Busche v. Busche

IN THE UTAH COURT OF APPEALS
‐‐‐‐ooOoo‐‐‐‐
Lori Ann Busche, ) OPINION
)
Petitioner, Appellee, and Cross‐ ) Case No. 20080388‐CA
appellant, )
)
v. ) FILED
) (January 20, 2012)
Matthias Busche, )
) 2012 UT App 16Respondent, Appellant, and )
Cross‐appellee. )
‐‐‐‐‐
Fourth District, Provo Department, 044400503
The Honorable Claudia Laycock
Attorneys: Rosemond G. Blakelock, Provo, for Appellant and Cross‐appellee
Douglas B. Thayer and Andrew V. Wright, Provo, for Appellee and
Cross‐appellant
‐‐‐‐‐
Before Judges Orme, Davis, and Roth.
ROTH, Judge:
¶1 Matthias Busche (Husband) appeals the district court’s denial of his motion to
modify his child support and alimony obligations following his termination from
employment and subsequent employment at a lower salary. Husband also contends
that the district court abused its discretion when it ordered him to pay $20,000 in
attorney fees. Lori Ann Busche (Wife) filed a cross‐appeal, in which she challenges the
district court’s decision to award her only $20,000 of the $51,000 she requested in
attorney fees. We reverse the district court’s finding that Husband’s job loss did not
amount to a substantial change of circumstances because he was voluntarily
underemployed and remand for reconsideration of whether he was in fact voluntarily
underemployed. We affirm the attorney fees award of $3324.71 resulting from the
August 29, 2005 order to show cause hearing but reverse and remand for
reconsideration of the remaining attorney fees award.
BACKGROUND
¶2 The Busches married in June 1995 and divorced on January 7, 2005. At the time
of the divorce, Husband was earning a gross monthly salary of $7067. The parties have
five children, and Wife stayed home to care for them. As part of the stipulated divorce
decree, the parties agreed that Husband would pay $1766 per month in child support
and $1545 per month in alimony, for a total of $3311 in monthly support obligations.
¶3 Husband’s employment as a manager for Tahitian Noni, however, ended on
January 28, 2005, shortly after the divorce decree was entered. On June 21, 2005,
Husband filed a verified petition to modify the support obligations of the divorce
decree, citing his termination from employment through no fault of his own as “a
substantial and material change in circumstances with regard to [his] income.” The
termination of Husband’s employment followed written warnings from his employer in
March 2004 and in December 2004, requiring him to correct certain behaviors the
employer considered inappropriate. After discharging him as a regular employee,
Tahitian Noni retained Husband as a contract employee at a rate of $5000 monthly.
When the contract ended in early 2006, Tahitian Noni declined to renew it, and
Husband remained unemployed until October 2, 2006, when he began work with
SupraNaturals at a monthly salary of $4583.33.
¶4 The district court held a bench trial on June 7, 2007, to determine whether
Husband’s change in employment and coinciding pay decrease warranted a
modification of the child support and alimony obligations as specified in the divorce
decree. In its subsequent memorandum decision, the court attributed Husband’s “less
remunerative salary” to “his refusal to accept the [March and December 2004] warnings
from his supervisor at Tahitian Noni to change his behavior and work habits,” even
though he had agreed, less than two weeks after the second warning, to pay a combined
$3311 per month in child support and alimony. The court therefore found Husband to
be voluntarily underemployed. Based on this finding, the district court determined that
there was no substantial change in circumstances to warrant further consideration of
Husband’s petition to modify the decree’s support orders.
20080388‐CA 2
¶5 The district court also awarded Wife some, but not all, of her attorney fees. Wife
requested over $51,000 in attorney fees, which she incurred in the course of earlier order
to show cause (OSC) proceedings as well as in connection with the trial on Husband’s
petition. The court granted Wife’s request for $3324.71 in attorney fees from an August
29, 2005 OSC hearing. With respect to the remaining fees, the court found that Wife had
prevailed at the OSC hearings and at trial and that she had shown a need but concluded
that the attorney fees requested were “excessive.” It also determined that Husband,
after factoring in his support obligations, had very little ability to pay. In this regard,
the court refused to consider Husband’s equity in the marital home as a source of
ongoing income for purposes of determining his ability to pay attorney fees.
Accordingly, it granted Wife attorney fees in the reduced amount of $16,675.29,
bringing the total fee award to $20,000.
¶6 The district court’s findings and conclusions regarding the modification petitions
and the award of attorney fees were memorialized in the Findings of Fact and
Amended Decree of Divorce.1 Husband now challenges the denial of his request for
modification. Husband and Wife both appeal the attorney fees order.
ISSUES AND STANDARDS OF REVIEW
¶7 Husband challenges the district court’s decision that there had not been an
unforeseeable and substantial change in circumstances that warranted modification of
the divorce decree’s child support and alimony orders. His contention of error, in
essence, has two components. Husband claims that the district court erroneously found
him to be voluntarily underemployed. He also argues that the court abused its
discretion in determining that the voluntary underemployment did not result in a
substantial change of circumstances that warranted modification of his support
obligations. In making this determination, Husband argues, the district court failed to
properly conduct the statutorily‐required imputation analysis that is part and parcel of
a finding of voluntary underemployment and instead simply imputed income to him at
the amount he earned when Tahitian Noni fired him‐‐$7067 per month. “The
1. Wife filed her own petition to modify in which she asked the district court to require
Husband to submit copies of certain financial documents each year. The parties
reached an agreement to exchange tax returns by April 30 of each year, and the court
granted Wife’s petition to modify the divorce decree as per their stipulation. That
modification is not at issue in this appeal.
20080388‐CA 3
determination of the trial court that there [has or has not] been a substantial change of
circumstances . . . is presumed valid, and we review the ruling under an abuse of
discretion standard.” Young v. Young, 2009 UT App 3, ¶ 4, 201 P.3d 301 (alteration and
omission in original) (internal quotation marks omitted). An abuse of discretion can
occur if a trial court misapplies the law in exercising its discretion. See State v. Barrett,
2005 UT 88, ¶ 17 & n.5, 127 P.3d 682. We review the court’s interpretation of statutory
requirements for correctness. See Lilly v. Lilly, 2011 UT App 53, ¶ 6, 250 P.3d 994.
¶8 Husband also challenges the district court’s decision to award Wife her attorney
fees, arguing that the court failed to enter findings on three statutorily‐required factors.
While Wife purports to raise three issues for review, all of her claims relate to the issue
of whether the district court properly awarded her attorney fees in an amount less than
she requested. We review the district court’s decision to award attorney fees in a
modification proceeding for an abuse of discretion. See Wilde v. Wilde, 2001 UT App
318, ¶ 38, 35 P.3d 341.
ANALYSIS
I. Modification of the Divorce Decree’s Support Obligations
¶9 Husband challenges the district court’s determination that he was voluntarily
underemployed and its consequent refusal to modify his support obligations. As an
initial matter, we consider whether the district court properly used its finding of
voluntary underemployment as the basis for its conclusion that there was not a
substantial change in circumstances sufficient to warrant modification of the support
orders.
¶10 We then address Husband’s contention that the district court erred in finding
that he was voluntarily underemployed pursuant to Utah Code section 78‐45‐7.5(7) (the
imputation provision).2 To support this contention, Husband first argues that the court
2. In 2008, the Utah Legislature renumbered the Utah Child Support Act, in which the
imputation provision is located. Because the imputation provision has also been
substantively amended, however, we must refer to the version in effect during the
lower court proceedings. For convenience of the reader, we will generally refer to this
provision as the imputation provision rather than by number within the text. In
(continued...)
20080388‐CA 4
improperly relied upon deposition and affidavit testimony that was admitted only for
impeachment purposes as the basis for its conclusion that Husband was terminated for
cause. He then claims that even if the district court correctly determined that he had
been terminated for cause, the court erred in equating termination for cause and
voluntary underemployment. Rather, he argues the district court should have
considered the factors identified in Hall v. Hall, 858 P.2d 1018 (Utah Ct. App. 1993), to
make the determination whether he was voluntarily underemployed.
¶11 Finally, Husband claims that the district court failed to properly conduct an
imputation analysis. The primary focus of this argument is his claim that the evidence
did not support imputation of his full previous salary. Husband also asserts that the
court should have applied the 2007 version of the imputation provision, rather than the
2006 version.3
A. The District Court Conflated the Substantial Change in Circumstances Analysis with
the Imputation Analysis.
¶12 Utah law permits modification of child support and alimony orders when there
has been a substantial change in circumstances. See generally Utah Code Ann. § 78B‐12‐
210(9)(a) (2008) (permitting a parent to petition to modify child support obligations
when “there has been a substantial change in circumstances”); Utah Code Ann. § 30‐3‐
5(8)(g) (Supp. 2011) (stating that the district court has continuing jurisdiction to modify
spousal support orders when there has been a “substantial material change in
circumstances not foreseeable at the time of divorce”). In the case of child support
orders, “a substantial change in circumstances may include . . . material changes of 30%
2. (...continued)
citation, however, we must reference the former numbering, which was 78‐45‐7.5(7).
See Utah Code Ann. § 78‐45‐7.5(7) (Supp. 2006). Section 78‐45‐7.5(7) is now codified as
section 78B‐12‐203(7). See Utah Code Ann. § 78B‐12‐203 amend. notes (2008).
References to other pertinent sections of the child support act as well as to the
divorce provisions governing modification of alimony, however, are to the current
version because they are substantively identical to the version then in effect.
3. The 2006 version of the imputation provision is identical to the statute that was in
effect when Husband’s employment with Tahitian Noni first ended in January 2005.
Compare Utah Code Ann. § 78‐45‐7.5(7) (Supp. 2006), with id. (2002). The parties have
only referred to the 2006 version, and we therefore refer to it as well for consistency.
20080388‐CA 5
or more in the income of a parent.” Utah Code Ann. § 78B‐12‐210(9)(b)(iii). In the
alimony context, a substantial change in circumstances includes a change in income not
anticipated in the divorce decree. See Bolliger v. Bolliger, 2000 UT App 47, ¶ 20, 997 P.2d
903; see, e.g., Haslam v. Haslam, 657 P.2d 757, 758 (Utah 1982) (reversing the denial of the
petition to modify alimony where the wife, who was unemployed at the time of the
divorce, was earning $1100 per month at the time of the modification petition and had
substantial savings).
¶13 Here, it is undisputed that Husband’s salary decreased by about 35%, from $7067
per month at the time the divorce decree was entered in January 2005 to $4583.33 per
month in October 2006, and that such a decrease was not contemplated in the divorce
decree itself.4 Nevertheless, in the findings of fact and amended decree of divorce, the
district court declined to consider this change in income as the kind of “substantial
change of circumstances” that would warrant consideration of Husband’s petition to
modify his support obligations, see Utah Code Ann. § 78B‐12‐210(9)(a); accord Utah
Code Ann. § 30‐3‐5(8)(g), because it attributed the change to Husband’s voluntary
underemployment. There is nothing in the applicable statutes, however, that links the
reason for an unanticipated loss of income to the determination of whether that loss
amounted to a substantial change of circumstances. Rather, the court must first
determine whether there is a substantial change in circumstances that warrants
consideration of the modification petition, see Utah Code Ann. § 78B‐12‐210(9)(a) (child
support modification statute); Utah Code Ann. § 30‐3‐5(8)(g) (spousal support
modification statute), and if there is a substantial change, then the court shall conduct
the imputation analysis, which involves determining whether the petitioner is
voluntarily unemployed or underemployed and, if so, how much income ought to be
imputed, see Utah Code Ann. § 78‐45‐7.5(7)(a)‐(b) (Supp. 2006) (current version at Utah
Code Ann. § 78B‐12‐203(7)(a)‐(b) (2008)). Thus, because Husband’s decrease in salary
amounted to a change in circumstances sufficient to warrant consideration of his
modification petition, the court should have gone on to conduct an imputation analysis
in order to determine whether modification of Husband’s support obligations was
ultimately warranted. Instead, the court first addressed the issue of whether Husband’s
4. Although Husband may have been aware that his income could significantly
decrease if he failed to remedy the behaviors that were leading to the warnings
regarding his job performance, “[t]he fact that [a] part[y] may have anticipated [a
substantial material change in circumstances] in [his] own mind[] . . . does not mean
that the decree itself contemplates the change.” See Bolliger v. Bolliger, 2000 UT App 47,
¶ 13, 997 P.2d 903 (fourth alteration in original) (internal quotation marks omitted).
20080388‐CA 6
reduced income was the result of voluntary underemployment (part of the imputation
analysis) and having decided that it was, never reached the issue of whether there was a
substantial change of circumstances in the first instance. Doing so thus inappropriately
conflated the threshold question of whether there is a substantial change of
circumstance with the first stage of the imputation analysis.
B. The District Court Applied the Wrong Standard for Determining if Husband Was
Voluntarily Underemployed.
¶14 We next turn to Husband’s contentions that the district court improperly found
him to be voluntarily underemployed and consequently abused its discretion in
imputing his full prior salary. The district court found Husband to be voluntarily
underemployed based on “his refusal to accept the warnings from his supervisor at
Tahitian Noni to change his behavior and work habits,” which had directly “resulted in
his discharge” and his subsequent “less remunerative salary.”5 As a result, the court
declined to consider modification of his existing support obligations.6 According to
Husband, income ought not be imputed to him because termination for cause does not
necessarily constitute voluntary underemployment as the term is used in the
5. Husband contends that the district court could not have made this finding without
improperly relying on the substance of deposition and affidavit testimony that was
admitted solely for impeachment purposes. We need not address that issue, however,
because our conclusion in this section that Husband’s termination, even if for cause,
cannot be the basis for a finding of voluntary underemployment renders any erroneous
consideration of impeachment testimony harmless.
6. Husband contends that the court abused its discretion in imputing his full previous
salary to him because the evidence did not support imputation of income at that level.
Although Husband presents this as an insufficiency‐of‐the‐evidence claim, it appears to
us that the district court did not impute income to him at all. Rather, as explained
above, once the court found that his termination from Tahitian Noni was for cause, it
simply decided that his subsequently‐reduced income was voluntary as well and
equated Husband’s voluntary underemployment with a lack of changed circumstances
sufficient to warrant consideration of the petition to modify. It therefore declined to
modify the support orders and left Husband’s support obligations unchanged.
Although the result was the same as it would be if the court had imputed income to
Husband at his previous salary, the court actually did not conduct an imputation
analysis and therefore did not impute income to Husband at all.
20080388‐CA 7
imputation provision. While Husband is correct that he was not voluntarily
unemployed as a result of his termination from Tahitian Noni, we remand for further
consideration regarding whether his subsequently‐reduced income was the result of
voluntary underemployment attributable to his actions after he initially lost the Tahitian
Noni job and, if so, whether imputation of additional income is appropriate.
1. Husband’s Termination Did Not Result in Voluntary Underemployment.
¶15 Although it may be tempting to place the burden of the loss of income stemming
from a termination for misconduct on the culpable party rather than on a dependent
spouse or child, the legislature has elected to allow imputation of income only when the
petitioner’s loss of employment is voluntary. Specifically, the imputation provision
then in effect provided that “[i]ncome may not be imputed to a parent . . . in contested
cases[ unless] a hearing is held and a finding made that the parent is voluntarily
unemployed or underemployed.” Id. § 78‐45‐7.5(7)(a) (emphasis added).7 The term
“voluntarily,” however, is not defined in the imputation provision, and Utah appellate
courts have not previously had an opportunity to construe its meaning. When
interpreting a statute, we first consult its plain language, “presum[ing] that the
legislature used each word advisedly and giv[ing] effect to each term according to its
ordinary and accepted meaning.” Arredondo v. Avis Rent A Car Sys., Inc., 2001 UT 29,
¶ 12, 24 P.3d 928 (internal quotation marks omitted). For this reason, “courts often refer
to the dictionary to define statutory terms.” Keene v. Bonser, 2005 UT App 37, ¶ 10, 107
P.3d 693.
¶16 Black’s Law Dictionary defines the word “voluntarily” to mean “[i]ntentionally;
without coercion.” Black’s Law Dictionary 1710 (9th ed. 2009); cf. Random House, Inc.,
Dictionary.com Unabridged, available at http://dictionary.reference.com/browse/voluntary
(last visited Jan. 6, 2012) (defining “voluntary” as “acting or done without compulsion
or obligation”; “done by intention, and not by accident”). Because the word
“‘voluntarily’ directly modifies the phrase ‘unemployed or underemployed[,’] [t]he
plain, definite, and sensible meaning of the provision, then, is that a [petitioner] is
‘voluntarily unemployed or underemployed’ when [he or she] intentionally chooses of
his or her own free will to become unemployed or underemployed.” In re J.R.T., 55 P.3d
217, 219 (Colo. Ct. App. 2002), aff’d, 70 P.3d 474 (Colo. 2003) (en banc); cf. Chandler v.
7. Although the section of the Utah Code that addresses imputation is located in the
Utah Child Support Act, “it is also relevant to imputation in the alimony context.” Fish
v. Fish, 2010 UT App 292, ¶ 14 n.5, 242 P.3d 787.
20080388‐CA 8
Department of Emp’t Sec., 678 P.2d 315, 320 (Utah 1984) (Oaks, J., writing for the majority
on this issue) (“In the context of th[e workers’ compensation] statute, “voluntarily”
simply means at the volition of the employee, in contrast to a firing or other termination
at the behest of the employer.”). A petitioner who is involuntarily terminated, even as a
result of his or her wrongful actions, does not deliberately choose to lose the job and
therefore cannot be considered voluntarily unemployed or underemployed simply
because the termination was for cause. This interpretation not only tracks the plain
meaning of the phrase but also is consistent with the imputation provision’s goal of
imputing income “to prevent parents [and spouses] from reducing their child support
or alimony by purposeful unemployment or underemployment.”8 Griffith v. Griffith, 959
P.2d 1015, 1018 (Utah Ct. App. 1998) (emphasis added), aff’d, 1999 UT 78, 985 P.2d 255;
American Law Inst., Principles of the Law of Family Dissolution: Analysis and
Recommendations § 3.14(5) cmt. e(i) (2002) (“Imputation is used when the obligor is
believed to be concealing income or to be shirking in his efforts to earn income.”).
¶17 In addition, our interpretation of voluntary unemployment or underemployment
to mean deliberate job loss accords with the decisions of a number of courts in other
jurisdictions that have concluded that termination for cause, even termination resulting
from misconduct, does not constitute voluntary unemployment or underemployment.
For example, in In re J.R.T., 70 P.3d 474 (Colo. 2003) (en banc), a father was ordered, by
two separate trial courts, to pay child support for his minor children based on a
monthly salary of $4510, see id. at 475‐76. Shortly thereafter, the father was terminated
from his employment for violating the company’s sexual harassment policies. See id. at
475. He was subsequently hired and terminated from a second position for failing to
timely deposit company funds. See id. Finally, the father was able to obtain
employment at a monthly salary of $2167, and he moved to reduce his child support
obligations. See id. The trial courts in both cases found him to be voluntarily
underemployed because he had been terminated due to misconduct. See id. at 475‐76.
8. Indeed, however inviting it may seem under the circumstances, alimony and child
support are not intended to be used as a form of punishment. See, e.g., English v.
English, 565 P.2d 409, 411 (Utah 1977) (“The purpose of alimony is to provide support
for [one spouse] and not to inflict punitive damages on the [other]. Alimony is not
intended as a penalty against the [paying spouse] nor a reward to the [dependent
spouse] . . . .” (internal quotation marks omitted)); Connell v. Connell, 2010 UT App 139,
¶ 16, 233 P.3d 836 (“The purpose of . . . imputation is to prevent parents from reducing
their child support or alimony by purposeful unemployment or underemployment.”
(internal quotation marks omitted)).
20080388‐CA 9
The Colorado Supreme Court consolidated the two cases and undertook an analysis of
what the term “voluntarily” means in the context of determining whether a parent is
voluntarily underemployed. See id. at 476‐78. The court observed that
[a]bility to pay is generally calibrated on the basis of
actual gross income, unless the facts of the case indicate that
the parent is voluntarily . . . underemployed. . . .
“Imputation is troubling when the obligor is charged with
obligations that he may not be able to pay, even with the
best of efforts. . . .”
. . . . [Moreover], the automatic imputation of income
at the level of pay the parent earned before being fired
would prevent the court from examining the present
circumstances of the parent’s incom[e] earning ability,
would not result in like treatment for similarly situated
parents, and would not necessarily take into account the best
interests of the child.
Id. at 478‐79 (quoting American Law Inst., § 3.14(5) cmt. e(i)). After considering the
goals of the statute and its legislative history, the court decided that the legislature
“intended income imputation to be an important exception to the normal rule of
computation based on actual gross income.” This exception arises only when the
petitioner “shirks his or her child support obligation by unreasonably foregoing higher
paying employment that he or she could obtain,” either by deliberately leaving a
higher‐paying position or by unreasonably failing to seek more lucrative pay once the
higher income has been lost. See id. at 479.
¶18 Other jurisdictions have adopted a similar definition of voluntary
unemployment or underemployment. See, e.g., Hart v. Hart, 561 A.2d 151, 152 (Conn.
App. Ct. 1989) (“It is particularly appropriate to base a financial award on earning
capacity where there is evidence that the payor has voluntarily quit or avoided
obtaining employment in his field.”); Guard v. Guard, 993 So. 2d 1086, 1089‐90 (Fla. Dist.
Ct. App. 2008) (agreeing with the husband that forced resignation by itself did not
constitute voluntary underemployment); Pace v. Pace, 24 P.3d 66, 68‐69 (Idaho Ct. App.
2001) (noting that although “‘it was [the mother]’s willful choice to improperly use
prescription drugs[, which led to termination],’” the termination itself was not
voluntary); In re Marriage of Johnson, 950 P.2d 267, 270 (Kan. Ct. App. 1997) (“Voluntary
conduct that results in an involuntary loss of income does not necessarily determine
20080388‐CA 10
that a parent is deliberately unemployed or underemployed.”); Lee v. Lee, 459 N.W.2d
365, 370 (Minn. Ct. App. 1990) (“Even assuming the willfulness of [the father]’s on‐the‐
job misconduct . . . , we are cited to no authority which permits a tribunal to equate
willful misconduct with voluntary termination where there is no evidence that the
misconduct was an attempt to induce termination and thereby avoid a child support
obligation.”); In re Sarvela, 910 A.2d 1214, 1223 (N.H. 2006) (“A parent who is
involuntarily terminated from his or her employment, or . . . involuntarily resigns from
that employment, did not ‘voluntarily’ become unemployed or underemployed.”);
Wilson v. Wilson, 43 S.W.3d 495, 497 (Tenn. Ct. App. 2000) (“We do not think that any
time an obligor parent is fired for misconduct he or she is willfully unemployed under
that provision of the child support guidelines. Although there is no requirement that a
parent intended to avoid [his or her] child support obligations by [his or her] actions,
we do think that willful or voluntary unemployment or underemployment must result
from an intent on the part of the parent to reduce or terminate his or her income.”);
Adkins v. Adkins, 656 S.E.2d 47, 53 (W.Va. 2007) (noting that West Virginia’s imputation
provision has been interpreted in a manner that excludes “an involuntary termination,
including those that are for cause and which involve intentional conduct,” from the
definition of voluntary underemployment for which income may be imputed).9 The
9. We have located cases from three jurisdictions that have held that termination for
cause constitutes voluntary unemployment or underemployment. Only one, however,
actually interprets the “voluntary unemployment or underemployment” language to
include terminations for cause. In that case, the Kentucky Court of Appeals, in an
unpublished decision, rather summarily extended the reasoning of an earlier case that
held that an incarcerated parent was voluntarily underemployed to a case where a
father was terminated for violating his company’s drug policy. See H.E.S. v.
Commonwealth, No. 2008‐CA‐001006‐ME, 2009 WL 414597, at *1 (Ky. Ct. App. 2009)
(stating that like the incarcerated parent, it was “apparent that [the father who failed to
comply with company policy was] voluntarily engaged in conduct which he should
have known would impair his ability to support his children” (internal quotation marks
omitted)). In the other two jurisdictions, the applicable statutes explicitly include an
element of fault. See Woehl v. Woehl, 2002 SD 6, ¶¶ 8, 15, 639 N.W.2d 188, 190‐92
(rejecting “the notion that . . . [the] resulting termination of [a father who struck his
coworker‐girlfriend at their place of employment] cannot be considered voluntary
because he did not provoke termination for the express purpose of avoiding child
support” on the basis that the applicable statute permits a court to impute income
where “[t]he voluntary act of [the] parent . . . reduces that parent’s income” (third
(continued...)
20080388‐CA 11
American Law Institute appears to have adopted a view of the law that would support
a similar approach to the concept of voluntary unemployment or underemployment in
termination‐for‐cause cases: “Imputation is used when the obligor is believed to be
concealing income or to be shirking in his efforts to earn income.” American Law Inst.,
§ 3.14(5) cmt. e(i).
¶19 Wife argues that the interpretation of the voluntary underemployment aspect10 of
the imputation provision to require an intentional shirking in one’s efforts to earn an
appropriate income, rather than simply termination for cause, is precluded by our
recent decision in Connell v. Connell, 2010 UT App 139, 233 P.3d 836. This argument is
not persuasive. In Connell, we upheld the trial court’s imputation of income based on
its finding that the husband’s forced resignation from his job at Brigham Young
University (BYU) was for cause, see id. ¶¶ 19‐20, and our opinion therefore states that
termination for cause, followed by a reduction in salary, can amount to voluntary
underemployment. The focus of the appeal, however, was not on whether the
husband’s loss of his job at BYU was voluntary, which the husband did not contest, but
on whether his earlier deliberate departure from Novell, Inc. for a lesser‐paying job
amounted to voluntary underemployment under the statute. See id. ¶¶ 14‐15. Because
the husband did not actually raise, as a claim of error on appeal, the issue of whether
his forced resignation from BYU for misconduct constituted voluntary
underemployment, Connell’s statement that the husband’s for‐cause job loss resulted in
voluntary underemployment does not amount to a holding. Rather, it is a recognition
9. (...continued)
alteration in original) (internal quotation marks omitted)); see also Ewing v. Ewing, 2004
PA Super. 46, ¶ 23 (noting that the statutory provision includes “fired for cause” in its
definition of “voluntary reduction of income”).
In three other jurisdictions, the pertinent state law expressly prohibits a district
court from granting a petition to reduce support obligations based on a change in
circumstances attributable to the petitioner’s voluntary acts. See, e.g., In re Marriage of
Imlay, 621 N.E.2d 992, 993‐95 (Ill. App. Ct. 1993); Murphy v. Murphy, 759 N.W.2d 710,
715‐16 (Neb. Ct. App. 2008); Edwards v. Lowry, 348 S.E.2d 259, 261 (Va. 1986), superseded
by statute on other grounds as stated in Farley v. Liskey, 401 S.E.2d 897, 898‐99 (Va. Ct. App.
1991).
10. In this discussion, we sometimes refer to the “voluntary unemployment or
underemployment” element of the imputation provision as simply the “voluntary
underemployment” element. This shorthand is for ease of reference.
20080388‐CA 12
of the basis for the district court’s unchallenged decision to impute income at the lower
level of the BYU salary, rather than at the higher Novell salary. That statement,
therefore, does not have the precedential significance that Wife claims.
¶20 In the end, based on our interpretation of the imputation provision and our own
relevant case law, we agree with the conclusion of the Colorado Court of Appeals “that
whether a person lost a job because of willful or knowing misconduct is not
determinative of whether the person is voluntarily unemployed or underemployed.” In
re J.R.T., 55 P.3d 217, 220 (Colo. Ct. App. 2002), aff’d, 70 P.3d 474 (Colo. 2003) (en banc).
Instead, the job loss itself must be intentional. As a result, the district court’s finding
that Husband was voluntarily underemployed simply based on the for‐cause nature of
his termination from Tahitian Noni was in error.
2. On Remand Husband’s Conduct Posttermination May Be Examined To
Determine Whether There Is Voluntary Underemployment.
¶21 Nevertheless, our decision that termination for cause does not in itself constitute
voluntary underemployment does not conclude the inquiry. As the Colorado Court of
Appeals stated in In re J.R.T., 55 P.3d 217 (Colo. Ct. App. 2002), aff’d, 70 P.3d 474 (Colo.
2003) (en banc),
What is determinative . . . is the person’s subsequent course
of action and decision making. A person who has been
involuntarily terminated from a position may thereafter
become voluntarily . . . underemployed by not attempting in
good faith to obtain new employment at a comparable salary
or by refusing to accept suitable employment offers.
Id. at 220 (citing Jensen v. Jensen, 877 S.W.2d 131, 136 (Mo. Ct. App. 1994)). Adopting a
similar approach, a Florida appellate court has held that even after finding that the
parent was not voluntarily underemployed as a result of termination or forced
resignation, a court must consider “what that parent has done since the prior
employment, i.e., whether he or she has remained unemployed or underemployed
voluntarily” as a result of the party’s “pursuit of his own interests or through less than
diligent and bona fide efforts to find employment paying income at a level equal to or
better than that formerly received,” see Guard, 993 So. 2d at 1089 (internal quotation
marks omitted). In other words, after determining that a petitioner’s for‐cause job loss
did not result in voluntary unemployment or underemployment, the district court must
then consider what the petitioner has done in the aftermath of termination to determine
20080388‐CA 13
whether he or she has become voluntarily underemployed by virtue of his or her failure
to then make reasonable efforts to obtain employment at a pay rate comparable to that
of the lost employment. This determination necessarily depends on whether there are
jobs available in the relevant market for a person with the party’s qualifications and
experience.
¶22 In Hall v. Hall, 858 P.2d 1018 (Utah Ct. App. 1993), we described the appropriate
analysis for assessing whether a person’s continuing underemployment following
termination is voluntary. See id. at 1023‐27. Although the precise issue in Hall was
whether income could be imputed in the absence of a finding of voluntary
underemployment, see id. at 1024, we identified several factors pertinent to the
determination of whether underemployment is actually voluntary:
Although the trial court found that appellant is currently
earning less than he was previously, that isolated finding
does not answer the critical question of whether the drop in
earnings was voluntary. Rather, appellant’s current
earnings, as compared to his historical income, is merely one
element in the matrix of factual issues affecting the ultimate
finding of whether appellant is underemployed. Many
critical questions are left unanswered: What are appellant’s
abilities? Is appellant’s current salary below the prevailing
market for a person with his abilities? Are there any job
openings for a person with appellant’s abilities? At a
minimum, the trial court must determine appellant’s
employment capacity and earnings potential . . . before it
[can] logically conclude that he is, in fact, underemployed.
Id. at 1026. These factors closely align with those identified in the imputation provision
for determining how much income is appropriately imputed. See generally Utah Code
Ann. § 78‐45‐7.5(7)(b) (Supp. 2006) (current version at 78B‐12‐203(7)(b) (2008)) (“If
income is imputed to a parent, the income shall be based upon employment potential
and probable earnings as derived from work history, occupation qualifications, and
prevailing earnings for persons of similar backgrounds in the community, or the
median earning for persons in the same occupation in the same geographical area as
found in the statistics maintained by the Bureau of Labor Statistics.”). This overlap is
not merely coincidental but rather stems from the nature of the imputation inquiry.
That is, in cases where the initial job loss was not intentional and the focus is on the
petitioner’s conduct in the aftermath, the factors that the legislature identified in the
20080388‐CA 14
imputation provision are as relevant to the determination of whether the party is in fact
voluntarily underemployed as they are to the determination of the specific amount that
ought to be imputed. This is because reduced income in the aftermath of job loss does
not itself support a reasonable inference that the underemployment is voluntary; rather,
such a finding of voluntary underemployment must be based on evidence that the party
could be earning more with reasonable effort. Consequently, the petitioner’s skills and
experience as well as the prevailing wages for a person with his or her qualifications,
that is, the considerations outlined in the imputation provision and in Hall, are pertinent
to the district court’s assessment of voluntariness.
¶23 Put differently, the court must determine whether there are jobs reasonably
available to someone with the party’s qualifications and experience. Should the court
determine that the petitioner is indeed voluntarily underemployed and that imputation
is appropriate under the circumstances, it may then proceed to refine the analysis to
arrive at a specific amount of income to be imputed. See Connell, 2010 UT App 139,
¶¶ 16‐17 (stating that “a finding of voluntary underemployment does not require a
court to impute the higher income; it merely allows it to do so” after weighing the
factors in the imputation provision (citing Hill v. Hill, 869 P.2d 963, 964‐65 (Utah Ct.
App. 1994))); see also In re J.R.T., 70 P.3d 474, 478‐79 (Colo. 2003) (en banc) (“[A]utomatic
imputation of income at the level of pay the parent earned before being fired would
prevent the court from examining the present circumstances of the parent’s incom[e]
earning ability, would not result in like treatment for similarly situated parents, and
would not necessarily take into account the best interests of the child.” (emphasis
added)); Pace v. Pace, 24 P.3d 66, 69 (Idaho Ct. App. 2001) (refusing to impute income to
a nurse who was attempting to rehabilitate from the prescription drug addiction that
resulted in her termination from employment where to do so would “add[] to an
accumulating burden which falls upon the parent at a time when [s]he is least able to
bear it”).11
11. There are several Utah cases where the obligated party is incarcerated following a
criminal conviction and income is imputed in the amount the party would be earning
but for the incarceration, regardless of the realities of the party’s ability to make support
payments. See, e.g., Young v. Young, 2009 UT App 3, ¶ 13, 201 P.3d 301; Proctor v.
Proctor, 773 P.2d 1389, 1391 (Utah Ct. App. 1989) (mem.). In those cases, the imputation
analysis is cursory, apparently because the choice to commit a criminal act results in the
party being unable to work and thereby fulfill his or her support obligations. See
generally Commonwealth ex rel. Marshall v. Marshall, 15 S.W.3d 396, 401‐02 (Ky. Ct. App.
(continued...)
20080388‐CA 15
¶24 While the district court in the case before us did make some findings regarding
the statutory factors, its finding of voluntary underemployment was ultimately
premised on its conclusion that Husband’s conduct at work led to his termination and
the subsequent reduction in his income. We therefore remand for the district court to
reconsider whether Husband’s “subsequent course of action and decision making”
rendered him voluntarily underemployed. See In re J.R.T., 55 P.3d 217, 220 (Colo. Ct.
App. 2002). In making this decision, the district court must address the factors
identified in Hall and codified as subsection (7)(b) of the imputation provision.12 If, on
11. (...continued)
2000) (reversing a reduction of a child support obligation for an incarcerated father
because “he voluntarily engaged in conduct which he should have known would
impair his ability to support his children”). Our decision here does not reach the
situation of an obligor who is out of a job as the result of a choice to engage in criminal
activity.
12. Husband contends that the district court should use the 2007 version of the
imputation provision, which became effective on July 1, 2007, rather than the 2006
version, which was in effect at the time of the underlying events and through the time
of trial, see Utah Code Ann. § 78‐45‐7.5(7) (2002, Supp. 2006, & Supp. 2007) (current
version at Utah Code Ann. § 78B‐12‐203(7) (2008)). It is well established that “[w]hen
adjudicating a dispute we apply the version of the statute that was in effect at the time
of the events giving rise to [the] [action],” Connell v. Connell, 2010 UT App 139, ¶ 16 n.4,
233 P.3d 836 (second and third alterations in original) (internal quotation marks
omitted). Although there are some limited exceptions to this rule, Husband has not
persuaded us, with regard to subsection (7)(a) of the imputation provision, that any
such exceptions were applicable at the time of the trial on June 7, 2007.
In Hall v. Hall, 858 P.2d 1018 (Utah Ct. App. 1993), however, this court identified
the availability of employment opportunities as one of the factors relevant to
determining whether one is voluntarily underemployed. See id. at 1026. As we have
discussed, the Hall factors are substantially identical to the statutory factors listed in
subsection (7)(b). For this reason, we view the 2007 amendment to subsection (7)(b) as
having clarified the statute by specifically identifying “employment opportunities” as a
factor, rather than having added it as a new one. As Hall implicitly recognized, the
availability of opportunities for more remunerative employment is a natural and logical
consideration in the analysis of whether unemployment or underemployment is
(continued...)
20080388‐CA 16
remand, the district court finds Husband to be voluntarily underemployed, it must then
determine, based on the statutory factors and in the exercise of its discretion under the
circumstances, whether income ought to be imputed to Husband, and if so, how
much.13 In addressing these issues on remand, the trial court has considerable discretion
to decide whether it is appropriate to reopen the hearing to take additional evidence or
for any other proper purpose, given the nature of our ruling here.
II. Attorney Fees
¶25 We now consider whether the district court properly exercised its discretion in
awarding Wife $20,000 in attorney fees, rather than the $51,000 that she requested, and
whether it made the appropriate findings to support the award. Specifically, Husband
argues that the award is not sustainable because the district court did not make detailed
findings about the reasonableness of the fees, Wife’s need, or Husband’s ability to pay.
Wife’s argument that the district court exceeded its discretion in reducing the fees to
$20,000 is based on three contentions. First, she asserts that the court erred in deciding
that Husband’s equity in the marital home was not income for purposes of attorney
fees. Second, she claims that the determination that the requested fees were
unreasonable was an abuse of the district court’s discretion. Finally, she contends that
the district court improperly considered the amount of Husband’s attorney fees, which
were not part of the evidence, in making that determination.
12. (...continued)
voluntary.
13. Husband argues, in his reply brief, that the district court must take into
consideration his tax liability when calculating his alimony obligation. See generally Fish
v. Fish, 2010 UT App 292, ¶ 21, 242 P.3d 787 (instructing the trial court to consider the
husband’s tax liability on imputed income as part of its examination of his ability to pay
alimony); Andrus v. Andrus, 2007 UT App 291, ¶¶ 17‐18, 169 P.3d 754 (remanding for
additional findings on the husband’s ability to pay alimony when the district court was
presented with evidence of his tax obligations but did not make any findings that
demonstrated whether it had considered these payments in calculating his income). We
decline to consider this claim, however, because it was presented for the first time in the
reply brief and is therefore waived. See generally Allen v. Friel, 2008 UT 56, ¶ 8, 194 P.3d
903 (“It is well settled that issues raised by an appellant in the reply brief that were not
presented in the opening brief are considered waived and will not be considered by the
appellate court.” (internal quotation marks omitted)).
20080388‐CA 17
¶26 The district court has broad discretion to award attorney fees in a divorce decree
modification action, and we reverse such an award only if it is “seriously inequitable or
otherwise unjust.” Young v. Young, 2009 UT App 3, ¶ 21, 201 P.3d 301. To allow
meaningful appellate review, however, the decision to award attorney fees must be
supported by detailed findings of fact. See Connell v. Connell, 2010 UT App 139, ¶ 27,
233 P.3d 836. There are two classes of attorney fees that may be awarded in a divorce
proceeding, each with different requirements. See id. ¶ 28. “Fees awarded . . . [for
establishing a support order] must be based on the usual factors of need, ability to pay,
and reasonableness.” See id.; see also Utah Code Ann. § 30‐3‐3(1) (Supp. 2011). “By
contrast, in awarding fees . . . [for enforcing an existing support order,] the court may
disregard the financial need of the moving party. The guiding factor . . . is whether the
party seeking an award of fees substantially prevailed on the claim.” Connell, 2010 UT
App 139, ¶ 28 (internal quotation marks and additional citations omitted) (citing Utah
Code Ann. § 30‐3‐3(2)); see id. ¶ 30 (noting that this is because fees awarded for
enforcing an existing order “serve no equalizing function but allow the moving party to
collect fees unnecessarily incurred due to the other party’s recalcitrance”). The district
court, however, retains its discretion to reduce or eliminate attorney fees if the paying
party is unable to pay or if there is another basis for reduction. See Utah Code Ann.
§ 30‐3‐3(2). The district court here made two awards of attorney fees: one in the
amount of $3324.71‐‐the full amount requested‐‐for fees incurred at the August 29, 2005
OSC hearing and one in the amount of $16,675.29‐‐reduced from the requested amount
of approximately $48,000‐‐to cover the remainder of Wife’s accrued fees. We will
address the propriety of each award in turn.
A. The District Court Properly Awarded Attorney Fees in the Amount of $3324.71 for
the August 29, 2005 OSC Hearing.
¶27 In June 2005, Wife filed a motion for an order to show cause on the basis that
Husband was not paying alimony or child support as required by the divorce decree.
As a result, the district court ordered Husband to make back payments. It reserved the
issue of attorney fees, however, until trial. At trial, Wife requested an award of fees for
the OSC hearing in the amount of $3324.71 and provided supporting documentation.
The district court determined Wife to be the prevailing party at that hearing, found the
fees to be “appropriate,” and awarded Wife the $3324.71 she requested. Husband now
argues that the court failed to make findings regarding Wife’s need. Wife’s need,
however, is not “relevant” in actions to enforce existing support orders. See Connell,
2010 UT App 139, ¶¶ 28, 31 (stating that the financial need of the moving party may be
disregarded in enforcement actions). Rather, reasonable attorney fees may be awarded
to the prevailing party. See id. Because the district court made the requisite findings
20080388‐CA 18
and there is no challenge to those findings, we affirm the award of $3324.71 in attorney
fees from the August 29, 2005 OSC hearing.
B. It Is Necessary To Remand for Additional Findings with Respect to the Remaining
Attorney Fees.
¶28 Wife also requested approximately $48,000 for attorney fees that were incurred at
earlier OSC hearings and at trial. Although Wife provided the district court with a
breakdown of these fees for reference, the court did not distinguish between fees
incurred to enforce existing support orders (OSC hearing fees) and those incurred in
establishing a new order (trial fees) in making the award. Because the district court did
not make this distinction, we cannot conduct a meaningful review of its conclusions.
See generally id. ¶ 27 (requiring the trial court to make adequate findings of fact to
permit appellate review). We recognize that the district court made findings on all the
required factors applicable to an award of trial fees (Wife’s need, Husband’s ability to
pay, the reasonableness of the requested fees) and OSC hearing fees (Wife’s status as the
prevailing party). But because the analyses were combined, with the fees from each
proceeding lumped together without distinction, we cannot meaningfully assess
whether the award constituted a proper exercise of discretion. Remand will allow the
district court an opportunity to more clearly enunciate its findings with respect to the
two types of claims for attorney fees and more fully explain its reasoning for any
reductions. Furthermore, the court’s determination about whether Husband is in fact
voluntarily underemployed directly relates to Husband’s ability to pay and may affect
the district court’s decision regarding trial fees. We therefore reverse the award and
remand for the entry of attorney fees with the requisite findings for each type of award.
1. Findings on Remand
¶29 On remand, should the district court award Wife attorney fees incurred during
the OSC hearings, “its order should be supported by a finding that Wife substantially
prevailed on the motions for which she seeks attorney fees.” See Connell, 2010 UT App
139, ¶ 32. If it reduces or precludes Wife’s recovery of attorney fees from the OSC
hearings, it must include “a finding that Husband is impecunious or a statement on the
record of its reason for its decision,” such as a finding that the requested fees were
unreasonable. See id.¶30 If the district court awards attorney fees incurred at trial, it must make findings
regarding “Wife’s need, Husband’s ability to pay, and the reasonableness of the fees.”
See id. An award of less than all the fees requested should include an explanation of
how the court arrived at the amount awarded. See generally Rappleye v. Rappleye, 855
20080388‐CA 19
P.2d 260, 266 (Utah Ct. App. 1993) (remanding for further consideration of the
reasonableness of the attorney fees award because the factual findings did not
adequately explain why the district court awarded the wife $5000 when she requested
over $15,000). In addition, contrary to Wife’s contention, it appears to us that the
district court properly understood that it could not consider Husband’s counsel’s
unsworn statement that Husband’s fees were approximately one‐fifth of Wife’s as
evidence that Wife’s fees were unreasonable, and we anticipate that on remand it will
also base its reasonableness finding solely upon the competent and admissible evidence
presented to it.
2. Home Equity
¶31 In connection with any award of attorney fees, the district court may consider all
sources of income but, contrary to Wife’s position, is not required to treat Husband’s
equity in the marital home as income. The cases relied upon by Wife help to illustrate
this maxim. For example, in Crompton v. Crompton, 888 P.2d 686 (Utah Ct. App. 1994),
this court held that
it would be inappropriate for an appellate court to tie the
hands of a trial court by confining its consideration of
income in every case to only that which springs from a forty‐
hour‐week source. A trial court must be able to consider all
sources of income that were used by the parties during their
marriage to meet their self‐defined needs, from whatever
source‐‐overtime, second job, self‐employment, etc., as well
as unearned income.
Id. at 689. Wife argues that the home equity here is the type of “unearned income”
referenced in Crompton. In Crompton, however, the husband had consistently worked
twenty to thirty hours in overtime each week throughout the marriage. See id. at 688.
Because the parties had established a lifestyle that consumed this additional income, the
trial court imputed income to the husband that included overtime pay. See id. In
affirming, this court recognized that the overtime income was enjoyed during the
marriage and was “regular, consistent and predictable.” See id. In the instance case, the
home equity is a one‐time source that came into being because of the divorce.
Moreover, the language in Crompton merely grants the trial court the flexibility to
consider all sources of income. Nothing about the language of this case, or other cases
cited by Wife, mandates that the court consider all the paying party’s assets, such as
home equity, as income for purposes of calculating support orders; rather, the matter is
left to the court’s judgment. See, e.g., Young v. Young, 2009 UT App 3, ¶¶ 23‐24, 201 P.3d
20080388‐CA 20
301 (concluding that the trial court’s consideration of the husband’s proceeds from the
sale of the marital home in determining his ability to pay attorney fees was within its
discretion where the husband was incarcerated and had no other source of income);14 cf.
Adelman v. Adelman, 815 P.2d 741, 745‐46 (Utah Ct. App. 1991) (affirming the trial court’s
decision to allow the wife to collect past‐due alimony and unreimbursed medical
expenses for the minor children, monies that had already been deemed the husband’s
responsibility, from the husband’s equity in the marital home). We decline to adopt
such a requirement here.
C. Attorney Fees on Appeal Are Not Warranted.
¶32 Finally, Wife requests attorney fees on appeal. Wife’s request, however, is
limited to fees pursuant to rule 33 of the Utah Rules of Appellate Procedure. Under
rule 33, a party may recover attorney fees incurred on appeal where the argument “is
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.” Utah R. App. P. 33(b).
Based on our decision here, rule 33 does not support an award of attorney fees against
Husband on appeal.
CONCLUSION
¶33 Husband’s change in income constituted a substantial change in circumstances
that warranted consideration of his modification petition. Because Wife alleged that
Husband’s reduced income was due to voluntary underemployment after his
involuntary termination, the court was required to conduct the imputation analysis to
determine if Husband was in fact voluntarily underemployed and, if so, whether
income ought to be imputed to him. We reverse the district court’s finding that
Husband was voluntarily underemployed based solely on his termination from
Tahitian Noni and remand for the court to consider whether Husband is voluntarily
underemployed based on his posttermination conduct and if so, to calculate how much
income, if any, to impute to him.
14. Wife also directs us to the decision of Madsen v. Madsen, No. 971680‐CA, 1998 WL
1758391 (Utah Ct. App. 1998) (mem.). In that case, the trial court ordered the husband
to pay $2000 in attorney fees, which it found he could pay from his equity in the marital
home. See id. at *2. This court, however, remanded for additional findings to support
the amount of the award. See id. There was no discussion about whether the court’s
consideration of home equity as income was proper. See id.
20080388‐CA 21
¶34 With respect to attorney fees, we affirm the award of $3324.71 incurred at the
August 29, 2005 OSC hearing. We reverse, however, the attorney fees award in the
amount of $16,675.29 and remand for the district court to make findings consistent with
this opinion in support of any fees awarded beyond the $3324.71. Wife’s request for
attorney fees on appeal is denied.
____________________________________
Stephen L. Roth, Judge
‐‐‐‐‐
¶35 WE CONCUR:
____________________________________
Gregory K. Orme, Judge
____________________________________
James Z. Davis, Judge
20080388‐CA 22