Jodi Lynn Erpelding v. Timothy John Erpelding ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 16-1419
Filed June 21, 2017
IN RE THE MARRIAGE OF JODI LYNN ERPELDING
AND TIMOTHY JOHN ERPELDING
CLERK OF SUPREME COURT
Upon the Petition of
JODI LYNN ERPELDING,
Petitioner-Appellant/Cross-Appellee,
And Concerning
TIMOTHY JOHN ERPELDING,
Respondent-Appellee/Cross-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Kossuth County, Patrick M. Carr,
Judge.
JUN 21, 2017
Jodi Erpelding appeals the economic provisions of the decree dissolving
her marriage to Tim Erpelding, and Tim cross-appeals the children’s split
physical care. AFFIRMED AS MODIFIED AND REMANDED.
ELECTRONICALLY FILED
Thomas W. Lipps of Peterson & Lipps Law Firm, Algona, for appellant.
Matthew G. Sease and Christopher R. Kemp of Kemp & Sease, Des
Moines, for appellee.
Heard by Vaitheswaran, P.J., and Tabor and Mullins, JJ.
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TABOR, Judge.
Jodi Erpelding appeals the economic provisions of the decree dissolving
her marriage to Tim Erpelding, and Tim cross-appeals the physical-care
arrangement and his child-support obligation. After our de novo review, we find
the district court’s provision for split care of the two brothers promotes the best
interests of each child. Due to a scrivener’s error, we remand for the district
court to recalculate Tim’s child support. We reject Jodi’s claim she is entitled to
reimbursement alimony but modify the decree to increase Jodi’s traditional
alimony from $1166 to $1666 per month. Resolving an issue of first impression,
we conclude the prenuptial agreement’s prohibition on the district court’s award
of attorney fees as to issues of parental responsibility and child support violates
Iowa public policy. We remand for the district court to determine and assess the
appropriate amount of Jodi’s attorney fees for the trial and on appeal.
I. Facts and Prior Proceedings
Tim and Jodi lived together for five years on the Erpelding family farm
before executing a prenuptial agreement in November 1997. Jodi discussed the
agreement with her own attorney before signing it. At that time, Tim—a lifelong
farmer—listed his net worth at more than $500,000, while Jodi had a net worth of
$41,000. The parties married in December 1997.
Tim farmed with his father in Kossuth County, east of Algona. Tim’s father
died a few years before the parties’ dissolution, and Tim received both gifts and
an inheritance from his father. Tim continued to operate the family farm with his
brothers, who had other full-time employment and farmed only part time. Jodi,
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also from Kossuth County, works for the Iowa State Education Association
(ISEA).
The parties have two sons, W.E., who was born in 2001, and D.E., who
was born in 2005. During the marriage, Jodi’s work location changed from
nearby Algona to Emmetsburg, and finally, to Clear Lake, which is about forty
miles from the family farm. Jodi reduced her hours after W.E.’s birth and again
after D.E.’s birth, generally working four days a week. Jodi’s employer also
provides her with another day off each week in June and July.
Jodi suffered a heart attack in September 2014, which she attributed to
the stress of an unhappy marriage. When she and Tim separated in January
2015, Tim moved in with a sibling who lived nearby. Tim and his attorney aided
Jodi’s negotiations for a house in Clear Lake, closer to her office, as the
transaction occurred before Jodi had obtained counsel. Using a bank loan, Tim
financed the Clear Lake home for Jodi. In February 2015, Jodi filed a petition to
dissolve the marriage.
In the decree dissolving their marriage of eighteen years, the district court
awarded Jodi and Tim joint legal custody and split the physical care of the
parties’ two sons. On the financial side, the district court found the parties’
prenuptial agreement was “clear and unambiguous” in requiring all property each
party owned before the marriage, as well as all property each party acquired
during the marriage in his or her individual name, to be awarded “to the party in
whose name it is registered or who otherwise owns the same” in the event of a
dissolution. Based on the parties’ agreement, the court awarded Jodi assets
worth approximately $810,000 and no debt. Similarly, Tim received his assets,
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including inherited and gifted assets and a debt obligation of $944,454, for
$6,300,000 in net assets.1 The court rejected Jodi’s request for reimbursement
alimony but awarded her traditional alimony in the amount of $1166 per month.
Jodi appeals, and Tim cross-appeals.
II. Scope and Standard of Review
In this equitable proceeding, we review de novo. See In re Marriage of
Probasco, 676 N.W.2d 179, 183 (Iowa 2004). “[W]hen considering the credibility
of witnesses, we give weight to the district court’s findings of fact, but we are not
bound by them.” Id. “No hard and fast rules govern the economic provisions in a
dissolution action; each decision turns on its own uniquely relevant facts.” In re
Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998). Generally, we will disturb
the trial court’s ruling only when there has been a failure to do equity. Id.
III. Split Physical Care
During the parties’ initial separation in the spring and summer of 2015,
they shared physical care while W.E. and D.E. finished the second semester of
third grade and eighth grade, respectively, at Bishop Garrigan, Algona’s
parochial schools. But neither party requested shared care at trial. In the
summer of 2015, Jodi sought temporary physical care of both boys, and the
parties agreed to mediate the issue with former justice David Baker. In August
2015, the parties agreed to a pre-decree plan for the upcoming 2015-16 school
year—D.E. lived in Clear Lake with Jodi and attended the local public school for
1
The court assigned Tim his farm-related debt of $635,454 and the $309,000 debt Tim
had assumed when he took out a loan for Jodi’s new home.
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fourth grade, and W.E. lived with Tim on the farm and attended ninth grade at
Garrigan high school in Algona.
Before trial, Tim asked the court to appoint a guardian ad litem (GAL),
suggesting attorney Gregory H. Stoebe. Jodi resisted. On October 23, 2015, the
court appointed Stoebe as the GAL for the children. The GAL conducted
interviews, questioned the parties at trial, and compiled a posttrial report dated
March 2, 2016. The GAL recognized “the long-established rule is to keep
children together whenever possible” but concluded:
I see nothing beneficial by forcing one child or the other to relocate.
Both are thriving. The parents are commendably getting along well
on issues of the children. I see only positives for the children into
the future with current living [arrangement] solemnized by the
[c]ourt. To uproot them now and reshuffle residence, visitation,
friends, school, etc. may well generate more court activity of a very
dark and damaging nature.
The district court’s July 28, 2016 dissolution decree discussed the GAL’s
report as one of eleven factors it analyzed, stating the GAL provided “an
excellent summary” of the relevant evidence and “has recommended” the court
implement “a split physical care arrangement. Although the court will not
abdicate to the [GAL] its duty to decide the custody issues in this case, the court
is grateful for the work [of the GAL] and has accorded respectful consideration” to
his report and recommendations. The court also provided a thoughtful analysis
of the other ten factors—the characteristics of each child, the emotional, social,
moral, material, and educational needs of each child, the characteristics of each
parent, the capacity and interest of each parent to provide for the needs of the
child, the interpersonal relationship between the child and each parent, the
interpersonal relationship between the siblings, the effect on each child of
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continuing or disrupting an existing custodial status, the stability and
wholesomeness of each home environment, the child’s preference, and the
court’s available alternatives. After considering all the factors and recognizing
the preference against split care made its decision “a close one,” the court ruled,
“in this case, split physical care is in the best interests of each child.”
Under the decree, the boys are together every Wednesday and every
weekend, alternating between Clear Lake and the farm. Each parent has ten
days of summer visitation each year with both boys. The district court
recognized implementation of the schedule is “a little complicated,” and it
expected the parties to be “flexible and accommodating with each other and with
their sons. The boys are at an age where their views are entitled to respectful
consideration by their mother and father.”
In his cross-appeal, Tim argues the family’s circumstances are not “the
unique situation in which split care should be awarded,” quoting the applicable
legal standard:
There is a presumption that siblings should not be
separated. We have long recognized that split physical care is
generally opposed because it deprives children of the benefit of
constant association with one another. “The rule is not ironclad,
however, and circumstances may arise which demonstrate that
separation may better promote the long-range interests of children.”
Good and compelling reasons must exist for a departure.
In re Marriage of Will, 489 N.W.2d 394, 398 (Iowa 1992) (citations omitted).
In the decree, the court found both Tim and Jodi “are good parents” who
will cooperate “to see that the two boys are together as much as possible.” The
court believed Jodi, as compared to Tim, “might be a bit more attuned to the
many non-verbal, intuitive queues of a child’s unstated emotional needs.” The
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court also found “some truth” to the fact Tim worked hard and became more
involved in the boys’ lives following the separation. But the court observed Tim
“seems able to overlook minor bumps in the road, trying to guide as much by
example and inaction as forcible intervention.” In sum, the court found “each
parent presents positive aspects, and each possesses some positive aspects the
other does not.”
Noting a resolution of physical care “involves a great deal more than
simply asking children with whom they wish to live,” the court gave some weight
to W.E.’s preference to live with his father on the farm and to D.E.’s preference to
live with his mother in Clear Lake, but based on each child’s age, it gave greater
weight to W.E.’s preference. The court also noted fourth-grader D.E. was in
generally good health but had stomach issues acknowledged by both parents
and treated medically. The court found both Jodi and D.E.’s “physician link, to
some extent, the custody difficulties, especially when [D.E. is with Tim], with
some recurrence of [D.E.’s] stomach problems.”
Discussing long-range issues, the court noted W.E. will finish high school
in three years (now two years), while D.E. had another year of grade school
followed by middle school in 2017-18. When considering the effect of continuing
or disrupting the children’s existing care, the district court believed trouble would
ensue if the court placed W.E. with his mother in Clear Lake and would also
ensue, “including probable emotional damage to D.E., should he be placed with
[his father] and required to live on the farm.” The court found, “any disposition
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other than split physical care will cause significant emotional harm to at least one
of the two children, which may take years to resolve, if ever.”2
After framing its alternatives—placing both boys on the farm with Tim,
placing both boys with Jodi in Clear Lake, or keeping split care—the court
concluded: “[S]plit physical care is the least damaging alternative available in this
case.” Our court has defined “split physical care” as “the separation of children
between parents.” In re Marriage of Fynaardt, 545 N.W.2d 890, 893 (Iowa Ct.
App. 1996). While courts endeavor to keep children together, the rule is not
“ironclad.” In re Marriage of Jones, 309 N.W.2d 457, 461 (Iowa 1981).
After observing Tim and Jodi over eight days of testimony, the district
concluded it was in the children’s best interests to be placed in split physical
care. See In re Marriage of Vrban, 359 N.W.2d 420, 423 (Iowa 1984)
(recognizing the district court’s ability to observe the demeanor of the witnesses
helps it formulate a “wise decision”). Relevant factors in addition to each parent’s
caretaking capability include the age difference between the separated children,
the relationship between the children, and the likelihood that one of the parents
or children would turn a child against the other parent. Will, 489 N.W.2d at 398.
The decree shows the district court was fully aware of these principles. The
decree implicitly concludes “both of the parties are capable caretakers as to the
2
Earlier, the court had found each boy had a stronger interpersonal relationship with the
parent with whom he had been living but “this phenomenon is more than just a result of
their recent placement.” Due to W.E.’s age and desire to emulate his father, W.E. has “a
strong interest” in his friends at school and in Algona generally, sports, and living and
working on the family farm. Finding D.E. to be “a harder study,” the court observed:
“[T]here was something about D.E. that has made him wish for some new surroundings.
He wanted, and now appears to thrive in, the school system in Clear Lake, Iowa and
living with his mother.”
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specific [child] placed in their care.” See id. (recognizing needs of “children
within the same family may differ”).
On appeal, Tim contends the difference of four and one-half years in age
and five grades between the brothers is not significant and the boys are bonded
to each other. As an example of their bond, Tim asserts D.E. likes to help W.E.
pick up rocks on the farm and they enjoy trap shooting together. Tim claims:
“[B]oth children’s relationships with their individual brother and with their parents
[are] normal and neither party had great disdain for the other.” But Tim
emphasizes W.E. was “absolutely adamant” about not leaving his current school
system or the farm. Tim argues split care was not working because the boys
were not spending enough quality time together. Tim alleges the boys were tired
from travelling back and forth and D.E. would fall asleep in the car. Tim
concludes split care should not be ordered because neither brother has angst
against the other or against a particular parent and because the GAL recognized
the brothers have a bond and both missed each other after only a couple of
months being apart.3
The issue before us is whether, despite the presumption in favor of
keeping siblings together, under the conditions that have arisen in this family,
“separation may better promote the long-range interests of the children.” See
3
Despite his own reliance on the GAL report for this conclusion, on appeal Tim contends
the GAL’s report used discredited gender stereotypes and the district court gave the
report too much deference. Jodi responds Tim did not preserve error on his challenge to
the GAL’s report. We find no merit in Jodi’s error-preservation challenge; the district
court acknowledged Tim disagreed with the GAL and sought physical care of both boys
in his posttrial briefing. On the other hand, we are not persuaded by Tim’s attack on the
GAL report. The district court weighed the GAL report as only one of the eleven factors
it thoughtfully considered in its physical-care analysis. Further, when the report is read
as a whole, the GAL’s conclusion is not premised on improper grounds.
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Jones, 309 N.W.2d at 461 (citing In re Marriage of Wahl, 246 N.W.2d 268, 270
(Iowa 1976)). Upon our de novo review, we find “good and compelling reasons”
for split physical care in the circumstances of this case. While each boy loves
both parents and his brother, the boys are five grades apart, their social lives and
activities are obviously unalike, and as recognized by the district court, their age
difference “means that they are not going to be in constant association with each
other. Their interests are necessarily going to diverge.”
Jodi and Tim love and support their children and each is a capable
caretaker. To their credit, neither Jodi nor Tim has taken steps to damage the
other’s relationship with the children.4 But we find it significant that Jodi was the
historical caretaker for the boys, and her more flexible work schedule, especially
in June and July when D.E. is not in school, allows her to “better minister” to
D.E.’s needs as a younger child. See Will, 489 N.W.2d at 396-99 (affirming
district court’s split physical care).
Split care is also supported by the stability the arrangement provides.
W.E. recently finished his sophomore year; he strongly desired to live on the farm
with Tim, is helpful on the farm, and is happy at Garrigan high school where he
can participate in activities with his long-time friends. In contrast, while D.E.
enjoys his time on the farm with his brother and father, he wants to live with his
mother and is thriving in his new school in Clear Lake, recently completing fifth
4
After Jodi and Tim separated, there were relatively few unpleasant incidents between
them affecting the children. The record shows those incidents were typical of incidents
occurring in the heightened emotions of dissolution proceedings. Such matters do not
affect either party’s ability to capably parent the children or either party’s ability to
support the children’s relationship with the other spouse.
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grade. The record supports the district court’s conclusion that moving D.E. into
Tim’s care would likely have negative consequences for D.E.
Recognizing the district court’s advantage of being able to watch and
listen to the parties and the other witnesses during this extended trial, we agree
with its observation “each boy has, to some extent, perhaps instinctively,
gravitated to the parent with whom he feels most comfortable, from whom he will
accept guidance best, and the parent [that] will ultimately guide him to a full
measure of well-adjusted adulthood.” Because split physical care promotes each
child’s long-term best interests, we affirm.
IV. Calculation of Tim’s Child Support Obligation
In the event split care is affirmed, Tim asks for a remand for the district
court to recalculate his child support. The parties agree Jodi’s wages are
$3458.10 per month, or $41,497.20 per year. The court found a six-year average
of Tim’s 2009 to 2014 annual income to be $149,800. For 2015, the court found
Tim’s “actual cash loss” would be “much less than his tax loss,” disallowing Tim’s
deductions for attorney fees and depreciation on farm equipment Tim “secured
from his father’s estate.” Taking these factors into consideration, the court
concluded a gross annual income of $125,000 “is a reasonable sum to attribute
to [Tim] for the purpose of calculating child and spousal support.” Tim does not
challenge this determination on appeal.5 The court ordered Tim to pay Jodi $742
in monthly child support while both boys are minors, with support increasing to
$1149 per month when D.E. is the only dependent.
5
The district court also found, if Tim decided to cash rent his farm ground at “$275 per
acre,” he could receive “$148,500 in gross annual income before real estate taxes.”
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On appeal, Tim asserts the district court mistakenly used $150,000 for
Tim’s income in its guideline calculations. We agree that amount was
inconsistent with the court’s earlier declaration that $125,000 per year was a
reasonable sum to assign as Tim’s income for determining child support.
Because the court made a scrivener’s error,6 we remand for the recalculation of
Tim’s child support using $125,000 as his gross annual income.
V. Alimony
At trial, Jodi requested reimbursement alimony to offset Tim’s purchase of
farm land titled in his name during their marriage. Citing Iowa case law dealing
with marriages of shorter duration where one spouse makes career sacrifices
while the other obtains a professional license, the district court ruled the facts
here did not support reimbursement alimony. The court reasoned: “In this case it
appears that efforts during the marriage by [Jodi] benefited [Tim]. In a case
without a prenuptial agreement, this economic benefit conferred by [Jodi] would
be reflected in a property settlement.” Instead, the district court ordered Tim to
pay traditional alimony of $1166 per month, terminating upon death or Jodi’s
remarriage.
Alimony is not an absolute right; an award depends upon the specific
circumstances of each case. In re Marriage of Gust, 858 N.W.2d 402, 408 (Iowa
2015). On appeal, Jodi challenges the alimony award in two alternative ways.
Jodi first seeks $600,000 in reimbursement alimony, asserting the court
“misinterpreted the law” after it recognized Tim benefited from Jodi’s efforts
6
A “scrivener’s error” results from inadvertence and not from judicial reasoning. See
Scrivener’s Error, Black’s Law Dictionary (9th ed. 2009)
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during the marriage as her efforts freed up marital cash for Tim to accumulate
farmland. Jodi admits the “typical factual circumstance” for reimbursement
alimony is a spouse’s contributing toward the other spouse’s “advanced
professional degree” but creatively argues reimbursement alimony “should not be
limited to only those situations involving professional degrees,” otherwise, a
farmer’s divorce rights are elevated “over those of persons with professional
degrees.”
Tim points to the long duration of the marriage—eighteen years—and the
fact the circumstances are not similar to “degree cases” where there is “little or
no property to be divided.” Jodi was awarded $810,000 in assets with no debt.
Tim contends Iowa law does not extend reimbursement alimony “beyond
situations where the marriage is devoted almost entirely to the educational
advancement of one spouse.” He asserts the rationale for reimbursement
alimony “is not the efforts of the supporting spouse, but the fact there has not
been enough time for the parties to receive the benefit from the [educational]
advancement through tangible assets accumulated during the marriage.”
After reviewing Iowa case law, we find Tim’s argument persuasive and
conclude Jodi is not entitled to reimbursement alimony under these
circumstances. See Probasco, 676 N.W.2d at 184 (“Reimbursement alimony
was first denominated as such in Francis.”); In re Marriage of Francis, 442
N.W.2d 59, 61 (Iowa 1989) (resolving “‘advanced degree/divorce decree’
dissolution of marriage action” (citation omitted)). Jodi cites no case from any
jurisdiction applying a “degree analysis” to the acquisition of farmland during a
long-term marriage. As the district court explained, but for the prenuptial
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agreement, the economic benefit Jodi conferred on Tim would have been
reflected in a property division in this marriage of long duration. See Francis, 442
N.W.2d at 66.
Our analysis starts with Francis, which ventured “no predictable method of
valuing” a wife’s contribution to her husband’s “increased earning capacity due to
his education received during the marriage” had been settled upon in Iowa. 442
N.W.2d at 61-61 (stating prior cases “interchangeably used property awards and
alimony” to compensate the non-student spouse). Seeking to provide
predictability, Francis approved the Utah Court of Appeals analysis recognizing
traditional alimony “would often work hardship” when a divorce “occurs shortly
after the degree is obtained” due to both spouses having modest incomes but
“one is on the threshold of a significant increase in earnings. Moreover, the
spouse who sacrificed . . . is precluded from enjoying the anticipated dividends
the degree will ordinarily provide.” Id. at 63 (quoting Petersen v. Petersen, 737
P.2d 237, 242 n.4 (Utah Ct. App. 1987)). Following these principles, Francis
affirmed an award of reimbursement alimony to the non-student spouse,
providing the following rationale:
A calculation of future earning capacity . . . essentially represents a
value placed on the income to be derived from the advanced
degree achieved during the marriage . . . . Thus, the court’s duty to
look at the future earning capacity of the spouses tracks more
closely with a concern for loss of anticipated support, reimbursable
through alimony, than through division of as-yet-unrealized tangible
assets.
442 N.W.2d at 63 (emphasis added).
In 2004, the Iowa Supreme Court followed Francis and rejected a wife’s
request for reimbursement alimony. See Probasco, 676 N.W.2d at 186. Similar
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to the matter before us, the parties in Probasco had a long-term marriage and the
wife had not contributed to the husband’s college degree. Id. After the wife
supported the husband in starting and running several successful restaurant
franchises, the parties accumulated tangible assets. Id. Probasco explained
Francis had described “the circumstances under which reimbursement alimony
should be awarded” as follows—“for marriages of short duration . . . devoted
almost entirely to the educational advancement of one spouse and yield[ing] the
accumulation of few tangible assets.” Id. at 185 (emphasis added) (quoting
Francis, 442 N.W.2d at 62); see also In re Marriage of Hayes, No. 11-1847, 2012
WL 2407540, at *2 (Iowa Ct. App. June 27, 2012) (affirming reimbursement
alimony where dissolution occurred five years after increase in doctor’s medical
income).
Probasco found the following circumstances “militate against an award of
reimbursement alimony” to the wife: (1) the “marriage was not one of short
duration devoted almost entirely to the educational advancement of one spouse”;
(2) although the wife “may not have pursued her career during the marriage as
much as she may have liked,” she was actively involved in the job market during
the marriage with career skills that are not outdated; and (3) the parties’
“significant assets” will balance the equities without the need for an award of
reimbursement alimony as the wife “leaves the marriage with a net worth in
excess of $800,000.” 676 N.W.2d at 186 (emphasis added).
Unlike Francis, Iowa’s seminal case on reimbursement alimony, Jodi and
Tim have accumulated millions of dollars in tangible assets, and Jodi did not
contribute to an advanced degree for Tim with her contribution followed shortly
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thereafter by a divorce. Under Frances and Probasco, we decline Jodi’s request
for reimbursement alimony.
Jodi alternatively requests “a significant increase in lifetime traditional
alimony,” claiming equity requires an increase from $1166 per month to $2200
each month “until death.” Tim disagrees.
As an initial matter, the district court ended Tim’s alimony obligation upon
either party’s death or Jodi’s remarriage; we find this provision equitable as
written. See Gust, 858 N.W.2d at 415 (stating “traditional spousal support is
ordinarily unlimited in duration except upon the remarriage of the payee spouse,
or death of either party”). Second, traditional alimony is intended to provide Jodi
“with support comparable” to what she would have received if her marriage to
Tim had continued. See In re Marriage of Schenkelberg, 824 N.W.2d 481, 486
(Iowa 2012). Alimony may not be restricted by a premarital agreement. In re
Marriage of Shanks, 758 N.W.2d 506, 513 (Iowa 2008); see also Iowa Code
§ 596.5(2) (2015). The amount of Jodi’s alimony is to be “calculated equitably”
based on all statutory factors, Schenkelberg, 824 N.W.2d at 486; such factors
are not “considered in isolation from each other,” Gust, 858 N.W.2d at 408.
The relevant factors are set out in Iowa Code section 598.21A, and we
“consider property division and alimony together in evaluating their individual
sufficiency.” In re Marriage of Christensen, 543 N.W.2d 915, 919 (Iowa Ct. App.
1995). We also consider the terms of any premarital agreement. Id.
(considering, unlike here, spouse seeking support received an “enhanced
property distribution” from her premarital agreement, diminishing “her need” for
alimony). Our supreme court has discussed the interrelationship of a property
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award under a premarital agreement and a request for alimony, explaining (1) the
husband “received a substantial property award” due to the premarital
agreement, (2) a proper spousal-support calculation for the wife looks “at the
assets each party received” in order to “determine the income potential of the
property distributed to each party,” and (3) the husband’s assets will continue “to
generate substantial income” and the assets the wife was awarded will not.
Schenkelberg, 824 N.W.2d at 487.
The following facts are key to our analysis. At the time of the dissolution
trial, Jodi was forty-six and Tim was fifty-one years old. Both parties are
generally in good health.7 Their marriage was of relatively long duration. Jodi
received $810,000 in net marital property. Under the premarital agreement, Tim
received more than three times as much net marital property, around
$3,582,000.8 As in Schenkelberg, the marital assets Tim received will continue
to generate substantially more income than the marital assets Jodi received.9
824 N.W.2d at 487. Additionally, the earning patterns of the parties are set, and
their earning capacity is another factor we consider in setting the amount of
spousal support. See id. Jodi continues in her long-term ISEA employment,
earning around $41,500 annually. Jodi’s child-care responsibilities during the
marriage reduced both her earned-income track at her employer and her
savings. Another factor reduced Jodi’s savings—as noted by the district court—
7
Jodi has recovered from her heart attack.
8
Specifically, Tim asserts: “Removing the gifted and inherited property ($3,538,321)
from Tim’s side of the equity and accounting for his $944,454 in liabilities, Tim actually
received $3,581,499 in marital assets.”
9
Jodi received $262,500 for her share of the Thill farm. The current rate of return for a
one-year CD (FDIC insured) is 1.5%. Applying that percent shows Jodi can earn $3938
each year in a conservative investment.
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the parties agreed to use Jodi’s income for nondeductible living expenses
allowing Tim to “free up cash flow generated by [his] farming operation to be
invested or re-invested in assets titled solely in his name.”
As to Tim’s earning capacity, he continues farming, earning an average
annual income of $125,000—three times the amount Jodi will earn each year.
Further, Jodi will not have the ability to rival Tim’s earning capacity as she
continues to provide physical care for D.E. We also agree with the district court’s
belief that many of Tim’s personal expenses “would be paid untaxed by his
farming operation.” As in Scheckelberg, Tim has “the ability to pay a substantial
amount of support indefinitely into the future.” Id. Considering all relevant
factors, we conclude it is unlikely Jodi will be able to support herself, care for
D.E., take vacations similar to the ones the parties enjoyed during their marriage,
and fund an increase to her savings without spousal support from Tim of $1666
per month. We modify the decree accordingly.10
VI. Trial and Appellate Attorney Fees
The prenuptial agreement states the parties “shall have no rights” to
attorney fees and expenses upon the filing of a petition for dissolution and the
court granting a dissolution. The district court asked the parties to brief whether
a prenuptial agreement’s prohibition of an award of attorney fees violated public
policy. See Iowa Code § 596.5(1)(g) (permitting parties to a premarital
agreement to contract with respect to “any other matter, including the personal
10
Jodi’s final alternative argument asserts, if she is not awarded “significant
reimbursement alimony or increased traditional alimony,” we should increase her
property award. Because we have increased Jodi’s traditional alimony, we do not
address this claim.
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rights and obligations of the parties, not in violation of public policy”). When the
parties failed to produce “any case on point in Iowa or elsewhere,” the court
rejected Jodi’s request for trial attorney fees, reasoning it did “not have authority
to ignore the plain language of the parties’ prenuptial agreement.” The court
ordered Tim to pay court costs, including the $9140 GAL fee.11
On appeal, Jodi claims the parties’ premarital agreement waiving attorney
fees in the event of dissolution is “void as against public policy.” She contends it
would “violate public policy to leave a spouse without means to litigate the best
interests of her children.”12
Generally, Iowa courts have considerable discretion in awarding attorney
fees in dissolution cases. In re Marriage of Steele, 502 N.W.2d 18, 22 (Iowa Ct.
App. 1993). Jodi bases her argument for attorney fees on the public-policy
limitation in Iowa Code section 596.5(1)(g), as well as section 596.5(2), which
commands that the right of a child to support “shall not be adversely affected by
a premarital agreement.” Jodi contends, because Iowa prohibits premarital
agreements “from regulating child custody and child support, it follows that
11
In the temporary proceedings, Jodi requested fees so she could employ experts to
appraise Tim’s real estate and farm machinery. The court ordered Tim to pay Jodi
$20,000, reserving its final resolution of Tim’s advance for the decree. Jodi then paid
the retainers and hired the valuation experts. In the decree, the court did not grant Tim’s
request Jodi repay this advance. Tim challenges that ruling on cross-appeal. In
declining to order repayment, the district court reasoned Jodi’s experts’ appraisals
“ultimately became the figures agreed to by the parties’ in their pretrial stipulation.” The
award of litigation expenses is traditionally within the district court’s discretion. EFCO
Corp. v. Norman Highway Constructors, Inc., 606 N.W.2d 297, 301 (Iowa 2000). Jodi’s
use of experts was related to the extensive nature and complexity of Tim’s assets and
led to a successful stipulation of values by the parties. Finding the district court’s
decision equitable and logical, we are unable to find the court abused its discretion.
12
Jodi also claims it would violate public policy to disallow attorney fees incurred to
litigate the validity of the premarital agreement and the provisions of spousal support.
Because she provides no compelling arguments to reach these litigation categories, we
limit our analysis to attorney fees concerning child-related issues.
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awarding attorney fees to seek child custody and child support cannot be
prohibited.”
In asking for briefing on the interplay of these two sections, the district
court opined “it did not seem fair that a party with vastly superior financial
resources could,” based on a prenuptial agreement, “possess a great deal of
money with which to fund litigation over such an important issue as child
custody.” The court explained that it “always viewed an award of counsel fees as
a way to allow each party to a marriage to make a fair fight of it at trial.” Although
the parties did not provide cases to the district court, both now cite relevant
cases on appeal. Both also acknowledge the Iowa Supreme Court has not
addressed the propriety of waiving attorney fees in a premarital agreement,
making it an issue of first impression in this state.
In support of her claim the premarital waiver of attorney fees violates
public policy, Jodi cites Walker v. Walker, 765 N.W.2d 747, 755 (S.D. 2009), in
which the husband argued the wife “unreasonably elevated the cost of litigation.”
Jodi similarly claims her evidence took two days and Tim increased her litigation
expenses by calling witnesses for six days. Walker held because public policy
precluded waiver of alimony in a prenuptial agreement, by “logical extension”
attorney fees associated with an alimony award also could not be prohibited by
the prenuptial agreement. 765 N.W.2d at 755. Jodi argues a similar “logical
extension” applies to attorney fees for litigating child custody and child support.
Citing Iowa Code section 596.5, Tim counters that “[a]lthough the
legislature had the opportunity to prohibit clauses in a premarital agreement that
restrict payment of attorney fees when child custody is at issue, the legislature
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did not do so.”13 But Tim acknowledges other state courts have found premarital
agreements prohibiting attorney fees as to child-related issues are not
enforceable. For example, in In re Marriage of Best, an Illinois appellate court
analyzed a premarital agreement that “would bar fee-shifting for costs incurred in
connection with child support.” 901 N.E.2d 967, 970 (Ill. App. Ct. 2009). Similar
to Iowa Code section 596.5(2), the pertinent Illinois provision stated: “The right of
a child to support may not be adversely affected by a premarital agreement.” Id.
at 971 (citation omitted). The “pivotal question” before the Illinois court was
“whether a fee-shifting ban governing child-related issues violates” public policy.
Id. Best answered the question in the affirmative, holding “the fee-shifting ban” in
the parties’ premarital agreement was “not enforceable as to child-related issues
because it violates public policy by discouraging both parents from pursuing
litigation in their child’s best interests.” Id. at 970.
Best cited approvingly to In re Marriage of Ikeler, 161 P.3d 663, 667 (Colo.
2007), where the state supreme court pointed out the Colorado Marital
Agreement Act (CMMA) did not specifically mention attorney fees; therefore, the
“only statutory basis for parties to contractually waive an award of attorney’s
fees” is the catch-all provision allowing contracts “not in violation of public policy.”
Ikeler reasoned, “[u]nder this subsection, if a waiver of attorney’s fees violates
public policy it cannot be enforced by the court because it is not a valid contract
term.” 161 P.3d at 667. Ikeler concluded:
13
Tim also cites the South Carolina Supreme Court’s holding: “[P]renuptial agreements
waiving alimony, support, and attorney’s fees are not per se unconscionable, nor are
they contrary to the public policy of this state.” Hardee v. Hardee, 585 S.E.2d 501, 504
(S.C. 2003). Because Hardee does not address attorney fees for child-related issues, it
is not persuasive to our analysis.
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[A] waiver of attorney’s fees violates public policy where one
spouse lacks the financial resources to litigate the dissolution, and
the case involves issues of parental responsibilities and child
support. The CMAA specifically states that “[a] marital agreement
may not adversely affect the right of a child to child support,” which
reflects the well-established policy of this state that the needs of the
children in a dissolution proceeding are paramount. If one spouse
is unable to hire an attorney, and the parties waived a possible
award of attorney’s fees in a marital agreement, the lesser-earning
spouse’s ability to effectively litigate the issues related to the
children will be substantially impaired. This, in turn, may negatively
impact the court’s ability to assess the best interests of the children.
Id. at 670-71 (citations omitted); see also In re Marriage of Joseph, 266 Cal. Rptr.
548, 552-53 (Cal. Ct. App. 1990) (reasoning a parent litigating a custody dispute
is also representing the child’s interests and the parties’ fee-shifting bar
“abridge[s] the courts’ ability to act on behalf of the children”).
Finally, the Washington Court of Appeals rejected a husband’s argument
that while parents cannot enter into binding contracts regarding parenting plan
issues, the parties can waive a right to an award of attorney fees and costs,
“which is not a parenting plan issue.” In re Marriage of Burke, 980 P.2d 265, 268
(Wash. Ct. App. 1999). Noting the “state’s interest in the welfare of children
requires” a court “have the discretion to make an award of attorney fees and
costs so that a parent is not deprived of his or her day in court by reason of
financial disadvantage,” the court ruled the parties’ attorney-fee bar in their
prenuptial agreement violated public policy as to litigation of parenting-plan
issues. Id.
In Iowa, the purpose of child support is “to provide for the best interests of
the children by recognizing the duty of both parents to provide adequate support
for their children in proportion to their respective incomes.” Iowa Ct. R. 9.3.
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Similarly, the controlling consideration in determining physical care is the
children’s best interests. McKee v. Dicus, 785 N.W.2d 733, 736 (Iowa Ct. App.
2010). As set out above, Iowa statues prohibit parties to a premarital agreement
from contracting in violation of public policy and from contracting “adversely” to
the right of children to support. Given these expressions of Iowa’s public policy,
we find persuasive the analyses in Best, Ikeler, Joseph, and Burke. Iowa’s
commitment to the best interests of the children of divorce requires our courts
“have the discretion to make an award of attorney fees and costs” as to child-
related issues in dissolution proceedings so that “a parent is not deprived of his
or her day in court by reason of financial disadvantage.” Burke, 980 P.2d at 268.
Accordingly, the provision in the Erpeldings’ premarital agreement waiving such
fees and costs is void and unenforceable as to child-related issues because it
violates Iowa “public policy by discouraging both parents from pursuing litigation
in their child’s best interests.”14 Best, 901 N.E.2d at 970.
We reverse and remand to the district court with instructions to exercise its
discretion to make an award of attorney fees and costs to Jodi as to child-related
issues litigated in the dissolution matter. Next, we grant Jodi’s request for
attorney fees on appeal as to the child-related issues. See McKee, 785 N.W.2d
at 740 (setting out standard). The amount of Jodi’s award, both at trial and on
appeal, shall be determined by the district court upon remand.
14
Tim alternatively asserts, if we conclude “a premarital agreement prohibition on
attorney fees” as to child-related issues violates public policy, we should find the
agreement’s restrictions here voidable as applied and not void per se. Tim then asserts
public policy concerns that Jodi would not be able to effectively litigate the children’s
best interests are not present because the children’s interests were “fully represented”
by the GAL and Tim paid the GAL’s fee. We are not persuaded. Tim cites no cases
supporting his proposition a GAL’s role supplants a parent’s role in dissolution
proceedings involving custody and child support.
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Costs on appeal are assessed to Tim.
AFFIRMED AS MODIFIED AND REMANDED.
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State of Iowa Courts
Case Number Case Title
16-1419 In re Marriage of Erpelding
Electronically signed on 2017-06-21 08:38:55
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