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MacDonald v. MacDonald

Supreme Court of Utah

September 5, 2018

Kirkpatrick MacDonald, Petitioner,
v.
Lee Anne MacDonald, Respondent.

          On Certiorari to the Utah Court of Appeals Third District, Silver Summit The Honorable Kara L. Pettit No. 104500031

          Troy L. Booher, Julie J. Nelson, Bart J. Johnsen, Salt Lake City, for petitioner

          Matthew A. Steward, Shannon K. Zollinger, Salt Lake City, for respondent

          Associate Chief Justice Lee authored the opinion of the Court, in which Chief Justice Durrant, Justice Himonas, Justice Pearce, and Justice Petersen joined.

          Lee Associate Chief Justice

         ¶1 Kirkpatrick MacDonald (MacDonald) filed a petition to vacate or reduce the alimony award to his former spouse Lee Anne MacDonald (now known as Lee Anne Fahey). The district court denied MacDonald's petition under Utah Code section 30-3-5(8)(i)(i). In doing so it applied a standard set forth in a line of cases from our court of appeals, which allows a modification of an alimony order only if there is a substantial change in circumstances that was not "contemplated" in the original decree of divorce. See Bolliger v. Bolliger, 2000 UT App 47, ¶ 11, 997 P.2d 903. That decision was affirmed on appeal to our court of appeals, but under a different standard.

         ¶2 The court of appeals repudiated the contemplated in the decree standard set forth in Bolliger and other cases. It concluded that those cases had been overtaken by the text of Utah Code section 30-3-5(8)(i)(i), which allows for a modification only where there is "a substantial material change in circumstances not foreseeable at the time of the divorce." But it affirmed the district court on the ground that the change in circumstances alleged by MacDonald was foreseeable at the time of the divorce in this case.

         ¶3 MacDonald asks us to reverse the court of appeals on the grounds that (1) the contemplated in the decree standard should be read into the statute by virtue of the "prior construction" canon of interpretation, see Christensen v. Indus. Comm'n, 642 P.2d 755, 756 (Utah 1982) (discussing the prior construction canon); and (2) the change in circumstance identified by MacDonald was neither contemplated in the divorce decree nor foreseeable at the time of the divorce. We affirm, while clarifying the standard that applies under Utah Code section 30-3-5(8)(i)(i).

         ¶4 We hold that there is no basis in the prior construction canon for the contemplated in the decree standard set forth in Bolliger and other cases. We base that conclusion on the absence of the core predicate for this canon-an authoritative construction by the courts of the operative language of the statute. Neither Bolliger nor any of the other cited cases ever attempted to interpret the text of the statute. They simply perpetuated a standard set forth in a prior line of cases (and established under a prior statutory regime). And without an authoritative construction of the statute there is no basis for the prior construction canon.

         ¶5 To this extent we affirm the standard embraced by the court of appeals. We hold that the plain language of the statute applies- and that the question is whether an alleged substantial change was "foreseeable" at the time of the divorce, not whether it was "contemplated" in the divorce decree. But we also raise a point of clarification that is not addressed explicitly in the decision of the court of appeals. We clarify that the inquiry of foreseeability is limited to the universe of information that was presented in the record at the time the district court entered the divorce decree.

         ¶6 We also affirm the court of appeals' application of the legal standard to the facts of this case under this clarified standard. We hold that MacDonald failed to carry his burden of establishing, on the basis of the record that was before the court that entered the divorce decree, that the change that he alleges was not foreseeable.

         I

         ¶7 MacDonald filed for divorce from Fahey in February 2010. MacDonald and Fahey entered into a mediated settlement agreement, which was fully incorporated into a divorce decree. That agreement required MacDonald to pay alimony to Fahey through December 2020 (or earlier if she remarried, cohabited, or died). Per the agreement, alimony payments increased from $2, 000 per month to $6, 000 per month after December 2012-the last month that MacDonald owed a monthly $4, 000 property settlement payment to Fahey.

         ¶8 The agreement also divided the marital real property. Fahey acquired ownership to three unencumbered lots. MacDonald agreed to pay the homeowner's association fees and property taxes on those lots as a loan, for five years or until Fahey sold one of the lots, at which time Fahey would reimburse MacDonald.

         ¶9 After the settlement agreement was signed and the divorce decree was entered one of Fahey's lots sold for $1, 425, 000. MacDonald "was directly involved in and responsible for the sale." Both MacDonald and Fahey agreed to that sale prior to entry of the divorce decree. And the sale closed shortly after the decree was entered. Fahey placed most of the proceeds from the property sale into an investment account that she previously opened with the $200, 000 financial settlement MacDonald paid Fahey before mediation. That investment account now produces about $45, 000 in annual income for Fahey.

         ¶10 In light of the property sale and Fahey's new income, MacDonald filed a petition to vacate or reduce the alimony award under Utah Code section 30-3-5(8)(i). The district court denied MacDonald's petition. In so doing it applied a test from a line of cases handed down by the Utah Court of Appeals, citing Wall v. Wall, 2007 UT App 61, 157 P.3d 341; Moon v. Moon, 1999 UT App 12, 973 P.2d 431; and Moore v. Moore, 872 P.2d 1054 (Utah Ct. App. 1994). That test grants the district court continuing jurisdiction to modify a divorce decree when a substantial change of circumstances is "not contemplated" by the decree itself. The court concluded that the divorce decree "expressly contemplate[d] that [Fahey] would sell the lots and use the proceeds of the sales of those lots to pay her expenses[, ]" therefore precluding the court from modifying the alimony award.

         ¶11 MacDonald appealed the denial of the petition. The court of appeals affirmed. But it based its decision on a different standard than that applied by the district court. It interpreted Utah Code section 30-3-5(8)(i)(i) to warrant a modification of alimony only when "a substantial material change in circumstances [was] not foreseeable." MacDonald v. MacDonald, 2017 UT App 136, ¶ 12, 402 P.3d 178. And it defined "'foreseeable' as 'being such as may reasonably be anticipated.'" Id. ¶ 11 (citing Webster's Third Int'l Dictionary 890 (1971)). "From the linguistic and structural position of this term in the statute" the court of appeals inferred "that the legislature purposely did not use the verb 'foresee' in its past tense, 'foreseen.'" Id. It also found that "distinction . . . important." Id. It concluded that "[i]f the provision required that the changed circumstances warranting modification were not actually foreseen, then a petitioner would bear the burden of showing that when the decree was entered the parties or the court had not actually contemplated that such a change would occur." Id. "Instead," the court concluded, "the legislature employed the adjective 'foreseeable, '" which in the court of appeals' view "includes not only those circumstances which the parties or the court actually had in mind, but also circumstances that could 'reasonably be anticipated' at the time of the decree." Id.

         ¶12 In so holding the court of appeals rejected the standard that MacDonald sought to import from a line of prior court of appeals cases-most significantly Bolliger v. Bolliger, 2000 UT App 47, 997 P.2d 903. MacDonald had cited Bolliger for the proposition that a successful petition for a change in alimony must show that "a substantial material change of circumstances has occurred 'since the entry of the decree and not contemplated in the decree itself.'" Id. ¶ 11 (emphasis removed) (quoting Durfee v. Durfee, 796 P.2d 713, 716 (Utah Ct. App. 1990)). Yet the court of appeals rejected the Bolliger standard on the ground that the court in that case had not addressed the governing statutory language, enacted by the legislature in 1995, but instead had simply carried forward a standard that had been adopted in our case law before the enactment of the governing statute. MacDonald, 2017 UT App 136, ¶ 16 (concluding that "the Bolliger court did not address whether the 1995 amendment altered the applicable standard" and holding that "the standard did change and we apply that standard today").

         ¶13 The court of appeals then affirmed the district court's decision under the statutory standard. It did so on the ground that it could not "say that it was unforeseeable that Fahey would sell some of the real estate and invest the proceeds" in the manner that she had done. Id. ¶ 18. To support that conclusion the court of appeals emphasized the following points: (a) the "express terms" of the divorce decree "discussed certain obligations that would arise if and when Fahey sold the [p]roperty," thus leaving "no doubt" that the sale of the property was foreseeable, id. ¶ 19; (b) a "reasonable person will normally act in a prudent manner to protect his or her financial interests and security," such that it is "not merely foreseeable" but "likely" that a person in Fahey's position would assure that the proceeds of a real estate transaction "would not be frittered away or left to gather dust," id. ¶ 18; and (c) Fahey invested the $200, 000 that was paid to her by MacDonald "in an investment account," such that it "is hardly a stretch to foresee that if real property were liquidated the proceeds of that sale might be deposited in that same account for investment purposes," id. In light of "these facts" the court of appeals held that "the trial court did not exceed its discretion when it concluded that MacDonald failed to show an unforeseeable substantial material change in circumstances from the time" of the divorce decree. Id. ¶ 19.

         ¶14 MacDonald filed a petition for certiorari. The threshold question presented is a question of law-as to the governing standard on a petition to modify an alimony award. Our review of such a question is de novo. In re Baby B., 2012 UT 35, ¶ 41, 308 P.3d 382. We are also asked to consider the propriety of the court of appeals' application of the governing standard to the facts of this case. Our review of the court of appeals' decision is for correctness. State v. Levin, 2006 UT 50, ¶ 15, 144 P.3d 1096.

         II

         ¶15 The court of appeals applied a standard that asks not whether a given change in circumstances was "contemplated" in a divorce decree but instead whether that change was "foreseeable" at the time the decree was entered. MacDonald v. MacDonald, 2017 UT App 136, ¶¶ 17-19, 402 P.3d 178. It defined foreseeable as that which "may reasonably be anticipated." Id. ΒΆ 11 (quoting Webster's Third Int'l Dictionary 890 (1971)). And it concluded that the district court did not exceed its discretion in concluding that MacDonald failed to show that Fahey's sale of the property and investment ...


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