Can courts double-count investment returns in divorce alimony calculations? Dutcher v. Dutcher Explained

In Dutcher v. Dutcher, the Utah Court of Appeals addressed a critical issue in divorce proceedings: whether courts can exclude investment returns from income calculations while simultaneously including investment-related expenses in alimony determinations.

Background and Facts

David and Audrey Dutcher divorced after 24 years of marriage, having accumulated substantial wealth including a brokerage account worth approximately $2 million. The parties stipulated that their marital home was valued at $1.7 million based on David’s appraiser’s assessment. During trial, David’s accountant testified that the brokerage account had averaged a 16.99% return over five years. David argued that Audrey’s projected investment returns should reduce her need for alimony, while also proposing that her monthly expenses should exclude retirement and investment contributions given her substantial asset award.

Key Legal Issues

The case presented two primary issues: (1) whether the district court properly excluded brokerage account returns from Audrey’s income calculation while including retirement and investment contributions as monthly expenses in the alimony calculation, and (2) whether the court abused its discretion in refusing to set aside the parties’ stipulation regarding the home’s value when a later appraisal showed increased value.

Court’s Analysis and Holding

The Court of Appeals found that the district court’s approach constituted impermissible double-counting. While courts have discretion in determining whether to impute investment returns as income, they cannot simultaneously exclude such returns from income calculations while including investment-related expenses in alimony determinations. The court noted this violated the principle established in Sorensen v. Sorensen that double-counting “is condemned in property division cases.” However, the court affirmed the district court’s decision to honor the parties’ stipulation regarding the home’s value, finding it fair and reasonable based on a professional appraisal.

Practice Implications

This decision provides important guidance for practitioners handling high-asset divorce cases. Courts must maintain consistency when treating investment assets—either including both the income potential and related expenses, or excluding both. The ruling also reinforces that while courts need not necessarily abide by property stipulations, they should give such agreements “great weight” when they are fair and reasonable. On remand, the court may either include investment returns as income and allow investment expense line items, or exclude both approaches, but cannot employ contradictory treatments.