Knowlton v. Knowlton ( 2023 )

2023 UT App 16THE UTAH COURT OF APPEALS
SHONDELL SWENSON KNOWLTON,
Appellee,
v.
BRADLEY LEWIS KNOWLTON,
Appellant.
Opinion
No. 20200483-CA
Filed February 9, 2023
Second District Court, Farmington Department
The Honorable David M. Connors
No. 174701016
Julie J. Nelson, Troy L. Booher, and
Alexandra Mareschal, Attorneys for Appellant
Jon M. Memmott, Shaun L. Peck, and
Shawn P. Bailey, Attorneys for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and
RYAN M. HARRIS concurred.
ORME, Judge:
¶1 This appeal arises from the divorce of Bradley Lewis
Knowlton and Shondell Swenson Knowlton. Bradley challenges
various aspects of the trial court’s valuation and equitable
division of marital property, its reconciliation of expenses, and its
determination that Shondell was not in contempt of court.1
1. Because the parties share the same last name, we follow our
usual practice of referring to them by their first names, with no
disrespect intended by the apparent informality.
Knowlton v. Knowlton
Because the court did not abuse its discretion in any of these
respects, we affirm.
BACKGROUND
¶2 Bradley and Shondell separated in 2017 after 41 years of
marriage. In August of that year, they entered a stipulated
temporary order (the Temporary Order), which was then signed
by the court. The Temporary Order governed how their
substantial marital estate was to be treated during the pendency
of the divorce proceeding. In July 2019, the trial court entered a
bifurcated decree of divorce, dissolving the parties’ marriage but
reserving all other issues for trial “and continuing, unaltered,” the
Temporary Order.
¶3 The court held a fourteen-day bench trial over the course
of multiple dates between May and November 2019 to value and
divide the marital estate. It was undisputed that nearly all the
parties’ assets belonged to the marital estate and were subject to
equitable division. We now discuss each asset bearing on an issue
before us on appeal.
Ascent Construction, LLC
¶4 Ascent Construction, LLC (Ascent) is a private
construction company Bradley founded during the marriage.
Bradley is the “primary officer of Ascent Construction and
continues to be active in its day to day business.” In May 2018, the
parties agreed to “jointly hire and retain” an expert (Ascent
Expert) to prepare a “Fair Market Value of Ascent” and to value
the parties’ ownership interests in Ascent. The parties stipulated
that “[t]he valuation date will be as of the most current, complete
financial information available for” Ascent, and that it was
“expected that such information will be as of December 31, 2017,
or more current.” Ascent Expert issued his report with a valuation
that was current as of December 31, 2017.
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¶5 Based on Ascent Expert’s conclusion that Bradley held a
50% ownership interest in Ascent, the parties stipulated to value
the ownership interest at $2,157,000. The parties further agreed
that the asset should be awarded to Bradley.
¶6 In March 2019, Shondell moved to update Ascent Expert’s
valuation of Ascent on the grounds that “the valuation will be
roughly 1.5 years out of date at the time of trial” and that the court
had not ruled that a valuation date other than the time of trial was
appropriate. In mid-May 2019, the court ruled that it was
“appropriate for [Ascent Expert] to update his valuation of Ascent
to the extent reasonably possible for purposes of the trial.” The
court ordered the parties to “jointly ask [Ascent Expert] to update
the valuation and provide him with any information that he
reasonably needs.” The court further instructed Ascent to
“produce the information and documents requested by [Ascent
Expert], including any partial or preliminary materials.” In the
event “Ascent claims materials requested by [Ascent Expert] do
not exist,” the court directed that “as to any accounting or
financial information, Ascent’s accountant . . . must provide a
sworn statement specifically identifying which of the materials
requested by [Ascent Expert] do not exist and why they do not
exist.”
¶7 A week later—two days before trial was to begin—
Ascent’s accountant filed an affidavit stating that most of the
financial documents Ascent Expert requested were not
available—some because they were “[n]ot yet finalized.” On the
first day of trial, Ascent’s accountant was questioned extensively
regarding the requested documents. Ultimately, the issue of
whether the valuation of Ascent could be updated remained
unresolved.
¶8 Later that day, the parties resolved this dispute by entering
a second stipulation (the May 2019 Stipulation) in the course of
the following exchange:
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MR. PECK[2]: [I]n light of where we are actually at
[in] the case, with time that is available to us, and in
light of the difficulty, I think, it would impose on
[Ascent Expert] to try and do his work . . . [Shondell]
offers as a stipulation to accept the 2017 year-end
value in the case with no further questioning about
the issue.
And to the extent that opposing counsel is
willing to agree to that stipulation as well, I think
we will just proceed on the 2017 valuation. We can
waive calling [Ascent Expert] since that report has
already been stipulated to. . . .
So with that in mind, I think that’s what we
offer to do.
THE COURT: You’re offering as a stipulation? Is
there a stipulation or—
MR. PECK: Well, [Ascent Expert’s] report is already
stipulated as to 2017.
THE COURT: Well, I know that. I know that part.
But I was trying to figure out if the rest of it has been
stipulated.
MR. PECK: The stipulation, in essence, is let’s let go
of the rest of the issues on that, and let’s proceed
with the information that’s already been stipulated
as to the value of 2017, and we’re okay with that. We
will simply ask no more questions about that and
just rely on [the] 2017 valuation by [Ascent Expert].
2. Shondell’s attorney.
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THE COURT: Mr. Rudd?[3]
MR. RUDD: No objection. We’re comfortable with
that. It’s the agreement of the parties as well. So no.
THE COURT: Okay. Well, with that in mind, I’m
good with that too. So essentially what we’re saying
is [Ascent Expert’s] already stipulated to . . . report
regarding the 2017 valuation will be the valuation
we’ll use on this asset for this trial.
MR. PECK: Yes.
MR. RUDD: And we would ask that his report be
received in evidence.
THE COURT: Is there any objection?
MR PECK: No.
THE COURT: All right. So his report will be
received into evidence. All right. Thank you.
The parties thus agreed to cease further inquiry into whether
Bradley complied with the court’s order and to use Ascent
Expert’s existing, un-updated 2017 valuation of the marital
estate’s ownership interest in Ascent at trial.
¶9 But in her written closing argument, Shondell argued that
despite the stipulated valuation of $2,157,000, Ascent should
instead be valued at $2,396,000 because Ascent Expert applied a
10% “lack of control discount” to the 2017 valuation. She asserted
that Bradley testified “three different times” at trial that he owned
a controlling interest in Ascent. Accordingly, she contended that
the 10% discount should be removed. Bradley argued for
enforcement of the May 2019 Stipulation, insisting that they had
3. Bradley’s attorney.
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already “stipulated to both the value ($2,157,000) and the
distribution of Ascent” to him.
¶10 In October 2019—in the midst of the ongoing trial—an
Ascent client filed a complaint against Ascent, alleging claims
based in contract and tort and seeking damages in excess of $38
million. In late-February 2020—after the trial in the present case
had already concluded but before the court issued its ruling—“the
sureties issuing the performance bonds for Ascent Construction
. . . sent a formal demand letter from their attorney . . . demanding
that Ascent Construction together with Brad and Shondell jointly
and severally indemnify the Sureties for up to $40 million in
performance and payment bond claims.”
¶11 In response, Bradley changed his position on the
inviolability of the May 2019 Stipulation and filed an expedited
motion to update the valuation of Ascent. He asserted that this
indemnity demand “will dramatically affect the valuation of
Ascent Construction, and it may affect the personal liability of
both Brad and Shondell tremendously” and “it therefore will
affect the value of the marital estate in a correspondingly dramatic
manner.” Shondell opposed the motion, now arguing that the
May 2019 Stipulation was binding and should not be revisited.
She also argued that Bradley was aware of the underlying dispute
as early as October 2019 but did not present that information at
trial despite having an opportunity to do so.
¶12 In its trial ruling, issued in April 2020, the court first
addressed Shondell’s request that the valuation of Ascent be
increased by 10%. The court held that the May 2019 Stipulation
“as to the value of the marital interest in Ascent Construction did
not leave room for Shondell to now argue for a different
valuation, even if that different valuation is still based on [Ascent
Expert’s] valuation report.” And although “subsequent testimony
regarding Brad’s percentage interest in Ascent Construction is not
entirely clear and it would be difficult to reach a conclusion on
whether that interest is exactly 50%, as Brad says, or is slightly
more than 50%, as Shondell now claims[,] . . . there is no ambiguity
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in the stipulation reached by the parties and announced in open
court at the outset of trial.”
¶13 Next, the court denied Bradley’s expedited motion to
update the valuation of Ascent. The court stated that because
“there was no stipulation by the parties to the possibility that the
stipulated value of Ascent Construction might change between
the date of the valuation (December 31, 2017) and the date of the
divorce decree,” it was “persuaded that the [May 2019
Stipulation] to the Value of Ascent Construction purported to fix
the value of the asset for all purposes related to the equitable
division of the parties’ marital property.” Indeed, the court noted
that the specific issue of whether the value of Ascent needed to be
updated was raised before trial and, following additional
discovery, the parties entered the May 2019 Stipulation providing
that “the 2017 valuation will be the valuation we’ll use on this
asset for this trial.” Accordingly, the court valued Ascent at the
stipulated value of $2,157,000 in its division of assets.
¶14 Bradley moved to amend the ruling and for a limited new
trial on the basis of “newly discovered material evidence,” i.e., the
sureties’ collection efforts against Ascent. The court denied
Bradley’s motion to alter or amend on the grounds that Bradley
had advocated for the binding nature of the May 2019 Stipulation
during trial when it suited his interest and that the complaint
against Ascent was brought while the trial was still ongoing but
Bradley did not bring the complaint to the court’s attention at that
time.
Tax Increment Funds
¶15 Bradley was also an owner of OBE Vision, LLC (OBE). In
2015, Ascent began building properties in Ogden, which were
owned by OBE. Over the next three years, Ascent billed OBE over
$7,000,000 in construction services on the project. In 2018, Bradley
made a capital call on OBE, which resulted in litigation over
Bradley’s ownership interest in the business. The parties to that
litigation reached a settlement later that year, in which Bradley
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became entitled to, among other things, $1.7 million in Tax
Increment Funds (the TIF Funds) that were to be paid by Ogden
City.4
¶16 The $1.7 million award in TIF Funds consisted of two
components: (1) $600,000 that accrued interest at 7%—with
approximately $73,500 in interest having already accrued by the
time of trial—and (2) $1.1 million that did not accrue interest.
Ogden City was to pay the TIF Funds during the tax increment
period,5 which was originally expected to end in 2033 but was
later extended to at least 2038. Payment on the second portion of
the TIF Funds was contingent on the occurrence of certain events
and therefore carried a risk that the tax increment period would
expire before the second portion was paid in full.
¶17 Each party retained an expert to value the TIF Funds. The
expert Bradley hired (Bradley’s Expert) valued the TIF Funds at
$1.7 million, their face value, without offering a specific valuation
for the two portions that made up the TIF Funds. He determined
that no discount was warranted on the second portion of the TIF
Funds based on the 7% interest accruing on the first portion and
4. As we glean from the record, TIF Funds are monies that Ogden
City receives from an economic development project area, a
portion of which it may pay to a developer to incentivize
economic development in the area. TIF Funds are “generally
calculated as the positive difference between the total ‘base year’
or pre-development ad valorem real property and personal
property taxes . . . in regards to the Project and the
post-development Property Taxes for the Project for each year
going forward during the Tax Increment Period.”
5. According to the applicable contract, “Tax Increment Period
means the years during which the Economic Development Project
Area will exist and” during which Ogden City is entitled to
receive TIF Funds.
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based on Ogden City’s “AAA” bond rating that rendered it a
“virtually risk-free investment.”
¶18 The expert Shondell hired (Shondell’s Expert) discounted
the value of the second component of the TIF Funds based on
several factors, including inflation, his estimation that payment
on the second portion would not begin for another ten years and
would take approximately four years to be paid off, the risk of
non-payment based on “substantial uncertainties that remain
with the project,” and the lack of interest accruing on the second
component. Accordingly, Shondell’s Expert applied an annual 7%
discount to the second portion, which consisted of 3% for inflation
and 4% for risk. This resulted in a valuation of $506,665 for the
second portion of the TIF Funds.
¶19 The court determined that neither expert was more
qualified than the other to conduct “a discounted analysis of a
future payment stream.” But the court ultimately rejected the
valuation offered by Bradley’s Expert, stating that the valuation
“is not supportable as to this asset” because the second portion of
the TIF Funds “does not bear interest, carries some risk of
non-payment, and will not even begin to pay out until well into
the future, perhaps five or more years from now.” The court
determined a risk of non-payment existed because payment was
“subject to many contingencies” and because “Ogden City is not
a guarantor of the payment stream.” Concerning the latter, the
court stated the TIF Funds “come from property tax payments
made by owners, or future owners, of the property included in the
[development project]” and “Ogden City’s obligation is simply to
be sure the payments, if received, are disbursed in accordance
with the governing disbursement agreement.” Therefore, the
court determined that Ogden City’s bond rating was “not directly
material to the valuation of this asset.”
¶20 In sum, the court determined “that a discount must be
applied in arriving at a proper valuation of the income stream.”
Because there was no other competing discounted valuation, the
court adopted the $506,665 valuation set by Shondell’s Expert,
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which the court thought was “much more consistent with the
reality of the delayed realization of payments and other potential
risks.” The court awarded the TIF Funds to Shondell, setting a
combined value of both portions of the asset at $1,106,665
($600,000 plus $506,665).
Jordan River Marketplace, LLC
¶21 Jordan River Marketplace, LLC (JRM) was a business entity
belonging exclusively to Bradley and Shondell. At the time of
trial, JRM’s sole asset was a potential recovery from a lawsuit
against West Valley City. Neither party provided an expert
valuation of JRM or of its lawsuit.6 Bradley testified that the
lawsuit “still has value” and “still has merit,” although he had
already spent in excess of $400,000 in attorney fees. There was also
testimony that JRM owed Ascent $88,403, although no other
record evidence of this debt was presented at trial.
¶22 Both parties requested that any award recovered from the
lawsuit be split equally. Bradley further requested that they
similarly split any fees or costs incurred during the litigation,
while Shondell requested that they equally split only any recovery
of attorney fees or costs JRM might be awarded in the litigation.
Shondell also asked for the authority to negotiate directly with
West Valley City relating to her 50% interest in the litigation.
¶23 After noting that Bradley “has much more confidence that
the litigation will ultimately be successful” than Shondell and that
Shondell “seems unwilling to fund the costs of future litigation,”
6. Instead, each party’s expert recommended that they wait until
the litigation is resolved and then equally split the recovery, if
any. The court rejected this suggestion, stating that it would result
in inappropriate “future entanglement between the parties”
because it “would require both parties to be involved in
decision-making and both parties to find some way to agree on
how to fund the ongoing costs of litigation.”
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the trial court awarded JRM in its entirety to Bradley. The court
reasoned that “[t]his avoids future entanglement between the two
parties as to this asset and will allow Brad to make decisions about
whether and to what extent to invest his own funds into covering
future litigation costs.” Additionally, due to “the significantly
speculative nature of any recovery,” the court assigned JRM a
nominal value of $100. The court further held that Bradley alone
would be responsible for any prior and future costs of litigation
and ordered Bradley to indemnify Shondell against any claim
JRM might have against her related to its legal expenses.
¶24 In a post-trial motion, Bradley argued that the court’s $100
valuation of JRM failed to address the $88,403 debt the company
owed to Ascent and that he was therefore “being inequitably
burdened with an additional $88,403 in debt that [Shondell] was
not.” The court rejected this argument, stating that it did not
overlook the debt when it valued JRM at only $100. It noted that
Bradley’s request that it assign JRM a negative value made little
sense and was against the weight of the evidence in light of
Bradley’s testimony that the litigation “had sufficient value to
justify continued payment of attorney fees and other costs
associated with that litigation.” Accordingly, the court stated that
“[t]he low nominal valuation of JRM at $100 represents the
Court’s balancing of the $88,403 liability of JRM against Brad’s
view that JRM’s claims had significant future value.” The court
concluded that, in any event, “since both Ascent and JRM were
awarded to Brad, the payable did not change the total valuation
of the assets awarded to Brad.”
Premature Partial Distributions
¶25 The Temporary Order allocated $840,000 as “an equal
premature partial distribution to each party from the marital
estate.” It further provided “that funds held in other bank
accounts will be subject to review, reconciliation and equalization
during the disclosure and discovery process.” Additionally, in
October 2017, Bradley received a distribution of $78,834 for his
interest in a marital property. Bradley’s former counsel emailed
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Shondell’s counsel, stating that half of that amount would be
delivered to Shondell “as a distribution in part of [her] portion of
the marital estate.” This resulted in each party receiving, by
stipulation, a total of $879,417 in premature partial distributions.
¶26 Shondell used her premature partial distributions to
purchase two homes and a vehicle. Bradley also purchased a
vehicle and placed $802,000 into the account of another one of his
businesses in “an attempt to ensure that Shondell would not have
access to the funds.” Bradley testified that he then transferred
$150,000 from that business account to cover JRM’s legal
expenses. But because he also used $140,000 from another source
to purchase another vehicle, to avoid “a lengthy discussion of
whether the purchase of that vehicle was or was not a dissipation
of marital funds,” the court treated the funds used to purchase the
vehicle as coming from Bradley’s premature partial distributions
instead of the funds used for JRM’s legal expenses. Bradley also
spent an unspecified amount of his premature partial
distributions on two vehicles, an engagement ring for his new
wife, their wedding reception, and their honeymoon.
¶27 At trial, Bradley argued that the homes Shondell acquired
using her premature partial distributions belonged to the marital
estate and that he was therefore entitled to a share of the
appreciation on those properties. The court held that because the
language of the Temporary Order and of the October 2017 email
between counsel was clear that “the proceeds of these premature
partial distributions are the parties’ separate property,” the homes
Shondell purchased with her premature partial distributions were
her separate property, and Bradley was not entitled to any portion
of the appreciation on those homes.
Idaho Cabin and $15,000 Monthly Allowance
¶28 The Temporary Order also provided that the parties would
share the use of a cabin located in Idaho that was marital property.
The order directed Bradley to “advance the ongoing expenses
associated with the cabin subject to equalization upon final
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distribution of the parties’ property.” Following trial, the court
awarded the cabin to Shondell but made Bradley “liable for the
payment of all utilities, services, and/or insurance associated with
the . . . Cabin until the date of entry of the Judgment and Decree
of Divorce.”
¶29 The Temporary Order also stated that each party was
entitled to $15,000 per month in income from the marital
properties and investments and that Bradley “shall continue to
operate the respective businesses in which the parties have
interests in the same manner as such businesses have been
operated in the past.” Shondell claimed that between June 2017
and December 2019, Bradley received over $3 million in income
from the marital estate—approximately $102,000 per month—and
urged the court to conduct an equalization review of the income
Bradley received during the pendency of the divorce case.
¶30 The court rejected Shondell’s request. It held that, with
some notable exceptions, “the amounts [Bradley] received in
excess of the funds he used to pay his own expenses and to make
required payments to Shondell were generally used to support
the marital assets.” And “where it was demonstrated that Brad
used funds in a way that dissipated marital property, the Court
has already factored that into its equitable division of marital
property” by counting those amounts as marital property already
received by Bradley. Accordingly, the court reasoned that “[t]o
now perform an additional ‘equalization of income’ as requested
by Shondell would result in double-dipping for Shondell, at least
as to those amounts.” Lastly, the court stated that because it had
“not been presented with detailed information about how each
party’s expenditures during the divorce proceedings compared to
the marital standard of living,” the court did “not have all the
information it would need to do that analysis.”
¶31 Relatedly, when Bradley argued that the court failed to
reimburse him for the cabin-related expenditures he made, the
court denied his request for reimbursement, stating that it had
already given him “credit for using excess marital funds to pay
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cabin expenses.” The court further noted that “Brad never
presented any evidence at trial suggesting that he paid any cabin
expenses out of his separate property.”
Dissipation of the Marital Estate
¶32 During the pendency of the divorce, Bradley used $564,100
of marital funds to pay his legal expenses in the divorce
proceeding. No evidence was presented that Bradley made
available to Shondell any marital funds—other than the $15,000
monthly payments he was required to make under the Temporary
Order—to similarly cover her legal expenses. Because Bradley’s
use of these marital funds to pay his own legal expenses did not
serve a marital purpose, the court held that Bradley dissipated the
marital estate and held him accountable by treating the $564,100
“as marital assets already received by Brad.”
¶33 During the divorce proceedings, Shondell did not provide
bank statements or other means of valuing two of her business
entities as required by rule 26.1(c) of the Utah Rules of Civil
Procedure. The court assigned each of those entities a nominal
value of $100. It reasoned that the first entity, which “Shondell
used from time to time when doing counseling services for private
clients,” had “little, if any, value as an entity” because it “is simply
a personal service that only generates revenues when Shondell is
actively doing counseling.” And neither party provided a
valuation for the second entity, which “may also have been used
by Shondell from time to time as an entity through which she did
some business.”
¶34 Bradley also argued that Shondell failed to disclose her
monthly expenditures and dissipated the marital estate by not
working as a counselor during the pendency of the divorce. The
court rejected these arguments. It stated that Shondell was not
required to disclose her monthly expenses because it was not
awarding alimony or child support in this case. It further held that
Shondell had not dissipated the marital estate because, for the
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past several years, Shondell had not maintained an active
counseling practice.
¶35 In a post-trial motion, Bradley argued that the court’s
dissipation ruling insofar as it related to his legal expenses
“treated the parties differently” because it punished him for
disclosing his expenditures—including his legal expenses—and
rewarded Shondell for not doing the same. Alternatively, he
argued that the court’s dissipation ruling failed to credit Bradley
for the $15,000 monthly payments made under the Temporary
Order. The court declined to revisit these issues, stating that
because Bradley had “virtually unfettered access to the marital
funds during the pendency of the divorce proceedings,” it took
into account the parties’ “very different financial positions” when
it attempted “to fairly and equitably address the obvious
imbalance in the fact that Brad . . . used $564,100 of these funds to
pay his own legal fees and costs while providing no similar
amount of marital funds to Shondell to pay her equally large legal
fees and costs.”
Home Equity Line of Credit
¶36 In November 2019, on the final day of trial, the court
ordered that until it issued its trial ruling, neither party was to do
anything to devalue the marital assets; that “[t]here certainly
should be no extraordinary transactions outside the ordinary
course of business”; and that the Temporary Order was to remain
in place, which included Bradley’s obligation to maintain the
marital estate and to make the $15,000 monthly payments to
Shondell.
¶37 In February and March 2020, Bradley withdrew a total of
$78,000 from the home equity line of credit (the HELOC) on
the parties’ marital home. In response, Shondell filed an
“Emergency Motion to Prevent Brad from Disposing of,
Encumbering, and/or Devaluing Marital Assets.” Bradley
responded that he withdrew the funds from the HELOC to
meet his obligations under the Temporary Order. Specifically, he
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stated he did not receive an expected payment from one of his
business entities but was required to pay a property tax obligation
on the marital home and to continue to pay Shondell $15,000 per
month. Shondell disputed Bradley’s claims, asserting that he had
“ample resources to make the required monthly payments
without taking improper, unauthorized withdrawals from the
parties’ HELOC.”
¶38 The court ordered Bradley to repay the amounts he
withdrew and any applicable interest from his share of the
marital assets or from his personal funds within 30 days.
After Bradley raised the issue again in his post-trial motion,
the court stated that Bradley made the withdrawals “long after the
trial had concluded, and long after the Court had specifically
instructed the parties not to make any extraordinary
withdrawals without consent of the other party or approval of the
Court” and that “if Brad had no other way to pay the property
taxes on the marital residence but for a HELOC withdrawal,
Brad should have sought consent or approval from the Court
first.” Accordingly, the court denied his request for a new trial on
that issue.
Contempt
¶39 The parties were required to amend their 2015 tax
return due to a failed 1031 exchange.7 As a result, the
parties incurred a significant joint federal tax obligation. After
Bradley failed to pay the obligation, and after receiving multiple
notices from the IRS, Shondell, on the advice of her accountants,
withdrew $80,000 from ShoniK, LLC—a marital business entity of
7. “A 1031 exchange is a swap of one real estate investment
property for another that allows capital gains taxes to be
deferred.” Robert W. Wood, What is a 1031 Exchange? Know the
Rules: How Savvy Investors Use 1031s to Defer Capital Gains and Build
Wealth, Investopedia, https://www.investopedia.com/financial-
edge/0110/10-things-to-know-about-1031-exchanges.aspx
[https://perma.cc/73Y5-K5RH].
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which she was a co-manager—to pay the obligation. Bradley
subsequently sought a finding of contempt against Shondell,
arguing that she violated the Temporary Order, which prohibited
the parties “from selling, encumbering, secreting, or disposing of
the assets of the parties without written approval of the other
party or of the court.”
¶40 The court declined to hold Shondell in contempt,
stating that based on the totality of the circumstances, it
was unable to “conclude that Brad has proven, by clear
and convincing evidence, that Shondell knowingly and
intentionally violated the provisions” of the Temporary Order.
The court based its decision on the following factors: the funds
were used to pay a marital debt; a few years earlier, Bradley had
also made a similar withdrawal from ShoniK to pay off the Idaho
cabin; Shondell did not hide the withdrawal from Bradley;
provision had already been made for the return of the funds from
an expected tax refund; and Shondell acted on the advice of her
accountants.
¶41 In response to Bradley’s post-trial motion urging it to
reconsider its decision, the court reiterated that it “cannot
conclude that Brad has proven, by clear and convincing evidence,
that Shondell knowingly and intentionally violated the
provisions” of the Temporary Order. The court added that
“[t]here is nothing in the [Temporary Order] that prohibits
Shondell from continuing to act as co-manager of ShoniK, that
removes her as co-manager, or that removes her as signatory on
ShoniK’s accounts.” The court further stated that while it “may
not believe” that either party’s withdrawal of ShoniK funds “were
entirely appropriate” because they were not the only members of
ShoniK, “the parties and their accountants have found ways to
make the other members whole, and the Court cannot conclude
that Shondell’s actions were clearly in violation of” the
Temporary Order. The court thus declined for a second time to
make a finding of contempt against Shondell.
¶42 Bradley now appeals.
20200483-CA 17 2023 UT App 16Knowlton v. Knowlton
ISSUES AND STANDARDS OF REVIEW
¶43 Bradley challenges the court’s valuations of Ascent, the TIF
Funds, and JRM. He also challenges certain aspects of the court’s
ultimate distribution of the marital estate.8 In a divorce
proceeding, the trial court is accorded “considerable discretion”
in its valuation and equitable distribution of marital property. See
Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 39, 507 P.3d 385(quotation simplified). See also Marroquin v. Marroquin, 2019 UT
App 38, ¶ 14, 440 P.3d 757 (“In a divorce proceeding, determining
and assigning values to marital property is a matter for the
trial court and this court will not disturb those determinations
absent a showing of clear abuse of discretion.”) (quotation
simplified); Jensen v. Jensen, 2009 UT App 1, ¶ 6, 203 P.3d 1020(stating that an appellate court will overturn a trial court’s
property distribution only if “such a serious inequity has resulted
as to manifest a clear abuse of discretion”) (quotation simplified).
A trial court abuses its discretion “only if no reasonable person
8. Additionally, Bradley challenges the trial court’s order
requiring him to pay back the $78,000 unauthorized withdrawal
from the HELOC, plus interest. However, following enforcement
proceedings, in July 2021—after Bradley filed an Amended Notice
of Appeal in this case—the court entered judgment related to the
HELOC withdrawals against Bradley, which he subsequently
satisfied in full. In the absence of any indication in the record that
Bradley satisfied the judgment under protest, his appeal of this
issue is moot and we do not address it further. See Diderickson v.
State, 2022 UT 2, ¶ 26, 506 P.3d 519 (“A satisfaction of judgment is
a legal determination indicating that the controversy has become
moot and the right to appeal is barred.”) (quotation simplified);
Scott Anderson Trucking Inc. v. Nielson Constr., 2020 UT App 43,
¶¶ 20–21, 462 P.3d 822 (stating that “if a judgment is voluntarily
paid, which is accepted, and a judgment satisfied, the controversy
has become moot and the right to appeal is waived” unless the
“judgment debtor’s intention of preserving his right to appeal is
made to appear clearly on the record”) (quotation simplified).
20200483-CA 18 2023 UT App 16Knowlton v. Knowlton
would take the view adopted by the trial court.” Gardner v.
Gardner, 2019 UT 61, ¶ 18, 452 P.3d 1134 (quotation simplified).
¶44 Bradley next argues that the trial court erred as a matter of
law when it held that under the terms of the Temporary Order,
the premature partial distributions awarded to each party
thereupon became their separate property. Because divorce
stipulations are interpreted “according to established rules of
contract interpretation,” Thayer v. Thayer, 2016 UT App 146, ¶ 17,
378 P.3d 1232 (quotation simplified), we review a trial court’s
interpretation of a stipulation for correctness, Brady v. Park, 2019
UT 16, ¶ 29, 445 P.3d 395.
¶45 Finally, Bradley argues that the court erred in declining to
hold Shondell in contempt for violating the Temporary Order
when she withdrew funds from ShoniK to pay a marital tax
obligation. “The decision to hold a party in contempt of court rests
within the sound discretion of the trial court and will not be
disturbed on appeal unless the trial court’s action is so
unreasonable as to be classified as capricious and arbitrary, or a
clear abuse of discretion.” Wadsworth, 2022 UT App 28, ¶ 40
(quotation simplified).
ANALYSIS
I. Valuation of Assets
A. Ascent
¶46 Bradley argues that the trial court abused its discretion
when it refused to set aside the May 2019 Stipulation and
refused his request to update the valuation of Ascent after
unforeseen events “severely diminished” its value.9 He
9. Bradley also contends that the trial court erred in failing to
make findings addressing his argument that changed
(continued…)
20200483-CA 19 2023 UT App 16Knowlton v. Knowlton
asserts that “the court was required to consider” the effect of the
sureties’ demand letter “when it divided the marital estate,
particularly since the resulting property division is grossly
inequitable.”10
circumstances rendered the May 2019 Stipulation inequitable. In
support of this argument, he cites Chandler v. West, 610 P.2d 1299(Utah 1980), which states that a trial court may commit reversible
error when it “decline[s] to modify . . . a stipulated property
settlement between the parties without an explanation as to why
those [changed] circumstances did not warrant a modification.”
Id. at 1301. See id. (“[W]hen a party . . . presents a prima facie case
of changed circumstances which basically raises a serious
question as to fairness and equity of continuing the financial
obligations of one party, the court’s determination that
modification of a decree is nevertheless inappropriate should be
based on written findings and conclusions.”). But here, the court
stated that it did “not see how [the sureties’] collection efforts
represent newly discovered evidence” because Ascent’s client
filed a complaint against Ascent seeking in excess of $38 million
while the trial in the current case was still ongoing, but Bradley
did not bring it to the court’s attention at that time. Accordingly,
because the court held that the sureties’ subsequent demand letter
did not amount to changed circumstances—which holding
Bradley has not meaningfully challenged on appeal—the court
was not required to make findings as to why the alleged changed
circumstances did not warrant modification of the May 2019
Stipulation.
10. Shondell argues that Bradley did not preserve his argument
that the May 2019 Stipulation was inequitable. But because we
resolve this case on the merits in Shondell’s favor, we need not
address her preservation argument. See State v. Kitches, 2021 UT
App 24, ¶ 28, 484 P.3d 415 (“If the merits of a claim can easily be
resolved in favor of the party asserting that the claim was not
preserved, we readily may opt to do so without addressing
preservation.”) (quotation simplified).
20200483-CA 20 2023 UT App 16Knowlton v. Knowlton
¶47 “Parties are generally free to agree upon facts subject to
judicial application of the law,” which in most cases “should be
welcomed as an exercise entirely consistent with efficient and
just judicial administration.” Batty v. Batty, 2006 UT App 506, ¶ 2,
153 P.3d 827 (quotation simplified). Thus, “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), stipulations regarding property distribution “should
be respected and given great weight,” Batty, 2006 UT App 506, ¶ 2
(quotation simplified). See Nave-Free v. Free, 2019 UT App 83, ¶ 6
n.4, 444 P.3d 3 (“With regard to property settlements, stipulations
entered into in contemplation of a divorce are conclusive and
binding on the parties unless, upon timely notice and for good
cause shown, relief is granted therefrom.”) (quotation
simplified). In sum, “a stipulation will ordinarily be enforced
unless the court finds it to be unfair or unreasonable.” Robinson v.
Robinson, 2010 UT App 96, ¶ 13, 232 P.3d 1081 (quotation
simplified).
¶48 Before the trial court, Bradley cited Dunn v. Dunn, 802 P.2d
1314 (Utah Ct. App. 1990), in support of his argument that the
May 2019 Stipulation should be set aside. In that case, the parties
to a divorce stipulated to an expert’s valuation of certain
retirement accounts. See id. at 1320. But because “[t]he marital
estate . . . should be valued as of the time of the divorce decree,”
and because the data the expert relied on in valuing the retirement
accounts was fifteen months old at the time of trial, the Dunn court
held that the valuation was “inadequate to support an equitable
division of this sizable asset.” Id. The court further stated that
“[w]hile the parties stipulated to the values of the retirement
accounts as of the date of valuation, they also stipulated to the
possibility that the values of the accounts may change between the date
of the valuation and the date of the divorce.” Id. (emphasis added). As
a result, the court was “not persuaded that the stipulation
purported to fix the value of the retirement account as of the date
of the divorce decree.” Id.20200483-CA 21 2023 UT App 16Knowlton v. Knowlton
¶49 The trial court in this case distinguished Dunn on the
ground that, “unlike Dunn, where the Court of Appeals was not
persuaded that the relevant stipulation in that case purported to
fix the value of the asset as of the date of the divorce decree, this
Court is persuaded that the [May 2019 Stipulation] to the value of
Ascent Construction purported to fix the value of the asset for all
purposes related to the equitable division of the parties’ marital
property.” The court further noted that the May 2019 Stipulation
was entered into at the beginning of trial after the specific
question of whether Ascent Expert’s valuation needed to be
updated was raised.
¶50 Bradley argues that the holding in Dunn did not hinge on
the parties’ stipulation allowing for the possibility that the value
of the retirement benefits could change.11 Bradley further argues
that under Klein v. Klein, 544 P.2d 472 (Utah 1975), “it would have
been an abuse of discretion not to update the valuation in Dunn.”
In sum, Bradley argues “that stipulations can and should be set
aside when they yield an inequitable result . . . or when the
information becomes stale over time.” Although we do not
necessarily disagree with the general proposition Bradley sets
11. Bradley also asserts that the parties did stipulate to allow for a
more current valuation at trial because the parties’ original
stipulation stated, with our emphasis, that the “valuation date
will be as of the most current, complete financial information
available for [Ascent],” which was expected to be “as of December
31, 2017, or more current.” But this overlooks the context in which
the May 2019 Stipulation was entered. Namely, it was after the
parties had attempted to have Ascent Expert provide a more
updated valuation of Ascent that they decided, in the interest of
avoiding further litigation on the subject, that Ascent Expert’s
valuation that was current as of December 31, 2017, “will be the
valuation we’ll use on this asset for this trial.” Accordingly, the
May 2019 Stipulation expressly foreclosed further updates on the
valuation of Ascent.
20200483-CA 22 2023 UT App 16Knowlton v. Knowlton
forth, we cannot say that the trial court abused its discretion when
it decided against setting the May 2019 Stipulation aside.
¶51 As an initial matter, a plain reading of Dunn provides that
the parties’ stipulation did not override the general rule that “[t]he
marital estate . . . should be valued as of the time of the divorce
decree” because the stipulation did not purport “to fix the value
of the retirement account as of the date of the divorce decree.” 802
P.2d at 1320. And because the stipulation did not preclude an
updated valuation of the asset at issue, the Dunn court did not
need to address whether the stipulation should be set aside.
Accordingly, contrary to Bradley’s assertion, the Dunn case did
hinge on the fact that the parties’ stipulation allowed for an
updated valuation of the retirement accounts.
¶52 We likewise disagree that Klein would have nonetheless
mandated an updated valuation of the retirement benefits in
Dunn. Bradley cites Klein for the proposition that “[i]f there is any
justification in law or equity for avoiding or repudiating a
stipulation, and [a party] timely does so, [the party] is entitled to
be relieved from it.”12 544 P.2d at 476. But the determination of
whether a “justification in . . . equity” exists remains within the
trial court’s discretion. Id. The general standard under which a
12. Bradley also cites Klein for the proposition that a stipulation in
a divorce proceeding “is only a recommendation to be adhered to
if the court believes it to be fair and reasonable.” Klein v. Klein, 544
P.2d 472, 476 (Utah 1975). But our Supreme Court has since stated
that “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). Accordingly, stipulations between
spouses, at least on subjects other than child custody and child
support (where best-interest-of-the-child principles must be taken
into account), have since been elevated from mere
recommendations to presumptively enforceable contracts.
20200483-CA 23 2023 UT App 16Knowlton v. Knowlton
stipulation may be set aside is “whether the contract was fairly
negotiated and does not result in an outcome so severely one
sided that it prevents the district court from fulfilling its equitable
obligations.” Ashby v. Ashby, 2010 UT 7, ¶ 21, 227 P.3d 246.
Accordingly, a trial court’s determination whether to set aside a
stipulation falls within the “wide discretion” granted it “in the
division of marital property,” which is “a matter of equity.”
Hartvigsen v. Hartvigsen, 2018 UT App 238, ¶ 27, 437 P.3d 1257(quotation simplified). And here, in light of several factors, we
cannot say that the trial court abused its discretion in enforcing
the May 2019 Stipulation and declining to update the valuation of
Ascent.
¶53 First, as the trial court noted, the May 2019 Stipulation was
entered during trial. Thus, although the parties were aware at the
time that an updated valuation of Ascent could likely be obtained,
they nonetheless agreed that the report regarding “the 2017
valuation will be the valuation we’ll use on this asset for this
trial.” And unlike in Dunn, the May 2019 Stipulation did not allow
for the possibility that the court could consider an updated
valuation down the line. See supra note 11.
¶54 Second, the May 2019 Stipulation was entered after the
parties had, with some difficulty, already attempted to update
Ascent Expert’s valuation. When the court initially ordered an
updated valuation of Ascent, it directed, with our emphasis, that
Ascent “produce the information and documents requested by
[Ascent Expert], including any partial or preliminary materials that
are responsive to [Ascent Expert’s] request.” But Bradley failed to
provide most of the requested documents, stating that many of
those documents were “[n]ot yet finalized.” To avoid further
litigation on the subject of updating the valuation of Ascent, the
parties stipulated that they would proceed with the already
existing valuation. This benefitted Bradley by avoiding further
inquiry into his apparent failure to abide by the court’s order to
produce even partial or preliminary versions of the requested
materials.
20200483-CA 24 2023 UT App 16Knowlton v. Knowlton
¶55 Third, by deciding to enforce the May 2019 Stipulation, the
court necessarily determined that its terms were equitable and did
not “result in an outcome so severely one sided that it prevent[ed]
the district court from fulfilling its equitable obligations.” See
Ashby, 2010 UT 7, ¶ 21. See also Robinson v. Robinson, 2010 UT App
96, ¶ 13, 232 P.3d 1081 (“[F]rom the district court’s decision to
enforce the stipulation, we assume—and have no findings that
would indicate otherwise—that the court determined that the
property division was equitable.”). Indeed, the court expressly
stated that it had “considered the impact of [the] multi-million
dollar collection efforts against the stipulated valuation of
Ascent” when it declined to set aside the May 2019 Stipulation,
thereby necessarily finding the stipulation to be equitable even in
light of Ascent’s legal troubles.
¶56 Fourth, when Shondell argued in closing that the
stipulated valuation should be adjusted because evidence at trial
suggested the 10% “lack of control discount” was not warranted,
Bradley was quick to insist on the inviolability of the May 2019
Stipulation, arguing that the parties had conclusively “stipulated
to both the value ($2,157,000) and distribution of Ascent.” The
court could reasonably consider this prior position taken by
Bradley in evaluating his later position that the May 2019
Stipulation should be undone.
¶57 Finally, the May 2019 Stipulation was “fairly negotiated.”
See Ashby, 2010 UT 7, ¶ 21. Both parties were sophisticated and
represented by counsel when they entered the stipulation.
Although parties need not be represented by counsel to enter a
stipulation, see Cox v. Hefley, 2019 UT App 60, ¶ 21, 441 P.3d 769,
such representation certainly weighs in favor of concluding that a
stipulation has been fairly negotiated, see Robinson, 2010 UT App
96, ¶ 13 (stating that the appellate court could not determine that
the trial court had abused its discretion “based on the facts of this
case, in particular the sophistication of the parties and the fact that
they each had the opportunity to consult with counsel and other
advisors before entering the stipulation”).
20200483-CA 25 2023 UT App 16Knowlton v. Knowlton
¶58 Thus, in the context in which the May 2019 Stipulation was
entered, we cannot say that “no reasonable person would take the
view adopted by the trial court.” See Gardner v. Gardner, 2019 UT
61, ¶ 18, 452 P.3d 1134 (quotation simplified). The court therefore
did not abuse its discretion when it enforced the May 2019
Stipulation and declined Bradley’s request to update Ascent
Expert’s valuation of Ascent.
B. TIF Funds
¶59 Bradley argues that the trial court abused its discretion
when it adopted the valuation of the TIF Funds provided by
Shondell’s Expert over the one provided by Bradley’s Expert.
First, he asserts that Shondell’s Expert provided the inferior
opinion because he “provided a calculation engagement, rather
than an opinion of value,”13 whereas Bradley’s Expert provided
an opinion of value.14 Second, Bradley argues that the valuation
13. Bradley also assails the qualifications of Shondell’s Expert to
opine as to the value of the TIF Funds. Specifically, Bradley asserts
that, although a certified public accountant, Shondell’s Expert
“was not licensed to provide an attestation of value.” But Bradley
stipulated at trial that Shondell’s Expert was qualified to testify as
an expert. Additionally, as Bradley acknowledges, Shondell’s
Expert “offered a calculation [engagement] instead” of an opinion
of value, and therefore the qualification of Shondell’s Expert to
provide the latter is irrelevant. Finally, the trial court—which is in
the superior position to assess the weight of evidence, see Morgan
v. Morgan, 854 P.2d 559, 563 (Utah Ct. App. 1993)—found these
arguments to be unpersuasive, stating that Bradley’s Expert “does
not appear to have any greater expertise in doing a discounted
analysis of a future payment stream than does Shondell’s Expert.”
14. Shondell’s Expert explained that an opinion of value involves
“opining as to the value of the underlying asset,” whereas a
calculation engagement involves putting the underlying assets
“into a format that would . . . lead the user to put the information
(continued…)
20200483-CA 26 2023 UT App 16Knowlton v. Knowlton
provided by Shondell’s Expert failed to account for the 7% interest
that was accruing on the first portion of the TIF Funds. And third,
Bradley argues that Shondell’s Expert incorrectly applied a 7%
discount—3% for inflation and 4% for risk—to the second portion
of the TIF Funds. He contends that the 4% discount for risk, which
was partly based on the possibility that the tax increment period
would expire in 2033 before the TIF Funds were paid in full, was
inappropriate because the tax increment period had actually been
extended, thereby diminishing the risk.15
¶60 “When considering testimony regarding valuation of
property, the trial court is entitled to give conflicting opinions
whatever weight it deems appropriate, and a trial court’s
valuation will be upheld if it is within the range of values
established by all the evidence.” DeAvila v. DeAvila, 2017 UT App
146, ¶ 22, 402 P.3d 184 (quotation simplified). See Morgan v.
Morgan, 854 P.2d 559, 563 (Utah Ct. App. 1993) (“[E]valuation of
the weight and credibility of testimony and evidence is a matter
for the trier of fact.”). Accordingly, merely “failing to accept one
party’s proposed valuations does not constitute an abuse of
discretion.” Taft v. Taft, 2016 UT App 135, ¶ 33, 379 P.3d 890(quotation simplified).
¶61 Here, before determining a specific value for the second
portion of the TIF Funds, the trial court had to first determine
whether a discount needed to be applied to its $1.1 million face
value. Bradley’s Expert testified that no discount was warranted
due to the 7% interest accruing on the first portion of the TIF
Funds and based on Ogden City’s “AAA” bond rating. Shondell’s
to a statement of value.” Bradley’s Expert explained that a
calculation engagement involves accepting the figures provided
by the client without scrutiny and putting them “into a form of
valuation,” without providing an “opinion of value.”
15. Bradley asserts that the tax increment period had been
extended from 2033 to 2045, but the record is unclear whether it
was extended until 2038 or 2045.
20200483-CA 27 2023 UT App 16Knowlton v. Knowlton
Expert, on the other hand, testified that the $1.1 million value
should be discounted due to several factors, including inflation,
his estimation that payment on the second portion would not
begin for another ten years and would take approximately four
years to be paid off, the risk of non-payment based on “substantial
uncertainties that remain with the project,” and the lack of interest
accruing on the second portion. Having heard testimony from
both experts on this issue, the trial court adopted the opinion of
Shondell’s Expert, holding that “a discount must be applied in
arriving at a proper valuation of that income stream.”
¶62 Bradley does not argue that the court abused its discretion
in concluding that a discount was necessary. Instead, he
challenges specific aspects of the valuation provided by
Shondell’s Expert. But because Bradley’s Expert provided no
“competing discounted analysis,” the discounted valuation
provided by Shondell’s Expert was the only valuation before the
court that discounted the face value of the second portion of the
TIF Funds.16
16. Bradley argues that Bradley’s Expert did, in fact, discount the
second portion of the TIF Funds because he testified the 7%
interest accruing on the first portion of the TIF Funds balanced
out any risk associated with the second portion of the TIF Funds.
Specifically, Bradley’s Expert stated that “[t]he risk of
non-payment is nominal because [Ogden is] a AAA bond-rated
city.” He reached this conclusion by “compar[ing] the increase
from the 600,000 with . . . a discounted interest rate on the 1.7
[million] total at the rate of the Ogden TIF, or Ogden AAA bond
rating rates,” which he assumed to be “2 percent to be
conservative.” And if “[y]ou run interest at 2 percent on the entire
1.7 million, compared to the interest you would get . . . on the
600,000, the interest on the entire amount, 1.7 with 2 percent
doesn’t equal the 7 percent you would get on the 600,000 upfront.”
But the trial court held that Ogden City’s “AAA” bond rating
and “[ability] to borrow funds at a very low interest rate are not
(continued…)
20200483-CA 28 2023 UT App 16Knowlton v. Knowlton
¶63 Viewed through that lens, it was not a clear abuse of
discretion for the trial court to adopt the sole expert valuation that
satisfied the court’s threshold requirement of applying a discount
to the second portion of the TIF Funds. Even assuming that
Bradley’s Expert applied a superior method of valuing the asset,
and although he disagreed with certain aspects of the
methodology Shondell’s Expert applied, the valuation provided
by Shondell’s Expert was “within the range of values established
by all the evidence.” See DeAvila, 2017 UT App 146, ¶ 22
(quotation simplified). Shondell’s Expert based his 3% discount
for inflation on “the inflation rate over the past several years as
promulgated by the IRS.” He also reached the 4% figure by
directly material to the valuation of” the TIF Funds because
“Ogden City is not a guarantor of that payment stream,” but,
rather, its “obligation is simply to be sure the payments, if
received, are disbursed in accordance with the governing
disbursement agreement.” By so holding, the court rejected the
entire basis for Bradley’s Expert’s conclusion that the second
portion of the TIF Funds carried only a nominal risk. Bradley does
not challenge this determination other than by asserting that
Ogden City’s bond rating “is material [because] it affects risk,”
and he has therefore not met his burden of persuasion in
challenging the court’s determination. See Utah R. App. P.
24(a)(8).
In sum, Bradley’s Expert did not provide an analysis as to how
the second portion of the TIF Funds should be discounted based
on risk, inflation, or any other relevant factor. Although Bradley’s
Expert testified that the first portion of the TIF Funds should be
viewed at a premium based on its 7% interest rate, the court stated
that “he did not offer a specific valuation of the initial $600,000
payment stream” and that he declined to discount the second
portion of the TIF Funds despite acknowledging that it “would
ordinarily be discounted.”
20200483-CA 29 2023 UT App 16Knowlton v. Knowlton
analyzing the information he obtained directly from Ogden City
to assess the risk of nonpayment.17
¶64 For these reasons, the trial court did not abuse its discretion
when it adopted Shondell’s Expert’s valuation of the TIF Funds.
C. JRM
¶65 “The overarching aim of a property division . . . is to
achieve a fair, just and equitable result between the parties.” Dahl
v. Dahl, 2015 UT 79, ¶ 25, 459 P.3d 276 (quotation simplified).
Although “there is no fixed formula for determining the division
of debts in a divorce action,” a district court must base its
allocation of debt “on adequate factual findings.” Id. ¶ 139. “And
we will not disturb those findings absent an abuse of discretion.”
Id.
¶66 Bradley asserts that the trial court abused its discretion
when it did not assign a negative value to JRM based on the
$88,403 debt it owed Ascent at the time of trial. Specifically, he
contends that (1) the court’s $100 valuation was unsupported by
the evidence; (2) the court’s focus on avoiding future
entanglements could have been achieved in a more equitable
manner by “allotting half [of JRM’s debt] to Shondell’s column,
and then awarding the entity, its future debt, and its future payout
to Brad”; and (3) the court erred in determining “that the debt was
17. Bradley argues that the valuation is flawed because it did not
account for the 7% interest accruing on the first portion of the TIF
Funds. But the trial court did not hear an alternative valuation for
the first portion of the TIF Funds. The court specifically stated that
although Bradley’s Expert testified that the first portion of the TIF
Funds should be viewed at a premium based on its 7% interest
rate, “he did not offer a specific valuation of the initial $600,000
payment stream.” The court therefore did not abuse its discretion
by not assigning a higher value to the first portion of the TIF
Funds.
20200483-CA 30 2023 UT App 16Knowlton v. Knowlton
irrelevant because it was owed to Ascent, not to an outside party,
and because Brad was being awarded JRM and Ascent.”18 We
disagree.
¶67 First, the court’s valuation of JRM was supported by the
evidence presented at trial, limited though it was. The court heard
testimony that JRM owed Ascent $88,403 and that JRM’s sole asset
at the time of trial was an ongoing lawsuit against West Valley
City. Concerning the lawsuit, neither party’s expert provided a
valuation, and each instead recommended that the parties wait
until the litigation is resolved and then equally split the recovery,
if any. Bradley was confident that the lawsuit would ultimately
prove successful and testified that it “still has value” and “still has
merit.” Bradley also insisted that the merits of the lawsuit
“justif[ied] continued payment of attorney fees and other costs
associated with that litigation” even though he had already spent
in excess of $400,000 in legal fees. Shondell, on the other hand, was
less optimistic about their chances of recovery and “seem[ed]
unwilling to fund the costs of future litigation.”
¶68 In light of these facts, even without an expert valuation of
the lawsuit, it was not unreasonable for the court to decline to
follow the experts’ recommendations of waiting until the lawsuit
had resolved itself. The court was faced with a situation in which
one party wished to continue to pursue the lawsuit, while the
other wished to cut her losses and not incur additional debt. Thus,
by not waiting, the court resolved this point of contention and
avoided forcing either Shondell to incur what she believed to be
unnecessary additional losses for the marital estate or Bradley to
abandon what he believed to be a meritorious lawsuit. This
decision also avoided “future entanglement between the two
parties,” who were unlikely to agree on how best to proceed with
the lawsuit, and instead allowed Bradley “to make decisions
18. Bradley also asserts that the court erred in stating “that the
debt was JRM’s debt, not a marital debt.” But we need not address
this argument because the court stated that it “took the payable
into account when determining what value to assign JRM.”
20200483-CA 31 2023 UT App 16Knowlton v. Knowlton
about whether and to what extent to invest his own funds into
covering future litigation costs.”
¶69 Thus, while faced with “the significantly speculative
nature of any future recovery” from the lawsuit, the court stated
that the $100 valuation represented the “balancing of the $88,403
liability of JRM against Brad’s view that JRM’s claims had
significant future value.” Cf. DeAvila v. DeAvila, 2017 UT App 146,
¶ 25, 402 P.3d 184 (“Under Utah law, a knowledgeable owner
generally may testify as to the market value of property, including
in divorce cases[.]”) (quotation simplified). In doing so, the court
acknowledged that “if the claims really do have significant
value”—as Bradley insisted—“Brad may receive a windfall” as a
result of this low valuation. Although the evidence was limited,
the court’s valuation was supported by the evidence presented at
trial: evidence of the debt and Bradley’s testimony that the lawsuit
had merit and warranted the investment of additional funds. And
in light of this evidence, it was not unreasonable for the trial court
to assign JRM a nominal value of $100, while giving Bradley the
chance to see if his gamble might pay off, without further
imposition on Shondell. See Gardner v. Gardner, 2019 UT 61, ¶ 18,
452 P.3d 1134 (stating that a trial court abuses its discretion “only
if no reasonable person would take the view adopted by the trial
court”) (quotation simplified).
¶70 The court also did not abuse its discretion when it did not
assign half of JRM’s $88,403 debt to Shondell. Bradley contends
that by assigning the whole debt to him, “the court lowered [his]
share by $44,201.50 and augmented Shondell’s share by the same
amount.” But although this debt was a liability of JRM, it was also
an asset of Ascent, which was also awarded in its entirety to
Bradley. Thus, although Bradley was made responsible for the
entirety of the marital debt attributable to JRM, he was also, in
essence, awarded the entirety of that sum as one of the marital
assets allocated to him. And as discussed above, the court
accounted for the debt in its $100 valuation of JRM. The debt thus
reduced the value of JRM as an asset, which the court took into
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account when it divided the other marital assets between the
parties in an equitable manner.
II. Division and Reconciliation of the Marital Estate
¶71 Bradley argues that “[t]he trial court abused its discretion
when it did not reconcile, at trial, the parties’ respective
obligations under the Temporary Order.” We address each of his
arguments in turn.
A. Idaho Cabin Expenses
¶72 The Temporary Order directed Bradley to “advance the
ongoing expenses associated with the [Idaho] cabin subject to
equalization and upon final distribution of the parties’ property.”
Bradley contends that the trial court “abused its discretion when
it failed to reconcile the amount that [he] had spent to service the
cabin with ‘his’ money as required by the” Temporary Order. He
asserts that “[t]he parties stipulated that [he] would service the
cabin, he provided evidence that he did so, the parties stipulated
that the amounts he spent would be reconciled, but they were
not,” which “deprives [him] of the ability to enjoy the marital
estate in the same way as Shondell.”
¶73 Bradley’s argument hinges on his contention that he
maintained the cabin using his separate funds, rather than marital
property.19 Although Bradley did offer evidence that he provided
funds for the maintenance of the cabin, there is no evidence in the
record that Bradley used his separate funds—as opposed to
marital funds—for that purpose. Indeed, the trial court found that
19. In his reply brief, Bradley asserts that under the Temporary
Order, Bradley was to use his $15,000 monthly allowance to pay
for the cabin’s maintenance. But the Temporary Order “awarded”
$15,000 to Bradley on a monthly basis as “income,” and the
Temporary Order is otherwise silent as to how the funds are to be
used.
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Bradley had used marital funds to maintain the marital estate,
which finding Bradley has not challenged on appeal.
¶74 When a party to a divorce proceeding uses marital funds
to pay a marital expense, “the value of the marital estate [is]
reduced by the amount of those costs.” Dahl v. Dahl, 2015 UT 79,
¶ 133, 459 P.3d 276. Because marital property is “owned equally
by each party,” id. ¶ 126, “when the district court divide[s] the
marital estate, both parties [have] effectively paid one-half” of the
payments, id. ¶ 133. Thus, requiring one party to reimburse the
other for expenses paid with marital funds effectively results in a
double payment. Id.
¶75 For this reason, it would have been inequitable for the trial
court to credit Bradley for maintaining the marital property with
marital funds, and the court therefore did not abuse its discretion
by not requiring Shondell to compensate Bradley for half of the
funds he disbursed for the maintenance of the cabin.20
20. Bradley also argues that the trial court abused its discretion
when it failed to credit him for making the $15,000 monthly
payments to Shondell under the Temporary Order, which he
asserts constituted “more than all the non-wage driven income
from [the] marital entities.” But Bradley does not directly address
the court’s reasoning in not crediting the sum.
Because Bradley had “virtually unfettered access to the marital
funds during the pendency of the divorce proceedings,” while
Shondell did not, Shondell requested that the court conduct “an
equalization of income received by Brad during the pendency of
the divorce case.” Specifically, Shondell asserted that between
June 2017 and December 2019, Bradley received approximately
$102,000 per month from the marital estate. The court declined
Shondell’s request in part because, with a few exceptions, “the
amounts [Bradley] received in excess of the funds he used to pay
his own expenses and to make required payments to Shondell
were generally used to support the marital assets.” Due to the
(continued…)
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B. Premature Partial Distributions
¶76 Shondell and Bradley each received $840,000 under the
Temporary Order, which stated that the sum represented “an
equal premature partial distribution to each party from the
marital estate.” The Temporary Order further provided “that
funds held in other bank accounts will be subject to review,
reconciliation and equalization during the disclosure and
discovery process.” Each party also received an additional $39,417
in premature partial distributions, which represented half of a
$78,834 distribution Bradley received from a marital property.
Bradley’s former counsel emailed Shondell’s counsel in October
2017, stating that Shondell would receive her half “as a
distribution in part of [her] portion of the marital estate.” This
resulted in each party receiving, by stipulation, a total of $879,417
in premature partial distributions.
¶77 Shondell used her premature partial distributions to
purchase homes that had appreciated in value by the time of trial.
Bradley, on the other hand, deposited much of his premature
partial distributions into a bank account of one of the businesses
he managed to ensure Shondell did not have access to them and
used the funds to—among other things—purchase two vehicles
and an engagement ring for his soon-to-be new wife, and to pay
for their wedding reception and honeymoon.
court’s denial of Shondell’s motion to conduct an equalization of
income, it is unclear how closely the funds Bradley used to cover
his living expenses matched the $15,000 monthly income to which
he was entitled under the Temporary Order. Nevertheless, it is
uncontested that Bradley likewise used marital funds to cover his
own living expenses during the pendency of the divorce
proceedings. And because neither party has challenged the
court’s denial of Shondell’s motion, for the same reason
articulated above the trial court did not abuse its discretion when
it did not credit Bradley for the $15,000 monthly payments he
made to Shondell from the marital estate.
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¶78 At trial, Bradley argued that the appreciation of the assets
acquired by Shondell using her premature partial distributions
belonged to the marital estate and should be divided between the
parties. The court rejected this argument, stating that “the
language of the [Temporary Order] and the [October 2017] email
between counsel is clear that the proceeds of these premature
partial distributions are the parties’ separate property, and that
assets purchased by the parties with the proceeds of these
premature partial distributions are their separate property.”
¶79 Bradley argues that “the trial court erred as a matter of law
when it awarded to Shondell, rather than divided, the
appreciation on properties Shondell purchased” using her
premature partial distribution. Specifically, he contends that the
court erred in determining that the premature partial
distributions constituted Shondell’s separate property—and not
marital property—because the parties were not yet divorced at
the time the distributions were made. See generally Dahl v. Dahl,
2015 UT 79, ¶ 126, 459 P.3d 276 (“Prior to the entry of a divorce
decree, all property acquired by parties to a marriage is marital
property, owned equally by each party.”); Berger v. Berger, 713
P.2d 695, 697 (Utah 1985) (“The marital estate should be valued as
of the time of the divorce decree.”).
¶80 But as discussed in greater detail in Part I.A. above, “a
stipulation will ordinarily be enforced unless the court finds it to
be unfair or unreasonable.” Robinson v. Robinson, 2010 UT App 96,
¶ 13, 232 P.3d 1081 (quotation simplified). See Thayer v. Thayer,
2016 UT App 146, ¶ 17, 378 P.3d 1232 (“[E]ven in the context of a
divorce, parties are generally bound by their stipulations.”). Thus,
the issue presented here is whether the parties stipulated in the
Temporary Order and in the October 2017 email that the
premature partial distributions constituted separate property. If
they did, then any appreciation that accrued until entry of the
divorce decree was likewise separate property. See Lindsey v.
Lindsey, 2017 UT App 38, ¶ 31, 392 P.3d 968 (stating that “any
appreciation that may accrue [on separate property] during the
marriage” is separate property). We hold that the trial court
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correctly determined that under the terms of the Temporary
Order and the October 2017 email, the parties agreed that the
premature partial distributions were separate property.21
¶81 As an initial matter, both the Temporary Order and the
October 2017 email referred to the funds each party received as
“distributions” from the marital estate. In the context of divorce,
the term “distribution” is used to describe “[t]he division of
marital property,” see Equitable Distribution, Black’s Law
Dictionary (11th ed. 2019), the end result of which is separate
property to each party. This definition is in line with the October
2017 email, which provided that the $39,417 represented, with our
emphasis, “a distribution in part of [Shondell’s] portion of the
marital estate.”
¶82 The Temporary Order’s description of the $840,000 to each
party as a “premature partial distribution . . . from the marital
estate” likewise communicates that the funds were intended to be
separate property. The use of the term “premature”
acknowledged that such a distribution is normally made at a later
time. Other than by way of contrast to the more typical division
of the marital estate upon entry of a divorce decree, it is unclear
to what other future event the term “premature” could refer,
especially when combined with the term “distribution.” Similarly,
the use of the term “partial” recognized that the distributed sums
did not represent the entirety of the marital estate. Finally, by
stating that funds other than the premature partial distributions
“will be subject to review, reconciliation and equalization during
the disclosure and discovery process”—which represents the
normal procedure in which the marital estate is identified and
distributed—the Temporary Order suggested that the premature
21. Indeed, Bradley does not offer an alternative interpretation of
the terms of the Temporary Order or of the October 2017 email.
He also has not argued that the trial court abused its discretion in
holding the parties to their agreement.
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partial distributions were to be treated, following distribution, as
separate property rather than marital property.
¶83 In conclusion, because the parties agreed that the
premature partial distributions represented an early division of a
portion of the marital estate, the funds became separate property
and Bradley was not entitled to any of the appreciation on the
properties Shondell purchased with her premature marital
distributions.
C. Dissipation of the Marital Estate
¶84 Bradley challenges the trial court’s determination that he
dissipated the marital estate by using $564,100 of marital funds to
pay his legal expenses in the divorce proceeding and by treating
that sum “as marital assets already received by” him. His
argument boils down to the assertion that because it was unclear
how much in marital funds Shondell had also spent on her legal
expenses, “it was inequitable to assume that only [he] had used
marital funds.”
¶85 In support of this argument, Bradley asserts that it is
unknown what portion of the “significant marital funds” to which
Shondell had access—namely, the $15,000 monthly allowance and
“various other payments” she received totaling $448,744.19
between June 2017 and March 2019—she spent on legal
expenses.22 He also asserts that because Shondell failed to make
certain disclosures of her income, expenses, and assets under rule
26.1(c) of the Utah Rules of Civil Procedure and to provide bank
statements of two of her business entities, it was possible she had
access to additional undisclosed marital funds that she could have
22. Bradley also includes Shondell’s premature partial
distributions when discussing marital funds to which Shondell
had access. But, as discussed in Part II.B. above, the premature
partial distributions were Shondell’s separate property, and not
marital funds.
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used to pay her legal expenses. We disagree with Bradley that the
court’s dissipation ruling constituted a clear abuse of discretion.
¶86 As an initial matter, whether Shondell used part of her
$15,000 monthly allowance to pay legal expenses is immaterial in
this context. Both parties were entitled to an equal monthly
allowance under the Temporary Order.23 Thus, even if Shondell
did use a portion of her allowance on legal expenses, such an
expenditure did not constitute an additional withdrawal of funds
from the marital estate that had not already been accounted for.
Conversely, the trial court specifically found that Bradley’s
payment of legal expenses “were payments in addition to, and in
excess of, the funds Brad was using to cover his own personal
living expenses” and that he made no similar provision in
addition to the monthly allowance to Shondell to cover her own
legal expenses. Accordingly, how Shondell spent her monthly
allocation is ultimately immaterial to the determination of
whether Bradley dissipated the marital estate when he used
marital funds far in excess of the $15,000 allotted to him by the
Temporary Order to pay legal expenses.
¶87 And in any event, the trial court, quoting Boyer v. Boyer,
2011 UT App 141, 259 P.3d 1063, stated in response to Bradley’s
post-trial motion that the court “should also consider whether
there are exceptional circumstances that overcome the general
presumption that marital property [should] be divided equally
23. Bradley also asserts that because he testified at trial that his
personal expenses during the pendency of the divorce totaled
$221,850.26—which was significantly lower than what Shondell
had received during that same period—the court should have
considered this discrepancy “when balancing each party’s
spending.” But as discussed in footnote 20, the trial court declined
Shondell’s request to conduct “an equalization of income received
by Brad during the pendency of the divorce case,” which decision
neither party has challenged on appeal. Accordingly, it is unclear
how Bradley’s personal expenses actually compared to those of
Shondell.
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between the parties.” See id. ¶ 10. In this context, it stated that in
making its ruling, it “took into account the very different financial
positions of Brad and Shondell in attempting to fairly and
equitably address the obvious imbalance” that resulted from
Bradley’s “virtually unfettered access to the marital funds during
the pendency of the divorce proceedings” and his use of those
funds to pay his legal expenses without providing Shondell with
a similar benefit. See generally Dahl v. Dahl, 2015 UT 79, ¶ 126, 459
P.3d 276 (“[I]t is improper to allow one spouse access to marital
funds to pay for reasonable and ordinary living expenses while
the divorce is pending, while denying the other spouse the same
access.”). And Bradley has not challenged on appeal the court’s
determination that this represented such an exceptional
circumstance.24 Thus, to the extent that the court failed to consider
additional sources of marital income that were possibly available
to Shondell when it treated the $564,100 Bradley had spent on
legal expenses “as marital assets already received by Brad,” such
an omission did not constitute a clear abuse of discretion.
¶88 For the reasons articulated above, the trial court did not
commit a clear abuse of discretion when it found that Bradley had
dissipated the marital estate by using marital funds to pay his
legal expenses and that that amount should be regarded as a
distribution of marital assets already made to him.
24. Bradley’s challenge to the court’s finding that he, unlike
Shondell, had “virtually unfettered access to the marital funds
during the pendency of the divorce proceedings,” is limited to the
assertion that it “was not true and not supported by the
evidence.” But because Bradley has not marshaled the evidence
in support of the court’s finding, he has not carried his burden of
persuasion on this issue. See Pankhurst v. Pankhurst, 2022 UT App
36, ¶ 15, 508 P.3d 612 (“A party will almost certainly fail to carry
its burden of persuasion on appeal if it fails to marshal the
evidence sufficient to overcome the healthy dose of deference
owed to factual findings.”) (quotation simplified).
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III. Contempt of Court
¶89 Contempt of court is, among other things, the
“disobedience of any lawful judgment, order, or process of the
court.” Utah Code Ann. § 78B-6-301(5) (LexisNexis 2018). “As a
general rule, in order to prove contempt for failure to comply with
a court order it must be shown”—by clear and convincing
evidence—“that the person cited for contempt knew what was
required, had the ability to comply, and intentionally failed or
refused to do so.” Wadsworth v. Wadsworth, 2022 UT App 28, ¶ 108,
507 P.3d 385 (quotation simplified).
¶90 Bradley argues that the trial court abused its discretion
when it did not hold Shondell in contempt because he had proven
all the elements of contempt. He asserts that “Shondell ‘knew
what was required’ because the Temporary Order prohibited her
unilateral withdrawal of funds from marital accounts.”25 Bradley
also contends that “Shondell ‘had the ability to comply’ because
she could have not withdrawn the funds” and, instead, could
have waited for Bradley to pay the tax obligation, could have used
unnamed “other sources” to pay it, or could have first sought
permission from Bradley or the court to withdraw the funds from
ShoniK. Finally, he contends that “she intentionally failed or
refused to [comply with the Temporary Order] because she never
pursued her other options or requested permission to withdraw
funds.”
25. Specifically, the Temporary Order provided:
The parties are enjoined and restrained from
charging or incurring any debts or obligations
against each other and [Shondell] shall not make
any withdrawals or transactions from the parties’
line of credit . . . and from selling, encumbering,
secreting, or disposing of the assets of the parties
without written approval of the other party or order
of the court.
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¶91 Bradley’s argument overlooks the trial court’s specific
determination that, when “[v]iewing the totality of
circumstances,” Bradley had not proven “by clear and convincing
evidence, that Shondell knowingly and intentionally violated the
provisions” of the Temporary Order. In support of its conclusion
that, in light of the totality of the circumstances, Shondell lacked
the necessary intent to be in contempt of court, the court cited
several factors, including that the funds were used to pay a
marital tax obligation; that a few years earlier, albeit before the
Temporary Order was put into place, Bradley had made a similar
withdrawal from ShoniK to pay off the Idaho cabin; that Shondell
did not hide the withdrawal from Bradley; that provision had
already been made for the return of the funds from an expected
tax refund; and that Shondell acted on the advice of accountants.
¶92 Bradley does not address the court’s specific reasoning.
Instead, he asserts that “[n]either Shondell nor the trial court
contended that the elements of contempt were not met,” but that
the court instead held that Shondell should not be held in
contempt “because (1) the tax debt was marital and (2) Brad had
also once, years before the parties separated, withdrawn funds
from [ShoniK] to pay off the marital cabin.” In essence, Bradley
argues that for the aforementioned reasons, the court excused
Shondell from the contempt she demonstrably committed. But
this mischaracterizes the court’s conclusion.
¶93 Despite Bradley’s assertions otherwise, the court
specifically stated that Bradley had failed to prove, by clear and
convincing evidence, the third element of contempt: “that
Shondell knowingly and intentionally violated the provisions” of
the Temporary Order. It therefore did not, as Bradley argues,
excuse Shondell despite finding that all elements of contempt
were met. The purpose of the court’s discussion of the totality of
the circumstances surrounding Shondell’s withdrawal of ShoniK
funds was not to excuse Shondell’s actions but to explain why it
could not find, by clear and convincing evidence, that Shondell
intentionally violated the Temporary Order.
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¶94 Thus, because Bradley does not address the court’s specific
reasoning, he has not carried his burden of persuasion on this
issue, and we do not address it further. See Utah R. App. P.
24(a)(8).
CONCLUSION
¶95 The trial court did not abuse its discretion in its valuation
of certain assets or in its reconciliation and ultimate equitable
distribution of the marital estate. It likewise did not abuse its
discretion when it declined to hold Shondell in contempt of court.
¶96 Affirmed.
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