Fischer v. Fischer

• Decision Date: 30 December 2021
• Docket Number: 20200557-CA
• Citation: 505 P.3d 56
• Parties: Gary Lee FISCHER, Appellant, v. Melissa Kay FISCHER, Appellee.
• Court: Utah Court of Appeals

505 P.3d 56

Gary Lee FISCHER, Appellant,

v.Melissa Kay FISCHER, Appellee.

No. 20200557-CA

Court of Appeals of Utah.

Filed December 30, 2021

Steve S. Christensen, Salt Lake City, and Clinton R. Brimhall, Attorneys for Appellant

K. Andrew Fitzgerald, Attorney for Appellee

Judge Gregory K. Orme authored this Opinion, in which Judges Jill M. Pohlman and Ryan M. Harris concurred.

Opinion

ORME, Judge:

¶1 Gary Lee Fischer challenges the district court's division of the marital estate in the parties’ divorce decree, which awarded Melissa Kay Fischer the marital home, a vehicle, and profits from a business that Gary operated.¹ Gary also challenges the court's denial of his post-trial motion for a new trial regarding the division of a savings account Melissa first disclosed at trial. We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

BACKGROUND²

¶2 Following a nearly 29-year marriage, Gary and Melissa separated on April 8, 2018. Gary filed for divorce approximately two months later. The case proceeded to trial in June 2019. The main issues at trial involved the division of various bank accounts, personal property, vehicles, the marital home, and an insurance business Gary had started during the marriage with Melissa's help.

¶3 At trial, the parties testified regarding their assets. During cross-examination of Melissa, Gary learned for the first time that Melissa had an American Express bank account with a balance of $50,000. Melissa testified that she set up the account in "early" 2019, long after the parties had separated. She explained that the account was started with money from her share of various accounts she co-owned with Gary and that she was able to get the balance to $50,000 because she "worked so hard to save" money after they separated. Gary did not then inquire further regarding this account.

¶4 After hearing all the relevant testimony, the court made an oral ruling from the bench, determining that Gary's business was established using marital funds. It ruled, however, that because the business "is the equivalent of a professional degree, what you would expect to see with a solo practitioner, attorney or accountant, or a doctor in solo practice," it had "to value this asset minus any goodwill component."³ The court then explained that

the balance of the [business] bank account as of today is $5,000. [Melissa] is entitled to one-half of that amount. Additionally, it is apparent from the tax returns that the business has made a profit in excess of its expenses and [Gary's] salary. Net profit has been $2,144 per month consistently through 2017, and [Gary] testified that it's been constant since then. Accordingly, that profit is a profit of this asset, and so 14 months worth of that profit, [Melissa's] share is $15,008.

So the asset is marital in the sense that it was established during the marriage and it was an asset to be considered in dividing, but the Court finds that there's no future equity share that is divisible, and so other than those monetary amounts, the Court awards the interest in the LLC to [Gary] 100 percent, and I certainly understand that it's frustrating. We help our spouses be successful, and they take our great ideas and they incorporate them into their business, and we give input to their endeavors, but in the end, I'm bound by the existing law, which says that this isn't a marketable asset unless he's running it, and ... so that's the basis for that finding.

¶5 Regarding the tangible marital assets, the court found that there was $292,285 equity in the home, resulting in a share of $146,142.50 for each party. The court nevertheless awarded the home to Melissa, explaining that Gary's share of the equity would be "used to offset the other property awards in this case." The court also allocated a vehicle worth $25,000 to Melissa. The court awarded Gary four vehicles and a trailer. The first three vehicles were valued at $29,600, $17,833, $51,450. The fourth vehicle, which still had money owing on it, had $4,000 in equity. The trailer was valued at $8,000. The court additionally distributed to Gary jewelry, art, and other personal property having a combined value of $57,590. The court valued all these assets "as of the date of divorce."

¶6 With respect to the parties’ joint bank accounts, the court decided that it would be more appropriate to divide these accounts as they stood at the time of the parties’ separation rather than at the time of divorce. The court stated that it did this

because it was the clearest picture of what the parties’ asset actually was. Since then, they've each gone on to either save money [or spend money]. She saved money. It appears he spent money. So that seemed to be the fairest division of the cash accounts ... given how long the separation has been, over a year.

¶7 The court also ordered that Melissa's retirement accounts, valued as of the date of divorce, be split equally between the parties. The court determined that the American Express account was not divisible in the divorce because it was Melissa's separate property. The court then concluded that "if my math is correct, that should leave a wash on all of the property."

¶8 In response to this ruling, Gary filed a post-trial motion, in which he argued that the court's division of marital assets was "not equal." He asserted that the court awarded a total of $396,793 in marital assets to Melissa, which included (1) the home at $292,285, (2) half the business account at $2,500, (3) half the profits from the business from the time of separation to the time of divorce at $15,008, (4) a vehicle at $25,000, (5) half the balance in two bank accounts existing at the time of separation at $12,000, and (6) the American Express account at $50,000.⁴ Gary then argued that the court awarded him only $197,981 in marital assets consisting, of (1) half the business account at $2,500, (2) half the profits from the business from the time of separation to the time of divorce at $15,008, (3) the four vehicles valued at a total of $102,883, (4) the trailer at $8,000, (5) the personal property items at $57,590, and (6) half of the two bank accounts at $12,000. Gary asserted that, as a result, Melissa received $198,812 more than he did—$148,812 once the $50,000 American Express Account is subtracted from Gary's calculation. See supra note 4. In essence, Gary's position was that the court's math was in fact quite wrong when it mused that, "if my math is correct, that should leave a wash on all of the property."

¶9 The court subsequently issued a written order memorializing its findings and rulings at trial. In that order, regarding the award of the marital home to Melissa, the court conceded that

[a]lthough the Court endeavored to equally divide the assets in the case, with [Gary] receiving the majority of high-value personal property to offset his share of equity in the home, the final division of property does not equally divide the value in the marital home. Nevertheless, the Court believes the division is equitable, based on all circumstances in the case.

[Gary] would like the home sold, with the cash divided equally. But the costs of sale would likely deplete most of the difference in the equity division. Neither party would benefit from those lost funds and [Melissa] would be left without a home. Additionally, although the Court awards [the business to Gary], it is apparent that [Melissa] significantly contributed to making [the business] a success. Her contribution to the business is not quantifiable. But the overall division of property and assets in this case is equitable, when the business is considered.

The court also determined that the American Express account would be awarded to Melissa as her separate property because it had been initially funded with her share of sums from marital accounts, then enhanced with post-separation deposits. The court also reiterated that it valued "the cash accounts as of the date of separation" because "[a]fter separation, [Gary] spent significant money and incurred substantial debt" and "[g]iven the length of separation, the value at the time of separation provides for the most equitable division of the cash accounts." The court then reaffirmed its oral ruling regarding the remainder of its award.

¶10 Gary subsequently filed another motion, this time requesting a new trial under rule 59(a) of the Utah Rules of Civil Procedure on the American Express account issue. He asserted that Melissa had "disclosed at trial and not before that she had a $50,000 American Express savings account" and that he "was genuinely surprised by this trial disclosure." He claimed that he "should have had the opportunity to investigate this account and trace its origin to determine whether [Melissa's] representations about it were accurate."

¶11 The district court denied Gary's motion in another written order. It stated that "with reasonable diligence, [Gary] could have discovered the account before trial but did not utilize the discovery process to his advantage." It additionally stated that "[Gary] did not object at trial to the introduction of the information related to the account and [Melissa] testified that the account was created after separation."

¶12 Gary appeals.

ISSUES AND STANDARDS OF REVIEW

¶13 Gary raises three issues on appeal. First, he asserts that the district court erred in determining that the American Express account was Melissa's separate property and in denying his motion for a new trial on that issue. This issue implicates two standards of review. First, "whether property is marital or separate is a question of law, which we review for correctness." See Brown v. Brown , 2020 UT App 146, ¶ 13, 476 P.3d 554 (quotation simplified). Second, "we review the decision to grant or deny a motion for a new trial only for an abuse of discretion." State v. Loose , 2000 UT 11, ¶ 8, 994 P.2d 1237.

¶14 Next, Gary challenges the court's award to Melissa of $15,008 of the...