Grgich v. Grgich

• Decision Date: 30 June 2011
• Docket Number: No. 20091002–CA.,20091002–CA.
• Parties: Rodney Frank GRGICH, Petitioner and Appellant,v.Sharon GRGICH, Respondent and Appellee.Brenda Kathleen Gowans, Rodney Grgich Jr., and Brittney Kaye Grgich, Intervenors and Appellants.
• Court: Utah Court of Appeals

262 P.3d 418

685 Utah Adv. Rep. 24

2011 UT App 214

Rodney Frank GRGICH, Petitioner and Appellant,

v.Sharon GRGICH, Respondent and Appellee.Brenda Kathleen Gowans, Rodney Grgich Jr., and Brittney Kaye Grgich, Intervenors and Appellants.

No. 20091002–CA.

Court of Appeals of Utah.

June 30, 2011.

Scott A. Broadhead, Tooele, for Appellants.Gary Buhler, Grantsville, for Appellee.Before Judges McHUGH, ORME, and VOROS.

OPINION

McHUGH, Associate Presiding Judge:

¶ 1 Rodney Frank Grgich (Husband) appeals the trial court's Order and Judgment Concerning Distribution of Assets and Debts (Order) and its related findings of fact and conclusions of law. Husband argues that the trial court erred in concluding that Sharon Grgich's (Wife) claim to an interest in certain farm property (the farm) was not barred by the statute of limitations, that a 1990 quitclaim deed purporting to convey the farm to Husband and three of the Grgich children was invalid, and that Wife was entitled to her attorney fees. ¹ We affirm on the first two issues, but remand for the entry of additional findings of fact on attorney fees.

BACKGROUND

¶ 2 Husband and Wife were married in 1967. The marriage produced five children, all of whom are now adults. From the time of their marriage until 1977, Husband and Wife lived on the farm, located in Tooele County, that originally belonged to Husband's father. The couple then lived in various other locations, losing residences through eviction and foreclosure until they ultimately moved back to the farm in 1993. In 1990, Husband inherited the farm from his father. The day after receiving title to the farm, Husband executed a quitclaim deed that purportedly conveyed the farm to himself and three of his then-minor children (the Children) as joint tenants. The quitclaim deed was signed and recorded at that time. Husband testified that he executed the quitclaim deed for “favorable property tax and inheritance tax treatment.” Despite the existence of the recorded quitclaim deed, Husband borrowed against the farm multiple times for the benefit of himself and Wife, sometimes with the permission or knowledge of one or more of the Children, and other times without their knowledge or over their objections.

¶ 3 While on the farm, Husband and Wife lived in a dilapidated trailer that continued to deteriorate until they eventually lived with no utilities save an extension cord plugged into a neighbor's electrical socket. Husband moved out of the trailer and filed for divorce in 2006. Wife continues to live in the dilapidated trailer on the farm, while Husband has been supported by his children, first in his own fully-serviced trailer provided by one daughter, and then eventually living with another daughter.

¶ 4 The divorce proceedings were originally tried before Judge Mark Kouris on November 15, 2007. Because neither party was financially stable, Judge Kouris determined that alimony would not be an option but that the marital assets would be divided. Wife claimed a one-half interest in the farm and cattle, asserting that it was part of the marital estate. In his divorce complaint, Husband asserted that he had sole ownership of the farm and cattle because he had inherited them. Sometime prior to the original bench trial, however, Husband changed tactics and claimed that he had no property to divide because the farm and other assets had been transferred to a trust before he filed the petition for divorce.² He claimed that the Children were the trustees and that the trust's purpose was to “take care of” Husband and Wife while they were alive.

¶ 5 After hearing evidence at a one-day bench trial, Judge Kouris issued a written ruling that states that “[no] documents were entered into evidence verifying the existence of this trust,” that the “trust is not recorded by the appropriate county recorder or any other governmental entity,” and that “the trial unearthed many facts that question the motivation and legitimacy of the alleged trust.” Based on these findings, Judge Kouris concluded that “[t]here is no legal basis for the alleged trust discussed in trial, therefore this Court has the ability to equitably divide said assets.” Judge Kouris further concluded that the inherited property had become part of the marital estate, in part due to Wife's “significant[ ] participat[ion] in the workings of the farm.” Therefore, Judge Kouris awarded Wife “one-half of the interest and ownership that [Husband] had in the farm land, the associated water rights, and farm equipment.”

¶ 6 After judgment was entered, the Children filed a motion to intervene and a motion to set aside the divorce decree and property distribution, asserting that based on the 1990 quitclaim deed, they had “a property interest in this matter which [was] not being protected.” Due to changes in judicial assignments, Judge Steven Henriod was then assigned to the case. Judge Henriod granted the motion to set aside judgment and the motion to intervene, reasoning that the Children had no legal notice of the action and that the prior decision “would deprive them of their property rights.” In response, Wife filed an Amended Answer and Complaint Against Intervenors, asserting that the Children “assisted [Husband] in a fraud upon the Court” when Husband deeded the farm to himself and the minor Children and that “the transfer was intended to deprive [Wife] of her marital interest in [the farm] to which she contributed significantly both before and after the deed recordation.” The Children and Husband then filed a motion to dismiss, arguing that Wife's claim to the farm was barred by the statute of limitations contained in Utah Code section 78B–2–207 because she did not bring her “action for the possession or recovery of real estate” within seven years of the 1990 quitclaim deed. See Utah Code Ann. § 78B–2–207 (2008).

¶ 7 A second bench trial was held in June and July of 2009 before Judge Henriod. A few days before this second trial, the trust was either dissolved or “its nonexistence” was recognized by Husband and the Children. At the second trial, Husband and the Children claimed for the first time that the 1990 quitclaim deed was a valid transfer and therefore, only Husband's one-fourth interest could be included in the marital estate. Wife disagreed, asserting that the 1990 quitclaim deed was not a valid transfer and the entire farm was part of the marital estate.

¶ 8 Following the second trial, Judge Henriod concluded that because Husband did not have the present intent to transfer title to the farm when he issued the 1990 quitclaim deed, it was invalid.³ Therefore, Judge Henriod determined that “the farm, including the water and all the farm equipment and other personal property on the farm is marital property.” He then divided the marital assets by ordering Wife to sell the farm, use the proceeds to satisfy any debts, and then split any remainder equally with Husband. With respect to Husband's statute of limitations claim, Judge Henriod found that Husband's “conduct from [the time of the deed] to the present led [Wife] to believe that the 1990 quitclaim deed did not constitute a transfer at that time.” Therefore, he concluded that Husband was “estopped from claiming that the 1990 quitclaim deed was a valid transfer, or that either the legal principle of laches or the statute of limitations appli[ed] to [Wife's] claim for an interest in the [farm].” Finally, Judge Henriod ordered that Wife be awarded her attorney fees “because of [Husband's] conduct in attempting to prevent her from receiving a fair share of marital assets.” Husband appeals Judge Henriod's Order and the related findings of fact and conclusions of law.

ISSUES AND STANDARDS OF REVIEW

¶ 9 Husband argues that Judge Henriod erred in concluding that the statute of limitations did not bar Wife's claim for an interest in the farm. “The applicability of a statute of limitations ... [is] a question of law, which we review for correctness.” Russell Packard Dev., Inc. v. Carson, 2005 UT 14, ¶ 18, 108 P.3d 741 (internal quotation marks omitted).

¶ 10 Husband next challenges Judge Henriod's conclusion that the 1990 quitclaim deed was invalid. At trial, “[a] party attacking the validity of a written instrument must do so by clear and convincing evidence.” Baker v. Pattee, 684 P.2d 632, 634 (Utah 1984). However, while we review questions of law for correctness on appeal, see generally Winegar v. Froerer Corp., 813 P.2d 104, 107 (Utah 1991) (recognizing that whether parties conveyed title to property is a matter of law), we “will disturb the findings of fact in equity cases only where the evidence clearly preponderates against them,” Baker, 684 P.2d at 634.

¶ 11 Husband also argues that it was error to award Wife attorney fees in the second trial. “Both the decision to award attorney fees and the amount of such fees are within the trial court's sound discretion.” Arnold v. Arnold, 2008 UT App 17, ¶ 11, 177 P.3d 89 (internal quotation marks omitted). However, any underlying legal questions are reviewed for correctness. See Connell v. Connell, 2010 UT App 139, ¶ 6, 233 P.3d 836; Boyer v. Boyer, 2008 UT App 138, ¶ 13, 183 P.3d 1068 (“Whether attorney fees are recoverable in an action is a question of law, which is reviewed for correctness.” (internal quotation marks omitted)).

ANALYSIS

I. Because Husband Concealed His Present Intent To Transfer the Farm, the Discovery Rule Tolled Any Statute of Limitations Applicable to Wife's Claim Until the Time of the Second Trial.

¶ 12 Husband asserts that the seven-year statute of limitations in Utah Code section 78B–2–207, see Utah Code Ann. § 78B–2–207 (2008), barred Wife's claim that the farm was part of the marital estate. In response, Wife contends that she did not bring a quiet title action and therefore section 78B–2–207 is inapplicable. We conclude that even if the quiet title statute of limitations was applicable, it was tolled.⁴

¶ 13 Based on evidence at the second...