Kunzler v. Kunzler

• Decision Date: 10 July 2008
• Docket Number: No. 20061146-CA.,20061146-CA.
• Parties: Allison Q. KUNZLER, Petitioner, Appellee, and Cross-appellant, v. Alan KUNZLER, Respondent, Appellant, and Cross-appellee.
• Court: Utah Court of Appeals

190 P.3d 497

2008 UT App 263

Allison Q. KUNZLER, Petitioner, Appellee, and Cross-appellant, v. Alan KUNZLER, Respondent, Appellant, and Cross-appellee.

No. 20061146-CA.

Court of Appeals of Utah.

July 10, 2008.

David S. Dolowitz, Dena C. Sarandos, Bradley M. Strassberg, and Thomas J. Burns, Salt Lake City, for Appellant and Cross-appellee.

Kim M. Luhn, Salt Lake City; and Jennifer D. Reyes, Brigham City, for Appellee and Cross-appellant.

Before GREENWOOD, P.J., BILLINGS and DAVIS, JJ.

OPINION

DAVIS, Judge:

¶ 1 The trial court awarded Allison Q. Kunzler (Wife), among other things, one half of Alan Kunzler's (Husband) undivided interests in five parcels of real property (the Properties). The Properties had been given to Husband and his siblings by his mother, Bernice L. Kunzler nka Bernice Rous (Rous), during the marriage of Husband and Wife. The trial court supported its award of the Properties by ruling that Husband's interests in these parcels were not really a gift from Rous but, rather, represented earnings due to Husband's work on Kunzler Ranch, LLC (the Ranch). This ruling was based solely upon Rous's deposition testimony. Husband appeals this award of the Properties to Wife, arguing that the trial court erred in ruling that the Properties are marital property.

¶ 2 The trial court also ruled that because Rous transferred her and her late husband's real estate into the Ranch for estate planning purposes, Husband's interest in the Ranch and the bulls that lived on the Ranch's land were his separate property. Wife cross-appeals, arguing that trial court erred by ruling Husband's interest in the Ranch to be non-marital property as well as by excluding the bulls that lived on the Ranch from the marital estate. We affirm in part, and reverse and remand in part.¹

BACKGROUND

¶ 3 On April 4, 1981, the parties married. Throughout the marriage, Husband worked on the family ranch and Wife was a homemaker. In 1987, Rous began purchasing properties and titling them in her children's names. The Ranch was established after Husband's father's death to reduce Rous's estate tax burden. Virtually all of the acreage placed under the control of the Ranch was originally owned by Husband's parents. Husband has a 20.37% ownership interest in the Ranch.

¶ 4 Wife filed a petition for divorce on April 24, 2003, after twenty-two years of marriage. The trial court issued a bifurcated decree of divorce on October 27, 2004, which divorced the couple, awarded Wife sole physical and legal custody of the minor children, ordered Husband to continue to pay $549 a month in temporary child support, and reserved the remaining issues for trial. Trial was held on August 17 and 18, 2005.

¶ 5 In her opening statement on the first day of trial, Wife's counsel requested

that with regard to any real property that [Husband] owns, individually or jointly, that [Wife] be awarded half interest in said property. With regard to the [Ranch] ownership interest, [Wife is] requesting an award of half of the 20.37 percent interest that he now holds. And then with regard to other personal property we would ask that [Wife] be awarded an equitable interest in that as well.

¶ 6 Later that day, Wife's counsel asked Husband, "Isn't it true that . . . your mother purchased this land . . . for the purpose of benefitting you and your brothers because you were working the [R]anch?" While Husband never directly answered the question, he responded by saying, "[Rous] is who owned the [R]anch. It went through her account. It was her. She paid the wage[s]. . . . Me and my brothers and some hired men did the work, but it was not [R]anch money [that paid for the Properties]." Wife's counsel never pressed Husband on why Rous gave him interests in the Properties.

¶ 7 On the second day of trial, Wife's counsel addressed Rous's dispersal of her land, pointing to a statement Rous made in a deposition. Before Wife's counsel could utter the statement, Husband's counsel objected, stating that he had been "informed that [the depositions] would not be transcribed," that "they've never been presented to [Rous] for signing," and that the deposition in question was "not before this court at this stage anyway." The trial court asked for cases on the issue of property division from both parties but declined to address the validity of the deposition, stating that the parties' motion regarding property division "sort of moots the question of whether I'm going to receive that deposition right now or not."

¶ 8 On cross-examination, Wife's counsel sought to ask Rous questions based on her previous statements in deposition. Husband's counsel then reiterated his previous objections. The trial court ruled, "I'm not going to accept the deposition at this point as evidence, but I will allow [Wife's counsel] to show it to [Rous] and have her read it and then [Wife's counsel] can ask her about it." Wife's counsel then asked Rous to read aloud both the question and her answer from the deposition, at which point Husband's counsel again objected. The trial court ruled that Wife's counsel could ask Rous to read the deposition and ask Rous if it refreshed her memory. Wife's counsel then read Rous's deposition testimony where she stated that her children who work on the Ranch would receive more real property than those children who do not. Rous testified that this reading of the deposition transcript refreshed her memory, but Wife's counsel moved on to another line of questioning without any further questions about the subject. After both parties rested, the trial court took the matter under advisement, promising to issue a written decision shortly.

¶ 9 The trial court issued a Memorandum Decision on August 24, 2005, addressing the issues of child support, alimony, personal and real property, and attorney fees, as well as directing Wife to prepare findings. Respecting the Properties, the trial court relied on Rous's deposition statements to rule that the Properties represented earnings for Husband's work on the Ranch and were therefore marital properties. Thereafter, the parties disputed various income calculations, technical errors, as well as the fact that the Properties had been deemed earnings by the trial court.

¶ 10 The trial court issued a second Memorandum Decision on March 15, 2006, recalculating Husband's income for the purposes of child support and alimony. Again, the trial court directed Wife to prepare findings. Wife's trial counsel submitted Supplemental Findings of Fact and Conclusions of Law on March 24, 2006. This document again referenced Rous's deposition testimony as the basis for the finding that the Properties represented earnings and not gifts. The trial court signed this document, along with a Supplemental Decree of Divorce, on April 6, 2006.

¶ 11 On November 22, 2006, the trial court issued its Amended Supplemental Findings of Fact and Conclusions of Law, as well as an Amended Supplemental Decree of Divorce. The trial court made findings on child support, alimony, health insurance, child care, tax exemptions, attorney fees, and personal and real property. Specifically, the trial court awarded Wife half of the cattle and horses owned by the parties but determined that the bulls belonged to the Ranch and not to Husband. Next, the trial court again determined that the undivided interests in the Properties were given to Husband by Rous not as a gift or inheritance but as earnings for his work on the Ranch, and accordingly awarded Wife a one half interest in Husband's undivided interests. To support this determination, the trial court relied upon Rous's deposition testimony. The trial court ruled that the land and livestock held by the Ranch was not marital property and that Husband's ownership interest in the Ranch was part of Rous's estate plan to keep the property in the family and reduce taxes.

¶ 12 Husband appeals the trial court's awarding of half of his interests in the Properties to Wife. Wife cross-appeals, challenging the trial court's determination that Husband's interests in the Ranch and the bulls are not marital property.

ISSUES AND STANDARDS OF REVIEW

¶ 13 Husband challenges the award of half of his share of the Properties to Wife. Wife challenges the conclusion that the Ranch and the bulls were not marital property. "In a divorce proceeding, there is no fixed formula from which to determine the division of property. Thus, `we afford the trial court considerable latitude in adjusting financial and property interests, and its actions are entitled to a presumption of validity.'" Baker v. Baker, 866 P.2d 540, 542 (Utah Ct.App.1993) (quoting Watson v. Watson, 837 P.2d 1, 5 (Utah Ct.App.1992), overruled in part on other grounds by Lyon v. Burton, 2000 UT 19, ¶ 76 n. 18, 5 P.3d 616). Therefore, "[w]e will alter the trial court's property division `only if there was a misunderstanding or misapplication of the law resulting in a 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.'" Id. at 543 (quoting Watson, 837 P.2d at 5); see also id. at 542 ("The trial court's findings of fact are presumed to be correct, and because we lack the advantage of seeing and hearing witnesses testify, we do not make our own findings of fact.").

¶ 14 A trial court's findings, however, must be supported by facts that would be admissible at trial. See Centro de la Familia de Utah v. Carter, 2004 UT 43, ¶ 6, 94 P.3d 261. "[O]n appeal from a judgment of the trial court, our role is not to substitute our own findings for those of the trial court, but to examine the record for evidence supporting the judgment." Shioji v. Shioji, 712 P.2d 197, 201 (Utah 1985).²

ANALYSIS

¶ 15 In a divorce proceeding, a property distribution "must be based upon adequate factual findings and must be in accordance with the standards set by this state's appellate courts." Dunn v. Dunn...