Smith v. Smith

               THE UTAH COURT OF APPEALS

                      JACQUELINE P. SMITH,
                           Appellee,
                               v.
                        DANIEL H. SMITH,
                          Appellant.

                             Opinion
                        No. 20220697-CA
                       Filed March 7, 2024

           Third District Court, Salt Lake Department
                 The Honorable Robert P. Faust
                          No. 194902295

             David Pedrazas, Attorney for Appellant
           Deborah L. Bulkeley, Attorney for Appellee

     JUDGE AMY J. OLIVER authored this Opinion, in which
 JUDGES DAVID N. MORTENSEN and RYAN M. HARRIS concurred.

OLIVER, Judge:

¶1      This divorce case illustrates why the sequence of
determining alimony matters. We recently clarified the three-step
procedure for alimony in Fox v. Fox, 

, 

,
cert. denied, 

 (Utah 2022). Here, the district court
ordered an alimony award of more than double the receiving
spouse’s demonstrated need because it accounted for the marital
standard of living at the end of the analysis instead of at the
beginning. Because the district court employed a backward
version of the three-step procedure for alimony, we vacate and
remand.
                           Smith v. Smith


                         BACKGROUND

¶2     Daniel H. and Jacqueline P. Smith separated after more
than thirty years of marriage. Their divorce case proceeded to a
one-day bench trial that mostly addressed alimony. Daniel 1
represented himself at trial. At the trial’s conclusion, the district
court took several issues, including the alimony award, under
advisement and issued a memorandum decision four days later.

¶3     On her financial declaration used at trial, Jacqueline
indicated her monthly net income was $3,274.55 and her monthly
expenses were $5,193.79. Jacqueline listed all her line-item
expenses in the “current amount” column and left the “marital
expenses” column blank. Jacqueline presented no evidence at trial
of the parties’ marital standard of living and no evidence that any
of her listed expenses were different during the marriage than
they were at the time of trial. She testified only to the reasons she
sought a divorce. The district court examined the expenses and
adjusted some of the amounts, finding that Jacqueline had
reasonable monthly expenses of $4,184.61. This left her with an
unmet need of $910.06 per month.

¶4      Daniel’s financial declaration admitted at trial indicated his
monthly net income was $7,757 and his monthly expenses—all
listed in the “current amount” column and none in the “marital
expenses” column—were $8,280. The district court similarly
examined Daniel’s expenses and made adjustments, finding that
Daniel had reasonable monthly expenses of $4,013.90 plus his
child support obligation of $703 for a total monthly expense of
$4,716.90, leaving him with a “positive income of $3,040.10 a
month.”

¶5    The district court stated that it adjusted the parties’
expenses in “an effort to put them on relatively equal footing,

1. Because the parties share the same last name, we refer to them
by their first names for clarity, with no disrespect intended.


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                          Smith v. Smith


recognizing that the parties’ level of expenses at the time of trial
are not representative of their marital standard of living.” Rather
than award Jacqueline alimony in the amount of her unmet need,
the district court calculated alimony by equalizing the difference
between Jacqueline’s monthly negative income and Daniel’s
monthly positive income. The court reasoned that “it is fair and
equitable to equalize the combined disparity of $3,950.16 per
month” and awarded Jacqueline $1,975 per month in alimony.
The alimony award exceeded Jacqueline’s demonstrated monthly
need by $1,064.94.

¶6     The district court instructed Jacqueline’s counsel to draft
proposed findings and a proposed decree based on the court’s
ruling. Daniel, having obtained counsel since trial, objected to the
proposed findings on multiple issues, including the alimony
calculation. The district court entered the findings and decree
without making any changes to the alimony award.

¶7     Daniel then filed a motion to amend the findings, arguing
that the district court did not make sufficient findings to support
an alimony award that exceeded Jacqueline’s demonstrated need.
The district court held a hearing on the motion, and Daniel asked
the court to “recalculate and redetermine the alimony” because a
“spouse’s demonstrated need must constitute the maximum
permissible alimony award.” The court explained the $1,975
alimony award “equalizes the net income of the parties for both
of them. That keeps them akin as we can to the lifestyle to which
they were accustomed during the time of the marriage.” Daniel
asserted that equalization should occur only “when somebody
has an excess need that the other party can’t meet.” And
Jacqueline suggested the court make “some additional findings”
to support what she viewed as its “appropriate” effort to consider
the parties’ needs and “augment those needs with excess income.”
The district court denied Daniel’s motion, leaving the alimony
award at $1,975 per month.




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                           Smith v. Smith


              ISSUE AND STANDARD OF REVIEW

¶8     Daniel challenges the district court’s alimony award. 2 “We
review a court’s alimony determination for an abuse of
discretion.” Fox v. Fox, 

, 

 (cleaned
up), cert. denied, 

 (Utah 2022). Although “we will not
lightly disturb a trial court’s alimony ruling, we will reverse if the
court has not exercised its discretion within the bounds and under
the standards we have set.” Knight v. Knight, 

, 

 (cleaned up).


                            ANALYSIS

¶9      “Under Utah law, the primary purposes of alimony are:
(1) to get the parties as close as possible to the same standard of
living that existed during the marriage; (2) to equalize the
standards of living of each party; and (3) to prevent the recipient
spouse from becoming a public charge.” Fox v. Fox, 

, 

 (cleaned up), cert. denied, 

 (Utah
2022). An alimony award need not provide “for only basic needs
but should be fashioned” in such a way “to approximate the
parties’ standard of living during the marriage as closely as
possible.” 

 (cleaned up). “The appropriate amount of any
alimony award is governed by a multi-factor inquiry” now found
in Utah Code section 30-3-5(10)(a). Miner v. Miner, 

, 

. “[C]ourts must consider the statutory
factors,” including “the financial condition and needs of the
recipient spouse,” “the recipient’s earning capacity,” and “the
ability of the payor spouse to provide support.” Rule v. Rule, 2017

2. Daniel also challenges the district court’s denial of his motion
to amend the findings. But we need not reach this issue because
we conclude the district court did not follow “the standards we
have set” in its alimony calculation, see Knight v. Knight, 

, 

 (cleaned up), and we remand the case
on that basis.


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                           Smith v. Smith


UT 

; see also Dahl v. Dahl, 

,
¶ 94, 

.

¶10 Thus, there are three steps to “the established process to be
followed by courts considering an award of alimony.” Fox, 

 (cleaned up); see also Rule, 

.
First, a court must “assess the needs of the parties, in light of their
marital standard of living.” 3 Fox, 

 (cleaned
up). Second, a court “must determine the extent to which the
receiving spouse is able to meet his or her own needs with his or
her own income.” 

 (cleaned up). Third, a court must “assess
whether the payor spouse’s income, after meeting his or her
needs, is sufficient to make up some or all of the shortfall between
the receiving spouse’s needs and income.” 

 (cleaned up).

¶11 Here, the district court abused its discretion when it failed
to properly follow this three-step process. Instead of considering
the marital standard of living at step one when calculating each
spouse’s need, the district court did so at step three, when it
equalized the parties’ income. While we do not fault the court for
wanting to “equalize the standards of living of each party,” as it
is one of the purposes of alimony, see id. ¶ 15 (cleaned up), the
court did not do so in accordance with the standards Utah
appellate courts have established for an alimony determination.

¶12 In step one, the district court assessed both parties’ needs
“at the time of trial” rather than in light of the marital standard of
living. See id. ¶ 20. But it was not an abuse of discretion to have
done so because neither Jacqueline nor Daniel provided any


3. “The marital standard of living is that which the parties shared,
and courts consider the parties as a single unit when evaluating
that standard.” Knight, 

. In terms of alimony,
“the marital standard of living analysis is about whether the
parties’ proposed points of calculation are consistent with the
parties’ manner of living and financial decisions.” 

 (cleaned up).


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                           Smith v. Smith


evidence of the marital standard of living. Indeed, both of their
financial declarations listed their monthly expenses in the
“current amount” column with nothing listed in the “marital
expenses” column, despite the instructions on the form to
complete both columns if one of the parties has requested
alimony. It is incumbent upon the parties to present evidence of
the marital standard of living if they want the district court to
consider the expenses during the marriage that differ from the
expenses at the time of trial. See Clarke v. Clarke, 

,
¶ 62 (“If a party offers into evidence only time-of-trial expense
amounts, and does not provide the court with any evidence of
pre-separation expenses (to the extent they are different), that
party has no right to complain when the court awards the time-of-trial amounts.”). And it is important that they provide such
evidence, because step one—where the district court determines
the parties’ reasonable expenses—is the place for taking the
marital standard of living into account in the alimony calculation.

¶13 In step three, the district court then combined Jacqueline’s
demonstrated need of $910.06 and David’s excess income of
$3,040.10, “equalize[d] the combined disparity of $3,950.16,” and
gave Jacqueline an alimony award of half that amount, $1,975.
Daniel contends the district court should have capped the
alimony award at the $910.06 monthly shortfall the district court
calculated as the difference between Jacqueline’s income and her
expenses. We agree with Daniel. “Regardless of the payor
spouse’s ability to pay more, the recipient spouse’s demonstrated
need must constitute the maximum permissible alimony award.”
Roberts v. Roberts, 

, 

 (cleaned
up); Rule, 

 (“The receiving spouse’s needs
ultimately set the bounds for the maximum permissible alimony
award.”); Barrani v. Barrani, 

, 

(“An alimony award in excess of the recipient’s need is a basis for
remand even when the payor spouse has the ability to pay.”);
Bingham v. Bingham, 

 (Utah Ct. App. 1994)
(“[T]he spouse’s demonstrated need must . . . constitute the



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                           Smith v. Smith


maximum permissible alimony award.”). Thus, the district court
abused its discretion when it awarded Jacqueline alimony in an
amount greater than her demonstrated need.

¶14 We also caution district courts that they “should not
calculate alimony by simply dividing the couple’s pre-separation
expenses in half,” Clarke, 

, ¶ 57, or by
“presumptively award[ing]” half of the “total money the parties
spent each month during the marriage,” Fox, 

. In other words, the proper way to take the marital standard
of living into account is at step one “by assessing a party’s claimed
line-item expenses in light of that standard.” Clarke, 

, ¶ 59.

¶15 Here, the district court abused its discretion at step three
when it took the parties’ “combined disparity of $3,950.16” per
month and awarded half of that amount to Jacqueline. Regardless
of how much income the payor spouse may have, the purpose of
alimony is to meet the demonstrated need of the recipient spouse,
not to redistribute all the income between the spouses. See Roberts,

 (“[T]he core function of alimony is
therefore economic—it should not operate as a penalty against the
payor nor a reward to the recipient.”). And although “we accord
trial courts broad discretion in dividing the shortfall and
apportioning that burden” in the third step, such discretion is
premised on the assumption the court “has properly determined
that a shortfall exists between the parties’ resources and needs.”
Rule, 

.

¶16 Sequence matters. See id. ¶ 22 (“Once the court has
determined that there are insufficient resources to meet the
baseline needs established by the marital living standard, the
court should then equitably allocate the burden of the shortfall
between the parties.” (emphases added)); see also Bakanowski v.
Bakanowski, 

, 

 (holding that
“attempting to equalize the parties’ income rather than going



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                           Smith v. Smith


through the traditional needs analysis” constitutes an abuse of
discretion). Just as it is an abuse of discretion to “skip[] over the
traditional needs analysis and move[] directly to address what it
perceives to be insufficient resources,” see Rule, 

, it was an abuse of discretion here when the district court
used the marital standard of living at step three to increase the
amount of the alimony award beyond the demonstrated need.

¶17 As a final note, we reiterate that it is proper for a district
court to consider the marital standard of living during step one of
the alimony analysis, so long as the parties have presented such
evidence. We would normally vacate the alimony award and
remand the matter to the district court “for the court to reassess
its alimony determinations in light of the marital standard of
living.” Id. ¶ 32. But here, neither party presented evidence of
their expenses during the marriage. Indeed, they both left the
“marital expenses” column on their financial declarations blank.
As a result, there is no evidence in the record from which the
district court can make findings that Jacqueline’s expenses were
different from what she listed. Thus, the district court’s finding
that her demonstrated need was $910.06 limits “the maximum
permissible alimony award” to that amount. See Wellman v.
Kawasaki, 

, 

.


                          CONCLUSION

¶18 The district court abused its discretion when it employed
the incorrect analysis in computing Jacqueline’s alimony award.
The court did not follow the three-step process required by Utah
law. Accordingly, we vacate and remand the case to the district
court for entry of an alimony award of $910.06 per month.




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