Mortensen v. Mortensen

• Decision Date: 16 August 1988
• Docket Number: No. 19328,19328
• Citation: 760 P.2d 304
• Parties: Hermona Jane MORTENSEN, Plaintiff and Appellee, v. Kay Sherman MORTENSEN, Defendant and Appellant.
• Court: Utah Supreme Court

Page 304

760 P.2d 304

Hermona Jane MORTENSEN, Plaintiff and Appellee, v. Kay Sherman MORTENSEN, Defendant and Appellant.

No. 19328.

Supreme Court of Utah.

Aug. 16, 1988.

Richard B. Johnson, Provo, for defendant and appellant.

Michael D. Esplin, Provo, for plaintiff and appellee.

HOWE, Associate Chief Justice:

This case presents for determination the question of what disposition should be made in a divorce decree of property given to one of the parties to the marriage by his or her family during the course of the marriage.

Plaintiff Hermona Jane Mortensen and defendant Kay Sherman Mortensen were married on June 18, 1959, when they were eighteen and nineteen years of age, respectively. Neither brought any substantial assets into the marriage. In 1969, defendant's parents, who owned a farm, organized a corporation to which they conveyed the farm. They issued 50 percent of the stock to themselves and the remaining 50 percent to their five children in equal shares. A certificate of stock bearing defendant's name alone was issued to him for his 10 percent of the outstanding shares. Plaintiff has had no involvement with the corporation except that she served as its secretary for six months, during which time she performed some nominal secretarial work.

Plaintiff brought this action for divorce. At the end of the trial, the court granted her a divorce, but suggested to counsel for both parties that they attempt to agree on a division of the property and on the amount of child support and alimony, if any. Counsel agreed to do so, but requested that the court first guide them by deciding whether the shares of stock given to defendant by his parents should be considered by them in their negotiation. The court took the question under advisement and, after reading trial memoranda provided by counsel, ruled that the stock "is property of the marriage and should be taken into consideration by the court in dividing all marital property on a fair and equitable basis." Thereafter, the parties stipulated to a division of their property which gave all of the shares of stock to defendant, but gave about two-thirds in value of the remaining property to plaintiff, including their major asset, their house and lot which had been fully paid for. They also stipulated to amounts of child support for the three minor children and that plaintiff should be awarded no alimony. The stipulation was made subject to the right of defendant to appeal to this Court the trial court's ruling quoted above concerning the shares of stock. The court accepted and approved the stipulation, which was incorporated into a decree of divorce.

Utah Code Ann. § 30-3-5 (1984, Supp.1988) tersely provides: "When a decree of divorce is rendered, the court may include in it equitable orders relating to the children, property, and parties." "Property" is nowhere defined in our divorce code. In Weaver v. Weaver, 21 Utah 2d 166, 442 P.2d 928 (1968), we rejected the contention of the defendant husband that shares of stock which had been given to him by his father and sister should not have been treated by the trial court as part of the marital estate and divided between him and his plaintiff wife. We did so without any analysis of the issue and based our decision on the oft-repeated rule that under section 30-3-5, there is no fixed rule or formula for the division of property, the trial court has wide discretion in property division and its judgment will not be disturbed on appeal unless an abuse of discretion can be demonstrated. In that case, however, the wife was awarded no alimony and was directed to pay her own attorney fees and costs, even though she was totally disabled. More recently in Bushell v. Bushell, 649 P.2d 85 (Utah 1982), the defendant husband's father had given him fourteen acres of land during the marriage. In a divorce action brought by the plaintiff wife, we affirmed the trial court's division of property which awarded her one acre of that land upon which the parties placed a mobile home in which they lived. She was also given the right to use the remaining thirteen acres for farming and for her livestock for seven and one-half years to assist in providing support for the minor children and herself. Similarly, in Dubois v. Dubois, 29 Utah 2d 75, 504 P.2d 1380 (1973), we were unable to find any abuse of discretion in the division of a marital estate totalling $588,581 which awarded to the plaintiff wife 60 percent thereof, even though "the greater part of the nucleus of this estate was the result of investment and reinvestment of gifts from the plaintiff's relatives." The defendant husband had appealed the division because the trial court had not taken into consideration that the wife was a beneficiary of the estate of her uncle who died after the divorce action was filed but before trial. This Court made no specific comment on that issue and affirmed the property division but reversed the award of alimony made by the trial court, since the wife could maintain herself on the income from the property awarded her.

In contrast to the above cases, we have on a number of occasions affirmed a division of property made by the trial court which awarded to one spouse property which he or she inherited during the marriage. For example in Preston v. Preston, 646 P.2d 705, 706 (Utah 1982), we affirmed a divorce decree awarding to each party, in general, the real and personal property he or she brought to the marriage or inherited during the marriage. We there said:

Following the principle we have approved in cases like Georgedes v. Georgedes, Utah, 627 P.2d 44 (1981); Jesperson v. Jesperson, Utah, 610 P.2d 326 (1980); and Humphreys v. Humphreys, Utah, 520 P.2d 193 (1974), the district court concluded that each party should, in general, receive the real and personal property he or she brought to the marriage or inherited during the marriage.

Again, in Burke v. Burke, 733 P.2d 133 (Utah 1987), the plaintiff wife, ten years into the marriage, inherited from her mother's estate three and one-half acres of unimproved land then worth less than $5,000. Although no improvements were made to the property nor any effort was expended by either party, the property had appreciated at the time of divorce to $35,000 per acre. The trial court awarded the property solely to the plaintiff wife, giving the defendant husband no part of the land's original value or appreciation during the marriage. This Court refused to disturb that award. A few months later, we decided Newmeyer v. Newmeyer, 745 P.2d 1276 (Utah 1987), where the plaintiff invested in houses money she had inherited early in the marriage. During their twenty-year marriage, the parties owned three houses in succession. During the holding periods, each house appreciated in value. Upon divorce, the plaintiff wife was credited with the amount of her inheritances that went into the houses, but the parties equally shared the appreciation of the value of the houses. We found no abuse of discretion in that arrangement. See also Argyle v. Argyle, 688 P.2d 468 (Utah 1984), where the defendant husband was credited with the amount of a gift of land received from his mother during the marriage.

Some of the above cases in which gifts or inheritances received by one of the parties to the marriage were treated differently can be reconciled because of the effort made by the nondonee or nonheir spouse to preserve or augment the asset, Dubois v. Dubois, supra, or because of the lack of such effort, Burke v. Burke, supra. Also, in Weaver v. Weaver, supra, the award to the wife of part of the assets given to the husband during the marriage by his family was in lieu of alimony and attorney fees. Significantly, no case has been found where this Court has reversed a trial court's disposition of gifts or inherited property received by one party during the marriage. In almost every case, we have emphasized the wide discretion trial courts have in property division and have refrained from laying down any general rules for the disposition of gifts and inherited property.

A review of the law in other jurisdictions discloses that generally property acquired by one spouse by gift or inheritance during the marriage is awarded wholly to that spouse upon divorce unless the other spouse has contributed to the augmentation, improvement, or operation of the property or has significantly cared for, protected, or preserved it, thereby acquiring an equitable interest in the property. In some states, this rule is aided by or based on statute. Bailey v. Bailey, 250 Ga. 15, 295 S.E.2d 304 (1982); Klingberg v. Klingberg, 68 Ill.App.3d 513, 25 Ill.Dec. 246, 386 N.E.2d 517 (1979); In re Marriage of Pitluck, 616 S.W.2d 861 (Mo.Ct.App.1981); In re Marriage of Herron, 186 Mont. 396, 608 P.2d 97 (1980); In the Matter of the Marriage of Pierson, 294 Or. 117, 653 P.2d 1258 (1982); Hussey v. Hussey, 280 S.C. 418, 312 S.E.2d 267 (Ct.App.1984); Wierman v. Wierman, 130 Wis.2d 425, 387 N.W.2d 744 (1986). In other states, the rule is founded on case law holding that although trial courts have wide discretion in the division of property, which discretion will be disturbed on appeal only if it has been abused, as a general rule an equitable and fair distribution of property requires that gifts and inheritances be retained by the donee or heir spouse. Raupp v. Raupp, 3 Haw.App. 602, 658 P.2d 329 (1983); Van Newkirk v. Van Newkirk, 212 Neb. 730, 325 N.W.2d 832 (1982). In Hussey v. Hussey, supra, the court noted that a substantial majority of states exclude inherited property from the marital estate of the parties, citing Baxter, Marital Property § 41:8 (Supp.1983); see now Supp.1987. It justified that policy on the ground that "property which comes to either party by avenues other than as a consequence of their mutual efforts owes nothing to the marriage and is not intended to be shared." Hussey, 312 S.E.2d at 270. The same court further observed:

Finally, we...