Howell v. Howell, 890596-CA

Decision Date28 February 1991
Docket NumberNo. 890596-CA,890596-CA
Citation806 P.2d 1209
PartiesWalter James HOWELL, Plaintiff and Appellee, v. Barbara Joyce HOWELL, Defendant and Appellant.
CourtUtah Court of Appeals

Paul H. Liapis, Helen E. Christian (argued), Kim M. Luhn, Gustin, Green, Stegall & Liapis, Salt Lake City, for defendant and appellant.

David S. Dolowitz (argued), Michael S. Evans, M. Joy Douglas, Cohne, Rappaport & Segal, P.C., Salt Lake City, for plaintiff and appellee.

Before BENCH, GARFF and GREENWOOD, JJ.

OPINION

GREENWOOD, Judge:

Defendant, Barbara Joyce Howell, appeals from a divorce decree's award of alimony and division of equity in a California home. We affirm the property division but reverse and remand as to alimony.

FACTS

Defendant and plaintiff, Walter James Howell, were married on October 14, 1956. Plaintiff began working as a pilot for Western Airlines shortly after the parties married. He continued to be employed as a pilot with Western, later taken over by Delta Airlines, throughout the parties' marriage. The parties had five children, four of whom were emancipated at the time of trial. The parties had marital difficulties on and off for a number of years and separated in November 1986. At that time, plaintiff's gross income was between $5500 and $5600 per month, and had been at that level for the prior five years. Western Airlines experienced financial problems prior to the takeover by Delta Airlines. As a result of negotiations between Western and its pilots, plaintiff received virtually no pay raises between 1981 and 1986, despite increases in the cost of living. Both parties testified that their family finances were strained during that time period.

Plaintiff filed for divorce in November 1987. At the time of trial, December 1988, his gross monthly income had increased to $10,120. Plaintiff's financial declaration indicated monthly expenses of $7960, which included $2400 for alimony and child support, $372 for vacations, and $633 for attorney fees.

During the parties' marriage, defendant was a homemaker and had worked only part time at unskilled labor jobs. At the time of trial defendant earned $649.80 per month, though that job was only temporary and terminated in December 1988. She testified at trial that she had monthly expenses totaling $5021. 1

The parties owned homes in Utah and California, as well as real property in Texas. Plaintiff testified that the Utah home had little, if any, equity, while the California home would yield substantial equity. Plaintiff wanted to sell all the properties and divide the net proceeds. Defendant testified she would prefer to live in the California home.

After trial, the court entered findings of fact, conclusions of law, and a decree of divorce on May 12, 1989. In its findings, the court states its belief that "the income level of $5500 reflects the income level and living standards of the parties during the last five years of their lives together." The court found that defendant was capable of earning $625 per month, and that plaintiff had income of $10,000 per month. The findings further state that "[t]he court has determined in setting alimony that while $5,500.00 per month represents the living standards of the parties in the last 5 years of the marriage, when the parties resided together, the ability of the plaintiff to pay alimony is based upon his present income of $10,000.00 per month." Defendant was awarded $1800 per month alimony and $1363 per month child support for the parties' then sixteen year-old child, based on the child support guidelines then in effect. The court ordered that all of the real property, including the California home, be sold and the net proceeds divided equally between the parties.

On appeal, defendant asserts (1) the parties' standard of living, for purposes of determining alimony, should be based on that at the time of trial; (2) the alimony awarded is insufficient; and (3) the trial court should have taken into consideration the tax consequences of selling the California home.

STANDARD OF REVIEW

Trial courts have considerable discretion in determining alimony and property distribution in divorce cases, and will be upheld on appeal unless a clear and prejudicial abuse of discretion is demonstrated. Rasband v. Rasband, 752 P.2d 1331, 1333 (Utah Ct.App.1988). Findings of fact in divorce appeals are subject to the clearly erroneous standard of review such that "due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Utah R.Civ.P. 52(a); Jense v. Jense, 784 P.2d 1249, 1251 (Utah Ct.App.1989). Conclusions of law, however, are reviewed for correctness and given no special deference on appeal. Bountiful v. Riley, 784 P.2d 1174, 1175 (Utah 1989); Smith v. Smith, 793 P.2d 407, 409 (Utah Ct.App.1990).

ALIMONY

Defendant claims that the alimony award would have been higher if the trial court had considered the parties' standard of living at the time of trial rather than when the parties separated, approximately two years earlier. Additionally, defendant claims alimony should have been higher because of the disparity in the parties' income, length of the marriage, and the parties' respective earning abilities and expenses. We consider first the applicable standard of living question.

The value of marital property is determined as of the time of the divorce decree or trial. Fletcher v. Fletcher, 615 P.2d 1218, 1222-23 (Utah 1980). See also Berger v. Berger, 713 P.2d 695, 697 (Utah 1985). The reason for the rule is that "[b]y the very nature of a property division, the marital estate is evaluated according to what property exists at the time the marriage is terminated." Jesperson v. Jesperson, 610 P.2d 326, 328 (Utah 1980). Courts can, however, in the exercise of their equitable powers, use a different date, such as the date of separation, if one party has "acted obstructively, ..." Peck v. Peck, 738 P.2d 1050, 1052 (Utah Ct.App.1987).

No cases in Utah or elsewhere, that we or counsel have discovered, have specifically addressed the question of when a couple's "standard of living" should be determined for the purpose of calculating alimony, be it separation or trial or some other time. Most speak only of the standard of living during marriage. See Savage v. Savage, 658 P.2d 1201, 1205 (Utah 1983). "Standard of living" is defined as "a minimum of necessities, comforts, or luxuries that is essential to maintaining a person in customary or proper status or circumstances." Webster's Third New International Dictionary 2223 (1986). "An alimony award should, to the extent possible, equalize the parties' respective post-divorce living standards...." Rasband v. Rasband, 752 P.2d 1331, 1333 (Utah Ct.App.1980).

In this case, the parties were separated for approximately one year before plaintiff filed for divorce. About one year later, trial was held. We note that a separation of two years before trial in a divorce action is certainly not unusual. During that two-year period, plaintiff's income doubled because of the successful takeover of Western Airlines by Delta Airlines. Plaintiff's ability to take advantage of that change was at least in part a result of having persevered during the lean times, as did his wife and children. The impact of the salary increase on the parties' standard of living, however, was certainly affected by the fact that it was used to maintain separate living arrangements.

We believe it is consistent with the goal of equalizing the parties' post divorce status to look to the standard of living existing at or near the time of trial in determining alimony. This is consonant with the treatment of both marital property and child support and is better designed to equip both parties to go forward with their separate lives with relatively equal odds. It is further justified because any future changes in alimony are limited to instances where a material change of circumstances has occurred. Bridenbaugh v. Bridenbaugh, 786 P.2d 241, 242 (Utah Ct.App.1990). In so holding, we agree with the dissenting opinion that determining standard of living is a "fact-sensitive, subjective task." We disagree, however, that standard of living is determined by actual expenses alone. Those expenses may be necessarily lower than needed to maintain an appropriate standard of living for various reasons, including, possibly, lack of income. As Webster says, standard of living includes "customary or proper status" considering the parties' circumstances. Those circumstances should be evaluated at the time of trial and, contrary to the dissent, can properly address what situation would have existed if the parties had not separated earlier. In this case, the post-separation substantial increase in plaintiff's income was akin to deferred income. In light of the facts of this case, we conclude that the trial court erred in looking at the pre-separation standard of living in setting alimony, but should have instead considered the standard of living "during the marriage" up to the time of trial. In so concluding we do not intend to establish a rigid rule which must be followed in all domestic cases, but acknowledge that trial courts have discretion to determine the standard of living which existed during the marriage after consideration of all relevant facts and equitable principles. In this case, it was inequitable and an abuse of discretion to pinpoint standard of living as of the time of the parties' separation.

We now turn to defendant's argument that the court did not properly consider all relevant factors, resulting in an unjustifiably low alimony award. Trial courts must consider the following factors in setting alimony: (1) the financial condition and needs of the recipient spouse; (2) the recipient's ability to produce income; and (3) the ability of the payor spouse to provide support. Davis v. Davis, 749 P.2d 647, 649 (Utah 1988). Utah cases have stated that the purpose of alimony is to...

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