Granger v. Granger

2016 UT App 117THE UTAH COURT OF APPEALS
TROY M. GRANGER,
Appellee and Cross-appellant,
v.
CINDY D. GRANGER,
Appellant and Cross-appellee.
Amended Opinion1
No. 20140196-CA
Filed May 26, 2016
Third District Court, Salt Lake Department
The Honorable Kate A. Toomey
No. 114902328
David Pedrazas, Attorney for Appellant
Melissa M. Bean and Martin N. Olsen, Attorneys
for Appellee
JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES
GREGORY K. ORME and J. FREDERIC VOROS JR. concurred.
ROTH, Judge:
¶1 Cindy D. Granger (Wife) appeals several rulings of the
district court in a divorce proceeding. Troy M. Granger
(Husband) cross-appeals, challenging the court’s denial of his
request for attorney fees. We reverse and remand to the district
court for further fact finding regarding the distribution of
Husband’s 401(k) retirement account and for entry of
1. This Amended Opinion replaces the Opinion issued April 7,
2016, Granger v. Granger, 2016 UT App 67. In response to a
petition for rehearing filed by Cindy D. Granger, paragraph 27
was added with the subsequent paragraph re-numbered as
paragraph 28.
Granger v. Granger
appropriate findings to support its decision on the issue of
attorney fees.
BACKGROUND
¶2 Husband and Wife married in 2003. Husband filed for
divorce in April 2011. In his petition for divorce, Husband
requested that any retirement accounts be divided in accordance
with the Woodward formula. See generally Woodward v. Woodward,
656 P.2d 431, 433–34 (Utah 1982). Wife responded that any
retirement benefits should be ‚equitably divided.‛
¶3 Before trial, both parties submitted trial briefs. Wife’s brief
stated, ‚Retirement accounts shall be divided pursuant to the
Woodward formula.‛ Husband’s brief also requested division of
retirement benefits according to the Woodward formula.
Husband’s brief proposed the amount he believed Wife was
entitled to under the formula. However, as with a different
figure Husband had provided in an earlier settlement proposal,
the number was not accompanied by any explanation of how it
had been calculated.
¶4 In July 2013, the district court held a two-day trial. During
opening statements and closing arguments, counsel for both
Husband and Wife said that the retirement accounts should be
divided according to the Woodward formula. There was no
further discussion regarding the Woodward formula or the
division of the retirement accounts during the trial. The district
court entered its findings of fact, conclusions of law, and order
on September 3, 2013. In its findings of fact, the court referenced
the retirement accounts once, noting that ‚[t]he parties stipulated
to the division of their retirement accounts pursuant to the
Woodward formula.‛2 It also ordered Husband’s counsel to
2. It is undisputed that the only retirement funds subject to
division was each party’s 401(k) account. But on appeal, only
Husband’s 401(k) retirement account is at issue.
20140196-CA 2 2016 UT App 117Granger v. Granger
prepare the final decree of divorce, later signed on October 18,
2013. Following the court’s order, contentions between Husband
and Wife over issues unrelated to this appeal continued for
months.
¶5 On January 28, 2014, Husband’s counsel sent Wife’s
counsel a copy of the qualified domestic relations order (the
QDRO3), which he proposed to file with the district court to
implement division of the retirement account. In an email
accompanying the document, Husband’s counsel explained that
‚the retirement will be divided according to the Woodward
formula‛ and, for the first time, he provided a mathematical
calculation showing ‚how *he+ arrived at the amount set forth in
the QDRO.‛ Wife’s counsel responded by email later that same
day, stating, ‚I am not sure how the figure . . . was arrived at*,+
but that is completely wrong.‛ Wife’s counsel continued, ‚This is
not working out. I simply suggest that I will draft [the] QDRO[]
based upon the Woodward formula.‛ Husband’s counsel
responded that the calculation he used was based on the
Woodward formula, explaining that he ‚multipl*ied+ one-half of
the value of the account by the number of years the parties were
married and divide[d] by the number of years [Husband] has
worked.‛ Wife’s counsel responded that the calculation
Husband’s counsel used was ‚wrong‛ and insisted that counsel
should have ‚simply divide[d] what was acquired during the
marriage.‛
3. We explained the origin and role of a QDRO in Bailey v. Bailey,
745 P.2d 830, 832 (Utah Ct. App. 1987):
The Retirement Equity Act of 1984, Pub. L. No. 98-
397, 98 Stat. 1426 (1986), created the Qualified
Domestic Relations Order (‚QDRO‛). When a
divorce is granted, the parties can obtain from the
trial court a QDRO. This order furnishes
instructions to the trustee of a retirement plan and
specifies how distributions should be made, to
whom, and when.
20140196-CA 3 2016 UT App 117Granger v. Granger
¶6 Wife filed an objection to the QDRO as well as a motion
under rule 60(b) of the Utah Rules of Civil Procedure to set aside
or clarify the divorce decree. Wife also provided notice that she
was issuing a subpoena to obtain records from the plan
administrator of Husband’s retirement account. Husband filed a
response to Wife’s objection to the QDRO and rule 60(b) motion
and also moved to quash the subpoena. The district court
granted Husband’s motion to quash and set a hearing on both
Wife’s rule 60(b) motion to set aside the divorce decree and her
objection to the QDRO.
¶7 At the hearing, Wife’s counsel stated,
I will admit that I stipulated to the Woodward
formula. The problem that I’ve always had, and I
guess I’ve had different results from all of the
*c+ourts is basically it’s always been my
understanding the Woodward formula basically
means you just divide whatever contributions were
made to the retirement during the marriage.
Wife’s counsel explained that he ‚never intended to use this
formula of doing the number of years‛ but that he believed the
actual mathematical formula set forth in Woodward applied only
to defined benefit plans and not to defined contribution plans
such as Husband’s 401(k) retirement account. Husband’s counsel
argued that Wife’s agreement to the Woodward formula was a
‚one-sided mistake‛—if there was a mistake made at all—made
entirely by Wife ‚because the Woodward formula has been
around for 32 years‛ and ‚the formula is clear.‛
¶8 The district court took the matter under advisement and
issued a written ruling in March 2014 denying Wife’s rule 60(b)
motion to set aside or clarify the divorce decree and her
objection to the QDRO. The court determined that ‚the Rule 60
motion was not filed in a timely fashion, and although *Wife’s+
counsel may not agree with it, the Woodward formula does not
require clarification. Moreover, *Husband’s+ settlement proposal
20140196-CA 4 2016 UT App 117Granger v. Granger
and trial brief each set forth the calculation being proposed, so it
does not appear that [Wife] was unaware of what she was
stipulating to when she agreed to a division of retirement
contributions.‛
¶9 On appeal, both Husband and Wife agree that as of the
date of divorce, the balance of Husband’s retirement account
was $591,938.64. But it is from this figure that Husband and Wife
diverge. The QDRO prepared by Husband and signed by the
district court divided this figure by two, multiplied the result by
the number of years the parties were married (10.5 years), and
then divided that result by the number of years Husband
worked (18.8 years). Husband therefore concluded that
$165,302.01 represents Wife’s portion of the retirement account
under the Woodward formula. Wife asserts that the $591,938.64
account balance should be reduced by Husband’s premarital
contributions of $193,526.04, leaving $398,412.60, which should
then be divided equally with Husband and Wife each receiving
$199,206.30. Wife claims that ‚pursuant to Woodward,‛ ‚the
portion of the retirement account accumulated during the
marriage shall be equally divided‛ between her and Husband
because ‚*t+o do otherwise . . . creates an injustice and inequity
that was never intended by the Woodward Court.‛ Wife asserts
on appeal that it was only in January 2014, when she reviewed
Husband’s proposed QDRO in which Husband provided the
actual calculations used to determine the final figure he believed
was Wife’s share of the retirement account, that ‚it became
apparent that the parties intended different results [from] the
division of the retirement account pursuant to Woodward‛
because ‚there was a serious misapplication and/or interpretation
of the ‘Woodward formula’‛ by Husband.
ISSUES AND STANDARDS OF REVIEW
¶10 There are two primary issues on appeal. First, Wife’s
appeal rests on her assertion that the district court erred in
dividing Husband’s 401(k) retirement account under the
20140196-CA 5 2016 UT App 117Granger v. Granger
Woodward formula because, Wife contends, division under the
Woodward formula means that the retirement account was to be
‚equally divided based upon marital contributions made during
the marriage.‛ ‚We will disturb the [district] court’s division
only if there is a misunderstanding or misapplication of the
law . . . indicating an abuse of discretion.‛ Johnson v. Johnson,
2014 UT 21, ¶ 23, 330 P.3d 704 (alteration in original) (citation
and internal quotation marks omitted).
¶11 Second, Husband cross-appeals, contending the district
court erred in denying his request for attorney fees related to the
rule 60(b) motion and the motion to quash. Because we reverse
the district court and remand for further consideration of the
division of Husband’s 401(k) account, Husband is no longer the
prevailing party below, and his attorney fees issue related to the
rule 60(b) motion and the motion to quash is essentially moot at
this point. See Osguthorpe v. Osguthorpe, 872 P.2d 1057, 1058
(Utah Ct. App. 1994) (‚Generally, we do not consider mooted
questions on appeal. Whether to consider a mooted controversy
is a matter of judicial policy and not law.‛ (citation omitted)).
ANALYSIS
¶12 Generally, there are two types of pension plans: a defined
benefit pension plan and a defined contribution retirement plan.
The retirement account at issue is not a defined benefit plan like
the pension at issue in Woodward. Instead it is a defined
contribution plan, specifically a 401(k) retirement account that
Husband had paid into before and during the marriage. In
Oliekan v. Oliekan, 2006 UT App 405, 147 P.3d 464, we explained
the difference between these two types of plans:
A defined contribution plan is comprised of funds
held in an account established by the employee
through his employer. A defined contribution plan
is one in which the employee and the employer
both make contributions to a retirement plan
20140196-CA 6 2016 UT App 117Granger v. Granger
account. . . . By contrast, a defined benefit plan
defines an employee’s benefits as a certain amount
per period of time.
Id. ¶ 5 n.3 (citation and internal quotation marks omitted); see
also Employee Benefit Plan, Black’s Law Dictionary (10th ed. 2014)
(‚Retirement benefits under a defined-benefit plan generally are
based on a formula that includes such factors as years of service
and compensation . . . . [A] defined-contribution plan . . . [is]
funded by the employee’s contributions and the employer’s
contributions.‛).
¶13 The question presented here is whether the formula
devised in Woodward v. Woodward, 656 P.2d 431 (Utah 1982), for
the division of marital property in a defined benefit plan can also
be strictly applied to the division of marital property in a defined
contribution plan such as Husband’s 401(k) account when the
only agreement between the parties was to ‚use the Woodward
formula‛ as a basis for that division. To address this question,
we first discuss some general principles of contract law and
explain how those general principles fit into the overall principle
of equity that Utah courts apply to property division in divorce
proceedings. Next, we consider Woodward itself and the
equitable principles that seem to underlie its decision regarding
the appropriate division of marital property in a defined benefit
plan. Finally, applying both contract and equitable principles,
we consider whether the sparse agreement made between
Husband and Wife to ‚use the Woodward formula‛ produces an
equitable result and whether the district court adequately
examined the formation of the contract to determine if the
parties actually bargained for this result. We conclude they did
not.
I. Agreements Between Parties in Divorce Proceedings
¶14 ‚It is a basic principle of contract law there can be no
contract without a meeting of the minds . . . .‛ Oberhansly v. Earle,
572 P.2d 1384, 1386 (Utah 1977). ‚Both parties must assent to the
20140196-CA 7 2016 UT App 117Granger v. Granger
same thing in the same sense . . . [; otherwise] there is no
agreement.‛ E.B. Wicks Co. v. Moyle, 137 P.2d 342, 346 (Utah
1943) (citation and internal quotation marks omitted). ‚It is
fundamental that a meeting of the minds on the integral features
of an agreement is essential to the formation of a contract. An
agreement cannot be enforced if its terms are indefinite.‛ Goggin
v. Goggin, 2011 UT 76, ¶ 37, 267 P.3d 885 (citation and internal
quotation marks omitted); see also Terry v. Bacon, 2011 UT App
432, ¶ 21, 269 P.3d 188 (‚Under general contract law, it is
fundamental that there be a meeting of the minds as to all
essential features of a contract.‛). However, ‚*p+ersons dealing
at arm’s length are entitled to contract on their own terms
without the intervention of the courts for the purpose of
relieving one side or the other from the effects of a bad bargain.‛
Commercial Real Estate Inv., LC v. Comcast of Utah II, Inc., 2012 UT
49, ¶ 38, 285 P.3d 1193 (citation and internal quotation marks
omitted). And ‚*i+t is not *the court’s+ prerogative to step in
and renegotiate the contract of the parties. Instead, . . . [courts]
should recognize and honor the right of persons to contract
freely and to make real and genuine mistakes when the
dealings are at arms’ length.‛ Id. (citation and internal quotation
marks omitted).
¶15 But in divorce cases, the ability of parties to contract is
constrained to some extent by the equitable nature of the
proceedings; therefore, ‚[t]he governing principle in our law is
that contracts between spouses are enforceable and generally
subject to ordinary contract principles so long as they are
negotiated in good faith . . . and do not unreasonably constrain
the [divorce] court’s equitable and statutory duties.‛ Ashby v.
Ashby, 2010 UT 7, ¶ 21, 227 P.3d 246 (alterations in original)
(citations and internal quotation marks omitted); cf. Maxwell v.
Maxwell, 796 P.2d 403, 406 (Utah Ct. App. 1990) (‚While a
property settlement agreement is not binding upon a trial court
in a divorce action, such agreement should be respected and
given considerable weight in the trial court’s determination of an
equitable division of property.‛). And in determining the
distribution of marital property in a divorce proceeding, ‚[t]he
20140196-CA 8 2016 UT App 117Granger v. Granger
overriding consideration is that the ultimate division be
equitable—that property be fairly divided between the parties.‛
Newmeyer v. Newmeyer, 745 P.2d 1276, 1278 (Utah 1987); see also
Englert v. Englert, 576 P.2d 1274, 1275–76 (Utah 1978) (quoting
Utah’s divorce statute that governs the division of property and
noting that ‚*t+he import of our decisions implementing [this]
statute is that proceedings in regard to the family are equitable
in a high degree‛); Stonehocker v. Stonehocker, 2008 UT App 11,
¶ 13, 176 P.3d 476 (‚*T+he primary purpose of a property
division . . . is to achieve a fair, just, and equitable result between
the parties.‛ (first alteration in original) (citation and internal
quotation marks omitted)).
¶16 As pertinent to the case at hand, ‚marital property
encompasses all types of retirement funds,‛ including ‚any
retirement fund accrued in whole or in part during the
marriage.‛ Greene v. Greene, 751 P.2d 827, 831 (Utah Ct. App.
1988); see also Gardner v. Gardner, 748 P.2d 1076, 1078–79 (Utah
1988) (noting that marital property includes pension funds
acquired during the marriage or contributed to with marital
funds). Because retirement funds are prospectively marital
property if acquired or contributed to during the marriage, the
distribution of such marital funds must fit within the
overarching principle of equity unless the parties have freely
and knowingly agreed to a different result that has been
appropriately sanctioned by the court. Cf. Woodward, 656 P.2d at
432–44 (equitably dividing funds in a defined benefit pension
plan); Oliekan, 2006 UT App 405, ¶¶ 25–28 (equitably dividing
funds in both a defined contribution and defined benefit
retirement plans); Greene, 751 P.2d at 831 (equitably dividing
military retirement benefits).
II. Division of Pension Benefits in Woodward
¶17 In Utah, the seminal case regarding division of pension
benefits is Woodward v. Woodward, 656 P.2d 431 (Utah 1982).
That case dealt with the division of a defined benefit pension
plan belonging to the husband. Id. at 431. At the time of the
20140196-CA 9 2016 UT App 117Granger v. Granger
divorce, the husband had worked for fifteen years as a civilian
employee for the federal government during which time he had
contributed $17,500 to his pension plan. Id. Under the terms of
the plan, if the husband left his government employment before
completing thirty years of service, he would receive only the
amount of his own contributions up to the time his employment
ended. Id. But if he completed thirty years of service, the
government would match his contributions. Id. The husband
conceded that the wife was entitled to ‚one-half of the sum he
ha[d] contributed during the fifteen years of their marriage‛ but
argued that the wife ‚ha*d+ no right or interest in the amount to
be contributed by the government at the time of his retirement
because that amount is contingent upon his continued
government employment.‛ Id. at 432. According to the husband,
‚because he cannot now benefit from the government’s
promised contributions to his pension plan at the time of
retirement, the wife should not receive any portion of the
benefits which are based on the government’s participation.‛ Id.The district court, however, determined that ‚because one-half
of the 30-year period occurred during the marriage,‛ she was
entitled to a portion of any future matching contribution made
by the government. Id. at 431–32.
¶18 In rejecting the husband’s argument and affirming the
district court’s ‚equitable distribution‛ of his retirement benefits,
id. at 433, our supreme court noted that in Englert, the court had
‚emphasized the equitable nature of proceedings dealing with
the family, pointing out that the court may take into
consideration all of the pertinent circumstances,‛ including ‚‘all
of the assets of every nature possessed by the parties, whenever
obtained and from whatever source derived[,] and that this
includes any such pension fund or insurance.’‛ Id. at 432(quoting Englert, 576 P.2d at 1276). Further, the court
‚recognize*d+ that pension or retirement benefits are a form of
deferred compensation by the employer‛ and that ‚*i+f the rights
to those benefits are acquired during the marriage, then the
[district] court must at least consider those benefits in making an
equitable distribution of the marital assets.‛ Id. Of particular
20140196-CA 10 2016 UT App 117Granger v. Granger
significance here, the court noted an important distinction
between a retirement plan, such as a retirement account, whose
present value is easily ascertainable (and thus divisible by two)
and one, such as a defined benefit plan, whose value requires
calculation:
Long-term and deferred sharing of financial
interests are obviously too susceptible to continued
strife and hostility, circumstances which our courts
traditionally strive to avoid to the greatest extent
possible. This goal may be best accomplished, if a
present value of the pension plan is ascertainable, by
fixing the other spouse’s share thereof, as adjusted
for all appropriate considerations, including the
length of time the pensioner must survive to enjoy
its benefits, to be satisfied out of other assets
leaving all pension benefits to the employee
himself.
On the other hand, where other assets for
equitable distribution are inadequate or lacking
altogether, or where no present value can be established
and the parties are unable to reach agreement,
resort must be had to a form of deferred
distribution based upon fixed percentages.[4]
Id. at 433 (emphases added) (quoting Kikkert v. Kikkert, 427 A.2d
76, 79–80 (N.J. Super. Ct. App. Div. 1981)). The retirement plan at
4. Regarding the parties’ conflict over the true meaning of ‚the
Woodward formula,‛ it is interesting to note that the quoted
portion of Woodward actually contemplates two possible
‚formulas‛: one where the present value can be ascertained and
there are sufficient assets to settle up and one where the present
value cannot be ascertained or the lack of assets prevents an
immediate distribution.
20140196-CA 11 2016 UT App 117Granger v. Granger
issue in Woodward was a defined benefit plan whose value
required calculation at a future time: ‚other assets available for
equitable distribution are inadequate, and a present value of
retirement benefits would be difficult if not impossible to ascertain
because the value of the benefits is contingent on the husband’s
decision to remain working for the government.‛ Id. (emphasis
added). Because ‚the husband must work for another fifteen
years to qualify for the maximum benefits‛ and the maximum
benefits would only be available after thirty years of employment,
the court decided it was equitable to apportion the husband’s
pension benefits between the divorced spouses by applying a
specific formula to the pension payments once he had actually
retired or otherwise terminated his employment: ‚Whenever the
husband chooses to terminate his government employment, the
marital property subject to distribution is a portion of the
retirement benefits represented by the number of years of the
marriage divided by the number of years of the husband’s
employment. The wife is entitled to one-half of that portion . . . .‛
Id. at 433–34.5
¶19 Thus, the approach taken to divide the husband’s
retirement benefits in Woodward was the product of the court’s
intent to ensure an equitable result in the division of a retirement
plan ‚where no present value can be established.‛ Id. at 433(citation and internal quotation marks omitted).
III. Equitable Division of Husband’s Defined Contribution Plan
¶20 This case presents quite a different situation from
Woodward. The present value of the defined benefit plan in
Woodward was ‚difficult if not impossible to ascertain,‛ but the
present value of the defined contribution plan here is readily
ascertainable; the parties agree that it is $591,938.64.
5. More recently, in Johnson v. Johnson, 2014 UT 21, 330 P.3d 704,
the supreme court referred to this method of the division of
deferred pension benefits as the ‚‘time rule’ formula.‛ Id. ¶ 26.
20140196-CA 12 2016 UT App 117Granger v. Granger
Accordingly, the present retirement benefit does not fit neatly
into the Woodward calculation.
¶21 Nevertheless, Husband contends that Wife stipulated to
using the Woodward formula, which he characterizes as a ‚term
of art‛ that refers to the supreme court’s conclusion about how
the deferred benefit plan in that case ought to be divided to
achieve the equitable goal—that is, one-half of ‚‘a portion of the
retirement benefits represented by the number of years of the
marriage divided by the number of years of *Husband’s+
employment.’‛ (Quoting Johnson v. Johnson, 2014 UT 21, ¶ 26, 330
P.3d 704, which quotes Woodward, 656 P.2d at 433–34.) He argues
that in this case the Woodward formula was necessarily applied to
a defined contribution plan and that Wife should be bound to
her agreement. Wife argues, however, that she understood that
‚dividing *the+ retirement account*+ pursuant to Woodward . . .
mean[s] that the portion of the retirement account accumulated
during the marriage shall be equally divided‛ rather than
constrained by the specific mathematical formula set out in that
case. Wife contends the district court erred by accepting
Husband’s calculation, which utilized a modified version of
Woodward’s formula—substituting the entire corpus of a defined
contribution plan as the multiplicand for the periodic payments
due under a deferred benefit plan—that led to a result that, she
argues, ‚was never intended by the Woodward court‛ and
therefore violated Woodward’s underlying principle of equity.
She contends that, as a result, she was awarded at least $30,000
less than she should have received had Husband’s 401(k)
account been divided equitably, based on its present value at the
time of the divorce. Ultimately, Wife asks this court to remand
this case for division of the retirement account in a way that is
more in line with the general principles of equity set forth in
Woodward by ‚determining the value of the defined contribution
at the time of marriage, . . . subtracting this amount along with
its appreciation from the balance at the time of divorce‛ and
then dividing the contributions made during marriage. We
conclude remand is appropriate.
20140196-CA 13 2016 UT App 117Granger v. Granger
¶22 We acknowledge that both Husband and Wife repeatedly
asserted that Husband’s 401(k) account was to be divided
according to what they each referred to as ‚the Woodward
formula.‛ But none of their discussions, statements, or proposed
stipulations contained a description or explanation of the actual
mathematical mechanism that would be used to divide the
defined contribution account at issue here. Rather, it was not
until January 2014—approximately six months after the trial
(and approximately three months after the district court entered
the final divorce decree)—that Husband’s counsel drafted the
QDRO, disclosing to Wife for the first time the specific
mathematical formula and actual calculations Husband’s
counsel had used to reach a final figure of $162,635.13,
representing Wife’s share of the retirement account.6 At that
time, Wife contended that she should draft a QDRO because she
believed Husband’s calculation had not followed the Woodward
formula. But Husband retorted by repeating that he had
calculated the account division according to the Woodward
formula. Thus, the parties’ views of what the Woodward formula
amounted to with respect to Husband’s 401(k) account were
clearly divergent. Wife’s counsel essentially conceded as much
during a hearing when he said,
I will admit that I stipulated to the Woodward
formula. The problem that I’ve always had, and I
guess I’ve had different results from all of the
*c+ourts is basically it’s always been my
6. Husband’s counsel had included figures of ‚approximately
$140,000.00‛ in a March 2013 settlement proposal and
$147,844.22 in a trial brief, which purported to represent the
amount of the proposed division of the retirement account as of
the particular date. They differed from each other and from the
final figure set out in the QDRO of $162,635.13, likely due to
changes in the account balance from time to time. Even so,
neither the settlement proposal nor Husband’s trial brief
described the calculation used to produce the figure.
20140196-CA 14 2016 UT App 117Granger v. Granger
understanding the Woodward formula basically
means you just divide whatever contributions were
made to the retirement during the marriage.
And Husband’s counsel conceded that before the QDRO,
Husband had provided to Wife only total figures for the
proposed division of the account without explaining the
mechanism by which it had been calculated. This divergence of
understanding is further illustrated by the fact that Husband’s
mathematical formula was not really the ‚formula‛ described in
Woodward—nor could it be. See Johnson, 2014 UT 21, ¶ 26
(presenting a graphic displaying the Woodward formula as a
mathematical equation); Woodward, 656 P.2d at 433–34
(presenting the formula in narrative form). Because the
retirement account at issue here was a defined contribution plan
and not a defined benefit plan as in Woodward, Husband had to
make a critical modification so that his application of the
Woodward formula would fit the differing circumstances.
¶23 Woodward stated that the spouse was ‚entitled to share in
that portion of the benefits to which the rights accrued during
the marriage.‛ Id. at 433. And as we have explained, the formula
described in Woodward was designed to take into account the
unique aspects of a defined benefit plan—a plan where the
benefit involves payments beginning at the commencement of a
future retirement. See id. at 432–34. But by its very terms, the set
of facts in which the Woodward formula was developed does not
apply to a 401(k) retirement account like Husband’s, where
‚a present value . . . is ascertainable,‛ permitting equitable
distribution in the way that Woodward described as optimal,
rather than by a formula which was meant to be limited to
situations where ‚resort must be had to a form of deferred
distribution based upon fixed percentages‛ because better
approaches were not available. See id. at 433 (citation and
internal quotation marks omitted). And here, the fact that
Husband had to modify the Woodward formula to fit—applying
it to the present value of the retirement account rather than to
the future pension payments for which it was designed—is
20140196-CA 15 2016 UT App 117Granger v. Granger
another indication that the talismanic recitation of ‚Woodward
formula‛ by both parties in this case cannot be relied on as an
expression of their clear agreement to either an approach or a
result. Notwithstanding the bare agreement to ‚use the
Woodward formula,‛ there was no meeting of the minds here
because neither Husband nor Wife contemplated application of
the Woodward formula in the manner contemplated by the other.
See E.B. Wicks Co. v. Moyle, 137 P.2d 342, 346 (Utah 1943) (‚Both
parties must assent to the same thing in the same sense . . .
[; otherwise+ there is no agreement.‛ (citation and internal
quotation marks omitted)).
¶24 We recognize that the Woodward formula may be subject
to modification, and this court has previously upheld equitable
divisions of marital property based upon a modified version of
the approach taken in Woodward. For example, in Oliekan v.
Oliekan, 2006 UT App 405, 147 P.3d 464, we determined that a
district court properly applied a modified Woodward formula to
two defined benefit plans that had been converted to lump sums
prior to the divorce. Id. ¶¶ 5, 7, 28. We concluded in Oliekan that
such an application was proper ‚despite the fact that Woodward
concerned future retirement benefits and this case involves
liquidated retirement funds.‛ Id. ¶ 28. In doing so, we noted that
the district court had adapted the Woodward formula in order to
accommodate the retirement plans ‚because the benefits were
converted to lump sums before the end of the marriage‛
and because ‚a significant portion of *the husband’s+ benefits
accrued during the years the parties were married.‛ Id. ¶ 27. We
concluded that the district court ‚was clearly acting within its
discretion,‛ and affirmed the court’s ‚attempt to apply the
Woodward formula and, more importantly, its underlying
rationale, to the facts of [the] case.‛ Id. ¶¶ 27–28. As we
have discussed, that ‚underlying rationale‛ was the goal of
equitable distribution.
¶25 Thus, while the Woodward formula can be modified to
adapt to varied circumstances related to a defined benefit plan,
as was done in Oliekan, that division must still comport with the
20140196-CA 16 2016 UT App 117Granger v. Granger
general principles of equity. See Johnson, 2014 UT 21, ¶ 31 (‚‘The
appropriate distribution of property var[ies] from case to case,
[but] [t]he overriding consideration is that the ultimate division
be equitable—that the property be fairly divided between the
parties, given their contribution during the marriage and their
circumstances at the time of divorce.’ Thus, our precedent has
endorsed a context-specific approach that recognizes the various
ways marital property can be acquired and then distributed
equitably.‛ (alterations in original) (quoting Goggin v. Goggin,
2013 UT 16, ¶ 48, 299 P.3d 1079)). And despite the fact that ‚the
district court is not bound by a specific prescribed approach in
determining the most equitable distribution of pension benefits
following the dissolution of a marriage,‛ the court ‚should
evaluate all relevant factors and circumstances in making such a
determination.‛ Id. ¶ 34. Here the district court did not. Based on
Wife’s calculations, it appears that she will receive less than she
believes is her equitable portion of the marital property, and if
true, Husband should not get a financial windfall at Wife’s
expense, unless this result was explicitly agreed to between the
parties.7
¶26 As a consequence, we conclude the district court erred
when it accepted the calculation Husband set forth in his
QDRO.8 See id. ¶ 23 (‚We will disturb the [district] court’s
7. As mentioned before, Wife calculates her share of the
retirement account to be $199,206.30. Supra ¶ 9. Husband
calculates Wife’s share of the retirement account to be
$162,635.13. Supra ¶ 22 and note 5. This is a difference of
$36,571.17, or approximately eighteen-percent less than what
Wife believes her equitable portion to be. Whether Wife’s
calculation is correct or whether another distribution meets the
requirements of equity under the facts is for the district court to
determine on remand.
8. We briefly address Wife’s claim that the district court erred in
denying her ‚Rule 60 Motion‛ on the basis that it was untimely.
(continued…)
20140196-CA 17 2016 UT App 117Granger v. Granger
(…continued)
Rule 60 of the Utah Rules of Civil Procedure provides a
mechanism for a party to obtain relief from a final judgment or
order. Utah R. Civ. P. 60(b). In her motion, Wife did not identify
the provision of the rule upon which she was relying, but styled
her motion as a ‚Motion to Set Aside Decree of Divorce and/or
Clarification‛ and argued that there was a mistake in how the
QDRO was drafted because Husband ‚misinterpret[ed] and
misappl[ied] the Woodward . . . formula to the current matter.‛ It
thus appears that Wife’s argument would fall under rule
60(b)(1), which includes relief for ‚mistake,‛ and therefore, to be
timely, would have to be filed ‚not more than 90 days after entry
of the judgment or order.‛ Id. R. 60(c). Wife filed her motion ten
days late. Thus, the district court denied Wife’s motion as
untimely under rule 60. Although the district court found Wife’s
motion untimely, Wife’s motion was styled as a motion for the
court to clarify its own divorce decree. Because Wife’s motion
arose based on the inclusion of the provision in the divorce
decree to divide the retirement accounts in accordance with the
Woodward formula, the decree was at best ambiguous and
therefore required clarification from the court in the face of the
actual QDRO, which brought this ambiguity to light for the first
time. In other words, the problem with the court’s distribution
provision in the decree became apparent only when the actual
implementation of the court’s decree was to begin—not at the
time of the decree itself. In effect, the divorce decree’s division of
the retirement account was not complete until the court signed
the QDRO, and it was at that time that the implementation of the
decree’s general reference to the ‚Woodward formula‛ as the
principle used for division of Husband’s 401(k) retirement
account actually acquired context and meaning. As discussed,
the stipulation to use the Woodward formula as found in the
divorce decree was not based upon a meeting of the minds
between Husband and Wife and was therefore unenforceable.
Accordingly, we see Wife’s motion not as a rule 60 motion but as
a motion for clarification in the face of the proposed QDRO, and
(continued…)
20140196-CA 18 2016 UT App 117Granger v. Granger
division only if there is a misunderstanding or misapplication of
the law . . . indicating an abuse of discretion.‛ (alteration in
original) (citation and internal quotation marks omitted)). Thus,
we remand this issue to the district court to determine the
equitable apportionment of Husband’s 401(k) retirement account
as appropriate under the circumstances.9
¶27 Finally, Wife requests an award of her attorney fees
incurred on appeal. ‚Generally, when the trial court awards fees
in a domestic action to the party who then substantially prevails
on appeal, fees will be awarded to that party on appeal.‛
Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 52, 176 P.3d 476(citation and internal quotation marks omitted). And ‚*a] party
in a divorce appeal, in need of financial assistance, may be
awarded attorney fees incurred in having to pursue an appeal.‛
Allred v. Allred, 835 P.2d 974, 979 (Utah Ct. App. 1992) (citation
omitted). The district court awarded Wife attorney fees at trial
due to her financial need and Wife has substantially prevailed on
appeal; accordingly, we award her attorney fees on appeal. See
Leppert v. Leppert, 2009 UT App 10, ¶ 29, 200 P.3d 223(concluding that [wife] was entitled to attorney fees on appeal
because she had substantially prevailed on appeal, even though
the issue on which she had prevailed required remand to the
district court for further consideration). Accordingly, we remand
to the district court to determine costs and attorney fees
(…continued)
therefore it is not subject to the time constraints of rule 60. See id.R. 60(b). And because Wife’s motion was filed on the same day
as service of the proposed QDRO, we conclude that the motion
was timely.
9. In this regard, if we have left any question about the issue, our
decision here is not meant to endorse Wife’s simple calculation
as the appropriate result. Rather, the district court may
determine an equitable result that it determines appropriate to
the circumstances.
20140196-CA 19 2016 UT App 117Granger v. Granger
reasonably incurred by Wife in connection with this appeal and
to make an appropriate award.
CONCLUSION
¶28 The district court erred by accepting the calculation set
forth by Husband in his QDRO. Therefore, we reverse and
remand for further proceedings consistent with this decision.
20140196-CA 20 2016 UT App 117