturbed unless the record indicates . . .
manifest injustice or inequity.” Colman v. Colman, 743 P.2d 782,
789 (Utah Ct. App. 1987). “Generally, in a divorce proceeding
each party is presumed to be entitled to . . . fifty percent of
the marital property,” but “this presumptive rule of thumb . . .
does not supersede the trial court’s broad equitable power
to distribute marital property.” Bradford v. Bradford, 1999 UT
App 373, ¶ 26, 993 P.2d 887 (quotation simplified). When
the parties have stipulated to the division of property, “[t]he
court need not necessarily abide by the terms of [the
stipulation],” but such terms should “be respected and given
great weight” by the court. Pearson v. Pearson, 561 P.2d 1080, 1082
(Utah 1977).
¶19 Reviewing the Stipulation’s award of one half of the
Luxoft shares to Michael, the district court concluded that “the
parties’ Stipulation [was not] so inequitable or lopsided to
warrant setting [the Stipulation] aside under equitable
principles.” The court based its conclusion on its finding that
Alina was aware before entering into the Stipulation that vesting
of the remaining unvested shares would require “post-
separation and post-trial efforts” and nevertheless stipulated to
the award of one half of all vested and unvested Luxoft shares to
Michael. The court also found that the couple had “worked
together for years with the ultimate goal of a big payoff from the
investment of time and energy into the Luxoft endeavor.”
“Because we lack the advantage of seeing and hearing witnesses
testify,” the district court’s “findings of fact are presumed to be
correct.” See Baker v. Baker, 866 P.2d 540, 542–43 (Utah Ct. App.
1993) (quotation simplified). Here, Alina has not demonstrated
that these findings “are so lacking in support as to be against the
clear weight of the evidence.” Id.20170948-CA 12 2019 UT App 130Plaia v. Plaia
¶20 In light of these findings, Alina has not shown how the
court’s ultimate division of property constituted an abuse of
discretion resulting in “manifest injustice or inequity.” See
Colman, 743 P.2d at 789. The district court was required to give
the Stipulation “great weight,” see Pearson, 561 P.2d at 1082, and
Alina specifically agreed that “the Stipulation is fair and
reasonable.” Alina has not met her burden of showing that,
despite her earlier statement, the Stipulation was so inequitable
that the district court erred in accepting the terms to which she
agreed. Accordingly, we conclude that the district court did not
err in determining that the Stipulation equitably distributed the
parties’ marital property.
CONCLUSION
¶21 The district court did not exceed its discretion in
concluding that there was no mutual mistake at the time the
parties entered into the Stipulation as to whether all the Luxoft
shares were marital property and that distributing the shares in
accordance with the Stipulation was equitable. We therefore
affirm.
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