UT Husband Not Guilty of Dissipation Despite Purchase of Yacht, Jet Late in Rocky Marriage
Utah case summary on property division & dissipation in divorce.
Candi Wadsworth v. Guy L. Wadsworth
The husband purchased two restaurants, a plane, a cabin, and a yacht.
The husband and wife in this Utah case were married in 1979. In 1991, the husband started a construction company which turned into a multimillion-dollar enterprise. They also had numerous other business interests.
In 2009, the wife suspected that the husband was involved in an affair and filed for divorce. They reconciled, but a year later, the husband admitted to the infidelity, and the wife filed for divorce again.
Between the two filings, the husband purchased two restaurants, a plane, a cabin, and a yacht, without informing the wife. The yacht cost over two million dollars, but at the time of trial, it was (figuratively) under water, since the husband owed over a million, but the boat was worth less than $800,000.
The husband also assigned fractional interests of various entities to a trust ostensibly for the children. The trust had been created two years earlier, but funded with only $10. By the time of trial in 2017, the trust was worth about $4 million.
While the case was pending, the husband controlled the assets, but the parties entered into a stipulation regarding his covering expenses. The wife brought a motion for contempt, alleging that he had violated the stipulation.
The final decree was made by the trial court on December 31, 2018.
Among the issues at trial was the wife’s argument that the husband had dissipated marital assets in anticipation of divorce, which included money spent on a girlfriend, as well as the yacht, aircraft, and a wine collection. She also argued that he paid attorney fees for the trust, and transferred money into the trust.
The trial court held that there had been no dissipation, with the exception of $814,000 the husband had spent on his girlfriend. It therefore credited the wife this amount from the marital estate. It also awarded wife half the legal fees spent on the trust to the wife, even though it held the husband’s actions did not constitute dissipation.
As for items such as the yacht, jet, and wine collection, the trial court held that these purchases did not constitute dissipation, because the assets remained part of the marital estate. The wife was awarded half the value of these assets. The wife did get some relief with respect to the yacht, since the husband had excluded the wife from the boat. Therefore, the trial court assigned the negative value of the boat to the husband.
After the final decree, the wife appealed to the Utah Court of Appeals, which considered a number of issues, including the allegations of dissipation. After setting forth the relevant legal standards, the appeals court turned first to the yacht. Here, the wife argued that it was a case of dissipation since it was “cash going out the door for no benefit.”
The court first noted that the mere purchase of a depreciating asset is not enough to establish dissipation. The wife cited an Illinois case which she urged supported changing that rule. But here, the appeals court noted that the purchase of the asset was consistent with the husband’s prior practice of buying planes and boats during the marriage.
On another investment that the wife claimed was dissipation, the appeals court noted again that the husband’s behavior of not consulting the wife was consistent with his practice during marriage.
Finally, the wife argued that the transfers to the trust constituted dissipation. Here, the appeals court found that the evidence could have gone either way, but that the trial court had acted within its discretion in not finding dissipation. While the timing of the transfers might have been circumstantial evidence of dissipation, it was not definitive.
For these reasons, the Court of Appeals affirmed the ruling with respect to dissipation. It did order some changes to the lower court’s order, but affirmed in most respects.
2022 UT App 28 (Utah Ct. App. Mar. 3, 2022).
See original opinion for exact language. Legal citations omitted.
To learn more, see Property Division in Tennessee Divorce and view our video Is Tennessee a 50 50 divorce state?
