Wadsworth v. Wadsworth
507 P.3d 385
Utah Ct. App.2022Background
- Candi and Guy Wadsworth married in 1979; Guy built Wadsworth Brothers Construction (WBC) and other businesses worth tens of millions. Divorce trial took place in 2017 with supplemental orders through 2019.
- Guy placed fractional interests in a 2007 irrevocable trust (the Trust) and made other unilateral business transactions during the pendency of the divorce; court found most transfers were consistent with historic practices and not dissipative.
- Experts disputed valuation items: (1) three notes receivable owed to Guy (~$1,059,466) were omitted from the estate valuation; (2) WBC backlog (testimony ranged from ~$3.4M net profit to expert opinions of no independent value); (3) equipment appraisals differed (~$13.89M auction-based v. ~$22.5M going-concern).
- District court valued the marital estate at ~$43.9M, awarded Candi ~$4.7M in specific assets and ordered Guy to pay an equalization sum (~$17.24M) via installments ($30,000/month + $500,000/year) plus a balloon due Dec. 31, 2024, at 5% interest; court declined to grant Candi a security interest in the unpaid balance.
- Court awarded Candi permanent alimony of $26,436.90/month (imputed income to Candi and no tax allowance for her), required Guy to provide life insurance in early findings but later left ambiguity about imposing security for alimony.
- On appeal, the court affirmed most valuation and division decisions but remanded to (1) include the omitted notes receivable in the marital estate, (2) require adequate security for Candi’s unpaid equalization, (3) adjust alimony for Candi’s tax burden, and (4) clarify whether life insurance/security for alimony is required.
Issues
| Issue | Candi's Argument | Guy's Argument | Held |
|---|---|---|---|
| Operative date / start of payment schedule | Decree should be effective Oct. 30, 2019 or balloon due Dec. 31, 2013 (earlier schedule) | Decree effective Dec. 31, 2018 was proper to preserve tax position; payments fixed by 2019 order | Court’s effective date and payment commencement not an abuse of discretion; affirmed |
| Valuation – notes receivable omitted | Court failed to include $1,059,466 notes receivable owed to Guy as marital assets | Notes not separately pointed to at trial; parties’ experts accounted for liabilities | Court erred; remand to add notes receivable to marital estate value |
| Valuation – WBC backlog & equipment | Backlog had value and equipment should be valued as going concern; court undervalued both | Guy’s expert: backlog had no independent value; equipment auction appraisal reflects fair market | Court credited Guy’s experts; backlog/equipment valuations within court’s discretion; affirmed |
| Dissipation (yacht, FDFM, Trust transfers) | Purchases and transfers were dissipative and should credit Candi | Transactions were consistent with historical practices and not obstructive | Court’s non-dissipation findings (except girlfriend expense) not an abuse; affirmed |
| Division & deferred equalization payments | Award was inequitable without security; court should have awarded more cash/business assets or immediate payment | Deferred plan appropriate given illiquid business assets; security unnecessary given findings | Deferred plan permissible but court must grant Candi adequate security for unpaid share; remand to fashion security |
| Interest rate on deferred balance | Candi: higher interest (10%) to compensate for forbearance | Guy: should be statutory postjudgment rate (lower) | 5% rate was reasonable and equitable under circumstances; affirmed |
| Alimony – tax treatment & security | Court failed to account for Candi’s tax burden; should require life insurance or substitute security | Candi failed to present tax evidence; Guy may be unable to obtain life insurance | Remand to make findings on Candi’s projected tax burden and adjust alimony; remand to clarify/resolve life insurance/security issue |
| Contempt for alleged Stipulation violations | Guy violated temporary orders and should be held in contempt | Transactions fell within Stipulation’s allowance for Guy to conduct business as before | Court did not abuse discretion in declining to hold Guy in contempt; affirmed |
Key Cases Cited
- Gardner v. Gardner, 452 P.3d 1134 (Utah 2019) (district court property-division discretion and standard of review)
- Goggin v. Goggin, 299 P.3d 1079 (Utah 2013) (remedy for dissipation; value assets as if not dissipated)
- Dahl v. Dahl, 459 P.3d 276 (Utah 2015) (equal access to marital funds during pendency; reimbursement principle)
- Marroquin v. Marroquin, 440 P.3d 757 (Utah Ct. App. 2019) (marital-property valuation is a snapshot in time)
- Taft v. Taft, 379 P.3d 890 (Utah Ct. App. 2016) (deferred-payment structures and interest must incentivize prompt payment)
- Stroud v. Stroud, 738 P.2d 649 (Utah Ct. App. 1987) (statutory postjudgment interest is a minimum; courts may set higher rates)
- Morgan v. Morgan, 795 P.2d 684 (Utah Ct. App. 1990) (valuation upheld if within range of testimony and adequately supported)
- Newmeyer v. Newmeyer, 745 P.2d 1276 (Utah 1987) (courts may split differences among competing valuations)
- Olsen v. Olsen, 169 P.3d 765 (Utah Ct. App. 2007) (equitable standard governs property-division questions)
- McPherson v. McPherson, 265 P.3d 839 (Utah Ct. App. 2011) (tax consequences generally considered when assessing income and expenses)