Taylor v. Taylor

• Decision Date: 18 August 2022
• Docket Number: 20191090
• Citation: 517 P.3d 380
• Parties: David Jenkins TAYLOR, Appellant, v. Jill Marie TAYLOR, Appellee.
• Court: Utah Supreme Court

517 P.3d 380

David Jenkins TAYLOR, Appellant,
v.
Jill Marie TAYLOR, Appellee.

No. 20191090

Supreme Court of Utah.

Heard: April 13, 2022
Filed August 18, 2022

Julie J. Nelson, Millcreek, Erin B. Hull, Salt Lake City, for appellant

Martin N. Olsen, Beau J. Olsen, Midvale, for appellee

Associate Chief Justice Pearce authored the opinion of the Court, in which Chief Justice Durrant, Justice Petersen, Justice Hagen, and Judge Harris joined.

Due to their retirement, Justice Himonas and Justice Lee did not participate herein; Justice Diana Hagen and Court of Appeals Judge Ryan M. Harris sat.^*

On Certification from the Court of Appeals

Associate Chief Justice Pearce, opinion of the Court:

INTRODUCTION

¶1 After litigating their divorce for a year, David Taylor asked his soon-to-be ex-wife, Jill Taylor, to arbitrate. David apparently hoped for an expeditious resolution that would allow him to receive favorable tax treatment of the alimony he was about to pay. After the arbitrator issued his decision, David moved the district court to invalidate the award under section 78B-11-107 of the Utah Uniform Arbitration Act, arguing that the arbitration agreement he proposed was invalid because it was contrary to public policy to arbitrate divorce actions. David alternatively asked the court to vacate the award, arguing that the arbitrator had manifestly disregarded the law. The district court denied David's motion.

¶2 The Utah Uniform Arbitration Act does not permit a party who participates in arbitration without objection to then contest an arbitration award by arguing that it is based on an infirm agreement to arbitrate. But even if David was able to contest the award, the arbitration agreement he sought was not invalid. Unless and until the Legislature provides additional guidance, the intersection of the Utah Uniform Arbitration Act and Utah family code permits parties to arbitrate the aspects of a divorce that the Taylors agreed to arbitrate. As for David's assertion that the arbitrator manifestly disregarded the law, even if we assume that is still a viable challenge to an arbitration award, David has not shown that the arbitrator manifestly disregarded the law. We affirm the district court.

BACKGROUND

¶3 In August 2017, Jill Taylor filed for divorce from her husband, David Taylor. Jill and David stipulated to joint legal and physical custody of their two children but were unable to agree on, among other things, alimony, child support, and the appropriate division of their assets.

¶4 David wanted to resolve the parties’ remaining issues by the end of 2018 so that he could avoid changes to the tax treatment of alimony that were slated to take effect the following year. To expedite a resolution, David asked Jill to attend arbitration in lieu of trial. Jill obliged, and the parties signed an arbitration agreement. The agreement provided that the Utah Uniform Arbitration Act

517 P.3d 384

(UUAA) would apply. See UTAH CODE §§ 78B-11-101 to -131. The agreement also named a retired district court judge as the arbitrator.

¶5 The parties engaged in an arbitration process that saw the arbitrator meet with each party separately and repeatedly. The arbitrator reviewed various expert reports as well as documents that detailed the parties’ employment history, earnings, and job prospects.

¶6 To determine Jill's income, the arbitrator reviewed evidence regarding Jill's past employment in finance and pharmaceutical sales. He also reviewed a report David's vocational expert prepared that detailed wage estimates for various jobs available to Jill based on Jill's qualifications and prior work experience. The arbitrator also spoke with Jill, who explained that she was currently working as an aide in the Park City School District and that she intended to seek employment as an elementary school teacher once she had completed her degree in elementary education.

¶7 After considering the parties’ positions and submissions, the arbitrator issued an award. Among other things, the arbitrator's award calculated alimony, set the amount of child support, and divided the parties’ assets.

¶8 As part of that decision, the arbitrator estimated Jill's future income. The arbitrator concluded that "[Jill] should be allowed to work in the field of her choice—education, and she should be given time to complete her degree." He calculated Jill's income for 2019–2021 based on her salary as an aide and her ability to find work during the summer, and for 2022 according to her ability to secure a full-time teaching position once she had completed her degree. As to alimony, the arbitrator awarded Jill spousal support based on the parties’ current financial situations and spending needs, including Jill's tuition costs.

¶9 A few months after the arbitrator issued the award, David moved the district court to correct three mathematical miscalculations. The district court made two of those corrections and entered the corrected award.

¶10 Less than two months later, David changed counsel and moved the district court to invalidate the entire arbitration award pursuant to section 78B-11-107 of the UUAA.¹ David argued that "[a]n arbitration agreement is not valid or binding in the divorce context" for three "well-defined" policy reasons.

¶11 David first claimed that arbitration interfered with a court's "inherent" and "nondelegable" authority to decide divorce issues. As David saw it, "[b]ecause parties cannot divest a court of jurisdiction by stipulati[on]" or delegation to a third party, it was necessarily true that they could not divest a court of jurisdiction by arbitration.

¶12 David next asserted that the UUAA permits modification of an arbitration award "only in ... very limited circumstances," and such a "bar against modif[ication] ... is flatly against the policy of ensuring that district courts retain ongoing jurisdiction to modify divorce-related rulings.

¶13 David additionally contended that the UUAA's limited appeal procedures impermissibly restrict the parties’ statutory right to appeal the arbitrator's child support determination.

¶14 Alternatively, David asked the district court to vacate the arbitration award because the arbitrator manifestly disregarded the law—and thus exceeded his authority—when he calculated Jill's imputed income.² David claimed that Utah law requires the arbitrator to consider a list of factors when calculating the parties’ incomes. See UTAH CODE § 78B-12-203(8)(b)(i)–(x). And David asserted that the arbitrator had substituted his "personal view" in place of those factors when he

517 P.3d 385

opined that Jill's income should be based on her desire "to work in the field of her choice."

¶15 David also argued that the arbitrator manifestly disregarded the law when he included Jill's tuition costs in the alimony budget. David contended that those costs were "not a part of the parties’ standard of living during the marriage, nor [were they] a ‘need,’ " and were thus "the epitome of an unnecessary expense, given that [Jill was] intending to pay to attend school so that she may earn less than she already earns."

¶16 Jill moved the district court to confirm the arbitration award and enter a decree of divorce.

¶17 A court commissioner heard the parties’ motions. The commissioner denied David's motion and granted Jill's. The commissioner concluded that contrary to David's position, public policy supports the arbitration of divorce cases. She reasoned that arbitration does not interfere with a court's continued jurisdiction because "[o]nce the arbitration award is reduced to a Decree of Divorce, the [c]ourt maintains jurisdiction to modify the decree based upon a material and substantial change in circumstances." The commissioner also concluded that "waiving the right to appeal is not contrary to law" because parties routinely waive their right to appeal "when the parties stipulate and a Decree of Divorce is entered."

¶18 As to David's claim that the arbitrator had manifestly disregarded the law, the commissioner determined that the arbitrator's calculation regarding Jill's income was "rational and evidence based." She explained that Utah law does not require a court to calculate income according to "the highest level." Rather, "[t]he imputation need[ed] to be reasonable and equitable," and "[i]t [was] not unreasonable to allow [Jill] to select a job that gives her a decent living rather than maximizing what a vocational evaluator opines." The commissioner also upheld the arbitrator's alimony award. The commissioner explained that "the standard of living during the marriage was such that [Jill] did not need to work full time." Therefore, "[t]he fact that tuition was provided so [Jill] could increase her earning potential, and that alimony was actually limited to the same time period as child support, was reasonable and equitable."

¶19 David asked the district court to overrule the commissioner's decision and made basically the same arguments he had included in his motion to invalidate or vacate the arbitration award.

¶20 The district court denied David's request to overrule the commissioner and confirmed the arbitration award. The court held that "Utah law does not preclude divorces from being arbitrated" for four reasons. The court first determined that "the plain language of the [UUAA] does not preclude divorce actions from being arbitrated," and "had the Utah legislature intended for divorce actions to be precluded from being arbitrated, it would have indicated so." The court next opined that the same public policies that favor arbitration in the civil context—"just, speedy, and inexpensive outcomes"—also "support parties being able to resolve their divorce cases in Utah via arbitration." The court stated that "[i]n fact, [David] invoked and relied on these policy considerations by proactively requesting to arbitrate this matter ... as opposed to setting it for trial." The court further reasoned that "the plain language of the [UUAA] indicates that district court judges retain...