Ouk v. Ouk

2015 UT App 104_________________________________________________________
THE UTAH COURT OF APPEALS
SIBEL JOHANNA OUK,
Petitioner and Appellee,
v.
SOVATPHONE OUK,
Respondent and Appellant.
Amended Memorandum Decision1
No. 20121015-CA
Filed April 30, 2015
Third District Court, Salt Lake Department
The Honorable Roger S. Dutson
No. 074905211
Mark L. Shurtleff, Attorney for Appellant
Bert L. Dart and Amy Hayes Kennedy, Attorneys
for Appellee
JUDGE MICHELE M. CHRISTIANSEN authored this Memorandum
Decision, in which JUDGES JAMES Z. DAVIS and STEPHEN L. ROTH
concurred.
CHRISTIANSEN, Judge:
¶1 Sovatphone Ouk (Husband) and Sibel Johanna Ouk (Wife)
divorced in 2009. Husband appeals from the trial court’s October
1. This Amended Memorandum Decision replaces the
Memorandum Decision issued March 12, 2015, Ouk v. Ouk, 2015 UT
App 57. In response to a petition for rehearing filed by Appellee
Sibel Johanna Ouk, we have added paragraph 19 and note 5 to this
amended decision.
Ouk v. Ouk
2012 final order setting forth the distribution of marital property
and awarding child support and attorney fees to Wife. We affirm.
¶2 Wife filed for divorce in December 2007. After a trial
regarding the validity of the parties’ prenuptial agreement, the
court entered a decree of divorce in July 2009. A second trial was
held in June 2012 on several remaining issues, including child
support and distribution of marital property. After the second trial,
the court ordered Husband to pay Wife child support for their two
minor children in the sum of $1,760 per month and entered a
judgment against Husband in the amount of $25,727 for unpaid
child support that had accrued pursuant to an earlier temporary
order. The trial court also determined that Wife was entitled to an
award of $100,000 to compensate her for Husband’s dissipation of
marital assets. The trial court based this determination on its
finding that Husband dissipated funds from a line of credit he took
out on the marital home and proceeds from his sale of one of the
parties’ vehicles. Finally, the trial court ordered Husband to pay
Wife’s attorney fees and costs in the amount of approximately
$95,000.
¶3 Husband first challenges the trial court’s award of child
support. Husband contends that the trial court erred in calculating
the amount he was required to pay because the court failed to
deduct necessary business expenses from Husband’s gross income
as required by Utah Code section 78B-12-203(4)(a). “The trial court
in a divorce action is permitted considerable discretion in adjusting
the financial and property interests of the parties, and its actions
are entitled to a presumption of validity.” Goggin v. Goggin, 2013
UT 16, ¶ 44, 299 P.3d 1079 (citation and internal quotation marks
omitted).
¶4 A noncustodial parent’s child-support obligation is
calculated using each parent’s adjusted gross income. See Utah
Code Ann. § 78-45-7.4 (LexisNexis 2002) (renumbered as Utah
Code Ann. § 78B-12-207 (LexisNexis 2012)). When a parent is
self-employed or operates a business, “[g]ross income . . . shall be
20121015-CA 2 2015 UT App 104Ouk v. Ouk
calculated by subtracting necessary expenses required for
self-employment or business operation from gross receipts.” Id. § 78-
45-7.5(4)(a) (Supp. 2007) (emphasis added) (current version at Utah
Code Ann. § 78B-12-203(4)(a) (LexisNexis 2012)). “Only those
expenses necessary to allow the business to operate at a reasonable level
may be deducted from gross receipts.” Id. (emphasis added). Utah
Code section 78-45-7.5(4)(a) “require[s] the person claiming
business expenses to prove that those expenses are necessary to
allow the business to operate at a reasonable level.” See Barrani v.
Barrani, 2014 UT App 204, ¶ 14, 334 P.3d 994 (citation and internal
quotation marks omitted).
¶5 Husband argues that, in determining his gross income, the
trial court was required to deduct from Husband’s reported income
the expenses he claimed in the financial declarations he submitted
to the court. These declarations listed Husband’s income and
personal expenses for the years 2009, 2010, and 2011. The listed
expenses included rent or mortgage payments for a residence,
residence maintenance, food and household supplies, utilities,
laundry and dry cleaning, and payments on cars. But the
declarations do not contain any information about Husband’s
business expenses. Even assuming that the declarations contained
information on legitimate business expenses, Husband failed to
demonstrate that these expenses were necessary to allow his
business to operate at a reasonable level. Husband also fails to
point to any other evidence in the record from which the trial court
could have determined that these were necessary business
expenses. Because Husband failed to meet his burden of proving
that these expenses were necessary to operate his business, the trial
court did not abuse its discretion in refusing to subtract those
expenses from his gross income.
¶6 Husband also claims that the trial court improperly imputed
income to him in calculating child support. Husband argues that
the trial court should have found that Husband was “voluntarily
unemployed or underemployed prior to deciding to impute
income,” and that the trial court “failed to articulate any findings
20121015-CA 3 2015 UT App 104Ouk v. Ouk
with regard to [Husband’s] ‘employment potential and probable
earnings’” as required by Utah Code section 78B-12-203(7)(b).
¶7 “[T]he imputation analysis . . . involves determining
whether the [spouse] is voluntarily unemployed or underemployed
and, if so, how much income ought to be imputed.” Rayner v.
Rayner, 2013 UT App 269, ¶ 7, 316 P.3d 455 (alterations and
omission in original) (citation and internal quotation marks
omitted). A person is “voluntarily unemployed or
underemployed” when he or she “intentionally chooses of his or
her own free will to become unemployed or underemployed.” Id.(citation and internal quotation marks omitted).
¶8 We disagree, however, with Husband’s claim that the trial
court imputed income to him. Rather, the trial court estimated
Husband’s income based on his reported historical income in 2009,
2010, and 2011. While the court found that at the time of trial,
Husband “was not living as lavishly as he normally lived,” the
court did not believe Husband’s claim that he was “impecunious
with no income.” The trial court did not conclude that Husband
was intentionally working less or actually earning less money, but
rather that Husband was being deceitful about his income due to
the inconclusive and unreliable documentation of current income
he had filed with the court.2 The trial court credited neither
2. The court found that Husband had directed employees or
consultants “to file misleading and deceptive financial documents
. . . in order to present an inaccurate financial picture.” The court
also determined that Husband had filed similar deceptive financial
documents with the court. The court observed that Husband did
not provide documentation requested by the court. For example,
the court found that Husband did not provide evidence of current
earnings of his business operations. The court also found
Husband’s claim of impecuniosity not credible and accordingly
denied Husband’s request to use the minimum wage as his income
level for purposes of calculating child support. The court stated,
(continued...)
20121015-CA 4 2015 UT App 104Ouk v. Ouk
Husband’s testimony nor the financial records Husband provided
that purported to represent a significant decrease in his current
income. Therefore, to determine Husband’s gross income at the
time of trial, the court used the amounts contained in Husband’s
sworn financial declarations and averaged his reported monthly
salary from 2009 through 2011 in order to arrive at an appropriate
estimate of Husband’s actual monthly income. Because the trial
court did not impute income to Husband, but rather simply
estimated Husband’s actual income by averaging his monthly
income from his sworn financial declarations, the court was not
required to undertake an imputation analysis or base that estimate
on the factors outlined in the imputation statute.
¶9 Husband next challenges the trial court’s determination that
he dissipated marital assets. The trial court awarded Wife $100,000
after determining that Husband failed to document or trace his use
of proceeds from a marital line of credit for a legitimate marital
purpose.3
¶10 “The trial court in a divorce action is permitted considerable
discretion in adjusting the financial and property interests of the
parties, and its actions are entitled to a presumption of validity.”
Goggin v. Goggin, 2013 UT 16, ¶ 44, 299 P.3d 1079 (citation and
internal quotation marks omitted). Thus, this court will not disturb
a court’s “distribution of marital property unless it is clearly unjust
2. (...continued)
“[Husband’s] pleas of poverty appear [to be intended] at least in
part . . . to try and avoid his obligation to his spouse and children.”
3. Husband does not challenge the court’s finding that Husband
dissipated $42,000 from the sale of a Mercedes, which was included
in the $100,000 judgment awarded to Wife. Husband argues only
that the trial court erred in finding that Husband dissipated the
funds from the line of credit. However, because Husband frames
his argument as a challenge to the entire $100,000 awarded by the
court, we use the full $100,000 amount for clarity.
20121015-CA 5 2015 UT App 104Ouk v. Ouk
or a clear abuse of discretion.” Id. (citation and internal quotation
marks omitted). Showing such an abuse of discretion “is a heavy
burden, and we can properly find abuse only if no reasonable
person would take the view adopted by the trial court.” Id. (citation
and internal quotation marks omitted).
¶11 In a domestic case such as this, after an initial showing of
apparent dissipation by one party, the burden shifts to the other
party “to show that the funds were not dissipated, but were used
for some legitimate marital purpose.” Parker v. Parker, 2000 UT App
30, ¶ 13, 996 P.2d 565. Thus, the party who apparently dissipated
assets bears the burden “to account for the missing money and
demonstrate that it was spent to service or retire marital debt, to
pay taxes for which both parties were responsible, to close the gap
between income and reasonable living expenses, or for other
marital purposes.” Id. ¶ 15. If the court finds that a spouse has
dissipated marital assets, “the court should calculate the value of
the marital property as though the assets remained.” Goggin, 2013
UT 16, ¶ 49 (citation and internal quotation marks omitted). And
if “a spouse’s behavior prevents the court from determining the
precise amount of dissipated assets, the court should estimate, to
the best of its ability, the upper limit of the amount of assets that
the spouse may have dissipated.” Rayner, 2013 UT App 269, ¶ 20
(citation and internal quotation marks omitted).
¶12 Here, Wife presented the trial court with evidence that in
June 2010, Husband obtained a $185,000 line of credit on the
marital home without her knowledge and that Wife never received
any benefit or funds from that line of credit. Accordingly, Wife’s
initial showing shifted the burden to Husband to demonstrate that
the funds from the line of credit were not dissipated and were used
for a legitimate marital purpose. See Parker, 2000 UT App 30, ¶ 13.
¶13 In support of his argument that the funds were used for
marital expenses, Husband states that he testified that $184,000
from the $185,000 line of credit went into his business, GMA, and
was used “towards operations of the business, payroll and
20121015-CA 6 2015 UT App 104Ouk v. Ouk
overhead expenses.”4 Husband also called an accounting expert
witness at trial to testify that the loan was “on the GMA side.” The
trial court did not find this evidence credible. On appeal, Husband
argues that “[n]o evidence was presented that showed that the [line
of credit] was used for anything other than running GMA” and
that there was “no evidence upon which the trial court could have
conjectured that the [money from the loan] was used by [Husband]
personally or for some nefarious purpose.” However, it was
Husband who bore the evidentiary burden, which he cannot meet
by pointing to a lack of contrary evidence. Husband also claims
that because the court found that GMA was a marital asset, no
other evidence was necessary to demonstrate that the funds were
used for a marital purpose. But the trial court found that Husband
did not meet his burden at trial to provide any evidence or
documentation proving that all of the proceeds from the line of
credit went into GMA and that the money was spent for the
business.
¶14 “Clearly, the fact-finder is in the best position to judge the
credibility of witnesses and is free to disbelieve their testimony.
Even where testimony is uncontroverted, a trial court is free to
disregard such testimony if it finds the evidence self-serving and
not credible.” Glauser Storage, LLC v. Smedley, 2001 UT App 141,
¶ 24, 27 P.3d 565 (citations and internal quotation marks omitted).
The trial court was in the best position to judge Husband’s
credibility, and in fact, the court ultimately determined that
Husband was not forthcoming about the use of the full $184,000.
The trial court found that Husband “treated all businesses and
business assets as his personal assets and used them at will for his
personal use and expenditures, as well as for business purposes”;
that there had “been periods of business mismanagement, lack of
effort to organize and properly handle important affairs of his
businesses, and excessive spending for personal purposes”; and
that Husband’s credibility was “questionable in regard to marital
4. The court determined that GMA was a marital asset.
20121015-CA 7 2015 UT App 104Ouk v. Ouk
assets.” Additionally, the testimony of Husband’s expert witness
that the loan was “on the GMA side” does nothing to explain how
the money was actually spent. With no evidence of how the funds
were actually used, the trial court could have reasonably concluded
that the testimony of Husband and his expert witness to the effect
that the money was used for “business” was not sufficient “to show
that the funds were not dissipated, but were used for some
legitimate marital purpose.” See Parker, 2000 UT App 30, ¶ 13.
Accordingly, Husband has failed to meet his burden on appeal to
show that no reasonable person would take the view adopted by
the trial court. See Goggin, 2013 UT 16, ¶ 44. Therefore, we conclude
that the trial court did not abuse its discretion in finding that
Husband had dissipated marital assets.
¶15 Last, Husband challenges the trial court’s award of attorney
fees to Wife. The trial court ordered Husband to pay $75,000 of
Wife’s attorney fees and $19,905.12 in costs. Husband argues that
the court abused its discretion “when it ordered [Husband] to pay
[Wife’s] attorney’s fees based solely upon the book value of the
total equity of [Husband’s] businesses, ignoring . . . loss to the
value” of his businesses.
¶16 A trial court in a divorce proceeding may “order a party to
pay the costs[ and] attorney fees . . . of the other party to enable the
other party to prosecute or defend the action.” Utah Code Ann.
§ 30-3-3(1) (LexisNexis 2007). Both the decision to award fees and
the amount of such fees are within the trial court’s discretion. See
Wight v. Wight, 2011 UT App 424, ¶ 33, 268 P.3d 861. However, “the
award [or denial of such fees] must be based on evidence of the
financial need of the receiving spouse, the ability of the other
spouse to pay, and the reasonableness of the requested fees.”
Oliekan v. Oliekan, 2006 UT App 405, ¶ 30, 147 P.3d 464 (alteration
in original) (citation and internal quotation marks omitted).
¶17 Here, the trial court adequately considered the evidence
presented in determining that Husband could pay what Wife could
not. The court found that Wife was unable to pay her attorney fees
20121015-CA 8 2015 UT App 104Ouk v. Ouk
because Wife was earning an income “barely sufficient to meet her
needs.” The trial court also found that Husband had millions of
dollars in business assets and that Husband was unable to provide
reliable and credible evidence to support his claims of poverty.
Though the court recognized that Husband’s financial situation
had deteriorated, the court found not credible Husband’s claim
that he should not and could not pay these obligations. Specifically,
the trial court found that on December 19, 2011, about six months
before the second trial, Husband filed a financial declaration stating
that the estimated value of GMA was $2,000,000. The court also
found that in 2011, financial papers Husband filed with Wells
Fargo Bank showed that another of Husband’s solely owned
companies had total equity of more than $2,000,000. Though
Husband denied that he had the ability to pay Wife’s attorney fees,
he could not explain what had happened to the assets he had
claimed to have only months before trial. In order to support his
claim that he was unable to pay, Husband was required to present
reliable evidence of his financial situation, and he failed to do so.
¶18 We conclude that the trial court was in the best position to
determine which representations of Husband’s financial position
were the most reliable, see Glauser Storage, 2001 UT App 141, ¶ 24,
and we defer to the trial court’s assessment of the credibility of
Husband’s evidence and testimony, see Stonehocker v. Stonehocker,
2008 UT App 11, ¶ 27, 176 P.3d 476. The court’s award of attorney
fees was not an abuse of discretion, and its finding that Husband
had the ability to pay Wife’s legal fees “follows logically from, and
is supported by, the evidence.” See Gardner v. Gardner, 748 P.2d
1076, 1078 (Utah 1988) (citation and internal quotation marks
omitted).
¶19 Finally, Wife requests an award of her attorney fees incurred
on appeal.5 “Generally, when the trial court awards fees in a
5. We note that the Utah Rules of Appellate Procedure require a
party seeking an award of attorney fees to explicitly set forth that
(continued...)
20121015-CA 9 2015 UT App 104Ouk v. Ouk
domestic action to the party who then substantially prevails on
appeal, fees will be awarded to that party on appeal.” Stonehocker,
2008 UT App 11, ¶ 52 (citation and internal quotation marks
omitted). Because the trial court awarded Wife attorney fees at trial
and Wife has substantially prevailed on appeal, we award her
attorney fees on appeal. We therefore remand this matter to the
trial court for the limited purpose of determining the reasonable
amount of attorney fees and costs incurred by Wife in connection
with this appeal.
¶20 Affirmed.
5. (...continued)
request and the legal basis for the award in the argument section
of its brief, not in the conclusion. See Utah R. App. P. 24(a)(9), (10).
However, in this case, though Wife included her request for fees in
the conclusion of her principal brief, we conclude that this technical
deficiency in Wife’s briefing does not merit a denial of her request
for attorney fees on appeal.
20121015-CA 10 2015 UT App 104