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White v. White

Court of Appeals of Utah

August 3, 2017

Dean White, Appellant,
Julie Dawn White, Appellee.

         Fourth District Court, Provo Department The Honorable Darold J. McDade No. 094401518

          Dean White, Appellant Pro Se.

          Terry R. Spencer, Attorney for Appellee.

          Judge Stephen L. Roth authored this Opinion, in which Judge Kate A. Toomey concurred. Judge J. Frederic Voros Jr. concurred, with opinion. [1]

          ROTH, Judge.

         ¶1 As part of the division of marital property in divorce proceedings, the district court awarded Dean White all interest in a limited liability company, which owned a residential property as its only asset. The primary issue on appeal is whether the district court properly denied Dean's claim to a homestead exemption in proceeds from the later sale of that residence. Dean also raises an issue regarding the allegedly improper service of pleadings upon him, and he requests an award of attorney fees on appeal. We affirm the district court's judgment and deny the request for attorney fees.


         ¶2 Dean White and Julie Dawn White[2] divorced in February 2010. Several years before their divorce, the parties purchased a rental property in Lehi, Utah (the Property). In 2007, the parties formed a limited liability company known as "The White Empire, LLC" (the LLC), having the parties as its only members. They then transferred ownership of the Property to the LLC.

         ¶3 The divorce decree awarded the LLC and "all right, title and interest" in the Property to Dean, and he began residing in the Property. Dean removed Julie as a member of the LLC, but the Property remained titled in the LLC's name, with Dean as the sole member.

         ¶4 Between the entry of the divorce decree in early 2010 and November 2015, the district court entered various judgments against Dean totaling approximately $53, 000. Dean failed to satisfy those judgments.

         The Charging Order

         ¶5 In an attempt to recover on the judgments, Julie filed a motion in November 2015 seeking a charging order against Dean's interest in the LLC pursuant to section 48-3a-503 of the Utah Revised Uniform Limited Liability Company Act. The charging order would have, if granted, effectively placed a lien upon Dean's membership interest in the LLC. See Utah Code Ann. § 48-3a-503(1) (LexisNexis 2015).[3] Julie requested that the court order the foreclosure of the lien and the sale of Dean's interest in the LLC if he did not satisfy her judgments against him within thirty days.

         ¶6 Dean responded that the Property was subject to a homestead exemption pursuant to Utah Code sections 78B-5-503 and -504. He represented that he had filed a Homestead Exemption Declaration against the Property about two weeks after Julie filed her motion. In the declaration, he claimed the Property as his primary personal residence, which entitled him under the statute to a $30, 000 exemption from judicial liens, execution, or forced sale. Dean asserted that taking into account the mortgage on the Property, its net value amounted to approximately $28, 000, or less than the $30, 000 statutory cap. And, according to Dean, because the Property was the LLC's only asset, his homestead exemption prevented Julie from executing on his LLC membership to recover any portion of her judgments against him.

         ¶7 In January 2016, before the hearing scheduled on Julie's charging order motion, the LLC sold the Property. Dean then dissolved the LLC. As the LLC's sole member, Dean received the $8, 621.30 in net proceeds from the sale.

         ¶8 Julie filed a motion asserting that the sale of the Property amounted to a fraudulent transfer under the Utah Fraudulent Transfer Act and requesting that the court either void the sale or "issue a writ of garnishment on any account held in [Dean's] name to which [Dean] transferred any of the sale proceeds" to allow her to collect on the judgments against him. Dean argued in response that the court should dismiss Julie's request for a charging order because the LLC had been dissolved and the sale proceeds were covered by the homestead exemption, which left Julie with nothing from which to recover.

         ¶9 The assigned commissioner held a hearing on the parties' motions. The commissioner determined that the sale of the Property was fraudulent and conducted in bad faith. The commissioner also determined that Dean was not entitled to a homestead exemption, because the Property was held in the LLC's name, not his, and because a homestead exemption could not be claimed "against a former spouse." The commissioner recommended that Dean be ordered to pay Julie all net proceeds from the sale of the Property.

         ¶10 Dean objected to the commissioner's recommendation and requested a hearing before the district court. The district court entered an order accepting the commissioner's recommendations but also scheduled a hearing regarding Dean's objections. At the objection hearing, Dean argued that he was entitled to a homestead exemption on the sale proceeds because the Property was his primary personal residence. He also contended that the identity of a home's titleholder or owner is irrelevant because the homestead exemption statutes do not "make any restrictions on who the owner is, who the house is titled to, anything of that nature." Julie responded that the commissioner correctly determined that Dean was not entitled to a homestead exemption because the Property "was in the name of a company" that Dean owned, not Dean himself. She also argued that according to our holding in Wiles v. Wiles, 871 P.2d 1026 (Utah Ct. App. 1994), "a homestead exemption doesn't apply in a domestic case."

         ¶11 The district court denied Dean's objection, concluding that because the Property was not in Dean's name, he was not entitled to a homestead exemption in the Property or in the proceeds from its sale. The court also agreed that Wiles precluded Dean from claiming a homestead exemption in connection with divorce proceedings.

         The Improper Service Allegation

         ¶12 Dean alleges that Julie failed to properly serve him one legal memorandum and two proposed orders, all related to the district court's ultimate determination that he was not entitled to the exemption. The memorandum to which he refers was Julie's reply to his assertion of the homestead exemption. In it she argued that Wiles precluded the homestead exemption from being used against ex-spouses. The two proposed orders were submitted by Julie following, respectively, the charging order hearing before the commissioner and the hearing before the district court on Dean's objection to the commissioner's recommendation.

         ¶13 Dean asserts that he notified both the commissioner and the district court that he had not received the legal memorandum or the proposed orders from Julie and requested that she be ordered to provide verification that she had served them. Dean contends that neither the commissioner nor the district court required Julie to provide verification and that, as a ...

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