Kunzler v. Kunzler

BILLINGS, Judge

(concurring in part II and dissenting in part I):

1 32 We agree with Judge Davis's opinion in Part I that the trial court erred in characterizing the Properties as joint property; however, our rationale is different. We conclude that the trial judge incorrectly characterized the Property as joint property and would do so even if the disputed evidence were properly admitted. However, instead of reversing the trial court's award, we remand for the trial court to consider division of the Properties under the rationale set forth in this opinion. Judge Davis's opinion refuses to give the trial court a chance to reconsider its division of the Properties because it claims the argument for an equitable distribution of the Properties was not made before the trial court. We conclude it was the trial court's mistaken characterization of the Properties as marital property that led the parties not to pursue the correct legal approach.

33 In her opening statement at trial, Wife's counsel clearly stated Wife's position that she was seeking an equitable interest in Husband's - individually-owned - property. Specifically, she stated that

regard[ing] . any real property that [Husband] owns, individually or jointly, [Wife requests] that she be awarded half interest in said property. With regards to the LLC ownership interest, she's requesting an award of half of the 20.87 percent interest that he now holds. And then with regard to other personal property we would ask that she be awarded an equitable interest in that as well.

However, Wife did not further pursue the correct legal approach of equitable distribution because the trial court incorrectly characterized the Properties as marital property. Before making any award of property, a trial court is "first required to properly categorize the parties' property as marital or separate." Elman v. Elman, 2002 UT App 83, ¶ 18, 45 P.3d 176 (emphasis added). It is only after this initial characterization that the trial court can continue in making its property distributions. See Hodge v. Hodge, 2007 UT App 394, ¶ 5, 174 P.3d 1137. "Trial courts must follow this 'systematic approach' when making property division determinations." Id. (quoting Kelley v. Kelley, 2000 UT App 236, ¶ 24, 9 P.3d 171). After the trial court initially characterized the Properties as marital property, Wife had no need to pursue her theory of equitable distribution. Thus, under the general principle that we can affirm a trial court's decision on a different legal theory on appeal, see Dipoma v. McPhie, 2001 UT 61, ¶ 18, 29 P.3d 1225, Wife should be given an opportunity to pursue the legal theory of equitable distribution after the trial court properly characterizes the Properties as Husband's separate property. We therefore remand the trial court's division of the Properties to be considered under an equitable distribution theory. If the Properties cannot be distributed equitably, the trial court may then reconsider its alimony award as an equitable alternative.

[ 34 In determining that Husband's interest in the Properties was not his separate property that Rous gifted to him during the marriage but rather was marital property, the trial court found that Husband's interest in the Properties was the result of his earnings from working on the Ranch. The trial court opined that "the only pension or retirement which most farmers and ranchers have is the value of the land which they have acquired." The court therefore found that "it makes sense that those who have stayed and worked the ranch receive a greater share. The greater share is not truly a gift, rather it is something that has been earned."

135 We disagree with the trial court's assessment that the Properties were marital rather than Husband's separate, gifted property. However, we conclude that this case is exactly the type of case where Utah's appellate courts have allowed the invasion of a spouse's separate property because it is the only way to achieve equity in the situation.

9136 "Generally, in a divoree proceeding each party is presumed to be entitled to all of his or her separate property and fifty percent of the marital property." Bradford v. Bradford, 1999 UT App 373, ¶ 26, 993 P.2d 887 (internal quotation marks omitted). "However, separate property is not 'totally beyond [al court's reach in an equitable property division'" Elman, 2002 UT App 83, ¶ 19, 45 P.3d 176 (alteration in original) (quoting Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct.App.1990)). Under Utah law, a trial court "may award the separate property of one spouse to the other spouse in extraordinary situations where equity so demands." Id. (internal quotation marks omitted).

T 37 In this case, Husband's limited income received from working on the Ranch may not allow him to provide a sufficient alimony payment to Wife to compensate her for twenty-three years of marriage where she managed the household and raised seven children. Wife's contribution to the household allowed Husband to focus his time and energy on preserving and increasing the value of both the Properties and the Ranch. Seq, eg., id. 1420, 24 n. 5 (noting that the wife was entitled to a portion of the husband's separate property interests because her work in maintaining and growing the marital property allowed the husband to concentrate full-time on his separate property). Thus, we conclude that an equitable distribution of the Properties would be well within the trial court's discretion on remand. See id. 117 ("A trial court has considerable discretion concerning property [division] in a divorce proceeding." (alteration in original) (internal quotation marks omitted)).

T38 I CONCUR: PAMELA T. GREENWOOD, Presiding Judge.