Fish v. Fish, 2016 UT App 125: A Review and Initial Thoughts

The newest divorce and alimony cases, Fish v. Fish, came down from the Utah Court of Appeals on 9 June 2016. It contains some, let’s say interesting, arguments and implications. I want to examine those for a bit, and then talk about the practical takeaways from the case.

Factual and Procedural Background

This decision is the second time Fish came before the Utah Court of Appeals. The case began in 2007, when Diane Fish filed for divorce. The District Court entered a divorce decree in 2009, ordering Jeffery to pay $800 per month in alimony.

Jeffery appealed, alleging the Court failed to impute income to Diane, incorrectly imputed income to him, and incorrectly calculated alimony. The Court of Appeals eventually remanded the case back to the District Court for a myriad of reasons.

Upon remand, the District Court made supplementary findings, determining Diane’s income was $2233 per month and her need was $2997 per month (difference of $764 per month). The District Court then reinstated its order that Jeffery pay Diane $800 per month in alimony.

In 2012, Jeffery filed a petition to terminate or reduce alimony. He alleged Diane’s income had increased over the years, which increase constituted a substantial change in circumstance.

The District Court held a bench trial on Jeffery’s petition in 2014. It was found that Diane’s income had increased $264 per month from 2009 to 2014, and that her reasonable and necessary expenses had increased $492 per month during that time. (This would make Diane’s 2014 income $2497 per month and her expenses $3489 per month.)

In light of this, the District Court found there was no substantial change in circumstance, kept alimony at $800 per month, and denied Jeffery’s petition.

Jeffery appealed the decision, arguing the following:

(1) by what he characterizes as modifying the divorce decree by increasing Diane’s monthly expenses, (2) by “failing to follow the law of the case that [Diane] is capable of working 36 hours per week,” (3) by failing to find that Diane was voluntarily underemployed, (4) by failing to find that an unforeseen material substantial change in circumstances warranted modification of the decree, (5) by denying Jeffery’s motion to amend findings of fact or to grant a new trial, and (6) by failing to award attorney fees to Jeffery.

Decision

To say alimony decisions from the Utah Court of Appeals are murky is to be generous to the adjective. Fishdoes little to clear up the murk.

Definition of modification and new needs

The Court of Appeals began its legal analysis examining whether the District Court modified the existing divorce decree by making new findings and the like. Ultimately, the Court of Appeals decided that because the alimony award stayed the same, the District Court did not modify the decree. The logic goes something like this: no overall change means no modification.

That has a certain simplicity to is, but is the logic correct? I’m not so convinced.

The District Court clearly found changes from 2009 to 2014. Diane’s income had increased $264 per month during the period (an increase of approximately 12%), and her reasonable and necessary monthly expenses had increased 16%.

If one was to do the normal alimony calculation, Diane’s 2014 shortfall would have been $992 per month — a 23% increase from 2009. If one did not include Diane’s increase in need from 2009 to 2014 (something the Court of Appeals recognized Utah law generally prevents), then Jeffery’s alimony should have decreased to $500 per month — a 37.5% decrease from $800 per month.

Instead of the above, the District Court included Diane’s new income and her new need, and then reduced Diane’s need approximately 20% (from $992 to $800) to fit the previous order of $800 per month.

It seems an odd standard of legality to find a host of actual changes, pretend the changes do not exist by ordering the same alimony regardless of those actual changes, thereby creating a situation in which there was no modification.

What makes this determination even more odd is the fact it is necessarily based on including Diane’s new level of need.

Utah Code Annotated, Section 30-3-5(8)(i)(ii) states: “The court may not modify alimony or issue a new order for alimony to address needs of the recipient that did not exist at the time the decree was entered, unless the court finds extenuating circumstances that justify that action.”

But this is exactly what the District Court did.

As shown above, without Diane’s new needs, Jeffery’s alimony should have been reduced to $500 per month (a 37.5% decrease). It was only by including her new needs that the District Court was able to create a situation in which it could have conceivably determined continuing alimony in the amount of $800 per month. And it could only do this by arbitrarily reducing Diane’s actual need by 20%.

As I see it, this is a pretty clear end run around 30-3-5(8)(i)(ii). In essence, the Court of Appeals willingly allowed the District Court to do what statute says it cannot do, as long as the District Court massaged the final numbers to come up with the exact same alimony award as before, because by so doing it didn’t modify anything. (Remember that 30-3-5(8)(i)(ii) only refers to modifications). Wink, wink, nod, nod.

Imputation of income and voluntary underemployment

In 2011, the District Court found Diane could work thirty-six hours per week. In 2014, however, she worked only around thirty hours per week.

Because of this, Jeffery (logically) argued her income should be imputed at the thirty-six-hour mark. There is nothing in the case facts as recited by the Court of Appeals that indicate Diane was incapable of actually working thirty-six hours per week. In fact, the facts demonstrate Diane’s employer allowed her to pick her hours, as long as she didn’t work more than forty per week. So, it’s pretty safe to say Diane working thirty per week was a voluntary lifestyle choice.

The Court of Appeals deals with this initially by stating it’s not “clear” the previous determination that Diane could work thirty-six hours per week was relevant to the number of hours Diane could work in 2014. (I’m not sure what clear means because the Court of Appeals never bothers to explain how things could be clear.) It continues its reasoning by noting the whole clear and relevance thing doesn’t actually matter because a finding of voluntary underemployment doesn’t require imputation of increased income; it merely allows it. So, if the District Court finds voluntary underemployment, it doesn’t have to do anything. No harm no foul.

Oddly, having dismissed the need for relevance, the Court of Appeals then circles back to the 2011 finding that Diane could work thirty-six hours per week, saying that finding “does not appear relevant” to the District Court’s 2014 finding that working thirty hours per week was reasonable. Based on no appearance of relevance, “there is no support” for Jeffery’s imputation argument, it asserts.

This reasoning is problematic. For example, I’m at a loss why the 2011 finding is not relevant. There is nothing in the facts that indicate a change in Diane’s ability to work from 2011 to 2014. Honestly, I think the only reason the previous finding is not relevant is because the District Court chose to disregard it. But disregarding a finding or other evidence does not make that finding or evidence irrelevant.

And using the logic above to say there is “no support” for imputation of income at thirty-six hours per week is simply incorrect. Jeffery’s argument for imputation is cogent and reasonable, especially in light of the District Court’s 2011 finding and the fact there has been no identified change since that time. How such a straightforward argument constitutes absolutely no legal support for imputation is beyond me.

Substantial and foreseeable change

Another perplexing portion of Fish is how the Court of Appeals deals with the foreseeability of changes in circumstance.

This subject is important in alimony cases because Utah law provides the District Court with continuing jurisdiction over alimony so it can adjust alimony when there are “substantial material changes in circumstances not foreseeable at the time of the divorce.”

The Court of Appeals notes the legal standard is foreseeability, not whether something was actually foreseenat the time of the divorce. In other words, you could actually anticipate something crazy will happen after your divorce, but that doesn’t necessarily mean that crazy thing was foreseeable.

While it’s not explicitly stated, the Court of Appeals is essentially imposing the following standard regarding foreseeability: would a reasonable person, having the same knowledge the parties had at the time of divorce, have foreseen a particular outcome. It’s the “reasonable person standard.”

With this standard in mind, we are told that increases in an ex’s income do not automatically qualify as a substantial change in circumstance. “We are not aware of any Utah authority requiring a district court to find that such a change has occurred simply because one party’s income has increased and the divorce decree did not discuss possible increases in income.”

That seems pretty axiomatic, but it doesn’t provide any actual guidance to determine when increases in income do constitute substantial changes in circumstance for the purpose of recalculating alimony.

Percentages v. absolute numbers

In this case, there was a 12% increase in income that apparently didn’t qualify as a substantial, unforeseeable change. Would 15% qualify? 20%? 50%? 100%? Instead of guidance, we are left to wonder.

Moreover, it’s not entirely clear the Court of Appeals thinks about a substantial change in percentage-of-total-income terms. It seemingly dismisses the possibility of a substantial change because Diane makes only $2 more per hour in 2014 than she made five years previous. So, instead of a percentage, we are left to deal with absolute numbers as a function of time.

But absolute numbers are not an entirely clear-cut standard when examining income. For example, if a doctor makes $20,000 per month, and receives a $13.85 per hour raise, that raise per hour (assuming a full-time 2080-hour work year) increases income by 12%, or $28,800 per year. This is exactly the same percentage increase as Diane’s.

Would the Court of Appeals consider a $13.85 per hour, or $28,8000 per year, raise a substantial change in circumstance? If we’re using absolute numbers, it seems at least somewhat likely, even though proportionally the raises discussed are exactly the same.

And what about raises as a function of time? Would there be a substantial change if the doctor received the $13.85 raise over five years instead of over six months? Unfortunately, we have no idea.

Inflation

In perhaps the most head-scratching portion of Fish, the Court of Appeals reasons that if increases in income automatically constituted substantial changes in material circumstance for the purpose of recalculating alimony, “creeping inflation could necessitate recalculation of nearly all alimony awards on an annual or biennial basis.”

The problem is it could not. Inflation is an economy-wide phenomenon marked by a general increase in prices and fall in the purchasing value of money.

Thus, creeping inflation has nothing directly to do with a person’s individual income. Moreover, inflation would actually decrease a person’s purchasing power (i.e., decrease their real-world income), not increase it.

(One may think the Court of Appeals is talking about inflation eating away at purchasing power, thereby possibly allowing for increases in alimony to make up the decrease. Unfortunately, this discussion of inflation is in the context of actual increases in absolute income.)

Perhaps the Court of Appeals is conflating inflation with cost-of-living adjustments (COLAs), which are, at least nominally on the federal level, pegged to inflation through indices like the Consumer Price Index. Honestly, I’m not sure why COLAs would be brought up in this case since there is no evidence Diane was receiving a COLA. We’ll probably never know exactly what the Court of Appeals was referring to.

(Note: I’ve never seen anyone make the argument that inflation over a long period of time would constitute a substantial material change allowing recalculation of alimony. It would be an interesting argument to make, especially when you think that inflation historically hovers just above 3% per year. So, ten years after an alimony award, the alimony recipient’s buying power has decreased by about 1/3. Something to think about.)

Miscellaneous

There is more to Fish than I have addressed so far. For example, the discussion regarding challenging the sufficiency of evidence supporting the District Court’s findings was interesting. In essence, if you want to attack a finding, you have to marshal a boat load of evidence and demonstrate the finding is clearly erroneous.

Also, if you want costs and fees assessed in your favor on appeal, you have to specifically request them during the appeal process. They are not automatic, even if you were awarded them in the District Court and you win on appeal.

Final Takeaways

My big takeaway from this case is the District Court has incredibly wide discretion in fashioning alimony awards, and the Court of Appeals will bend over backward to uphold those awards.

In this case, you have a woman who received a 12% increase in absolute income, despite the fact she voluntarily chose to work only thirty hours per week, and a judge who rather plainly massaged numbers so the alimony award would be exactly the same as the award he ordered the previous two times he ruled on the case, and the Court of Appeals said that was all good.

If that’s the level of deference afforded the District Court in alimony cases, then you better not bank on successfully challenging alimony on appeal.

(Here is a link to the full decision: Fish v. Fish.pdf)