Carma is a wonderful and valuable employee. Get to know her better below!
CLASSIFICATION OF SEPARATE PROPERTY AND MARITAL PROPERTY IN A UTAH DIVORCE—Segment #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).
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.
By Michael I. Welker, Esq.
Wheels of Justice is a non-profit corporation, organized by a group of attorneys who are cycling enthusiasts, to raise money for, increase awareness of, and provide limited pro bono legal services to non-profit organizations that devote their time and passion to the prevention and reduction of child abuse, and assisting victims of abuse. Problems addressed by these institutions include child abuse, bullying, dysfunctional relationships, and internet safety threats. The organizations include: Prevent Child Abuse Utah, Friends of the Salt Lake County Children’s Justice Center, Operation Underground Railroad, and The Utah Domestic Violence Coalition. Each of these organizations fights, prevents, and ameliorates the effects of child abuse. These organizations are very good at what they do. They need our support.
Wheels of Justice organizes and operates fundraising bicycle rides in support of these organizations. Participation is not limited to lawyers. Nor is participation limited to accomplished or competitive-level riders. Any cyclist at any level can participate in the rides. Different rides include street cycling, mountain biking, or off-road cycling.
Wheels of Justice’s biggest annual event is called the “Ain’t No Mountain High Enough” ride held each September. This difficult ride sends the riders up all 5 of Salt Lake County’s riding canyons (Little Cottonwood, Big Cottonwood, Millcreek, Emigration, and City Creek) in one day. Many participate-few finish. All have a great time, regardless of how much of the course they complete. The ride is meant as a metaphor, showing children and their families who have experienced abuse that they can overcome hard challenges, and that victims, whether they suffered personal injury or emotional and psychological injury, can overcome, survive, heal, and thrive.
Wheels of Justice not only collects financial donations, but also sells its team “kit” and other merchandise to raise funds. In conjunction with its events, Wheels of Justice also provides food, water bottles, and other items. Every event is fun for the whole family.
Wheels of Justice is growing. Membership is free and is open to all. Ride participation is free and is open to all. Running enthusiasts are starting to get involved with Wheels of Justice, and we soon may see running events added to the schedule of events. There is also talk about organizing a sister organization called “Wings of Justice” specifically for runners. One thing is for sure, Wheels of Justice will continue to fight the plague and effects of child abuse, and so will Gallian Welker & Beckstrom.
(The statements and views expressed herein are the views of Gallian Welker & Beckstrom. Gallian Welker & Beckstrom does not represent Wheels of Justice, and is not a spokesperson for Wheels of Justice. The views and statements expressed herein are solely the views of the author and are not necessarily the views of Wheels of Justice).