Stonehocker v. Stonehocker

• Decision Date: 10 January 2008
• Docket Number: No. 20060292-CA.,20060292-CA.
• Citation: 2008 UT App 11,176 P.3d 476
• Parties: Rick L. STONEHOCKER, Petitioner, Appellant, and Cross-appellee, v. Jacqueline F.M. STONEHOCKER, Respondent, Appellee, and Cross-appellant.
• Court: Utah Court of Appeals

176 P.3d 476

2008 UT App 11

Rick L. STONEHOCKER, Petitioner, Appellant, and Cross-appellee, v. Jacqueline F.M. STONEHOCKER, Respondent, Appellee, and Cross-appellant.

No. 20060292-CA.

Court of Appeals of Utah.

January 10, 2008.

Steven R. Bailey, Ogden, for Appellant.

Robert A. Echard, Ogden, for Appellee.

Before GREENWOOD, P.J., McHUGH and ORME, JJ.

OPINION

McHUGH, Judge:

¶ 1 Petitioner Rick L. Stonehocker (Husband) appeals and Respondent Jacqueline F.M. Stonehocker (Wife) cross-appeals the trial court's rulings regarding property distribution, debt allocation, and attorney fees in the parties' divorce action. We affirm in part, reverse in part, and remand for the entry of further findings of fact and conclusions of law.

BACKGROUND

¶ 2 Husband and Wife married on April 25, 1998. The parties had no children. After separating and reconciling several times, Husband filed a divorce petition on September 23, 2002. At trial, both parties presented evidence on the appropriate division of marital property and alimony. The trial court entered a Memorandum Decision on July 8, 2005, in which it distributed the parties' property and debts based on a finding that "no exceptional circumstances for an unequal division of personal marital property" existed. The court also denied. Wife's request for alimony.¹

¶ 3 The assets in dispute include a timeshare property located in Cabo San Lucas, Mexico (the Timeshare), the parties' personal residence in West Haven; Utah (the Family Home), a 1998 Volkswagen Passat (the Volkswagen), and a car dealership known as Stoney Motors, LLC (Stoney Motors). The debts in dispute include a mortgage balance of approximately $328,765 on the Family Home (the Mortgage), a $44,990 line of credit secured by the Family Home (the Line of Credit), and a $52,000 loan from Wife's father, Carl Manzel (the Manzel Loan).

¶ 4 The Family Home, built by the parties in 2001, recently appraised at $455,000. The building lot was purchased in 1999 by Husband for $46,000. Accepting the appraised value of the Family Home, less the Mortgage balance of approximately $328,765 and the Line of Credit balance of $44,990, the parties both value the equity in the Family Home at approximately $81,000. While the divorce was pending, Wife lived in the Family Home and her sister, Mary Ann Nessen (Sister), resided with her for approximately eleven months. Sister paid Wife $500 per month in rent. Throughout the divorce proceedings and pursuant to a pretrial order, Wife paid the utility bills for the Family Home and Husband made the monthly payments on the Mortgage and the Line of Credit.

¶ 5 Husband formed Stoney Motors, a used car dealership, in 2001, During the course of the marriage, Husband's dealership was the primary source of income.² The trial court found that although Wife is listed as an equal owner of Stoney Motors, she was not involved in the day-to-day operations of the business. The trial court also found that Stoney Motors was valued at about $200,000 by Wife's accountant and at approximately $100,000 by Husband's accountant.³ The primary difference in the two valuation methods was that Wife's figure included amounts attributed to the goodwill of the company.

¶ 6 In its July 5, 2005 Memorandum Decision, the trial court awarded full ownership of the Family Home to Wife, as well as full responsibility for payment of the Mortgage and Line of Credit. The court also determined that the payments Husband made for the building lot constituted a premarital asset, and awarded Husband a $46,000 lien against the Family Home. The court awarded the Timeshare to Husband, the Volkswagen to Wife, and determined that Wife was fully responsible for the Manzel Loan. The trial court also ruled that Stoney Motors is in reality a sole proprietorship of Husband, dependent upon his personal professional reputation. Therefore, the court did not award any interest in Stoney Motors to Wife and assessed its value without including an amount for goodwill. Finally, the trial court ordered Husband to pay $25,000 of Wife's attorney fees, based in part on a finding that Husband's desire to deny Wife any property was "unreasonable, untenable[,] and totally unrealistic."

¶ 7 In response to the July 5, 2005 Memorandum Decision, the parties filed multiple motions, including motions for clarification. The trial court heard argument on September 21, 2005 (the Clarification Hearing), during which it entered oral findings of fact. At the Clarification Hearing, the trial court modified its prior ruling and determined that Husband was responsible for the Line of Credit because the money borrowed against the Family Home was invested in Stoney Motors. The court then ordered that Husband's $46,000 lien on the Family Home would be satisfied by Wife's repayment of the $44,990 Line of Credit. All other rulings remained unchanged. On January 3, 2006, the trial court entered a Decree of Divorce and Findings of Fact and Conclusions of Law. During the period from July 5, 2005, when the Memorandum Decision was entered, and January 3, 2006, when the final Decree of Divorce was entered, Husband continued to pay the Mortgage and Line of Credit. Husband appeals and Wife crossappeals.

ISSUES AND STANDARDS OF REVIEW

¶ 8 The primary issue on appeal is the parties' challenge to the trial court's allocation of property and debt. "Trial courts have considerable discretion in determining ... property distribution in divorce cases, and will be upheld on appeal unless a clear and prejudicial abuse of discretion is demonstrated." Howell v. Howell, 806 P.2d 1209, 1211 (Utah Ct.App.1991); see also Olsen v. Olsen, 2007 UT App 296, ¶ 8, 169 P.3d 765 (stating that trial court has "broad latitude" when distributing property in divorce proceedings (internal quotation marks omitted)).

¶ 9 In a related argument, Husband asserts that the trial court's findings of fact regarding the property and debt distribution are insufficient to support its conclusions or to allow for "meaningful" appellate review. "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Utah R. Civ. P. 52(a). In addition, to challenge the findings of fact, Husband must first "marshal the evidence in support of the findings and then demonstrate that the findings are unsupported by substantial evidence." Featherstone v. Industrial Comm'n, 877 P.2d 1251, 1254 (Utah Ct.App.1994); see also Moon v. Moon, 1999 UT App 12, ¶ 24, 973 P.2d 431 (discussing marshaling requirement).⁴

¶ 10 Husband also claims that the trial court erred by awarding attorney fees to Wife in the sum of $25,000 without entering sufficient findings of fact. In a divorce proceeding, "`[b]oth the decision to award attorney fees and the amount of such fees are within the trial court's sound discretion.'" Oliekan v. Oliekan, 2006 UT App 405, ¶ 30, 147 P.3d 464 (quoting Wilde v. Wilde, 969 P.2d 438, 444 (Utah Ct.App. 1998)). However, the trial court's award or denial of attorney fees "must be based on evidence of the financial need of the receiving spouse, the ability of the other spouse to pay and the reasonableness of the requested fees." Id. (internal quotation marks omitted).

¶ 11 Finally, Wife asks us to award her attorney fees on appeal. "`In divorce actions where the trial court has awarded attorney fees and the receiving spouse [prevails] on the main issues, we generally award fees on appeal.'" Id. ¶ 17 (quoting Elman v. Elman, 2002 UT App 83, ¶ 43, 45 P.3d 176).

ANALYSIS

¶ 12 There are two main issues on appeal.⁵ First, the parties both argue that the trial court exceeded its discretion in distributing their marital and separate property and debts. Second, Husband disputes the trial court's award of attorney fees to Wife, as well as whether Wife is entitled to attorney fees on appeal. We discuss each issue in turn.

I. Property and Debt Distribution

¶ 13 The parties take issue with the trial court's distribution of their property and debt. "In Utah, marital property is ordinarily divided equally between the divorcing spouses and separate property, which may include premarital assets, inheritances, or similar assets, will be awarded to the acquiring spouse." Olsen v. Olsen, 2007 UT App 296, ¶ 23, 169 P.3d 765; see also Utah Code Ann. § 30-3-5(1) (2007) ("When a decree of divorce is rendered, the [trial] court may include in it equitable orders relating to the children, property, debts or obligations, and parties."). "[T]he primary purpose of a property division, in conjunction with an alimony award, is to achieve a fair, just, and equitable result between the parties." Riley. v. Riley, 2006 UT App 214, ¶ 27, 138 P.3d 84. Furthermore, "[i]n a divorce proceeding, the trial court should make a distribution of property and income so that the parties may readjust their lives to their new circumstances as well as possible." Gardner v. Gardner, 748 P.2d 1076, 1078 (Utah 1988). In making its determination "[a] trial court does not consider property division in isolation.... [and] shall consider all the circumstances of the parties in determining the distribution of real and personal property, including the obligations of the parties for child and spousal support." Rosendahl v. Rosendahl, 876 P.2d 870, 874-75 (Utah Ct. App.1994) (citation and internal quotation marks omitted).

¶ 14 Husband claims that the trial court erred by (1) offsetting his $46,000 premarital investment in the Family Home against the $44,900 Line of Credit; (2) failing to address the issue of equity in the Family Home; (3) awarding the 1998 Volkswagen to Wife; (4) failing to address the issue of rent received by Wife during the divorce proceeding; and (5) failing to set a date by which Husband's temporary obligations to pay the Mortgage and Line of Credit would terminate. In her cross-appeal, Wife...