separate property

Property Division in Divorce, Pt 1

CLASSIFICATION OF SEPARATE PROPERTY AND MARITAL PROPERTY IN A UTAH DIVORCESegment #1: Inextricably Commingled Separate Property

By: Zachary C. Lindley, Esq.
Gallian Welker & Beckstrom, L.C., St. George, Utah

As discussed in the Introduction to this blog post series, one of the exceptions to the presumption that separate property retains its character is when such property has been “inextricably commingled”—a costly classification for the spouse to whom the separate property would otherwise belong.

Courts are given broad discretion in making the determination as to whether separate property has been commingled with marital property so as to lose its character.[i] The analysis is highly fact intensive and there is no common rule upon which to rely in every case.

The following list represents some of what a court may consider in determining whether to classify otherwise separate property as marital property:[ii]

  • Whether there was expenditure of marital funds on the proposed separate property.
  • Whether co-mingled funds were subsequently transferred into an account that would otherwise be classified as separate property.
  • Whether, despite being put in the name of a third-party, marital funds were used to open a separate account.
  • Whether an account that would otherwise be deemed separate property is funded with a party’s day-to-day income and expenses, including marital earnings.
  • Whether marital funds have been expended toward separate property in the form of loan payments, taxes, etc.
  • Whether a party’s marital income, along with that party’s separate earnings, have been deposited into an account, and then said account is used to pay both business and personal expenses.
  • Whether an account consisting of both marital and separate property is used to make payments toward the purchase or improvement of otherwise separate real property.
  • Whether the property has been maintained in segregated accounts and portfolios.
  • Whether the only change to the property is a result of conversion from one investment medium to another, g. stocks, bonds, real estate, etc.
  • Whether a party uses proceeds from the sale of an asset owned prior to marriage to purchase another asset during marriage, and then that party uses marital income to make installment payments or effectuate other upkeep on the asset purchased.
  • Whether, despite premarital and marital funds being deposited together, it is still possible to trace and separately identify the funds, therefore maintaining the character of the property rather than losing its “identity.”
  • Whether the property is only temporarily placed in a joint account.
  • Whether, regardless of the change of the property through certain transitions, the separate property remains traceable and identifiable.
  • Whether the property becomes so commingled that it is impossible to distinguish or apportion it.
  • Whether there are sufficient records or evidence from which a determination can be made as to which portion of the combined fund is separate and which is community property.
  • Whether, despite being commingled for only a short period of time, there is other evidence that the co-mingled property was intended to be a gift to the community or that its status would thereafter be altered.
  • Whether the separate funds are far in excess of community funds deposited in the same account, resulting in more easily effectuated tracing.

Takeaways for Family Law practitioners:

When advising clients, ensure that you acquire all supporting documentation of the transactions surrounding any claimed separate property that has potentially been commingled with marital property. If such property can still be identified and traced, in a manner that is understandable to the parties and the court, there is a chance it will retain its character and not be converted to marital property.

Look for Segment #2 of this blog post series regarding the other spouse’s augmentation, maintenance, or protection of separate property.

[i] See Clarke v. Clarke, 2012 UT App 328, 292 P.3d 76; Elman v. Elman, 2002 UT App 83, 45 P.3d 176.

[ii] The list provided herein is supported by the following authority: Sandusky v. Sandusky, 2018 UT App 34, ¶12, 417 P.3d 634; Liston v. Liston, 2011 Utah App 433, 269 P.3d 169; Keiter v. Keiter, 2010 UT App 169, 235 P.3d 782; Oliekan v. Oliekan, 2006 UT App 405, ¶23, 147 P.3d 464; Schaumberg v. Schaumberg, 875 P.2d 598, 603 (Utah Ct.App.1994); Dunn v. Dunn, 802 P.2d 1314, 1321 (Utah Ct.App 1990); Burt v. Burt, 799 P.2d 1166, 1169 (Utah Ct.App 1990); Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988); 37 Am. Jur. Proof of Facts 2d 379 § 8. Mode of transmutation—By commingling; In re Marriage of Shui and Rose, 132 Wash.App. 568, 125 P.3d 180 (2005); Myrland v. Myrland, 19 Ariz.App. 498, 508 P.2d 757 (1973); In re Marriage of Jafeman, 29 Cal.App.3d 244, 105 Cal.Rptr. 483 (1972).

property division

Property Division in Divorce–Introduction

CLASSIFICATION OF SEPARATE PROPERTY AND MARITAL PROPERTY IN A UTAH DIVORCE—Introduction: Three Circumstances Under Which Presumption of Retention of Separate Property Can Be Overcome

By: Zachary C. Lindley, Esq.
Gallian Welker & Beckstrom, L.C., St. George, Utah

Undoubtedly, property division is at the crux of all drawn-out and contentious divorces. The classification of separate and marital property raises both traditional and nuanced issues, while never arriving at a hard-and-fast rule on how to make a determination as to when otherwise separate property becomes marital property. This blog post, followed by its three corresponding segments, is intended to provide the reader with a foundation as to how courts in Utah have classified separate and marital property under a diverse set of facts.

During a property division in Utah at the dissolution of a marriage, there is an “overriding consideration…that the ultimate division be equitable—that property be fairly divided between the parties.”[i] When so dividing property, there is a general presumption that each party retain his or her separate property—“married persons have a right to separately own and enjoy property, and that right does not dissipate upon divorce.”[ii] Marital property ordinarily includes all property acquired during the marriage, while separate property typically includes premarital property, gifts, inheritances, which also includes any appreciation that may accrue during the marriage.[iii] However, Utah courts have consistently found otherwise separate property is “not totally beyond the court’s reach.”[iv]

There are three circumstances identified in Utah under which the presumption of retention of separate property can be overcome: (1) the separate property has been inextricably commingled so as to lose separate property character; (2) the other spouse has augmented, maintained, or protected the separate property; and (3) in extraordinary circumstances when equity so demands.[v] Courts are given broad discretion in dividing property upon dissolution of the marriage.[vi]

In the following three (3) segments to this introductory blog post, we will explore each of the aforementioned exceptions to presumption of retention of separate property—namely, (1) commingling, (2) augmentation or maintenance, and (3) extraordinary circumstances.

 

[i] Granger v. Granger, 2016 UT App 117, ¶15, 374 P.3d 1043 (internal citations and quotations omitted); see also Utah Code Ann. § 30-3-5.

[ii] See Lindsey v. Lindsey, 2017 UT App 38, ¶32, 392 P.3d 968 (internal citations and quotations omitted).

[iii] Id. at ¶31.

[iv] See Sandusky v. Sandusky, 2018 UT App 34, ¶12, 417 P.3d 634.

[v] See Dunn v. Dunn, 802 P.2d 1314, 1320 (Utah Ct.App 1990); see also Mortensen v. Mortensen, 760 P.2d 304, 308 (Utah 1988).

[vi] See, e.g., Clarke v. Clarke, 2012 UT App 328, 292 P.3d 76; Elman v. Elman, 2002 UT App 83, 45 P.3d 176.

workers' compensation

Just How Inclusive is Utah’s Workers’ Compensation Statute?

By Zachary C. Lindley

On September 4, 2019, the Utah Supreme Court showed just how inclusive U.C.A. § 34A-2-401 (workers’ compensation statute) really is by clarifying what it takes to satisfy “arising out of” and “in the course of” in determining entitlement to workers’ compensation benefits—elements a claimant is required to establish.   

In Intercontinental Hotels Group v. Utah Labor Commission, 2019 UT 55, the Supreme Court upheld the Utah Labor Commission’s determination of a claimant’s entitlement to workers’ compensation benefits after injuring her foot in the parking lot while walking to work. To fully appreciate the Supreme Court’s analysis, it is important to understand the arguments presented by Intercontinental Hotels Group (“IHG”) in opposition.

IHG argued the elements of § 34A-2-401 had not been satisfied because (1) the claimant’s accident did not arise out of her employment, since the injury did not stem from an employment-related risk, and (2) the accident did not occur in the course of employment, since she was traveling to work at the time and was not on its premises. IHG argued, first, the arising out of element introduces a causation element that limits compensation to only those injuries sustained as a result of exposure to risk to which the general public is not exposed. IHG then argued the “going-and-coming rule” (i.e. not entitled to workers’ compensation while traveling to or from employer’s premises) prevented claimant from satisfying the second element—in the course of—barring entitlement to benefits. It argued the “premises rule,” relied upon by the Utah Labor Commission, is an exception to the going-and-coming rule, and that, after the Supreme Court’s decision in Jex v. Utah Labor Commission, 2013 UT 40, 306 P.3d 799, the Utah Labor Commission failed to satisfy either of the two-factors of the premises rule—benefit conferred and employer control.

First, as to IHG’s arise out of argument, the Supreme Court agreed with IHG that arising out of introduces a causation element to the statute. However, the Supreme Court rejected IHG’s more restrictive view.  Instead, the Supreme Court, citing the two-part test in Allen v. Industrial Commission, 729 P.2d 15 (Utah 1986) (legal and medical causation), stated legal causation is satisfied if the accident occurs as a “natural consequence” of the employee’s employment. More specifically, “a slip-and-fall accident arises out of employment where the employee slips and falls in a place, and at a time, in which the employee would not otherwise have been but for the employee’s employment obligations.” Intercontinental Hotel Groups, 2019 UT 55, ¶18. A standard less restrictive than tort causation.

Next, as to IHG’s in the course of argument, the Supreme Court found IHG erred when it assumed the going-and-coming rule applied to a case involving accidents on an employer’s premises. The going-and-coming rule only applies to injuries occurring off an employer’s premises. In other words, where an injury occurs off-premise, entitlement to workers’ compensation will depend on the two-factor test in Jex—benefit conferred and employer control. The Supreme Court found this assumption understandable, as previous cases discussed the going-and-coming rule as a distinct exception to the premises rule—it is not.  

In so finding, the Supreme Court made it clear:

[W]here an employee is injured on his or her employer’s premises, the going-and-coming rule does not apply, and the employee is considered to be in the course of employment.

* * *

[I]f an employee is injured while passing, with the express or implied consent of the employer, to or from his work by a way over the employer’s premises, or over those of another in such proximity and relation as to be in practical effect a part of the employer’s premises, the injury is compensable.

Intercontinental Hotels Group, 2019 UT 55, ¶¶34, 37 (internal citations and quotations omitted).

Takeaways for L&E practitioners:

  1. Causation in workers’ compensation is a less restrictive standard than that required in causes of action based in tort;
  2. The premises rule is not a distinct exception to the going-and-coming rule;
  3. The going-and-coming rule does not apply if an injury occurred on the employer’s premises; and 
  4. An employer’s premise includes not only that property owned by the employer but also may include any such premises in close proximity. 

 

crosswalks

Invisible Crosswalks

On a cold December night, a young man walks down the sidewalk of a side street to its intersection with a major road. There are no traffic lights, stop signs, painted lines, or markings of any kind at the intersection. A hundred feet down the major road is a traffic signal with a painted crosswalk and electronic signage for pedestrians. The young man intends to cross the major road to a enter shopping plaza directly across the street from where he now stands. Rather than brave the cold to walk down to the controlled intersection, he immediately starts crossing the major road, which contains two lanes of traffic for each direction, plus a middle turn lane, with sidewalks on both sides of the roadway. When he gets to the middle turn lane, suddenly, a vehicle exiting from the roadway at the shopping center across the street turns left onto the major road. Not seeing the young pedestrian, the vehicle hits the young man and sends him flying 20 feet through the air, finally landing on his back in the roadway.

The driver who hit the young man is frantic, frightened, and upset. He thinks, how could this young man jaywalk across the street right here? The driver runs over to the young pedestrian lying on the road and yells that he should have known better.

But was the young pedestrian jaywalking? There was no marked crosswalk where he crossed, and there was an electronic crossing with a painted crosswalk just half a block up the road. However, the lack of a painted crosswalk does not answer the question. In Utah, legal crosswalks do not necessarily have to be painted or otherwise marked as crosswalks. UCA Sections 41-6a-1002(3) and 41-6A-1003(1) expressly reference unmarked, or implied, crosswalks. The cases interpreting the statute have ruled that a legal, unmarked crosswalk exists at an intersection where sidewalk is present on both sides of the intersection. See, e.g., Langlois v. Rees, 951 P. 2d 638 (Utah 1960). Thus, in our example, the lack of a painted crosswalk did not render the young pedestrian a jaywalker.

The young pedestrian was crossing an intersection with vehicular access on both sides of the main road, and with pedestrian sidewalks on both sides of the road. Consequently, the young pedestrian was perfectly within his rights to cross the road where he did. He was not a jaywalker. He did not violate the law. He did nothing wrong. The driver of the car that crashed into the pedestrian is fully at fault for the collision and for the pedestrian’s injuries. The driver’s insurance company will be responsible to pay for the damages of the pedestrian, up to the limit of the driver’s insurance policy. The police officer who investigates the collision will have to decide whether to issue any type of traffic citation or criminal misdemeanor citation to the driver of the vehicle.

Furthermore, as a corollary, one should not presume that drivers on Utah roads have no duty to yield to jaywalkers. UCA §41-6a-1006 specifies that all drivers of vehicles, at all times, must “avoid colliding with a pedestrian.” This statute makes perfect sense. A pedestrian versus a vehicle is not a fair fight. Just because a person is jaywalking does not mean that a driver has no obligation to stop for, or avoid striking, the pedestrian. Because the risk of catastrophic injury and death to a pedestrian if hit by a moving vehicle is so great, the law imposes a duty on all drivers to watch for and avoid pedestrians, regardless of whether the pedestrian should be walking at that particular location or not. If, in the example above, the young pedestrian was not crossing at an unmarked crosswalk but was crossing the street at another location where there was no intersection with pedestrian walkways on both sides, he would have violated the law by jaywalking. And if the same vehicle in our example were to strike him at a location other than in a legal marked or unmarked crosswalk, then liability and fault for the collision likely would be shared by both the driver and the pedestrian. The driver would be at fault for failing to see and avoid a pedestrian, and the pedestrian would also be at fault for jaywalking—crossing the street outside of a legal crosswalk or other designated pedestrian pathway.

In sum, in Utah, the lack of a painted crosswalk or pedestrian markings at an intersection does not mean that no crosswalk exists. At any intersection, even if there is no marked or painted crosswalk, there is an unmarked crosswalk as a matter of law if, at the intersection, there is a pedestrian walkway on both sides of the intersection. As long as the pedestrian crosses approximately where a painted crosswalk would be placed if one were present at that intersection, the pedestrian is wholly within his rights to cross at the unmarked crosswalk. Drivers must always be on the lookout for a pedestrian, whether in an unmarked crosswalk, a marked crosswalk, or anywhere else on the road. If a pedestrian is in a legal, unmarked crosswalk, or other designated, legal crossing zone, a driver striking the pedestrian likely will be fully at fault for the collision.

 

The above article does not constitute legal advice to any person or for any case. It is for general informational purposes only and does not constitute or create any attorney-client relationship between the author and any reader of the article.