Dahl v. Dahl
2015 UT 23
| Utah | 2015Background
- Dr. Charles Dahl and Kim Dahl married ~18 years; two minor children; divorce trial spanned 14 nonconsecutive days in 2009; decree entered July 20, 2010.
- Ms. Dahl alleged the Dahl Family Irrevocable Trust (Trust) held marital assets; she sued the Trust and trustees seeking declarations and an accounting; the divorce court refused to consider Trust assets because the Trust was not joined in the divorce action.
- The trust court granted summary judgment for Trust defendants, finding the Trust irrevocable and that Ms. Dahl had no enforceable interest; Ms. Dahl appealed both the divorce and Trust decisions.
- The Supreme Court consolidated the appeals, held the Trust should have been joined in the divorce action, construed the Trust under Utah law (not Nevada), and found the Trust revocable because the settlor reserved an unrestricted power to amend.
- Because Ms. Dahl contributed property to the Trust, the Court held she is a settlor as to her contribution and may revoke the Trust with respect to that portion (including marital property), requiring remand to characterize Trust property and effect equitable distribution.
- The Court affirmed most divorce-court rulings (no judicial-disqualification, many evidentiary rulings, denial of alimony, custody award to Dr. Dahl), reversed certain property and cost allocations (including ordering Ms. Dahl to repay voluntary pre-decree payments and share of litigation costs), and invalidated Ms. Dahl’s primary attorney’s pre-decree lien/fee arrangement and referred him for discipline.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Trust should have been joined in divorce | Trust held marital assets; failure to join prevented equitable division | Too late to add party on eve of divorce trial; separate litigation controls | Trust should have been joined; appeals consolidated and remanded to join Trust |
| Choice of law and revocability of Trust | Utah public policy requires applying Utah law; Trust revocable because settlor reserved amendment power | Trust choice-of-law (Nevada) controls and Trust is irrevocable | Utah law governs; unrestricted amendment power makes Trust revocable |
| Ms. Dahl's interest in Trust property | Having contributed property, she is a settlor and may revoke portion attributable to her contribution | She is not a settlor; even if settlor, irrevocable-trust rules bar withdrawal | Ms. Dahl is a settlor as to her contributions and may revoke the Trust as to those portions (marital or separate) |
| Whether trial judge was biased / should be disqualified | Judge made adverse rulings and comments; prior interaction suggested bias | Rulings and frustration arose from proceedings, not extrajudicial sources; no disqualifying relationship | No disqualification; adverse rulings and courtroom frustration insufficient to show extrajudicial bias |
| Admissibility/sanctions for discovery and pretrial failures | Excluded exhibits and limited experts prejudiced Ms. Dahl | Counsel failed to comply with rules/orders; exclusion appropriate | No abuse of discretion—exclusions and limits were warranted by counsel’s procedural noncompliance |
| Alimony (temporary and permanent) | Ms. Dahl lacked access to records earlier; trial testimony and declarations showed need | Ms. Dahl failed to provide credible, verified financial declarations; payor can pay but burden on requester | Denial of temporary and permanent alimony affirmed—Ms. Dahl failed to prove present financial need |
| Distribution adjustments and costs (e.g., $162k, litigation costs) | Court erred in (1) forcing refund of voluntary pre-decree payments, (2) charging her half litigation costs though paid from marital funds | Court viewed payments and costs as equitable allocations reducing estate shares | Reverse in part: ordering refund of $162k and charging Ms. Dahl one-half of litigation costs was error; trial transcripts cost allocation to Ms. Dahl was proper |
| Attorney fees and retainer liens | Ms. Dahl sought fees and counsel asserts contractual lien on proceeds | Court found fee amounts unreasonable and pre-decree lien on marital estate impermissible in domestic relations matters | Denial of Ms. Dahl’s fee award affirmed; attorney’s pre-decree lien/fee agreement invalidated and referral to disciplinary authority |
Key Cases Cited
- Hiltsley v. Ryder, 738 P.2d 1024 (Utah 1987) (joinder and limits of court adjudicative power to parties before it)
- In re Estate of Flake, 71 P.3d 589 (Utah 2003) (an unrestricted power to amend a trust includes power to revoke)
- Woodward v. Woodward, 656 P.2d 431 (Utah 1982) (marital-property presumption: rights accruing during marriage are subject to equitable distribution)
- Waddoups v. Amalgamated Sugar Co., 54 P.3d 1054 (Utah 2002) (forum-state choice-of-law rules apply)
- Stonehocker v. Stonehocker, 176 P.3d 476 (Utah Ct. App. 2008) (framework for identifying, valuing, and distributing marital property)
- State v. Munguia, 253 P.3d 1082 (Utah 2011) (judicial-disqualification standard: bias must ordinarily arise from extrajudicial source)