Porenta v. Porenta

This opinion is subject to revision before final
publication in the Pacific Reporter
2017 UT 78IN THE
SUPREME COURT OF THE STATE OF UTAH
LOUISE PORENTA,
Appellant,
v.
PATRICIA PORENTA,
Appellee.
No. 20160243
Filed November 15, 2017
On Direct Appeal
Third District, Salt Lake Dep’t
The Honorable Andrew H. Stone
No. 080923394
Attorneys:
Stephen A. Starr, Layton, for appellant
Jennifer P. Lee, Salt Lake City, for appellee
JUSTICE DURHAM authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, JUSTICE PEARCE, and
JUDGE MORTENSEN joined.
ASSOCIATE CHIEF JUSTICE LEE filed a dissenting opinion.
Having recused himself, JUSTICE HIMONAS does not participate
herein; COURT OF APPEALS JUDGE DAVID N. MORTENSEN sat.
JUSTICE DURHAM, opinion of the Court:
INTRODUCTION
¶1 Patricia and Robert Porenta were married for approximately
seventeen years before the couple filed for divorce. During the
divorce proceedings, Robert transferred his interest in the couple’s
marital home to his mother with the intent to avoid Patricia’s claim
to the home. After transferring his interest in the home, Robert died
and the divorce case was dismissed for lack of jurisdiction. Patricia
filed this action against Robert’s mother alleging that the transfer
PORTENTA v. PORTENTA
Opinion of the Court
was fraudulent under the Utah Fraudulent Transfer Act and sought
to gain full ownership of the home. On appeal, both parties concede
that the transfer was fraudulent at the time it was made. Robert’s
mother merely argues that the debtor-creditor relationship was
extinguished when Robert died, and that the Utah Fraudulent
Transfer Act requires an ongoing debtor-creditor relationship when
a claim under the act is filed, therefore entitling her to retain her
interest in the home. Robert’s mother also argues that the only
remedy available under the act is an award of money damages
rather than the return of the fraudulently transferred asset. While we
hold that an ongoing debtor-creditor relationship is required, we
affirm the district court’s grant of the marital home to Patricia.
BACKGROUND
¶2 The plaintiff, Patricia Porenta (Wife), married Robert
Porenta (Husband) in 1988. During their marriage, the couple
purchased a home as joint tenants. After the home was purchased
the couple began having marital problems, and in November 2005,
Wife filed for divorce. The disposition of the home was at issue in
the divorce as part of the distribution of the marital estate. During
the divorce proceedings, Husband filed a motion asking the divorce
court for an order to list and sell the home, with the net proceeds to
be held in escrow pending distribution by the court or by written
agreement of Husband and Wife.
¶3 Seven days after filing his motion, Husband executed a quit
claim deed transferring “an undivided 01/100th share of” Husband’s
interest in the home to himself and his mother, Louise Porenta
(Mother), a defendant in the current action, as joint tenants. The deed
transferred the remaining “undivided 99/100th share of” Husband’s
interest in the home to Mother as a tenant in common. Seven days
after executing the quit claim deed, Husband filed a reply
memorandum in support of his original motion to sell the home. In
the reply memorandum, Husband stated that “[o]nce the home is
listed, either side has the option of buying it. . . . If [Wife] wants the
house, she can buy it. Proceeds can then be paid into escrow pending
equitable division or by a court order.” The reply memorandum
does not disclose that Husband had already fraudulently transferred
a large portion of his interest in the home to Mother, retaining only a
minor fraction for himself.
¶4 The divorce court held a hearing on Husband’s motion, with
Husband, Wife, and Mother present. Husband continued to
represent to Wife and the divorce court that the home was still
within the marital estate under the jurisdiction of the divorce court,
and that he desired to sell the home and leave the proceeds in
2
Cite as: 2017 UT 78Opinion of the Court
escrow. The divorce court denied Husband’s motion, and reserved
the issue of the sale of the home until trial unless a “danger of loss”
arose.
¶5 Wife discovered the transfer to Mother in the spring of 2008,
roughly one and a half years after Husband executed the quit claim
deed. Then, in September 2008, while the divorce case was still
pending before the divorce court, Husband died. The divorce court
subsequently dismissed the case for lack of jurisdiction.
¶6 Shortly thereafter, Wife filed the current action against
Mother, asking the trial court to set aside the quit claim deed under
the Utah Fraudulent Transfer Act (UFTA). 1 Mother answered and
counterclaimed, alleging that the transfer was repayment of $200,000
in loans she had made to the couple. 2
¶7 In September 2014, a trial was held on whether the transfer
to Mother was fraudulent and whether the home should be awarded
to Wife. Nine days before the trial on Wife’s UFTA claim, without
any disclosure to Wife or the court, Mother executed a quit claim
deed purporting to transfer the entire home to Diamond Fork Land
& Livestock Company. This company, according to Mother, is
owned by Robert Copier, the attorney who represented Husband in
the underlying divorce case and represented Mother at the
beginning of the present action. At the September trial, Mother again
did not disclose the transfer to Diamond Fork. Rather, she actively
concealed the fact that she had transferred all of her interest a week
before the trial. During the September trial, Mother suffered from a
medical issue and was transported to the hospital. The trial was
continued, and Wife later learned of the transfer from Mother to
Diamond Fork. Wife then amended her complaint to include a claim
under UFTA that Mother had fraudulently transferred her interest in
the home to Diamond Fork and Robert Copier.
1The Uniform Fraudulent Transfer Act was amended,
renumbered, and renamed as the Uniform Voidable Transactions
Act, effective May 6, 2017. S.B. 58, 62nd Leg., Gen. Sess. (Utah 2017).
This amendment did not take effect until after all of the facts in this
case took place and oral arguments were already completed before
this court. For these reasons, we apply the 2016 version of UFTA
instead of the Uniform Voidable Transactions Act. All citations to the
Utah Code are from the 2016 version unless otherwise noted.
2 Mother also sought other relief that is not at issue in this appeal.
3
PORTENTA v. PORTENTA
Opinion of the Court
¶8 Trial finally resumed in November 2015, seven years after
the original complaint had been filed. The trial court ultimately held
that Husband’s transfer to Mother was fraudulent under UFTA.
Additionally, the trial court awarded Wife her attorney fees because
of Mother’s misconduct during trial. Diamond Fork and Robert
Copier defaulted, and the trial court found that Mother’s “transfer to
Diamond Fork Land & Livestock Company was an attempt to
transfer the subject property beyond the jurisdiction of the court to
avoid the remedy sought by” Wife. The trial court further found that
Mother “filed at least sixty motions during the pendency of this case,
many of them repeating previously denied motions.” It held that
Mother’s “defenses were brought in bad faith, made with the
intention of hindering or delaying restoration of the property to
[Wife] or forcing [Wife] to abandon her case because of the legal fees
required by [Mother’s] paperwork blizzard for repetitive, baseless,
unsupported motions.” Mother appealed.
STANDARD OF REVIEW
¶9 Mother appeals two issues. First, she argues that the Utah
Fraudulent Transfer Act requires an ongoing debtor-creditor
relationship when the action is filed, and that the death of Husband
extinguished any such relationship prior to Wife filing her UFTA
claim. Our interpretation of a statute is a question of law that we
review for correctness. Sill v. Hart, 2007 UT 45, ¶ 5, 162 P.3d 1099.
Whether a debtor-creditor relationship exists is an “application of a
legal standard to a set of facts unique to a particular case.” In re
Adoption of Baby B., 2012 UT 35, ¶ 42, 308 P.3d 382. Thus, it is a mixed
question in which “our review is sometimes deferential and
sometimes not.” Id. The amount of deference we grant to a lower
court is based to some extent on whether the question is more “fact-
like” or more “law-like.” Id. ¶¶ 43-47; see also Martinez v. Media-
Paymaster Plus/Church of Jesus Christ of Latter-day Saints, 2007 UT 42,
¶¶ 28–29, 164 P.3d 384. The question of whether a debtor-creditor
relationship is extinguished upon the death of the debtor during a
divorce proceeding is more law-like, as the only real fact at issue is
the death of the spouse. The remainder of the inquiry is a legal
question, determining the effect of that death on the debtor-creditor
relationship. Because this question is more law-like, we review this
mixed question for correctness. Adoption of Baby B., 2012 UT 35,
¶¶ 42, 44.
¶10 The second issue is whether UFTA authorized the trial court
to award Wife with Mother’s interest in the home, rather than
awarding Wife money damages. This is a question of statutory
interpretation, which we review for correctness. Sill, 2007 UT 45, ¶ 5.
4
Cite as: 2017 UT 78Opinion of the Court
ANALYSIS
¶11 Mother raises two issues on appeal: 1) whether the death of
Husband extinguished any debtor-creditor relationship, and
2) whether UFTA authorized the trial court to award Wife the entire
home, or if it was limited to awarding Wife with money damages. 3
3 The dissent attempts to insert an entirely new issue into the
appeal. It looks to UFTA’s definition of “claim” to determine
whether a property interest, such as the joint tenancy at issue in this
case, can be a “right to payment.” Infra ¶¶ 62, 77; see also UTAH CODE
§ 25-6-2(3) (stating that a “claim” is “a right to payment”). The
dissent opines that a property interest cannot be a “right to
payment,” and therefore, Wife’s interest in the joint tenancy cannot
be a “UFTA Claim.” Infra ¶¶ 77–81.
While this is a serious question, it is one that was never raised by
either party. The issue raised and argued by Mother was simply
whether “the requisite debtor/creditor relationship . . . terminated
upon [Husband’s] death.” Mother argued broadly that Wife had no
surviving claims when she filed her UFTA action because they were
all extinguished when Husband died. She did not argue that
property interests can never be “UFTA Claims.” In fact, Mother
conceded that Wife had a valid “UFTA Claim” at the time that
Husband transferred his interest in the home to Mother. Mother
argued that “a debtor/creditor relationship existed between
Husband and Wife” as soon as Wife threatened divorce, but that the
“abatement of the divorce action terminated any debtor/creditor
relationship between Husband and Wife.” Thus, Mother concedes
that Wife’s interest in the marital estate was sufficient to give rise to
a “UFTA Claim,” thereby creating a debtor-creditor relationship at
the time Husband transferred the home to Mother. If it was a
sufficient “UFTA Claim” at the time the asset was transferred, then
Mother concedes it was a sufficient “UFTA Claim” at the time Wife
filed her UFTA action so long as that claim survived the abatement
of the divorce proceeding.
The dissent raises this new issue sua sponte. Our recent opinion in
State v. Johnson outlines when an issue may be raised sua sponte by
the court. 2017 UT 70, ¶¶ 49–53, --- P.3d ---. The dissent in this case
does not engage in any of the analysis required under Johnson, nor
does it request any additional briefing or argument on this issue. Id.
¶ 45 (“[A]n appellate court should typically allow some form of
argument from the parties to ‘test a notion of [the court’s] own
invention before using it to justify a reversal.” (second alteration in
original) (citation omitted)). We decline to address this issue.
(continued . . .)
5
PORTENTA v. PORTENTA
Opinion of the Court
Finally, Wife argues that she is entitled to attorney fees under Utah
Rule of Appellate Procedure 33 because Mother’s appeal was
brought for an improper purpose. We address each issue in turn.
I. DEBTOR-CREDITOR RELATIONSHIP UPON
DEATH OF A SPOUSE
¶12 The trial court held that the transfer from Husband to
Mother was fraudulent under three different sections of UFTA: Utah
Code sections 25-6-5, 25-6-6(1), and 25-6-6(2). All of these require a
debtor-creditor relationship. UTAH CODE §§ 25-6-5, -6 (2016) (stating
that a transfer by a “debtor is fraudulent as to a creditor” when
certain requirements are met). A “debtor” is defined as “a person
who is liable on a claim.” Id. § 25-6-2(6) (emphasis added). A
“creditor” is defined as “a person who has a claim.” Id. § 25-6-2(4)
(emphasis added). The existence of a claim, or right to payment, is at
the heart of the debtor-creditor relationship. See id. § 25-6-2(3) (a
claim is a “right to payment”). Both of these definitions use the
present tense when discussing the claim, indicating that there must
be a claim or right to payment held by the creditor against the debtor
at the time a UFTA claim is filed. See In re Discipline of Bates, 2017 UT
11, ¶ 23, 391 P.3d 1039 (use of present tense informs our
interpretation of rules and statutes); Bagley v. Bagley, 2016 UT 48,
¶ 10, 387 P.3d 1000 (when interpreting a statute, “[t]he best evidence
of the legislature’s intent is the plain language of the statute itself”
(alteration in original) (citation omitted)).
¶13 UFTA’s apparent purpose is to prevent insolvent debtors
from transferring all of their assets to avoid their creditors’ claims,
and to provide a means whereby creditors can collect against a
fraudulently transferred asset. See UTAH CODE §§ 25-6-5, -6. A
creditor cannot typically execute against a fraudulently transferred
asset under UFTA if the creditor no longer has a claim against the
debtor because the debt has been satisfied or is otherwise no longer
enforceable. See Tolle v. Fenley, 2006 UT App 78, ¶ 46, 132 P.3d 63(Thorne, J., concurring in the result) (“The UFTA plaintiff herself
must have some current claim against the grantor, as it is only the
need to satisfy that claim that justifies revesting the property in the
grantor.” (citation omitted)); but see Rupp v. Moffo, 2015 UT 71, 358
P.3d 1060 (claim brought solely against transferee by bankruptcy
(continued . . .)
Regardless, this opinion should not be construed to hold that
property interests fit the definition of “claim;” we merely hold that
this issue is not properly before us.
6
Cite as: 2017 UT 78Opinion of the Court
trustee where it could not have been brought against debtor because
of bankruptcy).
¶14 In this case, the trial court held that “[t]he creditor-debtor
relationship, and [Wife’s] claim against [Husband], arose when
[Wife] filed for divorce on November 10, 2005.” It further held that
Wife’s underlying claim against Husband was for “the whole of the
marital estate, including the right to preserve the joint tenancy or
require [Husband] to convey his interest free and clear to [Wife].”
¶15 On appeal, Mother argues that the divorce court’s orders for
“child support and medical and insurance expenses” were vacated
when Husband died. 4 Furthermore, she argues that the debtor-
creditor relationship—based on the child support orders amounting
to $20,086.63—between Husband and Wife was extinguished at
Husband’s death. (Relying on Nelson v. Davis, 592 P.2d 594, 597
(Utah 1979) (“[W]hen the death of one or both parties to a divorce
action occurs during the pendency of the action, the action itself
abates and their status, including their property rights, reverts to
what it had been before the action was filed.”)).
¶16 However, an order and a claim are two distinct things. A
claim is “[t]he assertion of an existing right; any right to payment or
to an equitable remedy, even if contingent or provisional.” Claim,
BLACK’S LAW DICTIONARY (10th ed. 2014). An order or judgment is a
court’s adjudication of the viability of a claim. Id. Order (“A written
direction or command delivered by a government official, esp. a
court or judge.”). Mother did not argue that the district court erred
in holding that Wife had a claim to preserve the joint tenancy. Nor
did she argue why that specific claim—the primary claim at issue in
this case—abated upon Husband’s death. She argues primarily that
court orders that award a spouse with property abate upon the death
of a spouse. Regarding claims, she simply makes the general
statement that Wife’s claims against Husband are unenforceable
because Husband is dead and she cannot bring a claim against a
dead person.
¶17 Whether court ordered child support versus a claim for a
joint tenancy abate upon the death of a spouse are two very distinct
4 Our only task is to determine whether there is an underlying
claim to support Wife’s UFTA claim. The divorce court entered these
orders during the divorce case. Because we do not disturb the trial
court’s holding that Wife had an underlying claim for the joint
tenancy, we do not address the impact of the divorce case’s
abatement on these orders.
7
PORTENTA v. PORTENTA
Opinion of the Court
questions. Utah courts have only ever wrestled with whether court
orders dealing with property rights abate upon the death of a
spouse. Whether a claim for equitable distribution or some other
property claim survives the death of a spouse during a divorce
proceeding has never been addressed by this court, and we decline
to address it for the first time without adequate briefing. We first
address our precedent discussing the effect of the death of a party on
court orders entered during a divorce proceeding. Next, we address
the effect of the death of a party on a claim that was or could have
been brought against that party. Finally, we address some additional
arguments that Mother raised for the first time during oral
arguments concerning the debtor-creditor relationship.
A. Utah’s Treatment of Court Orders Dealing With Property
Rights in Divorce Proceedings Where One Party Dies Prior
to a Final Decree
¶18 We have previously addressed whether a court order
addressing marital property survives the death of a party in a
divorce proceeding, and we originally held that it does. In a string of
cases we purportedly abandoned our original holding, but we now
dismiss those cases as dicta and reaffirm our original holding that a
court order dealing with marital property survives the death of a
spouse.
¶19 A claim for equitable distribution arises when one party in a
marriage threatens divorce. See Bradford v. Bradford, 1999 UT App
373, ¶¶ 14–16, 993 P.2d 887 (holding that a debtor-creditor
relationship is created between husband and wife once divorce is
threatened); see also Dahl v. Dahl, 2015 UT 79, ¶ 26, --- P.3d --- (“Utah
law presumes that property acquired during a marriage is marital
property subject to equitable distribution.”). Once the parties file for
divorce, the divorce court has the power to enter “equitable orders
relating to the . . . property” belonging to the marital estate. UTAH
CODE § 30-3-5(1). See also Dahl, 2015 UT 79, ¶ 25 (“Utah has a long-
established policy in favor of the equitable distribution
of marital assets in divorce cases.”). “Thus, by legislative enactment
and our long-standing precedent, Utah has an interest in ensuring
that marital assets are fairly and equitably distributed during
divorce and that divorcing spouses both retain sufficient assets to
avoid becoming a public charge.” Dahl, 2015 UT 79, ¶ 25. When one
spouse transfers assets out of the marital estate during the divorce
8
Cite as: 2017 UT 78Opinion of the Court
proceeding with the intent to keep those assets out of the hands of
their spouse, the equitable division of assets is frustrated. 5
¶20 Our precedent has addressed what happens when a divorce
court enters an order that relates to the marital property, but then a
spouse dies before the final divorce decree is entered. Originally, a
court order that divided marital property did not abate upon the
death of a spouse before a final divorce decree could be entered. In
In re Harper’s Estate, this court held that
[w]hen the death of one of the parties occurs after the
entry of a divorce decree and before the decree is final
the decree becomes ineffective to dissolve the marriage,
death having terminated that personal relationship.
However, the occurrence of death does not abate the action
itself and to the extent that property rights are determined by
the decree it remains effective and becomes final . . . .
265 P.2d 1005, 1006 (Utah 1954) (emphasis added). This appears to
comport with the majority of jurisdictions. “The general rule
followed in virtually all jurisdictions is that,” after one of the spouses
dies during a divorce proceeding, and “during the time an appeal is
pending or during the time when an appeal may be taken, a divorce
or dissolution action abates with respect to marital status of the
parties but does not abate with respect to property interests affected
by the decree.” 27A C.J.S. Divorce § 194 (2017 update). 6
5 We note that the district court in this case held that Husband’s
transfer of his interest in the home “was made with actual intent to
defraud, hinder or delay [Wife’s] claim [for the home] against
[Husband].” Mother concedes on appeal that Husband’s transfer
was fraudulent at the time it was made.
6 See, e.g., Bridgeman v. Bridgeman, 391 S.E.2d 367, 369 (W. Va.
1990) (“[D]ivorce actions abate at death except as to property rights. . . .
Thus, an alimony award that terminates on either party’s death may
not be appealed after a party’s death; on the other hand, a lump-sum
alimony award . . . may be appealed after a party’s death, because the
award is chargeable against the estate.” (emphases added)); Van
Emmerik v. Colosi, 972 P.2d 1034, 1036 n.1 (Ariz. Ct. App. 1998)
(“Although the [divorce] action abates,” a “transfer of property in
alleged violation of [a] preliminary injunction” remains as a “viable
[claim] for resolution in the probate [court].”); Goodloe v. LaRoche
Indus., Inc., 686 So.2d 335, 337–38 (Ala. Civ. App. 1996) (stating that
property rights at issue in a divorce proceeding are not abated upon
(continued . . .)
9
PORTENTA v. PORTENTA
Opinion of the Court
¶21 Despite this general agreement among jurisdictions, this
court, without analysis, purportedly abandoned the majority
approach in Daly v. Daly, 533 P.2d 884 (Utah 1975). In that case, this
court applied the rule of In re Harper’s Estate, but then prospectively
reversed “that part of the decision in In re Harper’s Estate . . . having
to do with determination of property rights . . . .” Id. at 885. Despite
this statement being pure dictum, as recognized in a separate
opinion, id. at 886 (Crocket, J., concurring and dissenting), the
majority went on to craft a new rule: “when the death of one or both
of the parties occurs after the entry of a divorce decree and before
the decree is final, the decree becomes ineffective and is deemed and
held to be of no further force or effect,” id. at 885–86. The court in
Daly did this without any analysis and the statement did not affect
the outcome of the case. “For a decision to become precedent and
trigger stare decisis, it must be (1) [a] deliberate or solemn decision
of a court or judge [2] made after argument of a question of law
fairly arising in a case, and [3] necessary to its determination.” State
v. Robertson, 2017 UT 27, ¶ 25, --- P.3d --- (alterations in original)
(citation omitted) (internal quotation marks omitted). Without
affecting the ultimate decision of the case, the statement in Daly was
not necessary to the court’s determination and is clearly dictum.
¶22 This statement was mentioned in Nelson v. Davis, 592 P.2d
594 (Utah 1979). However, it was again applied in dictum. In that
case, a mother going through a divorce executed a quit claim deed to
her daughter and also executed a “Notice of Termination of Joint
Tenancy.” Id. at 596. This court held that both the deed and the
notice of termination had no legal effect for various reasons and,
therefore, neither the daughter nor the mother’s estate had any
interest in the home. The daughter raised an alternative contention
that “even if she does not take by the deed, she should be entitled to
succeed to her mother’s interest in the property as the executrix of
her estate.” Id. at 597. This court stated that, from its prior analysis
regarding the deed and notice of termination, “it is obvious that
there was never any such conversion of the joint tenancy to a
tenancy in common.” Id. Thus, the husband “became the owner of
the home as the surviving joint tenant,” and the mother (and by
extension, the mother’s estate) did not have any interest in the home.
Id. After holding that the mother and the mother’s estate did not
(continued . . .)
the death of a party; rather, the action abates in regard to only the
“marital status of the[] parties.”) overruled on other grounds by Banks v.
Premier Serv. Co., 184 So. 3d 370 (Ala. Civ. App. 2014).
10
Cite as: 2017 UT 78Opinion of the Court
have any interest in the home, the court went on to state that even if
the mother had acquired some other interest in the home during the
divorce proceeding, “the death of one or both parties to a divorce
action . . . during the pendency of the action [causes] the action itself
[to] abate[] and [the married couple’s] status, including their
property rights, reverts to what it had been before the action was
filed.” Id. This was clearly dictum as it did not affect the outcome of
the case. The court had already established that the joint tenancy was
never severed and that the mother, and her estate, did not have any
remaining interest in the home.
¶23 We abandon any implication that this statement was
anything more than dictum. The dissenting opinion argues that this
dictum from Nelson means that all court orders and all claims that
arise in a divorce proceeding abate upon the death of a spouse. 7 See
infra ¶ 60 (“[A]ny right or claim arising from the existence or threat
of a divorce proceeding is extinguished upon the death of one of the
spouses.”). Even if Nelson’s statement wasn’t dictum, it does not do
the work that the dissent argues it does—it does much more. The
dissent argues that this statement means that all claims arising from
a divorce abate upon the death of a spouse. However, if we were to
apply the meaning and intent of Nelson’s actual statement in this
case, then the property rights of Husband and Wife would have
reverted to “what [they] had been before the [divorce] action was
filed.” Nelson, 592 P.2d at 597. In Nelson, the mother held a joint
tenancy in the home with her husband prior to the divorce
proceeding. Id. at 595. The court used Daly’s dictum statement to say
that, even if a tenancy in common had somehow been created or the
mother had gained some other interest that could pass to her estate
in the divorce, that interest was extinguished upon her death during
the divorce proceeding and the parties’ interest in the home
7 In citing this dictum from Nelson, Mother argued that it only
stands for the proposition that all court orders dealing with property
rights abate upon the death of a party. Her opening brief argued
that, “[i]t is important to note that the ‘property rights’ which revert
upon abatement of the divorce action are only . . . those rights
granted by the court via an order issued during the divorce.” Wife
countered that the only court orders that abate are interlocutory
orders that do not have an element of finality. She conceded that an
ongoing order for support payments would cease upon the death of
the spouse. But she argued that orders instructing a spouse to pay a
one-time support payment for a set amount should survive because
there was “nothing [left] for further determination of the court.”
11
PORTENTA v. PORTENTA
Opinion of the Court
“revert[ed] to what it had been before the action was filed.” Id. at
597. Nelson’s dictum stands for the proposition that the parties’
property interests in the marital estate are frozen in time during the
pendency of divorce litigation.8 If a party dies before the divorce
becomes final, than the couple’s status, including property rights in
the marital estate, are transported back in time to what they held
before the divorce case was filed. Thus, the only alteration in
property rights that are available is a final divorce decree that
divides the marital estate.
¶24 This court failed to apply this outcome in In re Estate of
Knickerbocker, 912 P.2d 969 (Utah 1996). After overruling a portion of
Nelson that is not at issue in this case, we stated that a litigant’s
property rights were not frozen by a divorce proceeding when a
court order 9 prohibits the transfer of property out of the marital
estate. Id. at 976. In that case, we held that a spouse could sever a
joint tenancy and create a tenancy in common in the marital home
because the home remained in the name of the spouse, 10 and thus,
8 Mother tries to limit Nelson’s statement by arguing that it only
unwinds court orders dealing with property rights. However, the
language in Nelson did not limit it to court orders, and there was no
court order granting property interests to the mother for the court to
unwind. The Nelson court clearly intended the statement to unwind
any severance of the joint tenancy that might have occurred during
the divorce proceeding, even though it was entirely unnecessary to
do so since it has just ruled that the mother’s attempt to sever the
joint tenancy had no effect under the then common law. 592 P.2d at
596–97.
9 We note that no order was issued in the divorce court here
prohibiting the transfer of the home. However, there was likely no
order entered due to a fraud on the court. As mentioned above,
Husband continually asserted that the home remained within the
jurisdiction of the court. The divorce court refused to sell the home
and divide the proceeds under the belief that it would remain in the
court’s jurisdiction, specifically stating that it would revisit the
request to sell the home if a “danger of loss” arose. If the court had
been aware that Husband considered transferring his interest in the
home, it likely would have ordered the sale of the home or entered
an order prohibiting him from taking such an action.
10 The spouse in Knickerbocker eventually transferred her interest
in the home to the trustees of her revocable trust. 912 P.2d at 972.
However, we treated it the same as having the title in her own name
(continued . . .)
12
Cite as: 2017 UT 78Opinion of the Court
remained in the jurisdiction of the divorce court. Id. at 982. Such an
outcome would not be available under the Nelson dictum. If we apply
Nelson on its face then the severance of the joint tenancy would be
ineffective because the parties would be placed back in their original
positions upon the death of either spouse.
¶25 This was not the outcome in Knickerbocker, and for good
reason. As we stated in Knickerbocker, a divorce case or any order
prohibiting a transfer of marital property in a divorce case is not
intended to “‘freeze’ the status of the parties’ assets,” or to “freeze
each party’s estate plan.” 912 P.2d at 976. Parties subject to a court
order similar to that in Knickerbocker are merely prevented from
unilaterally dissipating the marital estate by transferring marital
assets to a third party, thereby removing them from the jurisdiction
of the divorce court and preventing equitable distribution of those
assets. 11
¶26 Before the divorce action was filed in this case, Husband
and Wife were joint tenants. Wife did not acquire her interest as a
joint tenant in the property during the divorce proceeding; it pre-
existed as an interest that was part of the marital estate and was
subject to equitable distribution. Under the Nelson dictum, we would
be required to restore the joint tenancy. As joint tenants, Wife would
have succeeded to Husband’s interest in the home upon Husband’s
death. If the statements in Nelson are not dictum but are binding
precedent, we must affirm the district court on alternative grounds.
(continued . . .)
because “[t]he power of revocation is tantamount to ownership of
the trust property;” therefore, the spouse did not “insulate the trust
assets from the jurisdiction of the trial court.” Id. at 977 (citation
omitted).
11 Knickerbocker dealt directly with the effect of a court order
prohibiting the transfer of marital property outside the jurisdiction
of the court. 912 P.2d at 976. However, our analysis here is not
diminished. If Nelson applied, then it would have mandated a
different outcome in Knickerbocker regardless of the court order. We
would have placed the home back in the hands of the husband
because once the wife died in that case, Nelson’s dictum would
require us to place the parties in the same position as they were
before the divorce action was filed. And in Knickerbocker, as in this
case, the husband and wife were joint tenants, so the husband would
have received the wife’s interest in the home because of her death. Id.
at 972.
13
PORTENTA v. PORTENTA
Opinion of the Court
However, we reject this statement as dictum, and reaffirm our
holding in In re Harper’s Estate regarding the effect of the death of a
spouse on court orders dealing with property rights. 12 The death of a
spouse during a divorce proceeding abates the action concerning the
dissolution of the marriage, but it “does not abate the action itself”
when certain “property rights” have been determined by the court.
In re Harper’s Estate, 265 P.2d at 1006.
¶27 Conversely, all interlocutory orders that are effective only
during litigation abate upon the dismissal of a divorce case. In
Knickerbocker, the district court ordered that, “[e]ach of the parties is
12 We likewise reject the dissent’s contention that all claims
arising in a divorce abate under the Daly and Nelson dicta. The
dissent believes that we are reaching beyond the briefing when we
abandon this dicta, and are therefore engaging in the same conduct
that we reject in our footnote 3. Infra ¶ 70. We see the matter
differently. While Mother made the very broad statement that there
“was no ‘debtor-creditor relationship between [Husband] and
[Wife]” when the claim was filed, infra ¶ 80 n.3, she only ever made
the specific argument that there is no debtor-creditor relationship
because it abated at the death of Husband. She never questioned
whether a property interest could be a claim. Indeed, she conceded
as much when she argued that the transfer was fraudulent (as that
term is understood under UFTA) at the time Husband transferred
the home. Supra ¶ 11 n.3. If the transfer was fraudulent at the time it
was made, then Mother concedes that Wife necessarily had a valid
underlying “claim” at some point. She argues only that it abated.
“[W]e are not a depository in which the appealing party may dump
the burden of argument and research.” Bank of Am. v. Adamson, 2017
UT 2, ¶ 11, 391 P.3d 196. Nevertheless, the dissent takes the entire
burden of argument and research in reaching an issue that was
conceded by the appellant.
It is true that Wife never specifically asked us to abandon our
dicta statements in Daly and Nelson. However, she put this line of
cases at issue by providing specific arguments that certain court
orders and claims that arise in a divorce proceeding should survive
the death of a spouse. Supra ¶ 23 n.7; infra ¶ 31. Additionally, she
cited secondary sources showing that Utah is nearly alone in its
adoption of the standard set forth in Daly and Nelson. Supra ¶ 20;
infra ¶ 31. Nearly every other jurisdiction follows the rule (or
something similar) to that laid out in In re Harper’s Estate. Supra ¶ 20
& n.6.
14
Cite as: 2017 UT 78Opinion of the Court
restrained from selling . . . the assets of the parties . . . during the
pendency of this action.” 912 P.2d at 976. During the pendency of the
divorce action, the wife died and the divorce proceeding “died with”
her. Id. at 977. The court’s order prohibiting the transfer of marital
assets abated because it was expressly limited to the “pendency of
this action.” 13 Id. at 976.
B. Mother Inadequately Briefed Whether a Claim Arising in the
Context of a Divorce Proceeding Abates Upon the Death of a Spouse
¶28 While we reaffirm our precedent in In re Harper’s Estate, we
note that this line of precedent addresses only the effect of the death
of a party on a court order dealing with property rights. Indeed,
Mother expressly argued that the Nelson v. Davis line of cases only
applies to “those [property] rights granted by the court via an order
issued during the divorce.” She did not argue that it applied to any
claims that could be held by Wife. None of these cases address the
effect of the death of a party on a claim for equitable distribution or
any other property rights claim. This question appears to be an issue
of first impression in Utah.
¶29 “On appeal, the burden is upon the appellant to convince us
that the trial court committed error . . . .” Brigham v. Moon Lake Elec.
Ass’n, 470 P.2d 393, 397 (Utah 1970). When an appellant fails to
adequately argue an issue on appeal, she will “almost certainly fail to
carry [her] burden of persuasion on appeal.” Bank of Am. v. Adamson,
2017 UT 2, ¶ 12, 391 P.3d 196 (citation omitted). Mother spent the
vast majority of her opening brief on whether court orders abate
upon the death of a spouse in a divorce proceeding. Concerning
claims, rather than court orders, Mother simply stated that Wife “has
no currently enforceable claim against Husband” because “Husband
is dead” and Wife “cannot haul Husband back into the divorce
court.” Essentially, Mother argued in her opening brief that no claim
exists simply because Husband died. Wife countered by arguing that
her property claims “could be brought against the [Husband’s]
estate.” She argues that Utah Rule of Civil Procedure 25 is evidence
of the ability to substitute the deceased party with the deceased
party’s estate. Mother never filed a reply brief explaining why such a
claim does not extend to Husband’s estate.
¶30 At oral argument, Mother conceded that any claim held by
Wife against Husband that survived the abatement of the divorce
13This is not unique to the area of divorce law. Interlocutory
orders that expressly expire at the end of litigation do just that,
regardless of the type of case or how the litigation finally ends.
15
PORTENTA v. PORTENTA
Opinion of the Court
proceeding extended to Husband’s estate once he died. 14 We agree.
Claims that survive the death of a party are typically chargeable
against that party’s estate. See UTAH R. CIV. P. 25(a)(1) (“If a party
dies and the claim is not thereby extinguished, the court may order
substitution of the proper parties.”); Bridgeman v. Bridgeman, 391
S.E.2d 367, 369 (W. Va. 1990) (“[D]ivorce actions abate at death except
as to property rights. . . . because the award is chargeable against the
estate.” (emphasis added)). Yet, Mother’s only argument that Wife
did not have a claim (rather than court-ordered property rights)
against Husband was because she could not haul her dead Husband
back into the court to bring such a claim. She did not argue why
Wife’s property rights claim cannot be brought against Husband’s
estate. 15 This is fatal.
¶31 The dissent argues that Mother’s briefing did not address
this issue because Mother “is arguing for a broad rule that doesn’t
require the nuance now demanded by the majority.” 16 Infra ¶ 95.
14The exchange between the court and Mother’s counsel went as
follows: Question— “if there is a claim that still exists that was not
abated by the divorce, might it be a claim involving the husband’s
estate?” Answer— “Yes your honor, it would be, and in fact [Wife]
even admits that on page 11 of her brief that the claim, the demand,
now resides with the husband’s estate.” Oral Argument at 6:19
(April 2017), https://www.utcourts.gov/opinions/streams/sup/.
The dissent argues that Mother’s concession in oral argument that
the claim extended to Husband’s estate was limited by counsel’s
statement that the claim would extend only if such a claim survived
the dismissal of the divorce proceeding. Mother has failed to
adequately challenge the trial court’s holding that Wife had a claim
for the marital estate, including the joint tenancy. We therefore
affirm the trial court’s holding absent adequate argument. Because
we hold that Mother has failed to adequately argue that Wife’s claim
for the joint tenancy abated when the divorce proceeding was
dismissed, Wife’s claim for the joint tenancy attached to the estate
upon Husband’s death, as conceded by both parties.
15Mother argued, for the first time in oral arguments, that Wife
brought a claim that was barred by the estate. She also argued that
Wife’s claim should be reduced according to probate law. We
address these arguments below.
16As mentioned above, the dissent argues that the Nelson dictum
stands for the proposition that all claims arising in a divorce
proceeding abate upon the death of a spouse. See infra ¶ 60.
(continued . . .)
16
Cite as: 2017 UT 78Opinion of the Court
However, we do not demand this nuanced argument. It is
demanded by Wife’s counter-argument that property claims brought
in a divorce proceeding survive the death of a spouse. She argued
that while “the death of a spouse ends the cause of action for divorce
and abates any pending action for divorce[,] . . . insofar as a divorce
action seeks an adjudication of property rights, the cause of action
survives and may be revived.” (Quoting 24 AM. JUR. 2d Divorce &
Separation § 119 (2017)). She further argued that “[c]laims relating to
property rights” are not personal, unlike seeking a termination of the
marital relationship, and could be brought against the decedent’s
estate.
¶32 Mother never filed a reply brief and never grappled with
this important question. As the appellant, Mother had the burden of
establishing that the district court erred. Without adequate briefing
from Mother, we do not believe the time is right to rule on this issue.
We are rightly hesitant to address an issue of first impression
without the aid of adequate adversarial briefing. Mother failed to
adequately address the question of whether Wife’s claim for the joint
tenancy survived the death of Husband and thereby failed to meet
her burden on appeal, so we affirm the district court’s holding.
Because of this, we hold that Wife’s claim against Husband for the
joint tenancy extended to Husband’s estate. 17 The question then
becomes whether Wife’s claim is somehow barred against the estate
or is no longer for the entire marital estate. We do not reach these
issues, however, because Mother failed to brief them or to include an
adequate record on appeal. She also failed to demonstrate that they
were preserved at trial.
C. Claims Raised by Mother for the First Time During Oral Argument
¶33 After conceding at oral argument that any claim that
survived the death of Husband extended to his estate, Mother
alleged for the first time that Wife actually brought a claim against
the estate, but that it was disallowed by the personal representative
and Wife did not timely seek review by the probate court. Thus, her
(continued . . .)
However, we have already addressed this contention and abandoned
the Daly and Nelson dicta and reaffirmed our holding in In re Harper’s
Estate.
17 Again, we do not hold at this time that equitable distribution or
other property claims survive the abatement of a divorce proceeding.
We merely state that if they do, then they may be asserted against
the decedent’s estate.
17
PORTENTA v. PORTENTA
Opinion of the Court
underlying claim against the estate is time barred. If the underlying
claim against the debtor is barred then a UFTA claim against the
transferee could be barred as well. But see Goldberg, Bowen & Co. v.
Demick, 247 P. 261, 263–64 (Cal. Dist. Ct. App. 1926) (holding that
statute of limitations defense is personal to the debtor and may not
be asserted by the transferee in a fraudulent conveyance action). But
Mother raised this argument for the first time during oral argument,
and has not identified preservation in the trial court. We do not
address issues raised for the first time during oral argument. Allen v.
Friel, 2008 UT 56, ¶¶ 7–8, 194 P.3d 903 (appellants failing to raise an
issue in their opening brief have waived the issue on appeal). This
alone is fatal to Mother’s arguments.
¶34 Additionally, Mother failed to point to any part of the
record before us to support the assertion that a claim against the
estate was made, or the result of such a claim. On appeal, “we do not
abrogate a [party’s] obligation or assume the role of an advocate by
researching all applicable law and searching the entire record for
each and every indication of possible or potential error.” State v.
Honie, 2002 UT 4, ¶ 67, 57 P.3d 977 (citation omitted). This is
especially true where Mother could not confirm what claims were
brought by Wife against the estate, when they were brought, or
whether a probate court ever addressed those claims. While the
Utah Uniform Probate Code provides for different instances in
which a claim against an estate may be barred, Mother did not cite to
any authority or make any legal argument as to why Wife’s claim
against the estate is barred. She merely stated that Wife’s claim is
time barred. In the absence of timely argument or a record on the
question of whether Wife’s claims against the estate are time barred,
we will not assume as much.
¶35 At oral argument, the nature of Wife’s claim against the
estate—whether it is for the entire marital estate or some lesser
amount—was also raised for the first time. Once again, Mother did
not raise this issue in her opening brief, nor did she argue how this
should affect our analysis during oral arguments, nor point to any
will or other evidence in the record to indicate how Wife’s claim
should be decreased. For these reasons, we do not address this issue.
¶36 “On appeal, the burden is upon the appellant to convince
us that the trial court committed error . . . .” Brigham, 470 P.2d at 397.
Additionally, “when an appellant fails to provide an adequate
record on appeal, we presume the regularity of the proceedings
below. As this court has previously stated, ‘When crucial matters are
not included in the record, the missing portions are presumed to
support the action of the trial court.’” State v. Pritchett, 2003 UT 24,
18
Cite as: 2017 UT 78Opinion of the Court
¶ 13, 69 P.3d 1278 (citation omitted). In this case, Mother is the
appellant. Once Wife won in the trial court, the burden shifted to
Mother to persuade us, on appeal, that the trial court erred. This
included Mother’s duty to provide an adequate record. UTAH R. APP.
P. 11(e)(2) (“If the appellant intends to urge on appeal that a . . .
conclusion is unsupported by . . . the evidence, the appellant shall
include in the record a transcript of all evidence relevant to such . . .
conclusion. Neither the court nor the appellee is obligated to correct
appellant’s deficiencies in providing the relevant portions of the
transcript.”); id. 24(a)(9) (an appellant’s argument must include
“citations to the . . . parts of the record relied on”). Because Mother
has failed to provide us with timely argument or to point to the
record to challenge the trial court’s findings and conclusions, we
presume that Wife’s claim for the “whole of the marital estate,
including the right to preserve the joint tenancy,” extended to
Husband’s estate upon Husband’s death, and that this claim is still
valid. Based on this, a debtor-creditor relationship existed between
Husband’s estate and Wife at the time Wife filed her UFTA claim.
¶37 While Wife’s underlying claim for the joint tenancy is
against Husband’s estate, her UFTA claim was brought only against
Mother. But Wife’s failure to bring her UFTA claim against the estate
as well as Mother is not fatal to her claim. Nothing in UFTA requires
a fraudulent transfer claim to be brought by the creditor against the
debtor. See Hoesman v. Sheffler, 886 N.E.2d 622, 627 (Ind. Ct. App.
2008) (noting that “nothing under” Indiana’s Fraudulent Transfers
Act “indicates that a debtor is a mandatory party”). Indeed, UFTA
allows a claim to be brought by the creditor directly against the
transferee, even though the transferee was not the party that made
the fraudulent transfer. See UTAH CODE § 25-6-9(2) (“[J]udgment may
be entered against . . . the first transferee of the asset or the person
for whose benefit the transfer was made.”); see also Rupp v. Moffo,
2015 UT 71, ¶ 4, 358 P.3d 1060 (claim brought by bankruptcy trustee
directly against transferee without the debtor being added as a
party).
¶38 While the debtor does not always need to be added as a
defendant, we note that Utah Rule of Civil Procedure 19 applies to
UFTA claims, and in a fraudulent transfer case, the underlying
debtor is typically a necessary and indispensable party when “the
creditor has not reduced [the underlying] claim to judgment.” 37
AM. JUR. 2d Fraudulent Conveyances and Transfers § 163 (2017 update).
This is because the debtor has an interest in proving whether the
creditor’s underlying claim against the debtor is valid. See UTAH R.
CIV. P. 19(a) (a person is a necessary party when they have an
“interest relating to the subject of the action” and the person will be
19
PORTENTA v. PORTENTA
Opinion of the Court
“impair[ed] or impede[d]” from protecting that interest if not
added). Thus, when the creditor has not already obtained a
judgment on the underlying claim, the debtor is typically necessary
to “be heard in regard to the validity or amount of the [underlying]
claim” that serves as the basis for the UFTA claim. 37 AM. JUR. 2d
Fraudulent Conveyances and Transfers § 163 (2017 update).
¶39 Mother, however, has not argued on appeal that Husband’s
estate should be added as a defendant under Utah Rule of Civil
Procedure 19, nor did the estate assert an interest pursuant to rule
19. UTAH R. CIV. P. 19(a) (“A person . . . shall be joined as a party in
the action if . . . he claims an interest relating to the subject of the
action . . . .”). In the trial court, Mother did argue that the estate was
an indispensable party, but she only moved to have herself added in
her official capacity, as personal representative of Husband’s estate,
as a plaintiff rather than as a defendant. This would have positioned
her both as plaintiff (in her official capacity) and defendant (in her
individual capacity) in the case. Wife acquiesced to joining the estate
as a defendant because the estate “could conceivably assert a claim
that would be relevant to the issues of this case,” but argued that it
made no sense to add the estate as a plaintiff. The trial court held that
Mother could not add the estate as a plaintiff, but that she could
“join herself, in her capacity as personal representative of the
decedent’s estate, as a second Defendant.” Mother (in her individual
and official capacities) refused to add the estate as a defendant. Thus,
any argument that the estate was a necessary party has clearly been
waived.
¶40 While there may be questions about whether Wife’s
underlying claim is still for the “entire marital estate” and whether
any claim against the estate may still be brought, Mother has not
adequately raised these issues in her briefing nor provided an
adequate record for us to review them on appeal. Without adequate
argument that Wife’s claim for the joint tenancy abated when
Husband died, we refuse to vacate the holding of the district court.
Additionally, Mother’s concession that any claim “that still exists
that was not abated by the divorce” extends to the estate appears to
be an accurate statement of the law. Without Mother pointing to
anywhere in the record showing that the claim against the estate is
barred, we must affirm the district court’s holding that Wife had a
claim against Husband at the time she filed the current suit. We now
turn to whether the trial court erred in granting Wife the entire home
rather than money damages.
20
Cite as: 2017 UT 78Opinion of the Court
II. REMEDIES AVAILABLE UNDER THE UTAH FRAUDULENT
TRANSFER ACT
¶41 Utah Code section 25-6-8 provides the remedies available to
a creditor when a transfer is fraudulent. Mother argues that section
25-6-8 does not authorize the trial court’s holding that Wife “is the
sole owner of the [home] in fee simple absolute and that neither
[Mother] nor any subsequent transferees have any interest
whatsoever in this property.” She argues that, while an earlier
version of UFTA allowed for a transfer to be voided, the “current
version of UFTA now only allows a creditor . . . to obtain a judgment
in an amount necessary to satisfy her right to payment based on the
value of the property transferred.”
¶42 When interpreting a statute, our primary objective is “to
ascertain the intent of the legislature.” Bagley v. Bagley, 2016 UT 48,
¶ 10, 387 P.3d 1000 (citation omitted). We have consistently stated
that “[t]he best evidence of the legislature’s intent is the plain
language of the statute itself.” Id. (alteration in original) (citation
omitted). Accordingly, “we first look to the plain language of the
statute,” id. (citation omitted), while reading the “the statute as a
whole.” State v. Jeffries, 2009 UT 57, ¶ 11, 217 P.3d 265.
¶43 Prior to 1988, UFTA provided that a fraudulent transfer
“shall be void,” UTAH CODE § 25-1-8 (1987), and that creditors had
the right to “have the conveyance set aside,” id. § 25-1-15 (1987). In
1988, UFTA was amended, removing the reference to the transfer
being void18 and altering the language describing what remedies are
available for a fraudulent transfer. The 2016 version of Utah Code
section 25-6-8 reads
(1) In an action for relief against a transfer or
obligation under this chapter, a creditor, subject to the
limitations in Section 25-6-9, may obtain:
(a) avoidance of the transfer or obligation to the
extent necessary to satisfy the creditor’s claim;
(b) an attachment or other provisional remedy
against the asset transferred or other property of the
transferee in accordance with the procedure prescribed
by the Utah Rules of Civil Procedure;
18 While the reference to the transfer being “void” was removed,
the 2016 version reads that “a transfer is voidable” under Utah Code
section 25-6-8(1)(a). UTAH CODE §§ 25-6-9(2) (emphasis added).
21
PORTENTA v. PORTENTA
Opinion of the Court
(c) subject to applicable principles of equity and
in accordance with applicable rules of civil procedure:
...
(iii) any other relief the circumstances
may require.
(2) If a creditor has obtained a judgment on a claim
against the debtor, the creditor, if the court orders, may
levy execution on the asset transferred or its proceeds.
¶44 The trial court granted Wife the home under subsection
(1)(a). It held that “the ‘extent necessary to satisfy’ [Wife’s] nascent
claims that were created by the filing of the divorce action is to
entirely set aside the Transfer.” (quoting UTAH CODE § 25-6-8(1)(a)).
Section 25-6-8(1)(a), discussing the “avoidance of the transfer,” is
further clarified by section 25-6-9(2) which provides that,
to the extent a transfer is voidable in an action by a
creditor under Subsection 25-6-8(1)(a), the creditor may
recover judgment for the value of the asset transferred
. . . or the amount necessary to satisfy the creditor’s
claim, whichever is less.
(Emphases added).
¶45 Mother argues that this language limits the remedy
available under section 25-6-8(1)(a) to a judgment for money
damages. However, this interpretation does not comport with the
plain language of the statute. Section 25-6-9(2) states that a trial court
“may” authorize money damages when a “transfer is voidable.” Id.
(emphases added). This language gives discretion to the trial court in
determining whether to set aside the transfer or to award damages.
See In re Hill, 374 B.R. 745, 749 (Bankr. S.D. Cal. 2007) (stating that
“Congress certainly could have written ‘shall . . .’, but instead
Congress wrote ‘may’, which grants this Court discretion.”); Ockey v.
Lehmer, 2008 UT 37, ¶ 18, 189 P.3d 51 (stating that a “deed that is
voidable” may be “set . . . aside” by an “injured party”). This
interpretation is bolstered by the fact that the legislature specifically
allows “avoidance of the transfer” as a remedy. UTAH CODE § 25-6-
8(1)(a).
¶46 Husband executed a quit claim deed to Mother. Voiding
that deed places title back into the name of Husband. Because we
hold that Husband’s transfer to Mother was fraudulent under UFTA,
the joint tenancy was never severed and Wife likely takes title to the
property through the operation of law. See Hobbs v. Fenton, 479 P.2d
22Cite as: 2017 UT 78Opinion of the Court
472, 473 (Utah 1971) (stating that a joint tenancy includes “full rights
of survivorship” and that title “automatically vest[s]” in the
surviving joint tenant upon the death of the co-tenant).
¶47 We note that Wife only likely takes title because of a
procedural oddity which requires remand for further factual
findings. Utah Code section 25-6-9(2) provides that “[a] judgment
[under subsection 25-6-8(1)(a)] may be entered against: (a) the first
transferee of the asset . . .; or (b) any subsequent transferee other
than a good faith transferee who took for value or from any
subsequent transferee.”
¶48 Just prior to trial on Wife’s UFTA claim, Mother transferred
her interest in the property to Diamond Fork Land & Livestock
Company—a company that appears to be owned by Robert Copier
(one of Husband’s and Mother’s attorneys). The trial court found
that this transfer was made in bad faith with the intent to “transfer
the subject property beyond the jurisdiction of the court to avoid the
remedy sought by [Wife].” Both Diamond Fork and Mr. Copier were
added as parties in this action after Wife discovered the transfer, and
both defaulted. Thus, we may declare the transfer from Husband to
Mother void, and we may also declare the transfer from Mother to
Diamond Fork void because Diamond Fork was not a good faith
transferee and because it defaulted. See UTAH CODE § 25-6-9(2)
(stating that judgment may be entered against any “subsequent
transferee” so long as they did not take the property in good faith).
¶49 However, we do not know the current status of the title.
Diamond Fork apparently attempted to further transfer an interest in
the property to another individual, who later “denied claiming any
interest in the property.” While, based on the record before us, it
appears as though no other parties claim an interest from Mother or
Diamond Fork, we cannot be sure at this point. If Diamond Fork sold
its interest in the property to a good faith buyer, money damages
against Mother and Diamond Fork may be the only remedy available
under Utah Code section 25-6-8(1)(a). Given the fact that Mother and
Mr. Copier appear to have no qualms with transferring the property
while this case is pending, we determine that a remand to verify the
current status of the title is warranted.
¶50 We therefore remand to the trial court for further factual
findings and its determination on this issue. We also take this
opportunity to give a word of warning to Mother, Mr. Copier,
Diamond Fork Land & Livestock Company, and any other party or
attorney who claims an interest in the property. Given Mother’s and
Mr. Copier’s apparent disregard for the courts of this state and the
application of justice, we take the odd step as a court of last resort
23
PORTENTA v. PORTENTA
Opinion of the Court
and order that no party or attorney in this action attempt to further
convey this property without approval from the trial court. Mother
and Mr. Copier have caused this case to drag on long enough
through their dilatory tactics. 19 Another attempt to remove the
property from the jurisdiction of the court would warrant the most
severe sanctions available.
III. WIFE’S CLAIM FOR ATTORNEY FEES ON APPEAL
¶51 Wife was granted her attorney fees in the trial court, and
seeks attorney fees on appeal. Specifically, she “submits that double
attorney fees should be awarded pursuant to” Utah Rule of
Appellate Procedure 33. Rule 33 provides two instances in which
attorney fees are appropriate: 1) if the appeal is “frivolous,” and 2) if
the appeal is taken for “delay.” If either of these are found, the
appellate court “shall award just damages, which may include single
or double costs, as defined in Rule 34, and/or reasonable attorney
fees, to the prevailing party.” UTAH R. APP. P. 33(a). We first note
that double attorney fees are not available under rule 33, only double
costs “as defined in Rule 34.” Thus, if Wife is entitled to anything, the
most she may receiver are her actual attorney fees and double costs.
But parties seeking attorney fees under rule 33 face a high bar. “[T]he
imposition of such a sanction is a serious matter and only to be used
in egregious cases, lest the threat of such sanctions should chill
litigants’ rights to appeal lower court decisions.” Redd v. Hill, 2013
UT 35, ¶ 28, 304 P.3d 861.
¶52 Utah Rule of Appellate Procedure 33 defines a frivolous
appeal as “one that is not grounded in fact, not warranted by
existing law, or not based on a good faith argument to extend,
modify, or reverse existing law.” We have further clarified that,
“[s]anctions are appropriate for appeals obviously without merit,
with no reasonable likelihood of success, and which result in the
delay of a proper judgment.” Redd, 2013 UT 35, ¶ 28 (citation
omitted). While we ultimately reject Mother’s arguments, we cannot
say that they are obviously without merit.
19 We note that “[o]n February 22, 2017, the Honorable Kara Pettit
. . . entered Findings of Fact, Conclusions of Law and Order
disbarring Robert H. Copier from the practice of law . . . .” Attorney
Discipline, UTAH BAR J., 66 (Nov./Dec. 2017). The record in this case
also indicates multiple potential violations of the Utah Rules of
Professional conduct.
24
Cite as: 2017 UT 78Opinion of the Court
¶53 However, attorney fees are also available when the appeal is
taken for delay. See UTAH R. APP. P. 33(a). The trial court held that
Mother’s “defenses were brought in bad faith, made with the
intention of hindering or delaying restoration of the property to
[Wife].” Wife argues that this appeal “is but a continuation of the
same bad faith litigation” and that it was brought solely to place
another lis pendens on the property to prevent Wife from selling the
home. While the trial court’s holding appears to be partially based
on its determination that Mother’s claims were baseless, it was also
based on Mother’s trial tactics. For instance, the trial court found that
Mother “has filed at least sixty motions during the pendency of this
case, many of them repeating previously denied motions, and nearly
all with ‘little or no citation to legal authority, and little if any real
analysis of the legal arguments.’” Also, Mother transferred her
interest in the home to her previous attorney “in anticipation of
trial,” and for the purpose of moving the home “beyond the
jurisdiction of the court to avoid the remedy sought by Plaintiff.”
¶54 Mother’s only argument that this appeal was not brought
for any improper purpose is that she has a non-frivolous argument.
While a frivolous argument is evidence that the appeal was brought
for an improper purpose, it is not the only possible evidence. If it
were, awarding attorney fees for “delay” would be completely
subsumed by the frivolousness prong. See Lancer Ins. Co. v. Lake Shore
Motor Coach Lines, Inc., 2017 UT 8, ¶ 13, 391 P.3d 218 (we interpret
rules to give independent meaning to each provision). In this case,
Mother appears to have resorted to any method available in the trial
court to delay and prevent Wife from acquiring the home. And, on
appeal, she failed to directly challenge the trial court’s finding that
Mother’s defenses were brought with the intention of hindering or
delaying restoration of the property. This is one of those rare cases in
which costs are warranted. We hold that Mother must pay double
Wife’s costs on appeal, but not her attorney fees. We limit the award
because Mother’s claim was not frivolous. We remand to the trial
court for a determination of those costs. See DeBry v. Cascade Enters.,
935 P.2d 499, 503 (Utah 1997) (remanding to trial court for factual
determination of double costs and reasonable attorney fees on
appeal).
CONCLUSION
¶55 We conclude that the Utah Fraudulent Transfer Act requires
an ongoing debtor-creditor relationship at the time a claim under the
Act is filed. In this case, the debtor-creditor relationship existed
between Patricia Porenta and Robert Porenta’s estate. Because there
was an ongoing debtor-creditor relationship, Wife’s claim for
fraudulent transfer is not barred by the Act. Additionally, we hold
25
PORTENTA v. PORTENTA
Opinion of the Court
that the trial court did not err in granting Wife the entire marital
home rather than money damages, but we remand for a
determination of the current status of title. Finally, we award Wife
double her costs on appeal and remand to the trial court for a
determination of those costs.
26
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
ASSOCIATE CHIEF JUSTICE LEE, dissenting:
¶56 Robert Porenta transferred marital property to his mother
(Louise Porenta) while he was going through a divorce with his wife
(Patricia Porenta). Robert then died while the divorce case was
pending—before a divorce decree issued. Patricia now seeks to
recover the property from Louise via a claim under the Utah
Fraudulent Transfer Act (UFTA).
¶57 The property transfer was apparently fraudulent under the
UFTA at the time of the transfer. But Patricia cannot recover under
the UFTA unless she identifies a “claim” (as defined in the UFTA)
against Robert at the time she filed her suit. The “claims” that
Patricia has identified that could qualify are claims for child support
and related claims in the divorce proceeding. Yet those claims were
extinguished upon Robert’s death, which abated the divorce action.
And in Louise’s view that precludes Patricia from obtaining any
relief under the UFTA.
¶58 The majority disagrees. Looking to the district court order,
it starts with the presumption that Patricia had a UFTA-defined
claim at the time she filed unless proven otherwise by Louise, citing
the appellant’s burden of persuasion. It then declines to analyze the
validity of that claim under the statute, because it believes Louise did
not raise this issue on appeal. Instead, it believes the only threshold
question Louise raised was “whether the death of Husband
extinguished any debtor-creditor relationship”—in other words,
whether the UFTA Claims abated at Robert’s death. Supra ¶ 11.
Ultimately, it determines that Louise failed to adequately address
whether the “claims” described by the district court specifically
abated when Robert died and the divorce abated. It affirms on that
basis.
¶59 I disagree and accordingly dissent. First, I believe that
Louise has sufficiently raised the issue of whether the “claims”
underlying the district court’s holding count under the language of
the UFTA. Louise argues that Patricia had no right to payment from
Robert at the time she filed her action. Unlike the majority, I don’t
believe that we can answer this question without deciding whether
the district court’s supposed “UFTA Claims” were originally valid,
whether they abated or not. Second, I believe that any claims that
might otherwise have been valid—namely, those arising in the
divorce—nonetheless abated at Robert’s death. The majority finds
nuance here where I find none. Our law has long been clear on this
point. Claims arising out of divorce abate upon the death of one of
the spouses and the resulting abatement of the divorce. I believe that
27
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
Patricia had no valid or surviving UFTA Claim at the time she filed
her action, and I would reverse on that basis.
¶60 The majority avoids this result by repudiating a premise of
our longstanding case law in this important field—that any right or
claim arising from the existence or threat of a divorce proceeding is
extinguished upon the death of one of the spouses. This clear,
longstanding rule is set forth in a series of our cases. See In re Estate of
Knickerbocker, 912 P.2d 969, 977 (Utah 1996); Nelson v. Davis, 592 P.2d
594, 597 (Utah 1979); Daly v. Daly, 533 P.2d 884, 885–86 (1975). And
the rule is cast aside by today’s majority opinion. That strikes me as
problematic. We have no briefing from the parties on the merits or
demerits of the principle we reject today. The briefing on both sides
of this case accepted the viability of the rule we now reject. I disagree
with the court’s decision on this point. I would retain the existing
rule in a case in which no party has asked us to revisit the clear
standard set forth in our cases and the court has not offered a basis
for repudiating that rule under the doctrine of stare decisis.
I
¶61 The UFTA affords remedies for “creditors” against
“debtors” who have engaged in fraudulent transfers of property. See
UTAH CODE § 25-6-8 (2016) (setting forth the “relief against a transfer
or obligation” that “a creditor . . . may obtain”). A creditor, for
example, may seek an “avoidance of the transfer . . . to the extent
necessary to satisfy the creditor’s claim” against the debtor. Id. § 25-6-
8(1)(a).
¶62 Precision in the use of these terms is crucial to unraveling
some of the confusion in the questions presented in this case. One of
the key terms with a potential for confusion is the term “claim.” To
qualify as a creditor under the UFTA a party must have a “claim”
against a debtor. The UFTA defines a “Creditor” as “a person who
has a claim,” and a “Debtor” as “a person who is liable on the claim.”
Id. § 25-6-2(4), (6). This central concept of a “claim” is defined as “a
right to payment, whether or not the right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured.” Id.
§ 25-6-2(3). To avoid confusion with run-of-the-mill usages of
“claim,” I will refer to UFTA-defined claims as “UFTA Claims.”
¶63 A claim is a UFTA Claim only if it is against a debtor. See
supra ¶ 62. Here, that might mean either Robert or Robert’s estate.
But this is another point of confusion stemming from imprecision in
the terms used in this case. In the course of these proceedings we are
speaking not only of Robert Porenta and Robert Porenta’s estate, but
28
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
also the “marital estate.” The marital estate, however, is quite distinct
from Robert Porenta’s estate, as explained further below. The marital
estate is a res or a property interest—not a person or entity who could
qualify as a debtor. Only Robert Porenta’s estate could qualify as a
debtor, as it is only this estate that is a legal person or entity. To keep
these points clear, I will refer to Robert Porenta’s estate—the entity
that succeeded to Robert Porenta’s interests—as “Robert’s Estate” or
the “Estate.”
¶64 A threshold question presented is whether Patricia Porenta
has a viable UFTA Claim against Robert or his Estate. The majority
says that she does. It affirms the district court’s determination that
Patricia had a “claim for the marital estate, including the joint
tenancy.” Supra ¶ 30 n.14.
¶65 I disagree. Any “claims” the majority or district court may
have identified, other than those which arose from the divorce, are
not UFTA Claims. The mere intonation of the word “claim” is not
enough to satisfy the UFTA. That statute sets forth a limited
conception of the kind of “claim” necessary to trigger its application.
And the supposed “claim for the whole of the marital estate” does
not qualify. The only set of claims asserted by Patricia that could have
fulfilled the requirements of the UFTA were those that arose in the
divorce, and those claims were extinguished upon Robert Porenta’s
death when the divorce proceedings abated.
¶66 The valid UFTA Claims that were raised by Patricia all
abated with the abatement of the divorce. Patricia’s claims in divorce
made her a “creditor” under the UFTA at the time of the filing of the
divorce proceedings: At that point she had a “right to payment” that
was “unmatured” and “disputed.” See supra ¶ 62. But Patricia’s
divorce claim abated upon the death of her husband. Nelson v. Davis,
592 P.2d 594, 597 (Utah 1979); see also In re Estate of Knickerbocker, 912
P.2d 969, 977 (Utah 1996). This is a long-settled tenet of our case law.
Any right or claim arising from the existence or threat of a divorce
proceeding is extinguished upon the death of one of the spouses.
Nelson, 592 P.2d at 597.
¶67 The majority avoids this problem by overruling
Knickerbocker and Nelson (while purporting only to be clarifying that
those articulations of the rule were merely dicta). It then returns to a
regime set out in In re Harper’s Estate, 265 P.2d 1005 (Utah 1954). I
cannot concur in this approach for the following reasons.
¶68 First, I am not convinced that In re Harper’s Estate is on
point. The majority cites In re Harper’s Estate for the proposition that
“a court order that divide[s] marital property d[oes] not abate upon
the death of a spouse.” Supra ¶ 20. But In re Harper’s Estate dealt only
29
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
with “divorce decree[s]” that had not yet become final pursuant to
Utah Code 1953 section 30-3-6 (now repealed), not orders entered
during the pendency of the divorce. These are not identical. The
former is a “final judgment in a suit for divorce,” which “dissolves
the marriage and usu[ally] resolves all matters concerning property
and children.” Decree, BLACK’S LAW DICTIONARY (10th ed. 2014).
Orders, on the other hand, might encompass any number of issues
arising during the course of a divorce, such as the child support
orders discussed here. The rule in In re Harper’s Estate addresses
decrees rather than orders. 1 No such decree was issued in this case.
Given that fact, the rule in In re Harper’s Estate may not even apply.
¶69 Second, even if In re Harper’s Estate would otherwise apply
to this case, it was overruled by Daly v. Daly, 533 P.2d 884, 885–86
(Utah 1975). The majority overrules Daly and its progeny, calling
their relevant language “dicta.” Supra ¶¶ 21–27. It believes that the
holding in Daly did not “affect[] the ultimate decision [in Daly].”
Supra ¶ 21. Even if true, 2 the court in Daly unequivocally announced
1 This point also diminishes the force of the claim that “[n]early
every other jurisdiction follows the rule (or something similar) to
that laid out in In Re Harper’s Estate.” Supra ¶ 26 n.12; see, e.g.,
Bridgeman v. Bridgeman 391 S.E.2d 367, 369 (W. Va. 1990) (setting out
the rule that “divorce actions abate at death except as to property
rights” in the context of a divorce decree, rather than an order);
Goodloe v. LaRoche Indus., Inc., 686 So. 2d 335, 337–38 (Ala. Civ. App.
1996) (addressing the issue of divorce abatement in the context of a
final divorce judgment) overruled on other grounds by Banks v. Premier
Serv. Co., 184 So. 3d 370 (Ala. Civ. App. 2014).
2 While I am not convinced that the pronouncement in Daly was
dicta, it seems clear to me that the rule in Nelson cannot be dicta. The
court in Nelson addressed an “alternative contention” by the
appellant: “even if she does not take by the deed, she should be
entitled to her mother’s interest in the property as the executrix of
her estate and her heir.” Nelson, 592 P.2d at 597. The court
determined that, “[i]n regard to any rights in the property that her
mother may have acquired in the divorce action, the principle
announced by this Court in the case of [Daly] is applicable[.]” Id.
Whatever Daly’s pedigree might be, the Nelson court relied on it in
disposing of a theory by the appellant. I don’t understand how this
does not “affect[] the ultimate decision of the case.” Supra ¶ 21. And I
think it unwise for us to cast aside a clearly stated premise of our law
(continued . . .)
30
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
a principle that has been relied on as law. If the majority wants to
overrule precedent that has been operative for forty years, it should
do so on the merits of the case under our standard for overruling
precedent. See Eldridge v. Johndrow, 2015 UT 21, ¶¶ 21–22, 345 P.3d
553 (identifying the factors for when overruling of a precedent is
appropriate).
¶70 Third, no one has asked us to revisit or repudiate the
principles set forth in Daly, Nelson, or Knickerbocker. In fact, Patricia
cites both Nelson and Knickerbocker in her brief to this court. She does
not ask us to abandon these cases in favor of the principle set forth in
In re Harper’s Estate. Our decision to overhaul the law in this field is
likely to come as a big surprise to the parties in this case. And it may
upset settled reliance interests in this important field.
¶71 For these three reasons, I respectfully dissent from the
majority’s repudiation of the principle set forth in the cases following
In re Harper’s Estate. I would uphold the rule that “when the death of
one or both parties to a divorce action occurs during the pendency of
the action, the action itself abates and their status, including their
property rights, reverts to what it had been before the action was
filed.” Nelson, 592 P.2d at 597. And this principle would foreclose
Patricia’s assertion of a right to sue as a “creditor” protecting a
“claim” against a “debtor.”
¶72 Patricia had a “claim” as her husband’s “creditor” at the
time of the transfer of the property in question. But that is
insufficient. As the majority notes, the UFTA “use[s] the present
tense when discussing the [necessary] claim.” Supra ¶ 12. Thus, the
relevant timeframe under the UFTA is clear: “[T]here must be a claim
or right to payment held by the creditor against the debtor at the time
a UFTA claim is filed.” Supra ¶ 12 (emphasis added). And Patricia
accordingly is in no position to assert a UFTA claim on the basis of
the cause of action that she filed—and that was subsequently
abated—in the divorce proceeding.
¶73 The claims asserted in the divorce proceeding accordingly
were not in existence at the time Patricia filed her UFTA action. The
majority nonetheless declines to consider whether a claim in fact
existed at the time Patricia filed her action. Instead it presumes that
the district court correctly identified a surviving UFTA Claim, and
(continued . . .)
without any analysis under the doctrine of stare decisis or the benefit
of briefing from the parties.
31
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
faults Louise Porenta for failing to carry her burden of challenging
the district court’s decision on appeal. But none of the majority’s
points is persuasive.
A
¶74 The district court held in Patricia’s favor, and thus
apparently believed that Patricia had a UFTA Claim of some kind. In
its order, it set out a few possibilities:
Plaintiff’s claim against Defendant at the time of
the transfer encompassed the whole of the marital
estate, including the right to preserve the joint tenancy
or require Robert to convey his interest free and clear
to Patricia. The joint tenancy itself was a marital asset
that Robert could not unilaterally dissipate while the
divorce was pending.
¶75 Patricia has advanced similar arguments in the district
court and in this appeal. She seeks to establish a UFTA Claim on the
basis of alleged property interests, asserting that “insofar as a divorce
action seeks an adjudication of property rights, the cause of action
survives and may be revived by the proper party in interest for the
exclusive purpose of determining the property rights.” And she
contends that these rights could be “brought against the deceased
person’s estate.” In Patricia’s view her “property rights had been
unchanged during the divorce and were therefore unchanged by
dismissal of the divorce action.” Thus, Patricia asserts that she “still
had, as before, a marital interest in the home that she and [Robert]
acquired . . . .”
¶76 The majority endorses the approach advanced by Patricia
and upheld by the district court. It states that Patricia’s “underlying
claim against [Robert] was for ‘the whole of the marital estate,
including the right to preserve the joint tenancy or require [Robert] to
convey his interest free and clear to [Patricia].’” Supra ¶ 14.
¶77 Patricia has thus identified—and the district court and
majority apparently have upheld—three possible grounds for
establishing a UFTA Claim: (1) a claim to the “whole of the marital
estate”; (2) an interest in or a right to “preserve” the joint tenancy;
and (3) a right to require Robert to convey his interest in the joint
tenancy to Patricia. Yet none of these is a UFTA Claim—a “right to
payment” from Robert or from his Estate. At most the district court
identified purported rights or interests that Patricia may be able to
assert.
¶78 Some of the cited rights or interests are simply not
sustainable under the law. But clearly none qualifies as a “right to
32
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
payment” from a debtor. And in any event there is no “debtor”
against whom any such claim could be asserted, as Robert is dead
and Patricia has not identified any basis for a claim against Robert’s
Estate.
1
¶79 A “claim to the marital estate” is not a UFTA Claim. A
UFTA Claim, again, is a “right to payment.” And Patricia has no
“right to payment” “to the marital estate.” (Emphasis added.) That
statement makes no logical sense. That tells us there is no UFTA
Claim. The asserted “claim to the marital estate” is simply an alleged
property interest.
¶80 A property interest is not a UFTA Claim. 3 See Rosier v.
Rosier, 705 S.E.2d 595, 606–08 (W. Va. 2010) (concluding that “the
basis of any ‘claim’” under the Uniform Fraudulent Transfer Act
“cannot be founded upon whether the affected property would have
been declared marital property had the [parties] been seeking a
divorce prior to [the husband’s] death” (emphasis added)). If I own a
car it makes no sense to say that I have a “right to payment” in that
3 The majority calls this a “new issue.” Supra ¶ 11 n.3. But this is
exactly the issue that the parties asked us to resolve. Louise argued
that there was no “debtor/creditor relationship between [Robert]
and [Patricia].” To evaluate that argument, we must decide whether
Patricia had a UFTA Claim against Robert. UTAH CODE § 25-6-2
(2016). The district court held, and the majority now affirms, that
that UFTA Claim took the form of a “property interest.” But that
cannot stand under the plain language of the UFTA.
The majority’s position highlights a fundamental difference
between our respective approaches to this case. The majority
presumes that the district court identified a valid UFTA Claim and
asks only whether it could have survived. It bases that conclusion on
the proposition that Louise’s challenge on appeal was limited to the
narrow question of survival of the claim. I, on the other hand,
believe that Louise’s brief—while perhaps underdeveloped—
squarely raises the question whether a UFTA Claim exists, for the
reasons just stated. A UFTA Claim could “not exist” in two ways: (1)
because it existed once but expired (such as the child support
payment orders), or (2) because the “claim” identified by the district
court never qualified under the statute (such as the “property rights”
at issue here). Louise addresses both when she argues that no UFTA
Claim existed to validate Patricia’s suit. I discuss this further below.
Infra ¶¶ 92–105.
33
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
car. The mere ownership interest is not a right to payment. A right to
payment may arise in the event of a transaction involving the car. If I
enter into a contract to sell the car then I would have a right to
payment. But until then I have only an interest in the car.
¶81 The same goes for an interest in a marital estate. If a
married couple owns a home in joint tenancy neither has a “right to
payment” against the other. Both just have joint rights or interests.
Their rights or interests could be transformed into a right to payment
through a claim asserted in a divorce proceeding. But if the divorce
abates before such a claim is reduced to a judgment then there is no
right to payment.
¶82 That is exactly what happened here. Patricia had an
interest in the marital estate. But she had no right to payment. She
apparently sought to establish such a right in the claims she filed in
divorce, but those claims were extinguished (and the divorce abated)
upon Robert’s death.
¶83 Robert’s death also highlights a further defect in Patricia’s
case—the lack of a “debtor” for any purported UFTA Claim. Some
claims survive the death of the defendant and succeed to the
deceased defendant’s estate. But other claims do not. See Gressman v.
State, 2013 UT 63, ¶ 24, 323 P.3d 998 (noting the common law rule of
abatement of personal tort claims at death and discussing statutory
exceptions to that rule). And Patricia has identified no ground for
concluding that her alleged interest in the marital estate amounts to a
claim for which the Estate would be liable.
2
¶84 Patricia’s interest in or asserted right to prevent Robert
from severing the joint tenancy is likewise not a UFTA Claim. This
interest or right fails for the reasons that the interest in the marital
estate fails—there is no UFTA Claim because there is at most an
interest in property, not a right to payment, and there is no debtor
because Patricia has not identified a basis for any liability of the
Estate on this purported claim.
¶85 There is also a more fundamental problem with this
interest: Our law makes clear that there is no right to prevent Robert
from severing the joint tenancy. Under Utah law Robert was free to
alienate his portion of the property. “It is well-settled that a partial
owner” of a joint tenancy “may sell or encumber her share.” Franklin
Credit Mgmt. Corp. v. Hanney, 2011 UT App 213, ¶ 18, 262 P.3d 406(citation and internal quotation marks omitted). “This is true even
when the joint tenants are husband and wife . . . .” Id.; see also Nelson
v. Davis, 592 P.2d 594, 596 (Utah 1979) (“It is not to be questioned that
34
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
a joint tenant may in proper circumstances make a bona fide
conveyance of his interest in property to a third party . . . .”).
¶86 There is an exception to this general rule. A court may
enter an order prohibiting such a transfer during the pendency of a
divorce proceeding. See Nelson, 592 P.2d at 597; In re Estate of
Knickerbocker, 912 P.2d 969, 977 (Utah 1996). But there is no
suggestion by any party (or the majority) that any such order was
entered in the divorce proceedings in this case. 4 And even if such an
order had been entered, it would have been extinguished upon the
abatement of the divorce case on Robert’s death. Even if the right
hadn’t abated, moreover, the interest in preventing Robert from
alienating his share of the property would not rise to the level of a
“right to payment” from Robert, and so it couldn’t have been a UFTA
Claim to begin with.
3
¶87 The right to “require Robert to convey his interest” in the
joint tenancy to Patricia also fails for the same reasons. First, there is
no legal basis for any supposed right to require Robert to convey his
interest. Second, even if there were such a right it could not rise to
the level of a “right to payment,” and thus would not qualify as a
UFTA Claim. And third, there is no “debtor” because Patricia has not
identified a basis for any liability on the part of Robert’s Estate for
the claimed interest in the joint tenancy.
B
¶88 The majority resists the above conclusions without
reaching their merits. It does so first by reframing the question
presented—asking not whether Patricia has identified a UFTA Claim
but “whether [Patricia’s] claim is somehow barred against the estate
or is no longer for the entire marital estate.” 5 Supra ¶ 32. This masks
the underlying question whether any “claim” at issue qualifies as a
4 The majority speculates that the reason “there was likely no
order entered” was because Robert committed a “fraud on the
court.” Supra ¶ 24 n.9. I am not aware of any basis for such
speculation, and I would not do so here.
5 It is unclear whether the first “estate” in that sentence is
referring to Robert’s Estate or the marital estate. I assume that it is
the former, since the preposition “against” would not make sense if
applied to the marital estate, which is not a party and thus cannot
have a claim “against” it.
35
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
UFTA Claim. There is no UFTA Claim here for all the reasons set
forth above. And without a proper UFTA Claim it is irrelevant
whether some other property right or interest may be viably alleged
against Robert’s Estate.
¶89 The majority’s next move is to avoid the question
presented on the basis of purported missteps of Louise’s counsel:
(1) counsel’s supposed concession at oral argument that Patricia has
a claim against Robert’s Estate, supra ¶ 30; and (2) Louise’s alleged
failure to adequately brief the issues on appeal. I find no merit to
either argument.
1
¶90 The oral argument transcript does not support the court’s
determination of a concession on Louise’s part. Louise’s counsel did
not concede that Patricia had a UFTA Claim or that any such claim
extended to her husband’s estate after his death. Instead, in response
to probing questions from members of this court, counsel only
acknowledged that “if there is a claim that still exists that wasn’t
abated by the divorce,” such a claim would transfer to the son’s
estate. (Emphasis added.) But that doesn’t tell us anything about the
questions presented—whether there is a valid UFTA Claim and
whether any such claim may be asserted against the estate. Counsel
for Louise never made a concession on these points.
¶91 In fact counsel argued the contrary. Counsel expressly
asserted that there was no UFTA Claim—clarifying that the only
“claim” that counts is a “right to payment.” And clearly counsel was
not conceding that any UFTA Claim would transfer to Robert’s
Estate. Counsel specifically contended that the only UFTA Claim—
claim to a “right to payment”—was in the divorce proceeding, and
that such claims were extinguished upon Robert’s death.
2
¶92 The record also fails to support the conclusion that Louise
failed to contest the district court’s holding that Patricia “had a claim
for the marital estate, including the joint tenancy.” Supra ¶ 30 n.14. It
says that Louise “did not argue that [the Nelson line of cases] applied
to any claims that could be held by [Patricia],” but that she instead
argued only that the Nelson line means that “all court orders dealing
with property rights abate upon the death of a party.” Supra ¶¶ 28,
23 n.7 (emphasis in original).
¶93 The majority deems that a fatal briefing error. It says that
Louise “never grappled with th[e] important question” of whether
Patricia’s supposed “claim for the joint tenancy survived the death of
36
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
[Robert].” Supra ¶ 32. And it rules against Louise on the grounds of
“[in]adequate briefing.” Supra ¶ 32.
¶94 I see the matter differently. I see no way to read Louise’s
brief in the way the majority does. Perhaps Louise could have framed
her position more forcefully or more clearly. But she clearly (and
repeatedly) contended that “any debtor/creditor relationship that
existed between husband and wife during the pendency of the
divorce action terminated upon husband’s death and subsequent
abatement of the divorce action.” (Emphasis added.) This general,
sweeping argument was made repeatedly in Louise’s opening (and
only) brief. She argued that there is “no set of facts under which the
trial court could have found the debtor/creditor relationship between
Husband and Wife survived the abatement of the divorce as a matter
of law,” and that Patricia “has no currently enforceable claim against
Husband” because she “cannot haul Husband back into the divorce
court” to enforce her claims and “the divorce court cannot obtain
jurisdiction over him.” (Emphasis added.)
¶95 The majority says that Louise only argued that “the
divorce court’s orders for ‘child support and medical and insurance
expenses’ were vacated” by the husband’s death and abatement of
the divorce proceeding, or else that only “court orders dealing with
property rights abate upon the death of a party.” Supra ¶¶ 15, 23 n.7
(emphasis in original). But that is incorrect for two reasons. First, as
noted, Louise was advocating a sweeping rule of abatement that
extinguishes any claim (or, in other words, any debtor/creditor
relationship). To the extent her brief lacks detail it is because she is
arguing for a broad rule that doesn’t require the nuance now
demanded by the majority.
¶96 Second, Louise’s brief does in fact address the property
claims. Citing Nelson v. Davis, 592 P.2d 594 (Utah 1979), Louise
asserts that “‘when the death of one or both parties to a divorce
action occurs during the pendency of the action, the action itself
abates and their status, including their property rights, reverts to what it
had been before the action was filed,’” (quoting Nelson, 592 P.2d at 597
(emphasis added)). And in light of this rule, Louise contends that
there is no viable property claim asserted in the divorce proceeding.
Louise observes that “the ‘property rights’ which revert upon
abatement of [a] divorce action are only those rights ‘acquired in the
divorce action,’ or, in other words, those rights granted by the court
via an order issued during the divorce,” (quoting Nelson, 592 P.2d at
597). She also says that “[t]hese [property] rights abate upon death of
one of the parties because the court no longer has jurisdiction over
the parties, and without jurisdiction, the court cannot issue a divorce
decree”—i.e., a decree awarding property to a party to a divorce
37
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
proceeding that is legally abated and thus of no further legal effect.
“This is so because one cannot divorce a dead person.” See Farrell v.
Porter, 830 P.2d 299, 302 (Utah Ct. App. 1992).
¶97 The legal and logical grounds for Louise’s position strike
me as unimpeachable. Patricia asserted both a claim for child support
and an asserted property interest in the entire marital estate. But the
property claim was a claim in a divorce proceeding—by a wife
against a husband. And our case law establishes a general rule of
abatement of a divorce proceeding upon the death of a spouse—a
rule that forecloses any and all claims for relief that may be asserted
within that proceeding.
¶98 I cannot see how the law could be otherwise. Without a
spouse subject to the divorce court’s jurisdiction there is no party
against whom a judgment may be enforced. And without an adverse
party there is no viable adversary proceeding.
¶99 Patricia characterizes her property claim as consisting of an
alleged “right to benefit from the joint tenancy or to have Husband
convey his interest to her.” But Robert is dead, and thus cannot be
subject to an order of the divorce court addressed to his interests in
the marital estate. So the property claim in the divorce proceeding has
no continuing viability; when the UFTA Claim was filed in this case
there was no longer any legal basis for this property claim.
¶100 This does not mean that a surviving spouse with asserted
property rights is without recourse. Our law, as noted, provides that
the parties’ “status, including their property rights, reverts to what it
had been before the action was filed.” Nelson, 592 P.2d at 597. And
that leaves the surviving spouse with the prerogative of asserting her
rights against any party who may claim an adverse interest.
¶101 Patricia raises this argument in her briefing before us.
Citing American Jurisprudence 2d, she asserts that “‘[a]lthough the
death of a spouse ends the cause of action for divorce and abates any
pending action for divorce, courts have held that insofar as a divorce
action seeks an adjudication of property rights, the cause of action
survives and may be revived by the proper party in interest for the
exclusive purpose of determining the property rights,’” (quoting 24
AM. JUR. 2D Divorce & Separation § 119 (2017)). Patricia further notes
that the “gist of a divorce action is termination of the marital
relationship, a very personal matter, and loss of that person’s ability
to participate in the litigation was such a prejudice to the case that it
would be unjust for the court to proceed to judgment after a party’s
death.” And she seeks to distinguish property claims on this basis,
contending that “[c]laims relating to property rights or debts, not
38
Cite as: 2017 UT 78ASSOCIATE CHIEF JUSTICE LEE, dissenting
being so personal, could be brought against the deceased person’s estate or
could be brought by the deceased’s estate.” (Emphasis added.)
¶102 A reply brief addressed to these issues would have been
helpful. But I would not conclude that Louise defaulted by failing to
address these issues in a reply brief. Her opening brief seems to me
to adequately address the question presented—and to identify the
proper response to Patricia’s argument.
¶103 The principle advocated by Patricia (and apparently
embraced by the majority) can easily be accepted without any
endorsement of the viability of Patricia’s UFTA Claim in this case.
Patricia may well have a right to assert an interest in property against
the Estate of Robert. But that potential interest does not rise to the level
of a UFTA Claim. And Patricia has not asserted such a claim or cited
it as a basis for this UFTA action.
¶104 The only claims that Patricia cited in her complaint—or at
any point below—were claims asserted against Robert in the
underlying divorce proceeding. The district court’s ruling likewise
rested exclusively on claims arising from the filing of a divorce
proceeding. Counsel for Patricia conceded this point at oral
argument, moreover, acknowledging that the only claim at issue “is a
claim based on the marital interest” stemming from the divorce case.
¶105 I would reverse on the ground that the claims identified by
Patricia as the basis for her UFTA action were extinguished by the
abatement of the divorce action. And I would leave open the
possibility (not briefed and not properly presented for our review)
that Patricia may yet have other claims not pleaded or argued in this
case.
3
¶106 The possibility that Patricia might be able to assert another
sort of claim that would not be affected by Robert’s death is a question
raised for the first time by members of this court at oral argument.
With that in mind, we can hardly fault Louise for failing to anticipate
and respond to that possibility.
¶107 Throughout the proceedings in this case—both in the trial
court and in the briefing on appeal—both sides focused their
arguments exclusively on the claims arising in the divorce
proceeding. In my view, no one ever asserted that a claim unrelated
to the divorce might form the basis of Patricia’s UFTA Claim.
¶108 It is not our role to speculate on the possibility of such a
claim. Perhaps counsel for Patricia will identify one after our
decision in this case. But we are not now in a position to opine on the
viability of a hypothetical claim that was neither pleaded nor briefed
39
PORTENTA v. PORTENTA
ASSOCIATE CHIEF JUSTICE LEE, dissenting
as the basis for an action under the UFTA. On the pleadings and
briefing before us, we are asked only to decide whether Patricia had
a viable divorce “claim” as a “creditor” under the UFTA at the time
she filed this case. And the answer to that question is
straightforward: She did not because that claim was extinguished
upon the death of her husband. 6
II
¶109 I respectfully dissent for the reasons set forth above. I
would hold that Patricia is not entitled to any relief under UFTA.
And I would accordingly reverse the district court’s decision denying
Louise’s motion to dismiss. I would also reverse the award of
attorney fees in Patricia’s favor.
6 Robert appears to have made a transfer that was fraudulent
when made. But the question presented is not whether we condemn
the actions of Robert—or have sympathy for Patricia. It is whether
Patricia has asserted a viable claim under the UFTA. If she has not
then Louise is entitled to dismissal of this action.
That conclusion would leave for another day the question
whether Patricia has other viable claims against Louise that were not
asserted herein. Yet it would not leave parties in a divorce
proceeding free to thumb their nose at pending court orders. Any
transfer in violation of such an order would subject the transferor to
contempt charges. And the transferee’s interests in the property
would be placed in substantial jeopardy. See Nelson, 592 P.2d at 597
(when marital property is transferred during a divorce action,
transferee takes the property subject to the outcome of that action if
she has actual knowledge that the transferor is barred by the
underlying litigation from transferring the property); Hidden
Meadows Dev. Co. v. Mills, 590 P.2d 1244, 1248 (Utah 1979) (“One who
takes with full knowledge that the property taken is the subject of
on-going litigation acquires only the grantor’s interest therein,
subject to whatever disposition the court might make of it.”); Timm v.
Dewsnup, 921 P.2d 1381, 1392 (Utah 1996) (transferee taking property
subject to a lis pendens “acquires only the grantor’s interest therein, as
determined by the outcome of the litigation” (citing Hidden Meadows,
590 P.2d at 1248)).
40