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Rosser v. Rosser

Court of Appeals of Utah

January 10, 2019

Holly Rebecca Rosser, Appellee,
v.
Ronald Lee Rosser, Appellant.

          Sixth District Court, Panguitch Department The Honorable Paul D. Lyman No. 154600013

          Steven W. Beckstrom, Attorney for Appellant

          Stephen D. Spencer, Attorney for Appellee

          Judge Ryan M. Harris authored this Opinion, in which Judges David N. Mortensen and Diana Hagen concurred.

          OPINION

          HARRIS, JUDGE

         ¶1 Ronald Lee Rosser and Holly Rebecca Rosser divorced in 2016 pursuant to a stipulated decree of divorce that was the result of mediation. One of the points of contention in their divorce case was how the parties would divide their 2015 tax obligations. At the conclusion of the mediation, the parties apparently agreed to split the 2015 tax liability equally. A few weeks later, however, both parties executed a stipulated decree of divorce that obligated Holly[1] to "pay any tax liabilities . . . for the year 2015." Later, after Ronald refused to pay any of the outstanding 2015 tax obligation, Holly obtained an order to show cause and asked the district court to hold Ronald in contempt of court for refusing to pay his share of the 2015 taxes. The court granted Holly's request and found Ronald in contempt. Ronald now appeals, and we agree with Ronald that the actions he was found to have taken do not constitute statutory contempt of court. Accordingly, we vacate nearly the entirety of the district court's contempt order, and remand this case for further proceedings.

         BACKGROUND

         ¶2 After twenty-five years of marriage, Holly and Ronald separated in 2014, and Holly later petitioned for divorce. Over the course of their marriage, the parties acquired various assets, including several vehicles, a residence in Panguitch, Utah, two other parcels of real property, and a number of franchise restaurants that were owned by a company in which Holly and Ronald each held a 50% stake. In addition to these assets, the parties also had certain debts, including a $29, 902.71 tax obligation owed to the IRS for the 2015 tax year. The parties took opposing positions regarding the division of some of these assets and liabilities.

         ¶3 In an attempt to resolve their differences prior to trial, the parties agreed to participate in mediation on June 16, 2016. During that mediation session, the parties were able to come to an agreement regarding all of their issues, including the 2015 tax obligation. This consensus was memorialized in a three-page written agreement (the Mediation Agreement) that was signed by all parties immediately upon completion of the mediation. With regard to the tax obligation, the Mediation Agreement states as follows: "IRS debt from 2015, 50% Ron and 50% Holly." The parties also agreed that Ronald would be entitled to certain "rebates" that the couple's business received.

         ¶4 In the weeks following the mediation, Holly paid her half of the 2015 tax obligation. For reasons unclear from the record, Ronald did not. However, Ronald did contact the parties' accountant and identify several additional tax deductions that he thought could potentially reduce the parties' 2015 tax liability. Acting on Ronald's instructions, in July 2016 the accountant prepared an amended 2015 tax return for Ronald and Holly. In preparing that return, however, the accountant mistakenly assumed that the entire previous 2015 tax obligation of $29, 902.71 had already been paid, when in reality only half of it (Holly's half) had actually been paid. As a result, the amended tax return indicated that not only did Ronald and Holly not owe any taxes for 2015, they were actually due a tax refund of approximately $7, 900. Holly would later testify that, operating on the assumption that Ronald had paid his half of the preexisting 2015 tax obligation as she had done, she believed that the amended returns were accurate and that the parties were in fact owed a refund. For his part, Ronald would later testify that he also believed the amended tax returns were accurate, but premised this belief on a different assumption: that Holly had paid the entirety of the 2015 tax obligation in consideration for other income she had negotiated from him. Apparently both under the belief that the amended returns were accurate, the parties signed those returns on or about August 22, 2016.

         ¶5 On or about August 4, 2016-after the amended tax returns had been prepared and reviewed, but before either party actually signed them-the parties and their attorneys all signed a Stipulated Motion for Entry of Findings of Fact and Conclusions of Law and Final Decree of Divorce. With respect to the 2015 tax obligation, that stipulation stated-in contrast to the Mediation Agreement-that Holly "shall be solely entitled to receive any refund resulting from the amended returns, and shall also be responsible to pay any tax liabilities resulting to any of the Parties for the year 2015." A few days later, on August 8, 2016, the district court signed a Final Decree of Divorce (the Decree) in accordance with the parties' stipulated motion. Under the terms of the Decree, Holly "shall be solely entitled to receive any refund resulting from the amended [2015 tax] returns, and shall also be responsible to pay any tax liabilities resulting to any of the Parties for the year 2015." The Decree also states that Ronald is entitled to the rebates as agreed upon at the mediation.

         ¶6 Holly later discovered that the amended tax returns were inaccurate, and that instead of being entitled to a $7, 900 refund for tax year 2015, the parties still owed $7, 174.98. Under the terms of the recently-entered Decree, Holly was obligated to make this payment, but she considered that result unfair since she had already paid her half of the 2015 tax obligation, as the parties had agreed at mediation, and Ronald had not. In part because she felt as though Ronald owed her money related to the 2015 tax obligation, she declined to pass along to Ronald certain rebate checks she received to which Ronald was entitled under the terms of the Decree.

         ¶7 On November 21, 2016, Holly filed a Motion for Order to Show Cause, alleging that Ronald had defrauded her and asking the court to order Ronald to pay his share of the parties' 2015 tax obligations as well as her attorney fees in bringing the motion. A few weeks later, Ron filed his own Motion for Order to Show Cause, alleging that Holly had willfully failed to comply with the provision of the Decree that concerned the rebates. Eventually, the district court scheduled both motions for an evidentiary hearing. During that hearing, Holly testified that Ronald had misled her into believing that he had paid his share of the parties' 2015 tax obligation assigned to him pursuant to the Mediation Agreement. Ronald, by contrast, testified that Holly was not only aware that he had not done so, but that after mediation she had agreed to pay the entirety of the tax obligation. With regard to the rebates, Holly acknowledged that she had received rebate checks to which Ronald was entitled under the Decree, but stated that she had not passed those along to Ronald because she felt that he owed her money related to the 2015 tax obligations.

         ¶8 At the conclusion of the hearing, the court found that Ronald deceived Holly by allowing her to believe that he had paid his share of the tax obligation, and that Holly had not in fact agreed to pay it herself. The court then found Ronald in contempt of court for "his deliberate deceit and failure to act as agreed between the parties on June 16, 2016," and ordered Ronald to pay Holly approximately $15, 000 plus reasonable attorney fees, which were later determined to be $4, 000. The court also found that Holly had "failed to make" the rebate payments to Ronald as required by the Decree, but that Holly's conduct "did not intentionally violate the Decree" because Holly was "merely reacting to [Ronald's] deceit." Accordingly, the court allowed Holly to "offset" the rebate amounts she owed Ronald against the amount it determined Ronald owed her on the tax issue. After quantifying the amount of attorney fees to which it believed Holly was entitled, the court ...


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