Rule v. Rule , 844 Utah Adv. Rep. 34 ( 2017 )

2017 UT App 137THE UTAH COURT OF APPEALS
GEOFFREY S. RULE,
Appellee,
v.
RICHELLE RULE,
Appellant.
Opinion
No. 20150633-CA
Filed August 3, 2017
Third District Court, Salt Lake Department
The Honorable Su J. Chon
No. 134901588
Edward J. Stone, Attorney for Appellant
Suzanne Marelius, Attorney for Appellee
JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES
GREGORY K. ORME and JILL M. POHLMAN concurred. 1
ROTH, Judge:
¶1 Richelle Rule appeals from the district court’s final order
on its supplemental findings and conclusions regarding her
alimony award. We reverse and remand for further proceedings.
1. Judge Stephen L. Roth participated in this case as a member of
the Utah Court of Appeals. He retired from the court before this
decision issued.
Rule v. Rule
BACKGROUND
¶2 Geoffrey S. Rule and Richelle Rule 2 married in March
1997. They divorced by bifurcated decree in March 2014,
reserving for trial several issues, including alimony.
¶3 Before the May 2014 trial, both parties submitted updated
financial declarations to the district court. In her declaration,
Richelle included both the expenses incurred during marriage
and the actual expenses she was incurring at the time of trial for
many of the categories of monthly expenses—essentially
providing the court with both a marital standard of living and
her reduced living standard during the period after separation
and before trial. For example, for her housing expenses, she
indicated that the mortgage during her marriage was
approximately $1,300 a month, but that her current rental
expense was $950 a month. She also included estimates for
certain expenses based on expected homeownership similar to
that enjoyed during the marriage. For example, regarding
utilities, she noted that she was spending $50 a month on gas in
her current circumstances but estimated it would cost an
additional $125 a month based upon the “lifestyle established
during the marriage.” And she included among her expenses
voluntary and discretionary items based upon the marital
standard of living that she was not currently able to afford, such
as an approximately $600 monthly retirement contribution, $50
in donations, $80 in gifts, $300 in travel, and $120 in
entertainment. In Geoffrey’s declaration, the amounts itemized
in a majority of the expense categories were identical to
Richelle’s declared marital standard of living expenses. For
example, Geoffrey also included approximately $1,300 a month
in mortgage expenses and a $600 monthly retirement
contribution.
2. Because the parties share the same last name, we refer to them
individually by their first names for convenience.
20150633-CA 2 2017 UT App 137Rule v. Rule
¶4 Both parties were employed during the marriage.
Geoffrey continued to work full time as a scientist and indicated
that he earned a gross income of approximately $5,900 a month.
Richelle had held various jobs during the marriage—most of
them part time—but at the time of trial was unemployed and
had been since late summer the year before. Richelle indicated in
her updated financial declaration that her only income at the
time was a temporary alimony and child support award of
$1,500 a month. At trial she presented a report and testimony
from a vocational expert regarding her employment potential.
The report noted that Richelle had most recently been employed
as a customer service agent in the insurance industry with an
hourly wage of $17.00, but it also noted that there were ongoing
concerns that significantly impacted her ability to be successful
at work. Having reviewed Richelle’s vocational history, records
related to her employability, and the results of the vocational
testing, the expert opined that Richelle would not be able to
work full time and could “have difficulty in the workplace with
even part-time work.” Nonetheless, the expert stated that
Richelle might be able to perform “lower skilled job tasks . . . in a
small, low stress office environment,” and that her earning
capacity would be maximized by part-time employment as an
insurance processing clerk making $12.00 per hour. The
vocational expert recommended that Richelle work with the
State Division of Rehabilitation Services to assist her with
placement in an appropriate setting.
¶5 Following trial, the court entered its first supplemental
findings of fact and conclusions of law as well as a supplemental
decree of divorce addressing the issues reserved for trial. With
respect to alimony, the court made findings addressing the
parties’ respective incomes, monthly expenses, and needs. The
court determined that Geoffrey’s gross monthly income was
$6,167, with a net monthly income of $5,466. Turning to Richelle,
the court found that, based on the vocational expert’s testimony
and report, Richelle required retraining in another field in order
to transition from part-time to full-time employment, which it
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noted may take “approximately two years.” Based on this, the
court concluded that it was appropriate to impute minimum
wage to Richelle in the amount of $1,257 per month gross
income or $1,005 net income.
¶6 As to Richelle’s needs and Geoffrey’s ability to support
her, the court expressly declined to make any finding regarding
the standard of living established during the marriage because it
found that “neither party [could] maintain the standard of living
established during the marriage, given the divorce.” Instead, the
court determined each party’s reasonable monthly expenses by
“review[ing] both Financial Declarations of the parties
and . . . discount[ing] anything that was voluntary and
discretionary.” With regard to Richelle’s claimed expenses, the
court made adjustments to reflect “actual” rather than
“estimated” or “projected” expenses. After making its
adjustments, the court determined that Richelle had reasonable
monthly expenses of $3,100 and, after subtracting her imputed
income and child support, an unmet need of $1,362. The court
found, after making adjustments to some expense categories in
Geoffrey’s financial declaration, that he could not “provide for
all of [Richelle’s] unmet financial need” but had “the ability to
contribute the sum of $814 . . . to [her].” Ultimately, the court
awarded Richelle alimony in the amount of $814, to continue for
the term of the marriage—seventeen years.
¶7 Following the entry of the court’s supplemental decree,
Richelle filed a motion under rule 59 and rule 60 of the Utah
Rules of Civil Procedure, requesting additional findings and
conclusions or relief from judgment. Richelle argued that the
court erred by declining to “make a finding of the parties’
monthly needs consistent with the standard of living established
during the marriage.” She asserted that both parties had
presented evidence of the “standard of living established during
the marriage” through their financial declarations and that Utah
precedent required the court to assess her needs in light of the
parties’ marital standard of living; thus, it was inappropriate for
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the court to make its needs assessment based only on the parties’
reduced circumstances after separation. Richelle contended that,
partly as a consequence of this error, the court erred by failing to
equitably apportion between the parties the burden of
inadequate resources according to established precedent.
¶8 In response to Richelle’s motion, the court issued a second
set of supplemental findings and conclusions and order. The
court again refused to address alimony based upon the parties’
marital standard of living, stating that it evaluated Richelle’s
“standard of living at the time of trial to determine her need
given that there is not enough money to cover the [marital]
standard of living.” The court adjusted Geoffrey’s net monthly
income from its earlier figure of $5,446 to $4,810, apparently by
applying a higher 22% tax rate to his gross monthly income of
$6,167. It also further adjusted and reduced Richelle’s monthly
needs based upon “actual amounts stated at trial” and
specifically “exclude[d] any amounts” for “voluntary,
discretionary expenses,” such as donations, gifts, and retirement
contributions. After the adjustments, it determined that Richelle
had a “reasonable budgetary need of $2,702.” The court similarly
reduced certain of Geoffrey’s claimed expenses it labeled as
“unnecessary present expenses,” including some it considered to
be discretionary, such as donations and retirement contributions.
The court then found that Geoffrey had “reasonable monthly
expenses” of $3,198. Ultimately, the court increased Richelle’s
alimony award from $814 to $874 per month and ordered
Geoffrey to pay total monthly support in the amount of $1,612,
including alimony and child support. This award left Richelle
with monthly income of $2,617 to meet $2,702 of expenses, and
Geoffrey with exactly $3,198 to meet his $3,198 of monthly
expenses.
¶9 Richelle appeals from the court’s supplemental order,
challenging the court’s alimony determinations and conclusions.
20150633-CA 5 2017 UT App 137Rule v. Rule
ISSUES AND STANDARDS OF REVIEW
¶10 Richelle argues that the district court abused its discretion
by assessing her needs and calculating alimony based upon her
actual expenses at the time of trial rather than the standard of
living established during the marriage. She also argues that the
court’s findings are not adequate to support its ultimate alimony
determination. And she argues that the district court failed to
properly equalize the parties’ standards of living.
¶11 “Trial courts have broad latitude in determining whether
to award alimony and in setting the amount,” and we will not
lightly disturb a trial court’s alimony ruling. See Dobson v.
Dobson, 2012 UT App 373, ¶ 7, 294 P.3d 591. However, we will
reverse if the court has not “exercise[d] its discretion within the
bounds and under the standards we have set.” Id. (citation and
internal quotation marks omitted). In addition, a trial court
“must make sufficiently detailed findings of fact on each
[statutory] factor to enable a reviewing court to ensure that the
trial court’s discretionary determination was rationally based
upon these . . . factors,” which requires including “enough
subsidiary facts to disclose the steps by which the ultimate
[alimony] conclusion” was reached. Mark v. Mark, 2009 UT App
374, ¶ 9, 223 P.3d 476 (omission in original) (citations and
internal quotation marks omitted). “The absence of findings of
fact is a fundamental defect that makes it impossible to review
the issues that were briefed without invading the trial court’s
fact-finding domain,” and as a result, if there are insufficient
findings, “we must reverse unless the record is clear and
uncontroverted such as to allow us to apply the [statutory]
factors as a matter of law on appeal.” Id. (alteration in original)
(citations and internal quotation marks omitted).
ANALYSIS
¶12 Richelle contends that the court abused its discretion by
failing to determine the marital standard of living and evaluate
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alimony in light of that standard, and by failing to equalize the
parties’ post-divorce standards of living. She also argues that the
district court’s findings inadequately support the budgetary
reductions it made to arrive at its determination of her
reasonable monthly needs. Geoffrey, in contrast, argues that we
should affirm the district court’s alimony award, because the
court was within its discretion to base alimony on actual
expenses at the time of trial; the court considered the required
alimony factors and the marital living standard and supported
its decision with adequate findings; and the ultimate result is
equitable under the circumstances of the case. We agree with
Richelle.
I. Alimony Standards and Policies
¶13 In setting an alimony award, district courts must consider
the statutory factors set forth in Utah Code section 30-3-5(8)(a),
and failure to do so constitutes reversible error. See Jones v. Jones,
700 P.2d 1072, 1075–76 (Utah 1985). These factors include “(i) the
financial condition and needs of the recipient spouse; (ii) the
recipient’s earning capacity or ability to produce income; [and]
(iii) the ability of the payor spouse to provide support.” Utah
Code Ann. § 30-3-5(8)(a)(i)–(iii) (LexisNexis 2013).
¶14 An alimony award should also “advance, as much as
possible,” the primary purposes of alimony, see Hansen v.
Hansen, 2014 UT App 96, ¶ 6, 325 P.3d 864 (citation and internal
quotation marks omitted), which are: “(1) to get the parties as
close as possible to the same standard of living that existed
during the marriage; (2) to equalize the standards of living of
each party; and (3) to prevent the recipient spouse from
becoming a public charge,” Jensen v. Jensen, 2008 UT App 392,
¶ 9, 197 P.3d 117 (citation and internal quotation marks omitted).
Indeed, we have explained that alimony is not limited “to
provid[ing] for only basic needs” but should be fashioned in
consideration of “the recipient spouse’s station in life” in light of
the parties’ “customary or proper status or circumstances,” with
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the goal being an alimony award calculated “to approximate the
parties’ standard of living during the marriage as closely as
possible.” Howell v. Howell, 806 P.2d 1209, 1211–12 (Utah Ct.
App. 1991) (citation and internal quotation marks omitted); see
also Davis v. Davis, 749 P.2d 647, 649 (Utah 1988) (explaining that
“the ultimate test of the propriety of an alimony award is
whether, given all of these factors, the party receiving alimony
will be able to support him- or herself as nearly as possible at the
standard of living . . . enjoyed during marriage” (omission in
original) (citation and internal quotation marks omitted)); Savage
v. Savage, 658 P.2d 1201, 1203 (Utah 1983) (“One of the chief
functions of an alimony award is to permit the parties to
maintain as much as possible the same standards after the
dissolution of the marriage as those enjoyed during the
marriage.”).
¶15 Our precedent thus reflects and reinforces the general rule
that alimony should be based upon the standard of living the
parties established during the marriage rather than the standard
of living at the time of trial. See Utah Code Ann. § 30-3-5(8)(e).
This requires a court to determine the parties’ needs and
expenses as an initial matter in light of the marital standard of
living rather than, for example, actual costs being incurred at the
time of trial. See Howell, 806 P.2d at 1212 (explaining that the
marital standard of living “is [not] determined by actual
expenses alone,” because “[t]hose expenses may be necessarily
lower than needed to maintain an appropriate standard of living
for various reasons, including, possibly, lack of income”); see also
Dobson v. Dobson, 2012 UT App 373, ¶ 29, 294 P.3d 591 (reversing
an alimony award where there was “no indication in the record
that the trial court analyzed [the receiving spouse’s] claimed
expenses in light of the marital standard of living”). The needs of
each party, determined according to the marital standard of
living, then provide a baseline from which to craft an alimony
award that best fulfills the purposes of alimony—i.e., to allow
the parties to go forward in their separate lives with a standard
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of living as close as possible to the marital standard and “with
relatively equal odds.” See Howell, 806 P.2d at 1212.
¶16 There are several considerations that support this general
rule. First, in many cases, the level of expenses and the standard
of living of the separated parties at the time of trial will not be
representative of the parties’ “customary or proper status or
circumstances.” See id. at 1211. We have therefore cautioned
against determining alimony based upon actual expenses at the
time of trial because, as Richelle asserts to be true in her case,
“[a] party’s current, actual expenses ‘may be necessarily lower
than needed to maintain an appropriate standard of living for
various reasons, including, possibly, lack of income.’” Woolums
v. Woolums, 2013 UT App 232, ¶ 9, 312 P.3d 939 (quoting Howell,
806 P.2d at 1212). A party’s circumstances and living standard at
the time of trial may also necessarily be “significantly more
straitened than during the marriage” “due to the [parties’]
separation” and the exigencies inherent in building and
establishing a separate life apart from his or her spouse. See Kidd
v. Kidd, 2014 UT App 26, ¶ 24, 321 P.3d 200.
¶17 Second, assessing the parties’ needs based upon the
marital standard in the first instance makes sense in terms of a
court’s continuing jurisdiction over divorce cases, particularly in
marriages of long duration, as this one was. The receiving
spouse’s needs ultimately set the bounds for the maximum
permissible alimony award. See Dobson, 2012 UT App 373, ¶ 16.
And while a court has continuing jurisdiction over the alimony
award, it may exercise that jurisdiction only 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.” See Utah Code Ann. § 30-3-5(8)(i)(i) (emphasis
added). As a result, if the court considers the receiving spouse’s
needs based only upon a reduced standard of living at the time
of trial, the resulting needs determination could prevent the
receiving spouse from having her alimony increased to a level
consistent with the marital standard should economic
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circumstances materially change—if, for example, the payor
spouse’s income substantially increases during the alimony
period. See generally Smith v. Smith, 793 P.2d 407, 410 (Utah Ct.
App. 1990) (explaining that the doctrine of res judicata “bars
domestic modification proceedings only where the moving party
cannot establish either a substantial change of circumstances or
mistake of fact”). And while it would not necessarily be
impossible to determine the marital standard of living at a later
modification hearing, certainly the potential limitations on the
availability of evidence due to the passage of time could make
establishing the marital standard much more difficult.
¶18 Also, as a practical matter, it seems inherently
problematic for a trial court to attempt to design an alimony
award that advances the overall goal of allowing the parties to
go forward with their lives “as nearly as possible at the standard
of living enjoyed during marriage” without first determining
what that standard was in the first instance. A corollary concern
is the ability of a court—either at the trial level or on review—to
assess whether a particular alimony award is ultimately
equitable without a determination of the marital standard as a
baseline, even in circumstances where the parties’ resources are
insufficient to maintain their historical living standard.
¶19 With these principles in mind, we have established a
process to be followed by courts considering an award of
alimony that is applicable generally, including to cases
ultimately involving shortfall situations. First, the court should
“assess the needs of the parties, in light of their marital standard
of living.” Dobson, 2012 UT App 373, ¶ 22; see also Kidd, 2014 UT
App 26, ¶¶ 20–24 (calculating alimony in a shortfall situation
based upon the wife’s projected home ownership expenses,
consistent with the marital standard). This means that the court
must determine the parties’ needs “reasonably incurred,
calculated upon the standard of living . . . enjoyed during the
marriage.” Dobson, 2012 UT App 373, ¶ 22; see also Bakanowski v.
Bakanowski, 2003 UT App 357, ¶ 12, 80 P.3d 153 (explaining that
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the parties’ needs should be “based on the parties’ historical
standard of living”). Next, the court should determine the extent
to which the receiving spouse is able to meet her own needs with
her own income. If the court determines that the receiving
spouse is able to meet all her needs with her own income, “then
it should not award alimony.” Dobson, 2012 UT App 373, ¶ 22.
¶20 If the court finds, however, that the receiving spouse is
not able to meet her own needs, it should then “assess whether
[the payor spouse’s] income, after meeting his needs, is sufficient
to make up some or all of the shortfall between [the receiving
spouse’s] needs and income.” Id. This step should be undertaken
“with an eye towards equalizing the parties’ standards of living
only if there is not enough combined ability to maintain both
parties at the standard of living they enjoyed during the
marriage.” Id. (citation and internal quotation marks omitted).
Too often, this is the dilemma that a divorce court must
confront—the parties’ combined resources do not stretch far
enough to meet the legitimate needs of what are now two
households rather than one. Although we have referred to this
approach as “equalization of income,” it is best described as the
“equalization of poverty,” and its goal “is to ensure that when
the parties are unable to maintain the standard of living to which
they were accustomed during marriage, the shortfall is equitably
shared.” Kidd, 2014 UT App 26, ¶ 26 (citation and internal
quotation marks omitted); see also Sellers v. Sellers, 2010 UT App
393, ¶ 3, 246 P.3d 173.
¶21 Once a court has properly determined that a shortfall
exists between the parties’ resources and needs, we accord trial
courts broad discretion in dividing the shortfall and
apportioning that burden, so long as the award is equitable and
supported by the findings. See McPherson v. McPherson, 2011 UT
App 382, ¶ 16, 265 P.3d 839 (explaining that the trial court has
“discretion to make whatever . . . adjustments it deems necessary
to achieve an equalization of the parties’ standards of living” so
long as it “explain[s] its rationale” with adequate findings);
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Jensen v. Jensen, 2008 UT App 392, ¶ 9, 197 P.3d 117 (explaining
that once the trial court considers the required alimony factors,
“we will disturb its alimony award only if there is a serious
inequity . . . manifesting a clear abuse of discretion” (omission in
original) (brackets, citation, and internal quotation marks
omitted)). Equalization does not require a court to award
alimony so that each party is left with an equal monthly income.
See Howell v. Howell, 806 P.2d 1209, 1213 n.3 (Utah Ct. App. 1991)
(explaining that equalization does not require “[e]xact
mathematical equality of income,” but it does require “sufficient
parity to allow both parties to be on equal footing financially as
of the time of the divorce”); see also Keyes v. Keyes, 2015 UT App
114, ¶¶ 39–42, 351 P.3d 90 (reversing an alimony award where,
although the court’s equalization analysis left both parties with
an identical monthly shortfall, the court’s decision failed to
account for the husband’s needs, leaving him with next to
nothing to meet his monthly expenses). Rather, it requires a
court to divide the shortfall of income equitably between the
parties in light of each party’s demonstrated needs as well as the
other relevant circumstances in the case. See McPherson, 2011 UT
App 382, ¶¶ 15–16. For example, if one party legitimately has
greater needs than the other party, see Dobson v. Dobson, 2012 UT
App 373, ¶ 24, 294 P.3d 591, or there are other circumstances that
bear upon how the shortfall should be divided, see McPherson,
2011 UT App 382, ¶ 16, such circumstances should be taken into
account during the equalization process and reflected in the
ultimate alimony award. Indeed, we have explained that simply
“equaliz[ing] the parties’ income rather than going through the
traditional needs analysis” is an abuse of discretion. Bakanowski,
2003 UT App 357, ¶ 12.
¶22 This means that in most cases, “[i]t is . . . incumbent upon
the district court to determine the amount necessary to maintain
the standard of living established over the course of the marriage
rather than [just] the amount that is actually being spent at the
time of trial.” Woolums v. Woolums, 2013 UT App 232, ¶ 9, 312
P.3d 939; see also Dobson, 2012 UT App 373, ¶ 24 (explaining that
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a trial court is “obligated to assess [the receiving spouse’s] needs
in light of the parties’ marital standard of living”). Once the
court has determined that there are insufficient resources to meet
the baseline needs established by the marital living standard, the
court should then equitably allocate the burden of the shortfall
between the parties. Dobson, 2012 UT App 373, ¶ 22. And in all
cases a court must support its determinations with adequate
findings. See McPherson, 2011 UT App 382, ¶¶ 13, 16.
II. The Court’s Alimony Determination
¶23 Here, the district court did not follow the process we have
established. Instead, it appears to have skipped over the
traditional needs analysis and moved directly to address what it
perceived to be insufficient resources. In its first supplemental
findings of fact and conclusions of law, without making any
findings about what constituted the parties’ marital standard of
living, the district court stated that it “declines [Richelle’s]
request to make a finding of monthly expenses based on the
standard of living established during the marriage for either
party based on the finding that neither party can maintain the
standard of living established during the marriage, given the
divorce.” The court repeated this finding in its second (and final)
supplemental order, stating that it had evaluated Richelle’s
“standard of living at the time of trial to determine her need
given that there is not enough money to cover the [marital]
standard of living.” The court then proceeded to compress both
parties’ budgets by reducing certain of their claimed needs or
expenses to amounts the court determined to be more reasonable
given the resources available at the time of trial and by cutting
entire categories of expenditures it determined to be
“unnecessary present expenses.” For example, the court reduced
Richelle’s claimed needs in terms of rent, utilities, and health
insurance to “actual amounts” as of the time of trial. It also
entirely removed and excluded expenses it determined to be
“voluntary, discretionary expenses or estimates” and thereby
eliminated “any amounts” for retirement, gifts, donations,
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vacations and travel, and education. And in this regard, the
court rejected Richelle’s contention that the parties should at
least be “allowed a monthly retirement contribution as that was
regularly done during the marriage,” concluding that “there are
insufficient funds today to allow either party to have that regular
expense,” and accordingly removed it from both parties’
budgets.
¶24 Thus, the district court did not begin its alimony
determination with the traditional analysis of Richelle’s needs
based on the marital standard of living; the court expressly
declined to do so. Rather, the court determined Richelle’s needs
in the first instance based on the straitened circumstances in
which she found herself as a result of the divorce. See Dobson,
2012 UT App 373, ¶ 29 (reversing the trial court’s needs
determination for the receiving spouse where the court reduced
expenses without reference to the marital standard of living and
instead appeared to have, in the first instance, “applied its own
sense of what was reasonable under the circumstances in which
[the receiving spouse] found herself as a result of the divorce”).
The court’s only stated justification for refusing to first assess the
parties’ needs in light of their historical living standard was
insufficient resources. We conclude that in these circumstances,
the court exceeded its discretion.
¶25 Here, the court declined to determine the marital
standard of living for the parties before even attempting its
needs analysis because it had already decided that the parties
could not meet it. Even if that conclusion was justified by a
broad comparison of the parties’ financial declarations and their
available incomes, the court failed to actually determine the
extent of any shortfall. Rather, it simply proceeded to reduce the
parties’ expenses to meet available resources without first
establishing a baseline for determining whether the result was
equitable in terms of the parties’ marital living standard. See
Rayner v. Rayner, 2013 UT App 269, ¶ 22, 316 P.3d 455(explaining that an appellate court cannot review a decision if
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the trial court’s findings are “inadequate to explain its deviation
from the general rules” applying to divorce proceedings).
¶26 Certainly, a court is not obligated to assess the parties’
needs in light of the marital standard if evidence is not provided
to allow the court to do so. Compare Dahl v. Dahl, 2015 UT 79,
¶¶ 108–12 (affirming the district court’s decision not to award
permanent alimony where the receiving spouse failed to provide
credible evidence of her needs), with Kidd v. Kidd, 2014 UT App
26, ¶¶ 20–24, 321 P.3d 200 (affirming the district court’s decision
to accept the wife’s projected needs rather than actual expenses
in circumstances where the wife provided both in her financial
declaration and the projected expenses comported with the
standard of living she had grown accustomed to during the
marriage). But as Richelle points out, her financial declaration
included both her current expenses at the time of trial and
expenditures that she claimed reflected the parties’ standard of
living during the marriage. See Kidd, 2014 UT App 26, ¶ 21
(noting that the wife appropriately included her actual expenses
for rent at the time of trial, but also the expenses she would incur
when she eventually acquired a home, where home ownership
had been the marital standard). While Geoffrey did not include
both his current and his marital standard for some expense
categories, the majority of the expenses in his financial
declaration are identical in amount to those identified as marital
expenses in Richelle’s financial declaration, implying that his
expenses were based on a marital standard as well. Further, the
court appears to have eliminated entire categories of expenses—
those that “were voluntary, discretionary expenses or estimates,”
like retirement contributions—based upon its own
determination that they were not necessary to the parties’
present circumstances, not because there was no credible
evidence to support those expenses as part of the marital living
standard. Thus, lack of evidence does not appear to be a basis for
the court’s refusal to establish the marital living standard as the
baseline for making its alimony determination.
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¶27 The explanation the court gave for declining to determine
the marital standard of living as part of the alimony
determination was its conclusion that the parties’ combined
resources were insufficient to sustain the marital standard. But
under our well-established precedent, that alone is not enough
to justify bypassing the traditional needs analysis. Rather, the
traditional needs analysis is designed to identify and determine
the magnitude of any shortfall in resources. As we explained
above, it is well settled that after determining that the receiving
spouse has unmet needs in light of the historical living standard,
the next step is to determine whether the payor spouse’s
resources are sufficient to cover the shortfall identified. And if
that is not possible, the court must then equitably divide the
burden of insufficient resources between the parties. See Dobson
v. Dobson, 2012 UT App 373, ¶ 22, 294 P.3d 591 (laying out the
process to be followed for making a traditional needs analysis
and addressing the circumstances where equalization is proper);
Sellers v. Sellers, 2010 UT App 393, ¶ 3, 246 P.3d 173 (explaining
that income equalization is “better described as equalization of
poverty,” and a court should “equalize the incomes of the
parties only in those situations in which one party does not earn
enough to cover his or her demonstrated needs and the other
party does not have the ability to pay enough to cover those
needs” (internal quotation marks omitted)); see also McPherson v.
McPherson, 2011 UT App 382, ¶¶ 15–16, 265 P.3d 839 (explaining
that a court must provide adequate findings to justify
disproportionately burdening one party with the shortfall). The
equitable division of the shortfall begins with a determination of
the marital living standard: “The purpose of equalization is to
ensure that when parties are unable to maintain the standard of living
to which they were accustomed during marriage, the shortfall is
equitably shared.” Kidd, 2014 UT App 26, ¶ 26 (emphasis added).
In other words, our precedent has established that the shortfall
that justifies an “equalization of income” determination relates
to the difference between the parties’ historical living standard
and the parties’ present combined ability to meet that standard.
The parties’ historical living standard is therefore a baseline for
20150633-CA 16 2017 UT App 137Rule v. Rule
determining that a shortfall exists at all as well as a necessary
reference point in the determination of how to equitably allocate
the shortfall.
¶28 We acknowledge that under Utah Code section 30-3-
5(8)(e), trial courts do have some discretion to use the parties’
living standard at the time of trial, as the court appears to have
done here. Section 30-3-5(8)(e) sets forth the “general rule” that
“the court should look to the standard of living, existing at the
time of separation, in determining alimony,” but it also provides
that the court, through consideration of “all relevant facts and
equitable principles,” “may, in its discretion, base alimony on
the standard of living that existed at the time of trial.” Utah
Code Ann. § 30-3-5(8)(e) (LexisNexis 2013). However, as we have
explained above, the existence of a resource shortfall alone is not
sufficient to justify a departure from the general rule, because
our traditional needs analysis that begins with determination of
the marital living standard has itself been designed to deal with
the circumstance of insufficient resources. Rather, a departure
from the general rule must be justified on some other basis. See,
e.g., Dahl, 2015 UT 79, ¶¶ 110–12 (concluding that the district
court did not abuse its discretion in declining to award the wife
permanent alimony where she “fail[ed] to provide the court with
any credible evidence regarding her financial need,” which
rendered it “impossible [for the district court] to determine the
amount of alimony necessary to result in a standard of living at
present that would approach the previous living
condition”(internal quotation marks omitted)); Howell v. Howell,
806 P.2d 1209, 1212 (Utah Ct. App. 1991) (concluding that the
trial court abused its discretion by determining the standard of
living as of the time of separation rather than at the time of trial
where the payor spouse’s income doubled in the two years
between the parties’ separation and the trial, and his “ability to
take advantage of that change was at least in part a result of
having persevered during the lean times, as did his wife and
children,” and where the increased income was “akin to deferred
income”); see also Fish v. Fish, 2010 UT App 292, ¶ 29, 242 P.3d
20150633-CA 17 2017 UT App 137Rule v. Rule
787 (concluding that even though “the court based its calculation
of the parties’ needs on their expenses at the time of trial,” it was
not an abuse of discretion to do so where it did not appear that
“those expenses reflected a higher standard of living than the
parties experienced during their marriage”). 3
3. Although some of its language might suggest otherwise,
Mullins v. Mullins, 2016 UT App 77, 370 P.3d 1283, does not
support a different result. In Mullins, the trial court determined it
was appropriate to equalize the parties’ standards of living
because there was insufficient income to meet even the wife’s
minimum needs, and it awarded alimony to the wife
accordingly. Id. ¶¶ 11–14. The husband argued on appeal that
the trial court failed to make adequately detailed findings of fact
regarding the wife’s needs to support its alimony award. Id.
¶¶ 9, 11. In particular, he contended that the court had failed to
assess the wife’s needs according to the marital standard of
living but instead on her needs at the time of trial. Id. ¶ 11. We
upheld the trial court’s alimony award. Id. ¶¶ 11–14. Unlike the
present case, the trial court in Mullins considered all of the
evidence the parties presented regarding the wife’s needs,
including evidence of the income available to her at the time of
the parties’ separation, a financial declaration filed before trial
and additional testimony showing expenses of $3,900 a month,
and her testimony that her minimum needs at the time of trial
were $3,000 a month. Id. ¶¶ 13–14. The court considered and
made findings attempting to harmonize all the needs evidence
presented, and ultimately determined that though her
established needs were significantly higher than the minimum
expenses she testified to at trial, the parties’ combined resources
were inadequate to meet even that lower standard. Id. As a
result, the court decided to equalize the parties’ standards of
living by awarding alimony to the wife in an amount that would
result in each party bearing a comparable shortfall in income. Id.
Though the trial court did not expressly determine a marital
standard of living, it appears to have followed the process we
(continued…)
20150633-CA 18 2017 UT App 137Rule v. Rule
¶29 In awarding alimony, then, the district court departed
from the requirements of the traditional needs analysis by failing
to determine the parties’ needs in light of the marital standard of
living. As a consequence, even if its general conclusion that there
was insufficient combined income to meet the marital standard
was true, the court failed to establish the necessary baseline to
anchor the balance of the equalization analysis. It is therefore not
possible to reliably assess whether the court’s attempt to deal
with the burden of the parties’ insufficient resources by cutting
their expenses met the ultimate goal of equitable allocation of
that burden between them. See Kidd, 2014 UT App 26, ¶ 26
(explaining that “[t]he purpose of equalization is to ensure that
when parties are unable to maintain the standard of living to
which they were accustomed during marriage, the shortfall is
equitably shared”). Here, Richelle asked the court to determine
her marital living standard and provided evidence that her
actual expenses at the time of trial were not representative of the
standard of living she had grown accustomed to during the
marriage. For example, according to her financial declaration, at
the time of trial Richelle was renting a home instead of owning
one as was apparently typical during the marriage, and as a
result her current expenses were reduced in several expense
categories to reflect the lack of home ownership. And her
circumstances after separation meant that she did not have
income to spend on certain discretionary items, such as clothing
or retirement contributions, that were apparently part of her
(…continued)
have described above. The court appropriately took into account
all the evidence presented regarding the wife’s needs, including
evidence of her expenses and available income near the time of
the parties’ separation; determined that there was insufficient
income, even were it to base alimony on the minimal needs the
wife testified to at the time of trial; and then equalized the
parties’ shortfall in order to equitably allocate the burden of
insufficient resources. Id.20150633-CA 19 2017 UT App 137Rule v. Rule
lifestyle during the marriage. See Woolums v. Woolums, 2013 UT
App 232, ¶ 9, 312 P.3d 939 (explaining that we have “disavowed
the notion that ‘standard of living is determined by actual
expenses alone’” because “[a] party’s current, actual expenses
‘may be necessarily lower than needed to maintain an
appropriate standard of living for various reasons, including,
possibly, lack of income’” (quoting Howell, 806 P.2d at 1212)); cf.
Kidd, 2014 UT App 26, ¶¶ 20–24 (affirming the trial court’s
decision in a shortfall case to base the wife’s monthly expenses
on projected expenses consistent with home ownership, even
though at the time of trial the wife was living with a relative,
because home ownership was the standard she had grown
accustomed to during marriage).
¶30 Thus, the court’s decision to bypass the marital standard
and go straight to the parties’ actual expenses at the time of trial
resulted in Richelle’s legitimate needs being significantly
undervalued in terms of the marital living standard. Further, the
court then made its own determination of what expenditures
were reasonable given the circumstances at trial and did not
consider whether the result was equitable given the parties’
historical living standard. See, e.g., Dobson, 2012 UT App 373,
¶ 29 (reversing the court’s needs determination for the receiving
spouse where “there [was] no indication in the record that the
trial court analyzed [the receiving spouse’s] claimed expenses in
light of the marital standard of living”). Though a hard look at
the parties’ actual needs and resources at the time of trial is
certainly an appropriate component of an alimony
determination, it cannot be the only factor considered. See
Woolums, 2013 UT App 232, ¶ 9 (explaining that we have
“disavowed the notion that standard of living is determined by
actual expenses alone” (citation and internal quotation marks
omitted)). As a result, we cannot be confident that under the
circumstances the court’s alimony award is equitable or actually
advances one of alimony’s “chief functions”—“to permit [both]
parties to maintain as much as possible the same standards after
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the dissolution of the marriage as those enjoyed during the
marriage.” See Savage v. Savage, 658 P.2d 1201, 1205 (Utah 1983).
¶31 Moreover, the court’s needs determination represents
Richelle’s maximum permissible alimony award, and, as she
points out, the court’s reduced needs determination may well
impair her ability in the future to invoke the court’s continuing
jurisdiction to increase her alimony to a level commensurate
with the marital standard, should Geoffrey’s income—and
commensurate ability to meet her needs—materially change in
the future. See generally Smith v. Smith, 793 P.2d 407, 410 (Utah
Ct. App. 1990) (explaining that the doctrine of res judicata “bars
domestic modification proceedings only where the moving party
cannot establish either a substantial change of circumstances or
mistake of fact”). Such a change in circumstances is certainly
possible in the context of a long-term alimony award, such as
this one, given the seventeen-year length of the parties’
marriage. And such a change is made more difficult to establish
if the marital baseline is not established in the original alimony
determination when evidence is fresher and more readily
obtainable and verifiable.
¶32 For these reasons, we vacate the alimony award and
remand for the court to reassess its alimony determinations in
light of the marital standard of living and to accordingly make
detailed findings of fact to support its ultimate award. This
process should include the steps of the traditional analysis,
which involve a determination of Richelle’s needs based on the
marital standard of living, her ability to meet those needs, and
Geoffrey’s ability to cover any unmet needs. In the event that
Geoffrey’s income is not sufficient to cover Richelle’s unmet
needs, the court should equitably divide the shortfall between
the parties in light of their separate needs, based upon the
appropriate standard of living and any other relevant
circumstances. Dobson v. Dobson, 2012 UT App 373, ¶ 22, 294
P.3d 591. At that point, the court has discretion “to make
whatever . . . adjustments it deems necessary to achieve an
20150633-CA 21 2017 UT App 137Rule v. Rule
equalization of the parties’ standards of living” and otherwise
determine how best to equitably divide the burden of
insufficient income between the parties. McPherson v. McPherson,
2011 UT App 382, ¶ 16, 265 P.3d 839. For example, once a
shortfall has been established, taking into account and making
adjustments for what under the circumstances might be inflated,
improper, or unreasonable expenses may be acceptable, so long
as the considerations leading to the reductions are sufficiently
explained in the court’s findings and the overall result is
equitable. See id.CONCLUSION
¶33 We vacate the district court’s alimony award and remand
for the district court to reassess its alimony award in accordance
with this opinion.
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