Levin v. Carlton

• Decision Date: 25 June 2009
• Docket Number: No. 20080192-CA.,20080192-CA.
• Citation: 2009 UT App 170,213 P.3d 884
• Parties: Robert Keith LEVIN, Petitioner and Appellee, v. Hope M. CARLTON, Respondent and Appellant.
• Court: Utah Court of Appeals

213 P.3d 884

2009 UT App 170

Robert Keith LEVIN, Petitioner and Appellee, v. Hope M. CARLTON, Respondent and Appellant.

No. 20080192-CA.

Court of Appeals of Utah.

June 25, 2009.

Kenneth A. Okazaki and Stephen C. Clark, Salt Lake City, for Appellant.

David S. Dolowitz, Bradley M. Strassberg, and Joshua K. Peterman, Salt Lake City, for Appellee.

Before Judges GREENWOOD, THORNE, and ORME.

OPINION

GREENWOOD, Presiding Judge:

¶ 1 Appellant Hope M. Carlton (Wife) appeals from the trial court's order granting Robert Keith Levin's (Husband) petition for divorce, arguing that the court erred in (1) interpreting the parties' prenuptial agreement (the prenup) and in applying that interpretation to determine property division, alimony, and attorney fees; (2) denying Wife's discovery request regarding Husband's post-separation finances; (3) determining the amount of alimony to which Wife is entitled; and (4) awarding Husband attorney fees and denying Wife the same. We affirm.

BACKGROUND¹

¶ 2 Husband and Wife were married in 1991 in California. At the time of the marriage, Wife was a twenty-five-year-old aspiring actress who "had acted in some obscure films" and had sporadically appeared on television, making as much as $44,000 in one year. Husband, on the other hand, was at that time a forty-two-year-old semi-retired multi-millionaire. In an effort to "protect[ ] his present assets, future investments and future business activities, [Husband] insisted that the parties negotiate and enter into a prenuptial agreement." Husband and Wife each retained and were represented by independent counsel during negotiations resulting in the prenup. The parties both signed the prenup prior to the marriage. The prenup contained a provision stating that it "shall be subject to and interpreted under the laws of the State of California."

¶ 3 Shortly after marrying, Husband and Wife moved to Park City, Utah, "where they lived a luxurious leisure lifestyle" for nearly two years. In 1994, Husband purchased ranch property in Grand County, Utah using $800,000 of his personal assets. He and Wife moved to the ranch to develop it, with the hopes of transforming it into and operating it as a destination resort. Husband invested another $12,000,000 of his personal assets in pursuit of this development, and both parties worked to transform the ranch into the Sorrel River Ranch Resort (the Resort). Although this transformation process was rigorous, the parties also enjoyed numerous amenities as a result of living at the Resort.

¶ 4 In addition to investing in the Resort, Husband invested "in a limited liability company that developed lots on Flat Iron Mesa in San Juan County, Utah." Husband's investment in the Flat Iron Mesa development (Flat Iron) was structured so that he "received sixty per cent (60%) of the profits of the [LLC]." By the time all the lots were sold, Husband had received roughly $1,500,000 in profits therefrom, $1,000,000 of which was received prior to the parties' separation.

¶ 5 In 2005, Husband filed a petition for divorce. While litigating the divorce, Wife and Husband argued at length regarding the proper interpretation of the prenup as it affected division of their property. Wife based her claims for community property "first on her efforts to invalidate the [prenup], second on her claim that she was co-owner of the Resort, and third, that she was entitled to one-half of [Husband's] distributions from Flat Iron Mesa and one-half of the operation cash flow of the Resort." The prenup contained various provisions classifying separate and community property and delineating how to define and divide each. Of importance to this appeal, the prenup defined "earnings," and stated, in essence, that anything properly classified as earnings received by Husband was to be treated as community property and divided equally upon dissolution of the marriage.

¶ 6 The trial court ultimately sided with Husband, finding "that there was and is no community property." The trial court continued, stating that Wife's interpretation of the term "earnings"—and of the prenup in general—is "in conflict with the remainder of the [prenup] and [if accepted would] render it superfluous." The trial court also found "it hard to believe that [Husband] went to the trouble of obtaining such a comprehensive and detailed prenuptial agreement so that he could ensure that [Wife] could claim one-half of the profits from any business venture in which he would become involved."

¶ 7 The determination of alimony was expressly excluded from the prenup and was "reserved to the jurisdiction of the court." The trial court "reached its alimony award by looking at the documented historic expenditures," "find[ing] that the parties spent approximately $9,000.00 per month on [Wife]'s expenses before separation and after separation, [Wife] spent approximately $10,500.00 per month." Wife's expert testified that in order to allow Wife to continue to live the lifestyle she enjoyed during the parties' marriage, Wife reasonably needed $30,000 per month in alimony. Included in that total, among other things, was $6800 for Wife to purchase and pay the mortgage on a $1,000,000 home.² The trial court made extensive findings regarding the reasonableness of Wife's needs, finding that several of Wife's needs were exaggerated, unnecessary, or unreasonable. For example, the trial court found that the house in which Wife was then residing — which house was gifted to Wife prior to entry of the divorce decree — was "similar in appearance and quality to the residence in which she live[d] at the Resort. Accordingly, the Court reduce[d] [Wife's] proposed budget by $6,800.00 which is the monthly amount that [Wife] had included for the purchase of a new home." After analyzing each of Wife's claimed expenses, the trial court ultimately found "that [Wife] will require $12,000.00 per month after taxes to maintain her marital standard of living and thus found that she would need a monthly [gross alimony] payment of $15,000.00." Because the marriage lasted fourteen years and three months, the trial court set the presumptive duration of the alimony award at fourteen years and three months. In addition, the trial court abrogated the presumption that alimony terminates upon remarriage or cohabitation so that Wife could "make a gradual adjustment to a different lifestyle if she should decide to remarry, as well as [to provide] a cushion toward[ ] establishing a new career."

¶ 8 In order to allow Wife to litigate the interpretation of the prenup, the trial court had previously ordered Husband to pay $120,000 of Wife's attorney fees, advising her that it might later order her to reimburse Husband for the fee he advanced her. When entering the final decree, however, the trial court found that Husband "should not be required to pay any [of Wife's] further litigation expenses" above and beyond the $120,000 already advanced. Instead, the trial court ordered Wife to pay the remainder of her own attorney fees, at least $30,000 worth, out of "approximately $35,000 in a securities account that was gifted to her by [Husband] during the course of the marriage as well as the alimony that she will be receiving from [Husband]." The prenup also contained an attorney fees provision entitling the prevailing party with respect to interpretation of the prenup to recover any reasonable attorney fees expended in the course of litigating the prenup's interpretation. Because Husband prevailed as to the interpretation of the prenup, the trial court awarded Husband his attorney fees in the amount of $167,884.75, to be paid by Wife "by deducting $5,000 from each month's alimony payment . . . until paid in full." With an eye toward mitigating the impact this payment would have on Wife's ability to otherwise meet her needs, the trial court subsequently reduced the amount Husband could deduct from Wife's alimony to $2500 per month. This appeal followed.

ISSUES AND STANDARDS OF REVIEW

¶ 9 The first issue Wife raises is whether the trial court erred in interpreting the prenup and applying it to the facts of this case. "[Pre]nuptial agreements are to be construed and treated as are contracts in general. They are in no way different from any other ordinary contract." Berman v. Berman, 749 P.2d 1271, 1273 (Utah Ct.App. 1988) (citation and internal quotation marks omitted). We review a trial court's interpretation of an unambiguous contract for correctness. See Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 16, 84 P.3d 1134.

¶ 10 Wife also argues that the trial court erred in denying her discovery requests regarding Husband's post-separation finances.

Although trial courts have broad discretion in matters of discovery, the trial court, in exercising such discretion, must apply the correct law to its findings of fact, and its findings of fact must be supported by sufficient evidence. An appellate court will not find abuse of discretion absent an erroneous conclusion of law or where there is no evidentiary basis for the trial court's ruling.

Askew v. Hardman, 918 P.2d 469, 472 (Utah 1996).

¶ 11 Next, Wife argues that the trial court erred in setting the amount of alimony to which she is entitled. "`Trial courts have considerable discretion in determining alimony . . . and [determinations of alimony] will be upheld on appeal unless a clear and prejudicial abuse of discretion is demonstrated.'" Davis v. Davis, 2003 UT App 282, ¶ 7, 76 P.3d 716 (omission and alteration in original) (quoting Breinholt v. Breinholt, 905 P.2d 877, 879 (Utah Ct.App.1995)).

¶ 12 Finally, Wife contests the trial court's decision to award Husband attorney fees pursuant to the prenup and to deny her full attorney fees. The decision that a party is contractually entitled to attorney fees is reviewed for correctness, while the subsidiary factual determination of which party prevailed is reviewed for an abuse of discretion. See Crowley v. Black, 2007 UT App...