Rosser v. Rosser

502 P.3d 294

Holly Rebecca ROSSER, Petitioner,

v.Ronald Lee ROSSER, Respondent.

No. 20190320

Supreme Court of Utah.

Heard September 11, 2020

Filed December 23, 2021

Stephen D. Spencer, Murray, for petitioner

Steven W. Beckstrom, Nathanael J. Mitchell, St. George, for respondent

Justice Petersen authored the opinion of the Court, in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Justice Pearce joined.

On Certiorari to the Utah Court of Appeals

Justice Petersen, opinion of the Court:

INTRODUCTION

¶1 In this divorce case, the district court held Respondent Ronald Rosser in contempt after finding that he had deliberately deceived Petitioner Holly Rosser.¹ However, the court of appeals reversed, holding that Ronald's deceptive conduct did not amount to statutory contempt as a matter of law because it was directed at Holly rather than at the court. The court of appeals held that under subsection (4) of Utah Code section 78B-6-301 (the Contempt Statute), deceitful conduct during litigation does not rise to the level of contempt unless it is directed at the court.

¶2 Holly petitioned for certiorari, which we granted. The question before us is whether the court of appeals properly interpreted the meaning of "deceit" in subsection (4) of the Contempt Statute and whether it correctly applied the statute to the facts here.

¶3 We read subsection (4) of the Contempt Statute to be a bit broader. Under the plain language of the statute, deceitful conduct may be contemptuous not only when it is directed at the court, but when it is committed "in respect to a court or its proceedings. " UTAH CODE § 78B-6-301 (emphasis added). However, we agree with the court of appeals that the district court's contempt order did not include sufficient findings of fact and conclusions of law to hold Ronald in contempt here. So we affirm the court of appeals' vacatur of most of the district court's order.

¶4 Accordingly, we reverse in part, affirm in part, and remand to the district court for further proceedings consistent with this opinion.

BACKGROUND²

¶5 After over twenty-five years of marriage, Holly Rosser filed for divorce from her husband, Ronald Rosser. They disagreed on how to resolve certain financial aspects of their separation, including payment of an outstanding tax liability.

¶6 The Rossers eventually participated in mediation and entered into a written settlement agreement, which they signed on June 16, 2016 (Settlement Agreement). At the time of the mediation, the Rossers were aware that they owed $29,902.21 in unpaid taxes for 2015. In paragraph fifteen of the Settlement Agreement, the parties stipulated that they each would pay half of the outstanding tax liability. The Settlement Agreement stated, "IRS debt from 2015, 50% Ron and 50% Holly."

¶7 Soon after executing the Settlement Agreement, Holly paid her portion of the tax debt in the amount of $14,951.11. But Ronald did not.

¶8 Upon reviewing their 2015 tax filing, Ronald concluded that there were additional assets that could be depreciated to reduce the couple's overall tax liability. Ronald contacted Derrick Clark, the accountant who had prepared the couple's 2015 tax return, about amending the filing. Clark prepared an amended tax return dated July 16, 2016, which showed a reduction in the Rossers' tax liability of $7,900. It also showed a refund in the same amount, based on the assumption that the Rossers had paid the entire pre-existing tax debt.

¶9 The parties then filed in the district court a stipulated motion for entry of findings of fact, conclusions of law, and a final decree of divorce, which the district court signed and entered (Divorce Decree). The Divorce Decree contained a significant departure from the Settlement Agreement. Instead of dividing the 2015 income tax liability equally between the parties, it assigned the entire debt to Holly. It also stated that Holly would receive any refund resulting from the amended tax return. Paragraph 9(r) of the Divorce Decree read,

With respect to the 2015 tax obligations owed by [Holly] and [Ronald], the Parties shall sign and file the amended tax returns for [their business] and themselves, individually, that were prepared by Derrick C. Clark on or about July 16, 2016. [Holly] shall pay all fees charged by Derrick C. Clark in connection with the preparation and filing of the amended tax returns. Thereafter, [Holly] shall be solely entitled to receive any refund resulting from the amended returns, and shall also be responsible to pay any tax liabilities resulting to any of the Parties for the year 2015 ....

(Emphasis added.)

¶10 The Rossers executed and mailed the amended tax return. Two months later, Holly was surprised when, instead of a refund check, she received a notice from the IRS showing an outstanding tax debt of $7,174.98.

¶11 Holly moved the court for an order directed at Ronald to show cause why he should not be held in contempt and ordered to pay the tax liability apportioned to him under the Settlement Agreement. She asserted that Ronald's failure to do so was a violation of paragraph 9(r) of the Divorce Decree, because that paragraph was predicated on the assumption that both parties had fulfilled their obligation under the Settlement Agreement to pay their half of the tax liability. She also argued that Ronald "made fraudulent representations in connection with finalizing the stipulated decree of divorce." Ronald countered with his own motion for an order to show cause on a different issue.

¶12 The district court held a hearing on the dueling motions and ruled in favor of Holly, finding Ronald in contempt. Ronald responded with a number of motions attempting to undo the court's ruling and challenging its authority to hold him in contempt based on Holly's allegations.

¶13 Relevant here, Ronald argued that the court's ruling violated rule 10-1-602 of the Utah Code of Judicial Administration.³ Ronald argued that the rule, which outlined the procedure for orders to show cause in the Sixth Judicial District, did not permit such proceedings to be used to obtain an original order or judgment. Rather, Ronald argued that such a proceeding may be used only to enforce an existing order—in this case, the Divorce Decree. And he asserted that since he had not violated any of the terms of the Divorce Decree, a contempt proceeding was improper.

¶14 The district court granted Ronald a new trial. After taking evidence, the court found that: (1) The Settlement Agreement "required both parties to immediately take various actions related to the businesses, properties, expenses and income"; (2) "Both parties did take immediate actions, which they both relied upon"; (3) Holly paid her half of the tax debt; (4) "The parties intended on June 16, 2016 to file an Amended 2015 tax return, which would result in [Holly] receiving a $7,900 tax refund, which would only happen if they each paid their share of the ... $29,902.21 [tax debt]"; (5) "At no point did [Ronald] tell [Holly] that he had failed to pay his ... tax obligation"; (6) "[Ronald] knew he would eventually be found out, but chose to let his deception go forward"; (7) At the time the parties filed the stipulated motion to enter the Divorce Decree, only Ronald "knew he had failed to pay the obligation agreed to" in the Settlement Agreement; (8) "After listening to the parties at trial it was evident that [Ronald] knowingly and intentionally misl[ed] [Holly] about his failure to pay the taxes he agreed to pay ..."; and (9) Ronald was "not telling the truth" with regard to a claim that he had met with Holly and she had agreed to pay the full tax debt.

¶15 Based on these findings, the court concluded that "[Ronald] is in contempt, due to his deliberate deceit and failure to act as agreed between the parties on June 16, 2016."⁴ It awarded Holly $15,074.98 plus attorney fees and interest. The court did not identify the legal basis of its contempt ruling.

¶16 Ronald appealed. In his opening brief in the court of appeals, Ronald repeated his rule-based argument. He asserted again that local rule 10-1-602 (repealed May 1, 2021) limits motions for orders to show cause to enforcement of existing orders. And he reasoned that because he had not violated a provision of the Divorce Decree, which clearly assigned the tax liability to Holly, the district court's order finding him in contempt and requiring him to pay half of the tax debt violated the local rule.

¶17 He also argued that the exclusive means for Holly to pursue her allegations of fraud was through a motion under Utah Rule of Civil Procedure 60(b)(3), which permits relief from a judgment or order based on "fraud ... misrepresentation or other misconduct of an opposing party." So it was error for the district court to consider the fraud allegation in a contempt proceeding.⁵

¶18 In response to Ronald's procedural arguments, Holly argued that it was appropriate for the district court to sanction Ronald in the context of a contempt proceeding because Ronald's "conduct before the District Court fits within the statutory definition of ‘contempt.’ " She argued that Ronald had engaged in deception that was directed at her and at the district court. And, relevant here, she reasoned that the district court could find Ronald in contempt under subsection (4) of the Contempt Statute, which identifies "deceit, or abuse of the process or proceedings of the court," as contemptuous behavior.

¶19 Holly also disputed that she was required to raise her fraud allegations exclusively under rule 60(b)(3). She explained that she was not seeking to set aside the Divorce Decree, but to ask the district court to enforce the "correct meaning" of the Divorce Decree "based upon the written promises and representations of [Ronald], such as the [Settlement] Agreement and the amended tax return for 2015."⁶ She argued there was "no procedural error in utilizing [r]ule 10-1-602 under the circumstances," because she was trying to enforce the Divorce...