Keyes v. Keyes

351 P.3d 90

2015 UT App 114

Rebecca KEYES, Petitioner and Appellee

v.Warren Gene KEYES, Respondent and Appellant.

No. 20130524–CA.

Court of Appeals of Utah.

April 30, 2015.

Charles R. Ahlstrom, for Appellant.

Randall W. Richards, Clearfield, for Appellee.

Judge STEPHEN L. ROTH authored this Opinion, in which Judge J. FREDERIC VOROS JR. concurred. Judge GREGORY K. ORME concurred, with opinion.

Opinion

ROTH, Judge:

¶ 1 Warren Gene Keyes (Husband) appeals from the divorce decree dissolving his marriage to Rebecca Keyes (Wife). Husband contends that the trial court erred in ruling that the parties' premarital agreement was unenforceable. He also contends that the court abused its discretion in awarding Wife some of his separate property without providing detailed factual findings to support that decision. Finally, Husband challenges the alimony award to Wife. We reverse and remand.

BACKGROUND

Premarital Agreement

¶ 2 The parties acquired relatively few assets during their seventeen-year marriage, but each brought some assets to the marriage, most significantly Husband's interest in his family's landscaping business. Before they married, Husband and Wife executed a premarital agreement (the Agreement). The Agreement provides, in pertinent part, that each party

shall have, keep and retain sole ownership, control and enjoyment of during [his or her] life, and by last will and testament or other testamentary disposition, shall have the exclusive right to dispose of any and all ... real and personal property that [he or she] now owns or is possessed of.

Each party expressly “waive[d] all ... right, title and interest to which [he or she] is or may be entitled in and to any of [the] real and personal property listed in” two attached exhibits, one for each spouse. Husband's exhibit listed “[a]ny proceeds from the [landscaping] business ... and/or any other related business, investments, stocks, bonds and/or real property what so ever, including any increase in value of said business.” The Agreement further provides that “this agreement is entered into whether or not the parties hereto have full knowledge of the extent and probable value of the real and personal property referred to in the [attached exhibits].”

¶ 3 The trial court ultimately concluded that the Agreement was unenforceable. Relying on a provision of Utah's Uniform Premarital Agreement Act that governs enforcement of premarital agreements (the Premarital Agreement Statute), the court concluded that Wife had “met her burden in establishing that fraud had been committed” because Husband had failed to disclose his financial information to Wife before she had executed the Agreement, Wife had not waived disclosure of that information, and Wife could not have independently acquired knowledge regarding Husband's financial information prior to executing the Agreement. See Utah Code Ann. § 30–8–6(1)(b) (LexisNexis 2013).¹

Inventory

¶ 4 Because the trial court determined that the Agreement was unenforceable, it then went on to address the distribution of property. On appeal, Husband's only challenge to that distribution order relates to the award to Wife of one-half the value of his interest in his business's inventory.

¶ 5 About the time the couple married, Wife helped Husband acquire some storage racks for the landscaping business's warehouse. These storage racks allowed Husband's business to acquire substantially more inventory. Wife also testified that she encouraged Husband to diversify his inventory to attract more customers, which he did with some success. The trial court found that because this inventory was acquired “during the course of the marriage,” it was marital property. Thus, the court awarded Wife one-half of the value of Husband's interest in the inventory, or $115,266.

Alimony

¶ 6 Husband and Wife were both employed throughout the marriage. Husband worked exclusively for his family's landscaping business, in which he held a 50% ownership interest. Husband testified that he earned $1,400 a month in salary. But after hearing from the business's accountant about additional “distributions and guaranteed payments” to the owners, the trial court became concerned that Husband's reported income was “inaccurate” and “not support[ed] by his own testimony, by the testimony of his accountant, and by [the] exhibits.” Accordingly, the court ordered “that a forensic accountant be brought into this case for the purpose of digesting [the] tax documents and helping [the court] to better ascertain the income of [Husband].” After hearing the forensic accountant's testimony, the court calculated Husband's monthly income to be $2,627.

¶ 7 Throughout the marriage, Wife worked full time in retail as a merchandiser and interior designer. She earned as much as $1,750 per month, which, based on a forty-hour work week, is about $10 per hour. Shortly before Wife filed for divorce, however, she was terminated from her employment. Between the time she filed for divorce and trial, Wife worked for two different employers, earning as much as $11.75 per hour. In both jobs, there was limited work available due to a slow economy. Wife also testified that she could only work three to four hours at a time due a decline in her health. In the months leading up to trial, Wife's gross monthly income was about $722. The trial court, however, found that Wife was currently unemployed but was capable of working full time at minimum wage to earn $1,257 per month.

¶ 8 The trial court also considered the parties' monthly expenses relative to their incomes. It determined that Wife had reasonable monthly expenses of $4,799² and that after deducting taxes from her gross monthly income of $1,257, she had a shortfall of $3,856. The court accepted Husband's representation that he had $1,923 in expenses each month. The court determined that after deducting taxes and Husband's expenses from his gross income of $2,627, Husband had “a monthly surplus of $47.” Therefore, although the surplus was “barely identifiable,” Husband had some means to “assist [Wife].” Because the parties had more expenses than income, the court found it “appropriate that the parties share in the financial misery.” Accordingly, it ordered Husband to pay Wife $1,928 per month in alimony for a time period equal to the marriage, subject to the usual contingencies of remarriage, cohabitation, or death. The court explained that its alimony award equalized the parties' standards of living by leaving each party “with a monthly shortfall of approximately $1928.”³

¶ 9 Husband now appeals the trial court's decision on the enforceability of the Agreement as to the inventory and, in the event that the trial court's decision that the Agreement is unenforceable is upheld, the decision to award inventory itself. Husband also challenges the alimony award.

ISSUES AND STANDARDS OF REVIEW

¶ 10 Husband appeals from the trial court's decision not to enforce the Agreement. Husband challenges the court's interpretation of the Premarital Agreement Statute. We review the trial court's interpretation of a statute as a matter of law for correctness. Daniels v. Gamma W. Brachytherapy, LLC, 2009 UT 66, ¶ 46, 221 P.3d 256.

¶ 11 Husband contests the trial court's award to Wife of one-half of the value of Husband's share of the business inventory. Specifically, Husband contends that the trial court clearly erred in finding that the business inventory was marital property. “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.” Stonehocker v. Stonehocker, 2008 UT App 11, ¶ 8, 176 P.3d 476 (omission in original) (citation and internal quotation marks omitted). The decision, however, must be supported by adequate findings that “reveal how the court reached its conclusions.” Rappleye v. Rappleye, 855 P.2d 260, 263 (Utah Ct.App.1993). We review the legal adequacy of the trial court's findings for correctness. Wall v. Wall, 2007 UT App 61, ¶ 17, 157 P.3d 341.

¶ 12 Husband also challenges the trial court's alimony award. “We review a trial court's award of alimony for abuse of discretion. We will not disturb the trial court's alimony award so long as the trial court exercises its discretion within the standards set by the appellate courts.” Bakanowski v. Bakanowski, 2003 UT App 357, ¶ 7, 80 P.3d 153 (citations and internal quotation marks omitted). To the extent that Husband has also challenged the sufficiency of the evidence to support the court's factual findings, we will not disturb the court's findings “unless they are clearly erroneous.” Kimball v. Kimball, 2009 UT App 233, ¶ 14, 217 P.3d 733 (citation and internal quotation marks omitted).

ANALYSIS

I. The Agreement

¶ 13 Husband contends that the trial court erred when it determined that the Agreement was unenforceable. “Parties to a premarital agreement may contract with respect to ... the rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located ... [and] the disposition of property upon separation[ or] marital dissolution.” Utah Code Ann. § 30–8–4(1)(a), (c) (LexisNexis 2013). Generally, a premarital agreement is enforceable in the same manner as any other contract. Levin v. Carlton, 2009 UT App 170, ¶ 15, 213 P.3d 884. However, the Premarital Agreement Statute prohibits enforcement if

the agreement was fraudulent when executed and, before execution of that agreement, [the] party [against whom enforcement is sought]:

(i) was not provided a reasonable disclosure of the property or financial obligations of the other party insofar as was possible;

(ii) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and

(iii) did not have, or reasonably could not have had, an adequate knowledge of the property or

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