Small v. Small

               THE UTAH COURT OF APPEALS

                      NATHAN DALE SMALL,
                           Appellant,
                              v.
                      TRISHA DAWN SMALL,
                           Appellee.

                             Opinion
                         No. 20230487-CA
                     Filed November 29, 2024

         First District Court, Brigham City Department
                The Honorable Spencer D. Walsh
                          No. 224100138

              Jeremy G. Jones, Attorney for Appellant
          Michael E. Christiansen, Attorney for Appellee

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

OLIVER, Judge:

¶1     After struggling to resolve issues in their impending
divorce via email, Nathan Dale Small (Nathan) and Trisha Dawn
Small (Trisha) agreed to meet in person, along with Trisha’s
brother (Brother). 1 Nathan later believed the parties reached an
agreement during the meeting, and he sought to use his
declaration and an audio recording of the discussion to prove the
existence of the agreement and to enforce it in response to Trisha’s
petition for divorce. Nathan also sought to question Trisha about
the agreement during the hearing on his motion to enforce. Trisha
objected to all of Nathan’s attempts to introduce evidence
regarding the settlement discussions under rule 408 of the Utah

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


Rules of Evidence. The district court sustained Trisha’s objections,
concluding that the discussions were compromise negotiations
and that neither of the exceptions in rule 408 applied. The district
court also concluded that the statute of frauds barred admission
of the agreement because the negotiations involved an interest in
real property, the marital home. Nathan filed this interlocutory
appeal to challenge those rulings. We reverse the district court’s
rulings because neither rule 408 nor the statute of frauds applies.


                         BACKGROUND

               Discussions About the Planned Divorce

¶2     In early 2022, Nathan and Trisha began discussing a
resolution of the issues in their planned divorce via email. Trisha
asked Brother to contact Nathan to coordinate a time to sit down
and attempt to resolve the outstanding issues. In March, Trisha,
Nathan, and Brother met at the marital home and discussed the
disputed issues in person. Nathan made a surreptitious audio
recording of this conversation.

¶3      Trisha and Nathan have markedly different views of the
outcome of this meeting. Nathan asserts that they reached an
agreement “on the primary issues in dispute” and agreed that
Trisha’s attorney would draft the final written agreement after the
appraisal of the marital home. Trisha asserts that, although they
were close to an agreement on many key issues, they did not reach
a final agreement.

¶4     After the appraisal of the marital home was complete,
Brother reached out to Nathan to request another in-person
meeting. Nathan declined to have another meeting because he
believed they had a finalized agreement. Trisha filed a petition for
divorce shortly thereafter, seeking equitable division of the
marital home and any remaining personal property. Nathan
subsequently filed an answer asserting four defenses and a



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counterclaim that the parties had already reached a
settlement agreement regarding property division. Nathan also
filed a motion to enforce the oral settlement agreement,
which included his declaration and other exhibits. Two days
before the hearing on Nathan’s motion to enforce, Trisha filed an
objection citing rule 408 of the Utah Rules of Evidence and the
statute of frauds, but she failed to file an answer to Nathan’s
counterclaim.

¶5     After the hearing, the domestic relations commissioner
found there was no agreement and denied Nathan’s motion to
enforce. Nathan filed an objection to the commissioner’s
recommendation under rule 108 of the Utah Rules of Civil
Procedure, asserting that he should have been allowed to crossexamine Trisha and present evidence to dispute Trisha’s claim
that the parties had not reached an agreement.

                    The District Court Hearings

¶6      At the objection hearing before the district court, Nathan
subpoenaed Trisha and Brother to dispute Trisha’s claim that the
parties had not reached an agreement. Nathan first called Trisha
to testify. Almost immediately after Trisha was sworn in, her
counsel objected to Nathan’s questioning on multiple grounds,
including the scope of the hearing and the applicability of rule
408. The court continued the hearing to permit briefing on the
proper scope of the hearing. After resolving that issue, the court
proceeded with the hearing, where Nathan argued that rule 408
did not prohibit the admission of the recording of the parties’
initial meeting because it fell under both exceptions to rule 408:
the court may admit the evidence “for another purpose” and “the
court is not required to exclude [evidence that is] otherwise
discoverable.” Utah R. Civ. P. 408(b)(1)–(2). He further argued the
court should not apply the statute of frauds for the following
reasons: (1) Trisha waived the statute of frauds defense because
she did not raise it in a responsive pleading to his counterclaim,



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                           Small v. Small


(2) Trisha acknowledged the existence of an agreement, and (3)
the appraisal was partial performance of the agreement. Further,
Nathan argued that he wanted to introduce part of the recording
only to impeach Trisha’s denials about the existence of an
agreement and to “evaluate the portions of the recording that
establish that there was a settlement.” Trisha argued that the
statute of frauds was not waived due to failure to raise it in a
responsive pleading and that the exceptions to rule 408 were not
met.

¶7       At the end of the hearing, the district court issued a
detailed oral ruling that was memorialized into its written ruling
issued two months later. The court sustained Trisha’s objection
under rule 408, determining that the parties’ discussion was a
settlement negotiation and that evidence of such in the form of the
recording and Nathan’s declaration were not admissible under
rule 408 because neither of the rule’s exceptions applied. The court
concluded that the first exception—admission for another
purpose “such as proving a witness’s bias or prejudice,” see 

 R.
408(b)(1)—did not apply because “[t]he purpose [of
impeachment] is not to get to prejudice or bias but to get into the
purported terms of this agreement.” The court concluded that the
second exception—admission of “otherwise discoverable
evidence,” see 

 R. 408(b)(2)—did not apply because “what is
being sought to be introduced is what were the terms and what is
the agreement.” Finally, the court concluded that the statute of
frauds applied as this was an interest in real property, and that
the appraisal was not sufficient to demonstrate partial
performance to overcome the statute of frauds. However, the
court permitted Nathan to make a limited record in the form of a
list of the pieces of evidence he wished to submit and a list of the
alleged agreement’s essential terms.

¶8    Nathan filed an interlocutory appeal, which this court
granted.




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                           Small v. Small


            ISSUES AND STANDARDS OF REVIEW

¶9     Nathan raises three issues on appeal. Nathan first
challenges the recommendation of the commissioner. But “rulings
made by the commissioner become the order of the district court
until modified by that court.” Day v. Barnes, 

, 

. Because the district court made its own
“independent findings of fact and conclusions of law,” we decline
to review the recommendation of the commissioner. Id. ¶ 16
(cleaned up).

¶10 Nathan next contends that the district court incorrectly
applied rule 408 when it excluded his declaration and audio
recording as inadmissible compromise negotiations that were not
subject to either of rule 408’s exceptions. “We review the [district]
court’s resolution of the legal questions underlying the
admissibility of evidence for correctness,” and we review the
district court’s decision whether “to admit or exclude evidence for
an abuse of discretion.” Beckman v. Cybertary Franchising, LLC,

, 

.

¶11 Finally, Nathan contends that the district court erroneously
applied the statute of frauds to the oral agreement after it had
been waived. “The applicability of the statute of frauds is a
question of law to be reviewed for correctness.” Thompson v.
Capener, 

, 

 (cleaned up).


                            ANALYSIS

                    I. Applicability of Rule 408

¶12 Nathan contends the district court erroneously excluded
his declaration and the audio recording of the settlement
negotiations and alleged agreement for dissolution of the
marriage for two reasons. First, Nathan intended to use the
declaration and audio recording for impeachment, which he



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                            Small v. Small


asserts is a proper “other purpose” under the first exception to
rule 408. Second, he asserts the information in the declaration and
audio recording was “otherwise discoverable” under rule 408’s
second exception because Brother, a non-privileged third party,
was present during the settlement negotiations. But because we
hold that rule 408 does not apply here, we need not address the
application of either exception.

¶13 Rule 408 of the Utah Rules of Evidence states that evidence
of “furnishing, promising, or offering—or accepting, promising to
accept, or offering to accept—a valuable consideration in order to
compromise or attempt to compromise the claim,” or evidence of
“conduct or a statement made in compromise negotiations,” is not
admissible “to prove or disprove liability for or the validity or
amount of a disputed claim.” Utah R. Evid. 408(a) (emphasis added).
Because Utah’s rule 408 as originally written was identical to the
then-existing federal rule involving compromise offers and
negotiations, we look to the federal rule and caselaw for guidance
on the scope of rule 408’s prohibition. 2 See Utah R. Evid. 408
original advisory committee’s note (“This rule is the federal rule,
verbatim . . . .”); Robinson v. Taylor, 

, ¶ 10, 

(stating that, as Utah courts, “[w]e may also rely on
interpretations of similar federal rules by federal courts to assist
our own interpretation”).



2. We acknowledge that Utah’s rule 408 is not currently identical
to rule 408 of the Federal Rules of Evidence. Compare Utah R. Evid.
408, with Fed. R. Evid. 408. As our supreme court noted in In re
Estate of Osguthorpe, 

, 

, the federal rule now
“expressly prohibits the use of a statement made during
compromise negotiations if the purpose is to impeach,” while
Utah’s rule 408 does not contain the same prohibition. 

 ¶ 143
n.40 (cleaned up). But this difference is not relevant to the
question before us of whether rule 408 applies to the evidence
Nathan seeks to introduce.


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                            Small v. Small


¶14 Under Federal Rule of Evidence 408, “the admissibility of
compromise [or settlement] evidence depend[s] on the purpose
for which” the evidence is offered. 23 Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 5314 (2d ed.
June 2024 update) (footnote omitted). Federal courts have
construed rule 408 narrowly. Id.; see also Dahlgren v. First Nat’l
Bank of Holdredge, 

 (8th Cir. 2008) (discussing
Eighth Circuit caselaw and concluding that the circuit has
“viewed the scope of [r]ule 408 narrowly”); Rosas v. GEICO Cas.
Co., No. 2:18-cv-01200, 

, at *2 (D. Nev. Jan. 26,
2022) (stating that the scope of rule 408 is relatively narrow); Peek
v. Nationstar Mortgage, LLC, No. 17-cv-230, 

, at *1
(D.N.H. Sept. 22, 2017) (same); Clark v. Experian Info. Sols., Inc., No.
03 C 7882, 

, at *2 (N.D. Ill. Jan. 6, 2006) (same).

¶15 One use of compromise or settlement evidence that is not
prohibited by federal rule 408 is “where the compromise
agreement is the basis for the claim rather than circumstantial
evidence of the validity of the claim being compromised.” 23
Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 5314 (2d ed. June 2024 update). This includes the
use of settlement or compromise evidence to prove the existence
of a settlement agreement or to show breach of a settlement
agreement. See Cates v. Morgan Portable Bldg. Corp., 

,
691 (7th Cir. 1985) (“Obviously a settlement agreement is
admissible to prove the parties’ undertakings in the agreement,
should it be argued that a party broke the agreement.”); Global
Fleet Sales, LLC v. Delunas, 

, 819 (E.D. Mich.
2016) (recognizing that “settlement negotiations can be admissible
for other purposes, including proving the existence of an
agreement”); Palmer v. Wal-Mart Stores East, LP, No. 1:19-cv-0372,

, at *2 (W.D. Pa. Apr. 7, 2021) (“Offering evidence
to prove the existence of an agreement to settle a claim (or a
portion of a claim) is a purpose other than to establish liability on
a disputed claim and, therefore, outside of [r]ule 408’s
proscription of admissibility.”).



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                           Small v. Small


¶16 Moreover, allowing evidence from settlement or
compromise negotiations to show the existence or breach of an
agreement does not “contravene the public policy favoring
compromise.” Catullo v. Metzner, 

 (1st Cir.
1987). Rather, it is essential to allow such evidence to be admitted
to ensure “judicious enforcement of [such] agreement[s].” 

¶17 Here, “the negotiations leading up to settlement were not
offered to prove or undermine the validity of [Nathan’s]
underlying . . . claims against [Trisha]” or vice versa. Glen Elec.
Holdings GmbH v. Coolant Chillers, Inc., No. 1:10-cv-1109, 

, at *6 (W.D. Mich. May 31, 2013). Nathan offered his
declaration and the recording as evidence “to prove the existence
and terms of the settlement agreement itself.” 

 Therefore, we
hold that Utah’s rule 408—just like federal rule 408—“plainly
does not apply” to this situation. 

 Were we to hold that rule 408
mandates exclusion of all communications made during a
settlement negotiation—as Trisha advocates here—it is difficult to
imagine how a party could ever seek to prove the existence and
terms of an oral settlement agreement.

¶18 Turning to the specific evidence that Nathan seeks to
introduce, we have reviewed the declaration and conclude that
certain testimony is not prohibited by rule 408 because it goes to
the existence of an agreement and its terms rather than to “prove
or disprove liability for or the validity or amount of a disputed
claim.” 3 Utah R. Evid. 408(a). Paragraphs 1, 2, 3, 7, and 9 of


3. In addition to the declaration, the audio recording of the
conversation between Nathan and Trisha can also be used to
prove the existence and terms of an agreement without running
afoul of rule 408. But because we were not provided with the
audio recording and did not have the opportunity to review its
contents, we hold that the recording can only be used to the extent
it supports the specifically identified statements from the
declaration.


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                         Small v. Small


Nathan’s declaration do not run afoul of rule 408 and are
admissible in full. The following selections of the remaining
paragraphs are also admissible to demonstrate the existence and
terms of the agreement:

      4. On March 29, 2022, the three of us met in the
      kitchen of the marital home. [Trisha] and I parsed
      out the primary issues in dispute. Trisha and I were
      able to reach an agreement on the following terms:

             a. I agreed to offset $60,998.41 from my equal
             share of the equity in the marital home. . . .

             b. . . . Trisha agreed to waive claim against
             my Tier I public safety pension and I agreed
             not to seek award from Trisha’s TIAA
             Retirement account with Weber State
             University.

             c. We agreed to offset our respective 401k,
             IRA and other retirement accounts . . . .

             d. We agreed what to do with our dog, Ivan,
             who was primarily my pet. Trisha agreed to
             care for the dog in the marital home until I
             could find separate accommodation, subject
             to me paying for Ivan’s food and other
             expenses.

             e. I agreed to vacate the marital home and
             cede possession to Trisha as soon as the
             settlement was reduced to writing.

             f. We further agreed to take our own personal
             property, bank accounts, and other assets.
             We agreed to resolve any other property
             division between ourselves.



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                         Small v. Small


             g. We agreed to take our own vehicles, I
             agreed to take Trisha’s vehicle debt, and we
             each agreed to take our own credit card debt.

             h. Trisha agreed not to seek alimony.

             i. Trisha specifically promised that she would
             not file an action against me . . . .

             j. Trisha agreed to allow me to keep her
             suppressor. I agreed to let Trisha keep her
             firearms.

             k. We . . . agreed that the number from the
             appraisal would be used to set the value of
             the home so we could divide the equity per
             our agreement.

      5. . . . [W]e would allow [Trisha’s] attorney to draft
      up the agreement at the meeting Trisha had
      scheduled on April 18, 2022 . . . .

      ....

      8. On April 14, 2022, I received a call from [Brother]
      . . . . Trisha wanted to meet again to try to
      renegotiate the terms. I sent Trisha a letter
      indicating I planned on adhering to the agreement.

The omitted portions of the declaration are not admissible under
rule 408 because they address the underlying disputed claims
rather than the existence and terms of the settlement agreement.

¶19 In sum, rule 408 does not prohibit Nathan from
introducing evidence to establish the existence and terms of the
settlement agreement, and Nathan may use the specifically




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                           Small v. Small


identified sections of his declaration and the supporting parts of
the audio recording to do so.

                        II. Statute of Frauds

¶20 Nathan argues that the district court erred by excluding his
declaration and audio recording under the statute of frauds
because Trisha did not affirmatively raise the statute of frauds
defense at the pleading stage and therefore the defense was
waived. While we agree with Nathan that the statute of frauds
defense can be waived if a party fails to raise it in a responsive
pleading, see Utah R. Civ. P. 8(c), we need not address that issue
here as we determine that the statute of frauds does not apply.

¶21 Utah’s statute of frauds generally bars “enforcement of
certain [types of] agreements that the law requires to be
memorialized in writing.” Coleman v. Stuart, 

, 

 (cleaned up); see also Utah Code § 25-5-1. Estates
and interests in real property are types of agreements that fall
under the statute of frauds and “shall [not] be created, granted,
assigned, surrendered or declared otherwise than by . . . deed or
conveyance in writing.” Utah Code § 25-5-1. “Any contract
conveying an interest in land in which the agreement has not been
reduced to writing and signed by the person relinquishing the
property is unenforceable.” Coleman, 

(emphasis added) (cleaned up).

¶22 However, the statute of frauds is not implicated by “all
agreements that merely touch on real estate in some collateral
way.” Mattfeld v. Griffee, No. 2:16-cv-01278, 

, at
*2 (D. Utah May 10, 2017) (concluding that the alleged agreement
did not fall within the statute of frauds because the defendants
did not allege that any transfers of real property were made in the
oral instrument); see Bennett v. Huish, 

, ¶¶ 25–26,

 (ruling that an oral agreement involving loan
proceeds from a loan secured by real property was not a “transfer
of an interest in real property,” so the statute of frauds did not


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                          Small v. Small


apply); Warburton v. Virginia Beach Fed. Sav. & Loan Ass’n, 

, 781–83 (Utah Ct. App. 1995) (concluding that lot reservation
agreements that reserved a building lot and a membership at
country club were “not an interest in real property”); Mackintosh
v. Hampshire, 

, 1301–02 (Utah Ct. App. 1992) (holding
the statute of frauds did not apply where the “amended complaint
specifically claim[ed] a share of the monetary profits,” not “any
interest in real property”).

¶23 Nathan’s declaration does not mention a creation, transfer,
grant, assignment, surrender, or declaration of real property. The
closest the declaration gets to mentioning a conveyance of real
property is Nathan’s statements that he “agreed to offset
$60,998.41 from [his] equal share of the equity in the marital
home” and that he agreed to “cede possession to Trisha.” But
neither of these statements show a conveyance of real property
that triggers the statute of frauds because offsetting equity in a
home and moving out is not the same as transferring, granting,
assigning, surrendering, or otherwise conveying a property
interest to Trisha. Therefore, the statute of frauds does not apply
to the claimed agreement between Trisha and Nathan, and
regardless of whether Trisha waived the argument, Nathan is not
required to meet the statute of frauds requirements to prove the
existence and terms of the agreement.


                         CONCLUSION

¶24 We reverse the district court’s determination that rule 408
requires exclusion of all evidence regarding the settlement
negotiations. The aforementioned parts of Nathan’s declaration
and supporting parts of the audio recording are admissible to
prove the existence and terms of the oral agreement. We also
conclude that the district court erred in determining that the
statute of frauds applied here, and Nathan is therefore not
precluded from attempting to prove the existence of the oral
agreement.


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