Dayle Chelane Hansen v. Thaine S. Hansen

¶1 Thaine S. Hansen (Husband) appeals the trial court's ruling

on his petition to modify his divorce decree, which ordered him to

pay Dayle Chelane Hansen (Wife) alimony in the amount of $872

per month. We remand for clarification of the trial court's order

with respect to the retroactivity of the alimony award, but in all

other respects, we affirm the trial court's judgment.

BACKGROUND

¶2 Wife filed for divorce in May 2009. A two-day trial was held

in July 2010. After hearing the evidence, the trial court found that

Hansen v. Hansen

1.The careful reader may observe that some of these calculations

contain slight errors. However, because any such errors do not

affect our analysis, we use the numbers contained in the trial

court's orders.

2.Initially, the trial court explained that its alimony award was

intended to equalize the parties' incomes. However, in calculating

the award, the trial court neglected to take into account the income

that it had imputed to Wife. As a result, Wife's total monthly

income—including retirement income, imputed income, and

alimony—was greater than Husband's. When this error was

pointed out, the trial court issued a clarification order in which it

declined to alter the alimony award in spite of the erroneous

(continued...)

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Wife had reasonable monthly expenses of $4,063 and that Husband

had reasonable monthly expenses of $2,140. The court found that

Wife "is skillful in a variety of areas and capable of working a fulltime

minimum wage job” and determined that she was capable of

earning a net income of $1,005 per month. After making findings

regarding Husband's historical earning capacity, the trial court

found that Husband was capable of netting $2,162 per month. The

trial court calculated both parties' net incomes by applying a 20%

tax rate. Additionally, the trial court recognized that each party

would net $1,452 per month from Husband's civil service

retirement income, which the parties had stipulated should be

divided equally between them. Based on these calculations, the trial

court determined that Wife had an unmet monthly need of $1,605,

while Husband had a monthly surplus of $1,522. Based on Wife's

unmet need and Husband's ability to pay, the trial court ordered

Husband to pay alimony to Wife in the amount of $1,000 per

month. After taking into account the fact that alimony would be

taxable to Wife and tax deductible to Husband—leaving Wife with

only $800 per month in net alimony—the trial court pointed out

that this award would still leave Wife with a monthly shortfall of

$8111 and Husband with a monthly surplus of $722.2 The parties'

Hansen v. Hansen

2.(...continued)

calculation, explaining that even though the dollar amount of

Wife's income was ultimately greater, she still had a significant

monthly shortfall, whereas Husband had a surplus even after

paying alimony.

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divorce decree was entered on February 11, 2011, and is not the

subject of this appeal.

¶3 On April 4, 2011, Husband filed a Petition to Modify the

Decree, asserting that "he is unable to work due to a medical

condition that involves both his back and feet.” On June 17, 2012,

Husband was administratively determined to be disabled as of

March 21, 2011, and awarded Social Security Disability Income

(SSDI) in the amount of $488 per month. Following a trial on the

Petition to Modify, the trial court found Wife's monthly expenses

to be $4,064, approximately the same as they had been at the time

of the divorce. It again imputed minimum-wage income to her in

the gross amount of $1,257 per month. It also recognized that she

was receiving gross income of $1,939 per month from Husband's

civil service retirement and $366 per month from his military

retirement. The trial court this time applied a 25% tax rate and

calculated Wife's net monthly income to be $2,671, which left her

with a shortfall of $1,393 per month. The trial court found that

Husband's monthly expenses had changed and found that his

reasonable monthly expenses amounted to only $1,867. The trial

court did not impute income to Husband but determined that,

based on a 25% tax rate, he was receiving $1,729 per month in net

retirement income and $488 per month in non-taxable SSDI for a

total of $2,217 per month, leaving him with a surplus of $350 per

month.

¶4 Because Wife's needs had not changed but Husband no

longer had the ability to pay alimony at the previous rate, the trial

court determined that it would be appropriate to equalize the

parties' standards of living by awarding alimony in an amount that

would result in each party having an equal monthly shortfall.

Hansen v. Hansen

3. The trial court had previously ordered Husband to transfer

ownership of a life insurance policy to Wife, who would then be

responsible to pay the premium on the policy. After signing the

necessary paperwork to transfer the policy, Husband cancelled the

policy. The trial court considered Husband's behavior "underhanded

to say the least” and expressed doubt regarding the

likelihood of Husband's compliance with the court's order that he

either reinstate the policy or obtain a comparable policy.

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Accordingly, the trial court reduced the original $1,000 alimony

award and ordered Husband to pay Wife $872 per month in

alimony, which would leave each party with a monthly shortfall of

$521. The trial court indicated that its decision was influenced by

the fact that the parties had been married for forty-one years, that

Husband had remarried and now received financial assistance from

his new wife, and that Husband had contravened court orders

regarding his life insurance policy to the likely financial detriment

of Wife.3 The trial court ordered that the modified award would be

retroactive to the date when Husband was "administratively

determined to be disabled.” The court found that prior to the

administrative determination, Husband "was able to work, albeit

with limitations.” However, the trial court acknowledged that

Husband was on "temporary total disability for the period of time

of his surgeries and reasonable recuperation” and had therefore

"been unable continuously to work and generate an income.” The

court found that the "rehabilitation period for all surgeries and

recuperation” was four and a half months and accordingly

deducted an additional $4,500 from the amount Husband owed

Wife in back alimony, effectively excusing Husband from making

any alimony payments during those four and a half months.

Husband appeals the trial court's modified alimony award.

ISSUES AND STANDARD OF REVIEW

¶5 First, Husband asserts that the trial court failed to

adequately consider his ability to pay, Wife's reasonable needs, or

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20130114-CA 5 2014 UT App 96

Wife's ability to meet her own needs. Second, he challenges the

trial court's use of a 25% tax rate and its method of equalizing the

parties' monthly shortfalls in its order on the Petition to Modify

because the trial court took a different approach when it originally

fashioned an alimony award in the divorce decree. Third, he alleges

that the trial court erred by including his SSDI in its calculation of

his monthly income. Fourth, he argues that he should not be

required to pay alimony out of his retirement benefits where Wife

was already awarded half of those benefits. Finally, Husband

asserts that the trial court's findings were not sufficiently clear

regarding retroactivity of the modified alimony award.

Trial courts have broad latitude in determining

whether to award alimony and in setting the amount.

We review a trial court's award of alimony for an

abuse of discretion and will not disturb a trial court's

ruling on alimony as long as the court exercises its

discretion within the bounds and under the

standards we have set and has supported its decision

with adequate findings and conclusions.

Dobson v. Dobson, 2012 UT App 373, ¶ 7, 294 P.3d 591 (citation and

internal quotation marks omitted).

ANALYSIS

I. The Trial Court Properly Considered the Statutory Alimony

Factors.

¶6 "In fashioning an alimony award, the trial court is required

to consider the payor spouse's ability to pay and the recipient

spouse's need and ability to produce income.” Fish v. Fish, 2010 UT

App 292, ¶ 12, 242 P.3d 787 (citing Utah Code Ann. § 30-3-

5(8)(a)(i)–(iii) (Supp. 2010) (current version at id. (LexisNexis

2013))). "Furthermore, the award should advance, as much as

possible, the purposes of alimony by assisting the parties in

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20130114-CA 6 2014 UT App 96

achieving the same standard of living they enjoyed during the

marriage, equalizing the parties' respective standards of living, and

preventing either spouse from becoming a public charge.” Id.

¶7 Husband asserts that the trial court failed to adequately

consider his ability to pay, Wife's need, and Wife's ability to earn.

He first argues that the trial court exceeded its discretion by

ordering him to pay alimony in the amount of $872 per month after

finding that he had the ability to pay only $350 per month. In

support of this argument, he relies on McPherson v. McPherson, 2011

UT App 382, 265 P.3d 839, in which this court held that a trial court

had exceeded its discretion by calculating "an alimony amount

designed to cover [the wife's] needs” despite the fact that the

husband did not have the ability to pay that amount. Id. ¶ 15. The

case at hand is distinguishable from McPherson because the trial

court did not order Husband to pay "an alimony amount designed

to cover Wife's needs.” See id. Rather, the trial court equalized the

parties' incomes so that each suffered an equal monthly shortfall.

We have consistently held that equalization of income—also

termed "equalization of poverty”—is appropriate in "situations in

which one party does not earn enough to cover his or her

demonstrated needs and the other party does not have the ability

to pay enough to cover those needs.” Sellers v. Sellers, 2010 UT App

393, ¶ 3, 246 P.3d 173; see also Fish, 2010 UT App 292, ¶ 30 ("If there

is not enough combined income available for both spouses to

remain at the standard of living enjoyed during the marriage, their

incomes should be equalized to the extent possible.”); Child v. Child,

2008 UT App 338, ¶ 7, 194 P.3d 205 (discerning no error in the trial

court's alimony award of $2,575 to the wife, which would leave the

husband with $2,575 to meet his needs of $3,945 and the wife $5,214

to meet her needs of $7,217), vacated in part on other grounds, 2009

UT 17, 206 P.3d 633 (per curiam). Indeed, even in McPherson, this

court acknowledged that on remand the trial court would have

"discretion to make whatever other adjustments it deem[ed]

necessary to achieve an equalization of the parties' standards of

living or to explain its rationale for assigning a disproportionate

Hansen v. Hansen

4. Throughout his brief, Husband reiterates the idea that the

alimony award requires him to work in perpetuity in order to pay

alimony to Wife. However, the trial court did not impute any

earned income to Husband but calculated his income based solely

on his retirement and disability benefits. On the other hand, the

trial court did impute income to Wife, assuming that she was

capable of working a minimum wage job in spite of her advancing

age. After calculating these incomes and comparing them to the

parties' needs, Wife still had a $1,393 per month shortfall, while

Husband had a $350 per month surplus. The trial court's decision

to equalize the parties' shortfalls does not sentence Husband to a

life of involuntary servitude, as he suggests. Husband is in the

same boat as Wife—they will both have to cut back their monthly

expenses by $521 or find a way to make up the difference (in fact,

considering that alimony is taxable to Wife and tax-deductible to

Husband, and employing the same 25% tax rate as the trial court,

Husband will actually have to cut back $391 per month, while Wife

will have to cut back $651). And if Wife continues to choose not to

work, she will have to cut back an additional $943 per month

because the trial court imputed income to her, while Husband will

suffer no additional penalty for his inability to work because the

trial court did not impute income to him. Additionally, Husband

has the support of a new spouse sharing his living expenses. In

short, Husband has not been left quite so destitute as he would

have us believe.

20130114-CA 7 2014 UT App 96

percentage of the shortfall to one party.” McPherson, 2011 UT App

382, ¶ 16.

¶8 This case presents precisely the situation where we have

deemed equalization of income to be appropriate. Wife has an

unmet monthly need of $1,393 and Husband lacks the ability to

fulfill that need because he has a monthly surplus of only $350.

Thus, it was entirely appropriate for the trial court to equalize the

parties' monthly shortfalls, 4 particularly in light of the trial court's

additional findings regarding the length of the marriage,

Husband's new wife's financial situation, and Husband's actions

Hansen v. Hansen

5. Husband suggests that the trial court should have considered the

fact that Wife has cut back on her standard of living since the

divorce because she has gone "for long periods of time” without

the alimony she was awarded—apparently because Husband

stopped paying alimony after his surgeries—and because she has

not actually been earning the wage that was imputed to her. We

recently rejected a similar argument in Kidd v. Kidd, 2014 UT App

26, holding that it was appropriate for the trial court to base its

(continued...)

20130114-CA 8 2014 UT App 96

with respect to the life insurance policy. See Utah Code Ann. § 30-3-

5(8)(a)(iv), (c)(iv), (h)(iii)(A) (recognizing the length of the marriage,

actions taken by one spouse to substantially undermine the

financial stability of the other party, and a subsequent spouse's

financial ability to share living expenses as appropriate

considerations relating to an alimony award).

¶9 Husband further asserts that the trial court failed to consider

Wife's ability to meet her own needs in calculating the alimony

award. This assertion is simply not accurate. The trial court did

consider Wife's ability to work and in fact imputed income to her.

Husband's argument rests primarily on the fact that Wife has not

actually been working, but regardless of whether Wife is working,

she is deemed to be making the minimum wage she would earn at

a full-time job. By imputing income to her, the trial court required

her to meet that portion of her needs on her own. Imputing income

does exactly what Husband claims the court did not do: it holds

Wife accountable for meeting her own needs to the extent she is

capable. Even if Wife were working a full-time minimum-wage job,

it would not alter either her needs or income as found by the trial

court. The only difference would be that she would actually be

earning the money the imputation assumes she is earning.

¶10 Husband also argues that the needs Wife claims were based

on an inflated standard of living the parties had enjoyed only after

Husband's retirement, as a result of his working two part-time jobs

while collecting retirement benefits.5 Accordingly, Husband argues

Hansen v. Hansen

5. (...continued)

assessment of the recipient party's need on her projected needs,

despite the fact that she had cut back on expenses since the parties'

separation due to lack of income. Id. ¶¶ 22–24.

6. Husband did not challenge those findings in the context of the

original divorce decree either.

20130114-CA 9 2014 UT App 96

that the trial court erred by setting Wife's monthly needs at $4,064.

While it is surprising that Wife should have monthly needs that are

more than double that of Husband's, Husband has not challenged

the trial court's factual findings regarding Wife's needs.6 We

therefore decline to disturb those findings or the trial court's

ultimate calculation of Wife's needs.

II. It Was Within the Trial Court's Discretion To Employ the 25%

Tax Rate and To Equalize the Parties' Monthly Shortfalls in

Calculating Alimony for Purposes of the Modification.

¶11 Husband next asserts that the trial court erred by applying

a 25% tax rate to the parties' incomes rather than the 20% tax rate

it applied in the divorce decree. Husband argues that this approach

"is not fair because [Wife] now has a greater deficit [than] what she

had at the entry of the Decree of Divorce.” However, Husband has

failed to articulate any reason why the trial court should have been

obligated to employ the same tax rate it used in the divorce decree

when calculating the parties' incomes for purposes of the

modification. Given that the trial court applied the higher tax rate

to both Wife's and Husband's incomes, we fail to see how the result

was inequitable.

¶12 Husband's argument regarding the method the trial court

used to calculate alimony is similarly unpersuasive. Although the

trial court first purported to equalize the parties' monthly incomes

in the divorce decree and then relied on the parties' relative

shortfalls and surpluses in its clarification order, see supra note 2,

Hansen v. Hansen

7. Even if the equalization had been appropriate in calculating

alimony for purposes of the divorce decree, Husband has failed to

explain why the trial court would necessarily have been bound to

use the same method of equalization in the modification as it did

in the decree, so long as both methods were appropriate.

8. Given that Wife's monthly shortfall was greater than Husband's

ability to pay, an equalization analysis—and a greater alimony

award to Wife based on that analysis—would not necessarily have

been inappropriate in the context of the original divorce decree.

However, Wife never challenged the trial court's initial alimony

award, and we express no opinion on the propriety of that award.

Suffice it to say that the award as calculated did not require an

equalization analysis because the award did not exceed Husband's

ability to pay.

20130114-CA 10 2014 UT App 96

both of these analyses, which seemed to address equalization

principles, were ultimately irrelevant. Because the alimony award

in the original decree did not exceed Husband's ability to pay, the

traditional needs analysis was sufficient,7 and based on that

analysis, the trial court could have awarded alimony up to the

maximum of Husband's ability to pay so long as that amount did

not exceed Wife's need.8 See Sellers v. Sellers, 2010 UT App 393, ¶ 3,

246 P.3d 173 ("[C]ourts will equalize the incomes of the parties only

in those situations in which one party does not earn enough to

cover his or her demonstrated needs and the other party does not

have the ability to pay enough to cover those needs.”); see also

Jensen v. Jensen, 2008 UT App 392, ¶ 13, 197 P.3d 117 (explaining

that "the [recipient] spouse's demonstrated need must . . .

constitute the maximum permissible alimony award” and that

unless the circumstances are such as to make equalization

appropriate, "attempting to equalize the parties' income[,] rather

than going through the traditional needs analysis, is an abuse of

discretion” (alterations and omission in original) (citations and

internal quotation marks omitted)).

Hansen v. Hansen

20130114-CA 11 2014 UT App 96

¶13 The analysis undertaken by the court in modifying alimony

was necessarily different. Because the parties' combined income

was insufficient to meet their combined needs, an equalization

analysis was appropriate. The trial court calculated alimony in such

a way as to equalize the parties' monthly shortfalls. This approach

is consistent with calculations we have approved in other cases. See,

e.g., McPherson v. McPherson, 2011 UT App 382, ¶ 16, 265 P.3d 839

(recognizing "the trial court's discretion to make whatever . . .

adjustments it deems necessary to achieve an equalization of the

parties' standards of living” and advising the trial court to justify

any decision to assign "a disproportionate percentage of the

shortfall to one party”); Boyer v. Boyer, 2011 UT App 141, ¶¶ 4, 17

n.5, 20, 259 P.3d 1063 (approving the trial court's equalization of

the parties' monthly shortfalls for purposes of awarding

rehabilitative alimony). Thus, the trial court did not abuse its

discretion by equalizing the parties' shortfalls in calculating

alimony for the purposes of the modification.

III. The Trial Court Was Correct To Include Husband's SSDI in

Calculating Husband's Monthly Income.

¶14 Husband argues that the trial court erred by considering his

SSDI as part of his total income for purposes of calculating

alimony. In support of this contention, he relies on case law

instructing trial courts not to classify social security benefits as

marital property. See Olsen v. Olsen, 2007 UT App 296, ¶ 25, 169

P.3d 765. However, there is a difference between dividing social

security benefits as marital property and considering them as a

source of income for alimony purposes. When determining an

alimony award, "it is appropriate and necessary for [trial courts] to

consider all sources of income.” Wilde v. Wilde, 2001 UT App 318,

¶ 27, 35 P.3d 341 (alteration in original) (citation and internal

quotation marks omitted) (rejecting a recipient spouse's argument

that the trial court should not have considered her disability

benefits in calculating her ability to meet her own needs); cf. Bolliger

v. Bolliger, 2000 UT App 47, ¶¶ 20, 29, 997 P.2d 903 (holding that the

recipient spouse's receipt of social security benefits could constitute

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20130114-CA 12 2014 UT App 96

a material change of circumstances permitting modification of an

alimony award). Thus, the trial court was correct to include

Husband's SSDI in its calculation of Husband's income.

IV. The Fact that the Parties Were Living on Retirement Income

at the Time of the Divorce Does Not Affect the Trial Court's

Alimony Analysis.

¶15 Husband next argues that he should not be required to pay

alimony out of his retirement when Wife has already been awarded

half of the retirement as part of the parties' property settlement.

Although Husband acknowledges that we have previously

considered and rejected this argument in Jensen v. Jensen, 2007 UT

App 377, 173 P.3d 223, see id. ¶¶ 8–9, he nevertheless attempts to

distinguish his case on the basis that he and Wife were already

living on his retirement benefits at the time of the divorce, whereas

the parties in Jensen were divorced before the parties began

collecting retirement benefits, see id. ¶ 1. Husband has failed to

provide any support for this distinction. Indeed, we do not see how

a recipient spouse's ability to collect retirement benefits negates

any needs he or she may have in excess of those benefits. The trial

court in this case considered the retirement benefits in calculating

Wife's income and even imputed income to her, yet it still

determined that she had unmet need. Insofar as Husband was

capable of meeting that need—or, in this case, sharing the

shortfall—the trial court did not exceed its discretion in requiring

him to do so.

V. The Trial Court's Order Regarding the Retroactivity of the

Alimony Award Is Ambiguous.

¶16 The trial court ordered that the $872 monthly alimony

award would be retroactive "to the date that [Husband] was

administratively determined to be disabled.” The Social Security

Administration determined that Husband became disabled on

March 21, 2011, but this determination was not made until June 17,

Hansen v. Hansen

9. We acknowledge that if this interpretation reflects the trial

court's actual reasoning, it reveals an error in the trial court's

understanding of how far back retroactive alimony could be

ordered. Regardless of the trial court's intent, retroactive alimony

could not be awarded for any period prior to April 4, 2011. See

Utah Code Ann. § 78B-12-112(4) (LexisNexis 2012).

20130114-CA 13 2014 UT App 96

2012. Husband asserts that the court's order is ambiguous because

it could be interpreted as referring to either date. We agree.

¶17 The trial court explained its decision not to make the award

retroactive to an earlier date by pointing out that there was no

evidence indicating that Husband "could not work prior to the

time he was administratively determined to be disabled.” This

statement provides no clarity as to the trial court's intent. The fact

that the trial court contemplated the possibility of an earlier date

suggests that it intended to order the alimony retroactive to June

17, 2012, since the trial court lacked the authority to make alimony

retroactive to any date before approximately April 4, 2011, when

the petition to modify was filed. See Utah Code Ann. § 78B-12-

112(4) (LexisNexis 2012) (explaining that alimony may not be

retroactively modified to a date prior to the time the petition to

modify is served on the opposing party). On the other hand,

because the Social Security Administration set Husband's disability

date as March 21, 2011, the trial court's statement that the

administrative determination provided the first evidence of

disability tends to indicate an intent to make the alimony award

retroactive to that date. Because 9 the trial court's order is

ambiguous, we find it necessary to remand for the trial court to

clarify the date to which the modified alimony award is retroactive.

¶18 Husband also argues that if the trial court intended the

retroactive date to be June 17, 2012, then it exceeded its discretion

by determining that he was capable of working and paying the

original $1,000 monthly alimony award through that date. "[T]rial

courts have broad discretion” in determining whether to make an

award retroactive "for any or all of [the] period” between the time

Hansen v. Hansen

10. It is conceivable that the trial court's $4,500 credit to Husband,

which was based on his inability to work while undergoing and

recovering from surgery, was designed to compensate for the

greater alimony payments between April 4, 2011, and June 17, 2012.

Indeed, reducing alimony to $872 per month during that

approximately fifteen-and-a-half-month time period would have

saved Husband a total of $1,984 (($1,000 – $872) x 15.5),

significantly less than the $4,500 credit, which completely excused

Husband from making his $1,000 monthly alimony payment for

four and a half months due to his surgeries. On the other hand, it

is also conceivable that the trial court intended to grant Husband

the $4,500 credit in addition to making the alimony retroactive to

April 4, 2011. This should be clarified on remand.

20130114-CA 14 2014 UT App 96

the petition to modify is filed and the time the modification order

is entered. McPherson v. McPherson, 2011 UT App 382, ¶¶ 17–18,

265 P.3d 839. Nevertheless, the trial court's factual findings must

support its determination. Cf. id. ¶¶ 19–23 (reversing the trial

court's order refusing to modify a temporary alimony award

retroactively after the court found that the payor spouse was not

voluntarily underemployed where the only justification for the

amount of the award was the payor spouse's purported

underemployment). Should the trial court determine that June 17,

2012, is the appropriate retroactive date, its reasoning in

determining that Husband had the ability to pay alimony at the

rate of $1,000 per month between the time the petition to modify

was filed and June 17, 2012, should be explained in light of the

Social Security Administration's determination that Husband was

disabled as of March 21, 2011.10



* * *



their combined income was insufficient to meet their combined

needs. The trial court was not required to use the same tax rate in

the modification that it used for purposes of the divorce decree,

and the equalization analysis it undertook in the modification was

appropriate. Additionally, the trial court correctly considered

Husband's SSDI in calculating alimony and was not precluded

from awarding alimony based on Wife's receipt of her share of

Husband's retirement income. However, we consider the trial

court's retroactivity order to be ambiguous. Accordingly, we affirm

the trial court's alimony award but remand for the trial court to

clarify the date it intended for the modified award to become

effective.

¶19 The trial court appropriately considered the statutory

alimony factors of need, ability to pay, and ability to earn in

conducting its alimony analysis. Further, it was within the trial

court’s discretion to equalize the parties’ monthly shortfalls where