Gerwe v. Gerwe

• Decision Date: 26 April 2018
• Docket Number: No. 20160117-CA,20160117-CA
• Citation: 424 P.3d 1113
• Court: Utah Court of Appeals
• Parties: Shannon Olivia GERWE, Appellee, v. Brian Scott GERWE, Appellant.

424 P.3d 1113

Shannon Olivia GERWE, Appellee,

v.Brian Scott GERWE, Appellant.

No. 20160117-CA

Court of Appeals of Utah.

Filed April 26, 2018

Andrew G. Deiss, Brent A. Orozco, and Diana F. Bradley, Salt Lake City, Attorneys for Appellant.

Russell Yauney, Attorney for Appellee.

Judge Diana Hagen authored this Opinion, in which Judges Kate A. Toomey and David N. Mortensen concurred.

Opinion

HAGEN, Judge:

¶1 Brian Scott Gerwe (Husband) challenges the district court’s order setting aside a postnuptial agreement (the Postnuptial Agreement) Husband entered into with Shannon Olivia Gerwe (Wife) as well as various findings of fact and conclusions of law associated with the court’s divorce decree. We affirm.

BACKGROUND

¶2 In January 2014, Wife petitioned for divorce from Husband. On June 25, 2014, the parties entered into the Postnuptial Agreement, which divided the parties’ assets and set forth their financial obligations. In August 2014, Wife moved the court to set aside the Postnuptial Agreement on grounds that Husband fraudulently induced her to sign it.

¶3 Following an evidentiary hearing, the court granted Wife’s motion. It found that Husband had induced Wife to sign the Postnuptial Agreement in hopes of reconciliation when Husband "had no intent to reconcile with" Wife. This was evidenced by (1) the "shortness of time between the signing of the document and the request to move forward with the divorce," (2) the "text messages from [Husband] sent to [Wife] almost immediately after the document was signed," and (3) the fact that the "six factors [Husband] cited to about why he did not want to get back together, were not valid, and were only used as an attempt to justify his actions."

¶4 After a bench trial, the district court entered findings of fact and conclusions of law in support of the divorce decree. Relevant to this appeal, the court found that: (1) Wife was entitled to half the marital funds in a brokerage account but was not responsible for a loan Husband claimed had been used to fund the account; (2) the total value of personal property remaining in Husband’s possession was $48,000, and half of that value should be awarded to Wife; and (3) based on Husband’s current gross income is $9,373 per month, he was required to pay Wife child support in the amount of $671 per month and alimony in the amount of $1,000 per month.

¶5 Husband now appeals the court’s order to set aside the Postnuptial Agreement as well as various findings of fact and conclusions of law associated with the divorce decree.

ISSUES AND STANDARDS OF REVIEW

¶6 Husband raises four issues on appeal. First, Husband argues that the district court failed to utilize the "clear and convincing" evidentiary standard when it set aside the Postnuptial Agreement and failed to make sufficient findings on the essential elements of fraudulent inducement. Husband acknowledges that he did not raise this issue below and would normally be barred from asserting it on appeal. He asks this court to reach the merits of his argument under the plain error exception to the preservation rule.¹ "The party seeking the benefit of the plain error exception must demonstrate that (i) an error exists; (ii) the error should have been obvious to the trial court; and (iii) the error is harmful, i.e., absent the error, there is a reasonable likelihood of a more favorable outcome" for the appellant. Meadow Valley Contractors, Inc. v. State Dep’t of Transpo. , 2011 UT 35, ¶ 17, 266 P.3d 671 (quotation simplified). To the extent Husband challenges the sufficiency of the evidence supporting a finding of fraudulent inducement, "we will not set aside a [district] court’s factual findings ‘unless clearly erroneous,’ giving ‘due regard to the [district] court’s opportunity to judge the credibility of the witnesses.’ " Shuman v. Shuman , 2017 UT App 192, ¶ 3, 406 P.3d 258 (quoting Utah R. Civ. P. 52(a)(4) ).

¶7 Second, Husband contends that the district court erred when it awarded each party half the marital funds in the brokerage account but allocated to him the entirety of a loan he claimed was used to fund the account. "In a divorce action, there is no fixed formula upon which to determine a division of debts. However, such allocation must be based upon adequate factual findings which ruling we will not disturb absent an abuse of discretion." Rehn v. Rehn , 1999 UT App 41, ¶ 19, 974 P.2d 306 (quotation simplified).

¶8 Third, Husband contends that the district court abused its discretion in distributing the value of the parties’ personal property. "[D]istrict courts have considerable discretion concerning property distribution in a divorce ... [and] we will uphold the decision of the district court ... unless a clear and prejudicial abuse of discretion is demonstrated." Dahl v. Dahl , 2015 UT 79, ¶ 119, ––– P.3d –––– (quotation simplified).

¶9 Finally, Husband contends that the district court abused its discretion by failing to calculate alimony and child support based on his projected salary. A district court’s award of alimony is reviewed for abuse of discretion. Bakanowski v. Bakanowski , 2003 UT App 357, ¶ 7, 80 P.3d 153.

ANALYSIS

I. Fraudulent Inducement

¶10 Husband argues that the district court committed plain error when it set aside the Postnuptial Agreement because it failed to use the "clear and convincing" evidentiary standard. Husband also asserts that the court failed to make sufficient findings on the essential elements of fraudulent inducement and that the evidence was insufficient to support such findings.

¶11 To prevail on a claim of fraudulent inducement, the party alleging fraud "must present clear and convincing evidence" of the following:

(1) that a representation was made (2) concerning a presently existing material fact (3) which was false and (4) which the representor either (a) knew to be false or (b) made recklessly, knowing that there was insufficient knowledge upon which to base such a representation, (5) for the purpose of inducing the other party to act upon it and (6) that the other party, acting reasonably and in ignorance of its falsity, (7) did in fact rely upon it (8) and was thereby induced to act (9) to that party’s injury and damage.

Daines v. Vincent , 2008 UT 51, ¶ 38, 190 P.3d 1269 (quotation simplified). "[F]or a matter to be clear and convincing to a particular mind it must at least have reached the point where there remains no serious or substantial doubt as to the correctness of the conclusion." Greener v. Greener , 116 Utah 571, 212 P.2d 194, 205 (1949).

¶12 On appeal, Husband has not established that the district court committed plain error in ruling that Wife had proven fraudulent inducement. "The burden of showing error is on the party who seeks to upset the judgment." State v. Jones , 657 P.2d 1263, 1267 (Utah 1982). Accordingly, "[i]n the absence of record evidence to the contrary, we assume regularity in the proceedings below, and affirm the judgment." Id.

¶13 Although the district court did not expressly state that Wife presented clear and convincing evidence of fraudulent inducement, it never suggested that a lower standard of proof applied. A reviewing court "will not presume from a silent record that the court applied an incorrect legal standard" but "must presume the regularity and validity of the [district] court’s proceedings, and that it applied the correct legal standard, in the absence of evidence to the contrary." State v. Cash , 193 Ohio App.3d 224, 951 N.E.2d 486, 492 (2011) ; see also Granville Med. Center v. Tipton , 160 N.C.App. 484, 586 S.E.2d 791, 795 (2003) (rejecting claim that district court applied the wrong legal standard below because "[w]here the record is silent on a particular point, we presume that the trial court acted correctly"); Committee for Responsible Planning v. City of Indian Wells , 209 Cal.App.3d 1005, 257 Cal.Rptr. 635, 638 (1989) ("In the absence of any contrary indication in the record, we therefore assume that the trial court followed the correct legal standard in ruling on the motion."). Because nothing in the record suggests that the court applied something less than the clear and convincing standard,² Husband cannot establish error.

¶14 Husband also claims the district court committed plain error because it did not make express factual findings on each of the nine elements of fraudulent inducement. On plain error review, we cannot assume that the court committed any legal error simply because it did not expressly recite each element of fraudulent inducement in announcing its ruling. Nothing in the record would lead us to conclude that the court set aside the Postnuptial Agreement without first finding that Wife established each element of fraudulent inducement by clear and convincing evidence.

¶15 Relatedly, Husband claims that the evidence was insufficient to support such findings. The court’s ruling identified three evidentiary grounds for setting aside the Postnuptial Agreement based on fraud: (1) "[t]he shortness of time between the signing of the document and the request to move forward with the divorce"; (2) the text messages between Husband and Wife, which were sent immediately after the Postnuptial Agreement was signed; and (3) Husband’s testimony "about why he did not want to get back together [with Wife], [was] not valid, and [was] only used as an attempt to justify his actions."

¶16 "On appeal, we consider the facts in a light most favorable to the district court’s ruling, including its findings." See Mota v. Mota , 2016 UT App 201, ¶ 2 n.2, 382 P.3d 1080. Viewed in that light, these findings support each element of fraudulent inducement. Specifically, these facts are sufficient to establish that (1) Husband made a representation (2) concerning the material fact that he intended to reconcile (3) which was false and (4) which Husband knew to be false (5) for the purpose of inducing Wife to sign the Postnuptial Agreement and (6) that Wife acted reasonably and in ignorance of its falsity (7) w...