Morgan v. Morgan

• Decision Date: 29 June 1990
• Docket Number: No. 880414-CA,880414-CA
• Parties: Vera MORGAN, Plaintiff and Appellee, v. Wallace Jay MORGAN, Defendant and Appellant.
• Court: Utah Court of Appeals

Page 684

795 P.2d 684

Vera MORGAN, Plaintiff and Appellee, v. Wallace Jay MORGAN, Defendant and Appellant.

No. 880414-CA.

Court of Appeals of Utah.

June 29, 1990.

Bert L. Dart (argued), Dart, Adamson & Parken, David S. Dolowitz, and Julie A. Bryan, Cohne, Rappaport & Segal, Salt Lake City, for defendant and appellant.

Dennis C. Ferguson (argued), Snow Christensen & Martineau, and Craig S. Cook, Salt Lake City, for plaintiff and appellee.

Before DAVIDSON, JACKSON, and LARSON ¹, JJ.

OPINION

DAVIDSON, Judge:

Wallace Morgan appeals from the trial court's award of costs and attorney fees, the distribution and valuation of property, and the alimony award in his divorce. We reverse and remand for additional findings.

Wallace and Vera Morgan were married in 1950. At the time of their marriage, Wallace was a dental student attending Washington University in St. Louis, Missouri. After he completed dental school in 1953, the couple moved back to Salt Lake City. In 1986, Vera filed a complaint for separate maintenance; Wallace filed an answer and counterclaim seeking a decree of divorce. The case was tried before the district court in December 1987. In April 1988, the trial court granted Vera a divorce and made rulings on equitable property division and alimony, and ordered Wallace to pay Vera's accounting, appraisal, and attorney fees. Both parties prepared proposed findings of fact and conclusions of law and post-trial hearings were held to discuss each side's objections. The trial court eventually accepted Vera's findings of fact and conclusions of law. Wallace raised several objections, but final findings of fact and conclusions of law and a decree of divorce were entered on May 26, 1988.

In the findings and conclusions, the trial court divided the marital assets and liabilities upon fair market value based primarily on the evidence presented by Vera. The court also ordered that the marital home be sold and the proceeds equally divided, that Wallace pay Vera's legal, accounting, and appraisal fees, and that he pay her $2,000 per month in alimony, to be reduced to $1,700 per month two years after the date of entry of the decree.

We address five issues: (1) the appropriateness of ordering Wallace to pay Vera's attorney fees and costs; (2) the appropriateness of valuing joint bank accounts as of a time prior to trial; (3) the sufficiency of findings to support the court's award of alimony; (4) consideration of tax consequences incident to a sale of marital property; and (5) application of a minority discount factor when valuing Wallace's minority interests in partnerships.

ATTORNEY FEES AND COSTS

A. Costs

Wallace first argues that the trial court erred in ordering him to pay Vera's costs, contending that they are not awardable by statute. The decree ordered him to pay accounting fees of $10,973.41 and appraisal fees of $920, both of which were incurred in preparation for trial. He also contends that $11,617.44 of Vera's $75,000 attorney fees bill were improperly included costs. ² Vera argues that the appraisal, accounting, and attorney fees were not costs, but were instead marital obligations. She contends that the trial court awarded Wallace a greater percentage of the marital estate to cover payment of those expenses.

We review the trial court's award of costs under an abuse of discretion standard. Frampton v. Wilson, 605 P.2d 771, 773-74 (Utah 1980); Lloyd's Unlimited v. Nature's Way Marketing, Ltd., 753 P.2d 507, 512 (Utah Ct.App.1988).

"[C]osts are 'generally allowable only in the amounts and in the manner provided by statute,' but the [Utah] Supreme Court 'has taken the position that the trial court can exercise reasonable discretion in regard to the allowance of costs; and that it has a duty to guard against any excesses or abuses in the taxing thereof.' " Hatanaka v. Struhs, 738 P.2d 1052, 1055 (Utah Ct.App.1987) (quoting Frampton, 605 P.2d at 773-74). Utah Rule of Civil Procedure 54(d)(1) governs cost awards in civil litigation:

Except when express provision therefor is made either in a statute of this state or in these Rules, costs shall be allowed as of course to the prevailing party unless the court otherwise directs....

The Utah Supreme Court has defined costs to mean "those fees which are required to be paid to the court and to witnesses, and for which the statutes authorize to be included in the judgment." Frampton, 605 P.2d at 774. Thus, witness fees, travel expenses, and service of process expenses are chargeable only in accordance with the fee schedule set by statute. Id. See generally Utah Code Ann. § 21-2-4 (Supp.1989) (sheriff's fees); Utah Code Ann. § 21-5-8 (Supp.1989) (witness fees in civil cases). Witness compensation in excess of the statutory schedule is generally inappropriate as a cost. Frampton, 605 P.2d at 774.

Furthermore, our appellate courts make a distinction between "legitimate and taxable 'costs' and other 'expenses,' of litigation which may be ever so necessary, but are not taxable as costs." Id. For instance, neither land surveys nor appraisal fees, incurred in preparation for litigation, are recoverable as costs. Stratford v. Wood, 11 Utah 2d 251, 253, 358 P.2d 80, 81 (1961) (costs of survey made in preparation of trial not recoverable); Hatanaka, 738 P.2d at 1055 (survey); Stevens v. Stevens, 754 P.2d 952, 959 (Utah Ct.App.1988) (cost of property appraisal). The appraisal and accounting fees here were incurred in preparation for trial and cannot be considered a cost. The trial court abused its discretion in awarding these two items as costs. See Hatanaka, 738 P.2d at 1055. We also hold that it was inappropriate for the trial court to award $4,110 in appraisal fees which were included as part of the attorney fees award.

Costs of depositions also are not recoverable unless "the trial court is persuaded that they were taken in good faith and, in the light of the circumstances, appeared to be essential for the development and presentation of the case." Frampton, 605 P.2d at 774; Lloyd's Unlimited, 753 P.2d at 512.

In Lloyd's Unlimited, we stated that the party seeking the cost of depositions bears the burden of proving that the depositions were reasonably necessary. Id. at 512. Depositions are reasonably necessary only where the complex nature of the case prevents a party from completing discovery through less expensive methods such as interrogatories, requests for admissions, and requests for the production of documents. Id.

Vera argues that the two depositions, for which she seeks costs, were necessary "in order to verify that the information obtained [from Wallace] was correct." In our review of the record, we cannot determine if the trial judge concluded that the deposition fees were reasonably necessary. In the findings and conclusions and decree, the deposition costs were simply awarded as part of the overall attorney fees, without consideration of their necessity. ³ We therefore remand this issue to the trial court to determine if the deposition costs were reasonably necessary. We also note that it was inappropriate for the trial court to award the costs of service of process in excess of that allowed by statute. Frampton, 605 P.2d at 774.

The remaining miscellaneous costs ⁴ are not provided for by statute. These miscellaneous expenses, totalling $6,467.37, are not properly taxable as costs. See Frampton, 605 P.2d at 774 (miscellaneous expenses of $395 for a contour model, photographs, and certified copies not taxable as costs). We therefore reverse the trial court's award of these costs.

B. Attorney Fees

Wallace next argues that the trial court erred in ordering him to pay Vera's attorney fees because the fees were excessive and the court neither considered his ability to pay nor Vera's need for the award. A trial court has the authority to award attorney fees in divorce proceedings. Kerr v. Kerr, 610 P.2d 1380, 1384 (Utah 1980); Rasband v. Rasband, 752 P.2d 1331, 1336 (Utah Ct.App.1988). The decision to award fees rests within the sound discretion of the trial court, but must be based on evidence of financial need and reasonableness. Huck v. Huck, 734 P.2d 417, 419 (Utah 1986); Kerr, 610 P.2d at 1384; Rasband, 752 P.2d at 1336.

Reasonable attorneys fees are not measured by what an attorney actually bills, nor is the number of hours spent on the case determinative in computing fees, ... [a] court may consider, among other factors, the difficulty of the litigation, the efficiency of the attorneys in presenting the case, the reasonableness of the number of hours spent on the case, the fee customarily charged in the locality for similar services, the amount involved in the case and the result attained, and the expertise and experience of the attorneys involved.

Rasband, 752 P.2d at 1336 (quoting Cabrera v. Cottrell, 694 P.2d 622, 624-25 (Utah 1985)).

The decree simply orders Wallace to pay Vera's attorney fees in the amount of $75,000. The findings are deficient in that there is no mention that the trial court considered Vera's ability to pay her own fees or Wallace's ability to pay. See Kerr, 610 P.2d at 1384. The findings also fail to show the reasonableness of the requested fee. See Huck, 734 P.2d at 419. Although Vera's attorney testified that such fees were reasonable in light of the difficulty of the case, there is no independent attempt by the court to characterize the fee as reasonable. See Kerr, 610 P.2d at 1384. Accordingly, we remand for reconsideration of the award of fees and for entry of such additional findings as may be necessary.

VALUATION OF BANK ACCOUNTS

Wallace next argues that the court erred by valuing six bank accounts prior to trial. He contends that the bank accounts were working accounts with fluctuating balances and that on the date of trial those balances were substantially lower than the balances listed on pre-trial bank statements produced by Vera. ⁵

The trial court should, in most circumstances, value the marital...