Hansen v. Hansen

• Decision Date: 24 April 2014
• Docket Number: No. 20130114–CA.,20130114–CA.
• Citation: 325 P.3d 864,759 Utah Adv. Rep. 26
• Court: Utah Court of Appeals
• Parties: Dayle Chelane HANSEN, Petitioner and Appellee, v. Thaine S. HANSEN, Respondent and Appellant.

325 P.3d 864

759 Utah Adv. Rep. 26

Dayle Chelane HANSEN, Petitioner and Appellee,

v.Thaine S. HANSEN, Respondent and Appellant.

No. 20130114–CA.

Court of Appeals of Utah.

April 24, 2014.

Catherine J. Hoskins, Clearfield, and Jill Cottle Garrett, Ogden, Attorneys for Appellant.

Timothy W. Blackburn and William A. Street, Ogden, for appellee.

Judge JAMES Z. DAVIS authored this Opinion, in which Judges J. FREDERIC VOROS JR. and JOHN A. PEARCE concurred.

Opinion

DAVIS, Judge:

¶ 1 Thaine S. Hansen (Husband) appeals the trial court's ruling on his petition to modify his divorce decree, which ordered him to pay Dayle Chelane Hansen (Wife) alimony in the amount of $872 per month. We remand for clarification of the trial court's order with respect to the retroactivity of the alimony award, but in all other respects, we affirm the trial court's judgment.

BACKGROUND

¶ 2 Wife filed for divorce in May 2009. A two-day trial was held in July 2010. After hearing the evidence, the trial court found that Wife had reasonable monthly expenses of $4,063 and that Husband had reasonable monthly expenses of $2,140. The court found that Wife “is skillful in a variety of areas and capable of working a full-time minimum wage job” and determined that she was capable of earning a net income of $1,005 per month. After making findings regarding Husband's historical earning capacity, the trial court found that Husband was capable of netting $2,162 per month. The trial court calculated both parties' net incomes by applying a 20% tax rate. Additionally, the trial court recognized that each party would net $1,452 per month from Husband's civil service retirement income, which the parties had stipulated should be divided equally between them. Based on these calculations, the trial court determined that Wife had an unmet monthly need of $1,605, while Husband had a monthly surplus of $1,522. Based on Wife's unmet need and Husband's ability to pay, the trial court ordered Husband to pay alimony to Wife in the amount of $1,000 per month. After taking into account the fact that alimony would be taxable to Wife and tax deductible to Husband—leaving Wife with only $800 per month in net alimony—the trial court pointed out that this award would still leave Wife with a monthly shortfall of $811 ¹ and Husband with a monthly surplus of $722.² The parties' divorce decree was entered on February 11, 2011, and is not the subject of this appeal.

¶ 3 On April 4, 2011, Husband filed a Petition to Modify the Decree, asserting that “he is unable to work due to a medical condition that involves both his back and feet.” On June 17, 2012, Husband was administratively determined to be disabled as of March 21, 2011, and awarded Social Security Disability Income (SSDI) in the amount of $488 per month. Following a trial on the Petition to Modify, the trial court found Wife's monthly expenses to be $4,064, approximately the same as they had been at the time of the divorce. It again imputed minimum-wage income to her in the gross amount of $1,257 per month. It also recognized that she was receiving gross income of $1,939 per month from Husband's civil service retirement and $366 per month from his military retirement. The trial court this time applied a 25% tax rate and calculated Wife's net monthly income to be $2,671, which left her with a shortfall of $1,393 per month. The trial court found that Husband's monthly expenses had changed and found that his reasonable monthly expenses amounted to only $1,867. The trial court did not impute income to Husband but determined that, based on a 25% tax rate, he was receiving $1,729 per month in net retirement income and $488 per month in non-taxable SSDI for a total of $2,217 per month, leaving him with a surplus of $350 per month.

¶ 4 Because Wife's needs had not changed but Husband no longer had the ability to pay alimony at the previous rate, the trial court determined that it would be appropriate to equalize the parties' standards of living by awarding alimony in an amount that would result in each party having an equal monthly shortfall. Accordingly, the trial court reduced the original $1,000 alimony award and ordered Husband to pay Wife $872 per month in alimony, which would leave each party with a monthly shortfall of $521. The trial court indicated that its decision was influenced by the fact that the parties had been married for forty-one years, that Husband had remarried and now received financial assistance from his new wife, and that Husband had contravened court orders regarding his life insurance policy to the likely financial detriment of Wife. ³ The trial court ordered that the modified award would be retroactive to the date when Husband was “administratively determined to be disabled.” The court found that prior to the administrative determination, Husband “was able to work, albeit with limitations.” However, the trial court acknowledged that Husband was on “temporary total disability for the period of time of his surgeries and reasonable recuperation” and had therefore “been unable continuously to work and generate an income.” The court found that the “rehabilitation period for all surgeries and recuperation” was four and a half months and accordingly deducted an additional $4,500 from the amount Husband owed Wife in back alimony, effectively excusing Husband from making any alimony payments during those four and a half months. Husband appeals the trial court's modified alimony award.

ISSUES AND STANDARD OF REVIEW

¶ 5 First, Husband asserts that the trial court failed to adequately consider his ability to pay, Wife's reasonable needs, or Wife's ability to meet her own needs. Second, he challenges the trial court's use of a 25% tax rate and its method of equalizing the parties' monthly shortfalls in its order on the Petition to Modify because the trial court took a different approach when it originally fashioned an alimony award in the divorce decree. Third, he alleges that the trial court erred by including his SSDI in its calculation of his monthly income. Fourth, he argues that he should not be required to pay alimony out of his retirement benefits where Wife was already awarded half of those benefits. Finally, Husband asserts that the trial court's findings were not sufficiently clear regarding retroactivity of the modified alimony award.

Trial courts have broad latitude in determining whether to award alimony and in setting the amount. We review a trial court's award of alimony for an abuse of discretion and will not disturb a trial court's ruling on alimony as long as the court exercises its discretion within the bounds and under the standards we have set and has supported its decision with adequate findings and conclusions.Dobson v. Dobson, 2012 UT App 373, ¶ 7, 294 P.3d 591 (citation and internal quotation marks omitted).

ANALYSIS

I. The Trial Court Properly Considered the Statutory Alimony Factors.

¶ 6 “In fashioning an alimony award, the trial court is required to consider the payor spouse's ability to pay and the recipient spouse's need and ability to produce income.” Fish v. Fish, 2010 UT App 292, ¶ 12, 242 P.3d 787 (citing Utah Code Ann. § 30–3–5(8)(a)(i)–(iii) (Supp.2010) (current version at id. (LexisNexis 2013))). “Furthermore, the award should advance, as much as possible, the purposes of alimony by assisting the parties in achieving the same standard of living they enjoyed during the marriage, equalizing the parties' respective standards of living, and preventing either spouse from becoming a public charge.” Id.

¶ 7 Husband asserts that the trial court failed to adequately consider his ability to pay, Wife's need, and Wife's ability to earn. He first argues that the trial court exceeded its discretion by ordering him to pay alimony in the amount of $872 per month after finding that he had the ability to pay only $350 per month. In support of this argument, he relies on McPherson v. McPherson, 2011 UT App 382, 265 P.3d 839, in which this court held that a trial court had exceeded its discretion by calculating “an alimony amount designed to cover [the wife's] needs” despite the fact that the husband did not have the ability to pay that amount. Id. ¶ 15. The case at hand is distinguishable from McPherson because the trial court did not order Husband to pay “an alimony amount designed to cover Wife's needs.” See id. Rather, the trial court equalized the parties' incomes so that each suffered an equal monthly shortfall. We have consistently held that equalization of income—also termed “equalization of poverty”—is appropriate in “situations in which one party does not earn enough to cover his or her demonstrated needs and the other party does not have the ability to pay enough to cover those needs.” Sellers v. Sellers, 2010 UT App 393, ¶ 3, 246 P.3d 173;see also Fish, 2010 UT App 292, ¶ 30, 242 P.3d 787 (“If there is not enough combined income available for both spouses to remain at the standard of living enjoyed during the marriage, their incomes should be equalized to the extent possible.”); Child v. Child, 2008 UT App 338, ¶ 7, 194 P.3d 205 (discerning no error in the trial court's alimony award of $2,575 to the wife, which would leave the husband with $2,575 to meet his needs of $3,945 and the wife $5,214 to meet her needs of $7,217), vacated in part on other grounds,2009 UT 17, 206 P.3d 633 (per curiam). Indeed, even in McPherson, this court acknowledged that on remand the trial court would have “discretion to make whatever other adjustments it deem[ed] necessary to achieve an equalization of the parties' standards of living or to explain its rationale for assigning a disproportionate percentage of the shortfall to one party.” McPherson, 2011 UT App 382, ¶ 16, 265 P.3d 839.

¶ 8 This case presents precisely the situation where we have deemed equalization of income to be appropriate. Wife has an unmet monthly need of $1,393 and Husband lacks the ability to fulfill that need because ...