Can Utah courts exclude anomalous income years when calculating alimony? Clarke v. Clarke Explained

In divorce proceedings, determining a spouse’s earning capacity for alimony purposes can be challenging when income fluctuates significantly from year to year. The Utah Court of Appeals’ decision in Clarke v. Clarke provides important guidance on how trial courts may handle anomalous income years in alimony calculations.

Background and Facts

Edwin Clarke, an airline pilot, and Angozi Clarke divorced after twenty years of marriage. Edwin’s income varied significantly: he earned approximately $271,000-$292,000 from 2016-2018, but $349,000 in 2019 due to pilot shortages enabling substantial overtime. In 2020, the COVID-19 pandemic drastically reduced his earning opportunities. The trial court needed to determine Edwin’s earning capacity for alimony purposes amid these fluctuations.

Key Legal Issues

The primary issues were whether the trial court properly: (1) calculated Edwin’s gross earning capacity by excluding anomalous years; (2) declined to include profit-sharing payments in the income calculation; (3) denied Angozi’s business expense deductions; and (4) denied her motion for new trial based on allegedly newly discovered financial evidence.

Court’s Analysis and Holding

The Court of Appeals affirmed the trial court’s approach. The trial court reasonably determined that Edwin’s 2019 income was anomalous due to extraordinary overtime opportunities, while 2020 was affected by pandemic-related industry downturn. Averaging his 2016-2018 earnings provided the most accurate measure of his current earning capacity. The court also properly excluded profit-sharing payments given economic uncertainty, while preserving Angozi’s right to half of any future profit-sharing received. Regarding Angozi’s business expenses, she failed to prove which expenses were necessary for reasonable business operation as required by statute.

Practice Implications

This decision confirms that Utah courts have broad discretion to exclude anomalous income years when calculating earning capacity for alimony purposes. Practitioners should prepare comprehensive evidence explaining why certain years are not representative of ongoing earning capacity, particularly in volatile industries. The decision also reinforces that self-employed parties must provide detailed testimony and documentation to support claimed business expense deductions, and that parties seeking new trials based on “newly discovered” financial evidence must demonstrate they could not have obtained the information through reasonable diligence during trial proceedings.