Finlayson v. Finlayson

• Decision Date: 13 April 1994
• Docket Number: No. 920411-CA,920411-CA
• Citation: 874 P.2d 843
• Parties: Arvilla FINLAYSON, Plaintiff, Appellant, and Cross-Appellee, v. Roger FINLAYSON, Defendant, Appellee, and Cross-Appellant.
• Court: Utah Court of Appeals

Page 843

874 P.2d 843

Arvilla FINLAYSON, Plaintiff, Appellant, and Cross-Appellee, v. Roger FINLAYSON, Defendant, Appellee, and Cross-Appellant.

No. 920411-CA.

Court of Appeals of Utah.

April 13, 1994.

Rehearing Denied June 15, 1994.

Sharon A. Donovan, Kent M. Kasting, argued, and Shannon W. Clark, Dart, Adamson & Kasting, Salt Lake City, for appellant.

William R. Russell, argued, Salt Lake City, for appellee.

Before BENCH, BILLINGS and DAVIS, JJ.

OPINION

DAVIS, Judge:

Arvilla Finlayson (Wife) and Roger Finlayson (Husband) each appeal from a final divorce order entered March 31, 1992. We affirm in part, reverse in part, and remand.

FACTS

The couple married on September 4, 1964. After approximately twenty-six years, they separated December 21, 1990 and divorced three months later. They had four children, only one of whom was a minor at the time of the divorce.

Two years prior to the marriage, Husband's father gave him $14,800.84 (the Hallmark Money) to assist Husband in purchasing and buying inventory for a Hallmark gift shop. One year prior to the marriage, Husband purchased the shop and started up the business. Once the couple was married, they ran the business together.

For the first five years of the marriage, Husband's parents allowed the couple to live rent-free in an apartment they owned. Later, the couple purchased a home and relied on the shop for income to pay the day-to-day family expenses. Husband's parents owned a vacant lot (the Lot) next to the parties' marital home. The older couple planned to eventually build a home on the Lot. When Husband's father died in 1969, Husband's mother (Mina) abandoned the plan. In 1978, Husband as trustee and Mina as settlor signed and executed a warranty deed to the Lot conveying it to Husband and Wife as tenants in common without any reservations. The deed was later recorded. Over the years, Husband and Wife maintained and weeded the Lot and paid $6000 in real estate taxes from marital assets.

At trial, Husband claimed he and Mina transferred the Lot to Wife and himself so that he could more easily sell the Lot for Mina. However, Husband never listed the Lot for sale and he received only one offer on it. Husband and Mina each testified that they never intended to transfer the Lot to the couple.

In 1985, the couple sold the shop for $250,000 at $50,000 down payment and $6000 per month on the balance. Husband deposited the down payment in a local thrift and loan, which later failed. The parties recouped about seventy percent of their initial deposit. In 1988, the couple paid off the mortgage on the marital home.

In early December of 1990, Husband told Wife to file for divorce. He then withdrew money from the couple's savings account and paid it to Mina, claiming he was making payments on the "loans" for the Hallmark shop, purportedly made in 1962, and for the rent-free apartment purportedly made in 1964. Between December 11 and December 14, 1990, Husband paid Mina $57,285.03 from the marital account. At the time, Mina was approximately ninety-two years old, and Husband was one of two surviving apparent heirs. Upon learning of these withdrawals, Wife withdrew the remaining $35,488.89 to prevent Husband from making further withdrawals.

In December 1990, Wife filed for divorce. The trial was held October 17 and 18, 1991.

During trial, Husband produced two notes he claimed he prepared, signed, and gave to his father on September 4, 1962 (the Hallmark Note) and September 4, 1964 (the Rent Note) respectively. Husband testified he prepared and signed each of the notes on the dates as stated thereon. He testified he had not again seen either of these notes until shortly before the divorce was filed in December of 1990. Mina testified differently. She said she found the notes about eighteen years ago, two or three years after her husband's death, and that she had given them to her son (Husband) several years ago. Neither of the notes was signed by Wife and she claimed she never saw them until the divorce.

Husband testified he had discussed with Wife the fact that the Hallmark Money was a debt and that she urged him to repay the debt. Mina also testified that she discussed the debt with Wife and that she told her she expected the money to be repaid. Wife also testified that she had urged Husband to repay the debt.

At the conclusion of the trial, the court ruled from the bench regarding division of marital property, custody, support obligations, and allocation of debt and attorney fees. Later, the court heard Wife's objections to the proposed findings of fact, conclusions of law, and decree of divorce that Husband's attorney prepared. At the conclusion of that hearing, the court made additional findings and clarifications. Wife then moved for a new trial. The court denied the motion.

The court concluded that the money Husband's father gave him in 1962 for the Hallmark shop constituted a loan rather than a gift. The court then approved Husband's disposition of the $57,285.03 that he withdrew from the marital account and paid to Mina for the Hallmark "loan." The trial court "awarded his withdrawals partially as a separate award of marital property and partially as joint marital funds to pay joint marital obligations." Of the total amount Husband withdrew from the account, the trial court charged him with only $16,731.29, finding that Husband properly paid $40,553.74 of the total to Mina. The court awarded Wife the $35,488.89 she withdrew from the account.

The trial court ruled that the note for the rent on the apartment would have represented a marital debt but was unenforceable because the statute of limitations had run, and the obligation was, therefore, not a debt at all.

The trial court concluded that the Lot was not marital property because Mina never intended to give it to the couple. The trial court found that "marital funds were used to pay the property taxes for such parcel as they came due." However, the trial court considered the $6000 the couple spent in property taxes to be a "wash" because of the two unpaid notes. "As such, the Court finds that said real property is not within the marital estate. Each of the parties should be ordered to execute a Quit-Claim deed in favor of Mina Finlayson, her successor, or her designated agent."

The trial court determined that Husband should pay $500 of $2599.15 incurred by Wife in attorney fees as a result of Husband's noncompliance with interim orders regarding custody and visitation, the sale of the home and "other issues." Although the evidence was undisputed that Wife incurred the fees as a result of Husband's noncompliance, the trial court made no findings connecting the amount claimed with Husband's noncompliance or supporting its reduction of the requested fees to only $500. Nor did the trial court make findings regarding the reasonableness of the fees charged.

Wife appeals and Husband cross appeals.

MARITAL PROPERTY LAW

"There is no fixed formula upon which to determine a division of assets or debts in a divorce action." Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah App.1993) (citing Watson v. Watson, 837 P.2d 1, 5 (Utah App.1992)). Moreover, the trial court "has considerable latitude in adjusting financial and property interests, and its actions are entitled to a presumption of validity." Naranjo v. Naranjo, 751 P.2d 1144, 1146 (Utah App.1988) (citing Savage v. Savage, 658 P.2d 1201, 1203 (Utah 1983)).

" '[E]ach party should, in general, receive the real and personal property he or she brought to the marriage or inherited during the marriage.' " Mortensen v. Mortensen, 760 P.2d 304, 306 (Utah 1988) (quoting Preston v. Preston, 646 P.2d 705, 706 (Utah 1982)); accord Rappleye, 855 P.2d at 263. This includes any appreciation of the separate property. Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah App.1990). "Exceptions to this general rule include whether the property has been commingled, whether the other spouse has by his or her efforts augmented, maintained, or protected the separate property, and whether the distribution achieves a fair, just, and equitable result." Id. (citing Burt v. Burt, 799 P.2d 1166, 1168 (Utah App.1990)).

"To permit appellate review of the property distribution, the distribution must be based upon adequate factual findings and must be in accordance with the standards set by this state's appellate courts." Id. at 1317. This court will approve changes in a trial court's property and debt distribution " "only if there was a misunderstanding or misapplication of the law resulting in substantial and prejudicial error, the evidence clearly preponderated against the findings, or such a serious inequity has resulted as to manifest a clear abuse of discretion.' " Watson, 837 P.2d at 5 (quoting Naranjo, 751 P.2d at 1146).

HALLMARK MONEY

Wife claims the trial court erred in determining that (1) the money Husband's father gave him two years prior to the marriage was a loan and not a gift; (2) the money represented a marital obligation; and (3) Husband properly paid a significant amount of the marital estate's liquid assets to settle the debt.

Hallmark Note

Before we can reach these issues, we address Wife's claim, raised for the first time on appeal, as to whether the Hallmark Note was prepared in 1962 as it purports to be, or whether Husband prepared it later. The Hallmark Note contains two addresses, both of which have zip codes of 84105. Wife asks this court to take judicial notice that zip codes were not introduced to the public until July 1, 1963.

"Reply briefs shall be limited to answering any new matter set forth in the opposing brief." Utah Rule App.P. 24(c). Moreover, appellate courts of this state do not consider new evidence on appeal. Low v. Bonacci, 788 P.2d 512, 513 (Utah 1990). Thus " 'issues not raised in the trial court in timely fashion are deemed waived, precluding [the appellate court] from considering their merits on appeal.' " LeBaron & Assocs. v. Rebel...