In RE the Marriage of Magdalen C. O'Brien and Dennis R. O'Brien Upon the Petition of Magdalen C. O'Brien , 821 N.W.2d 423 ( 2012 )

IN THE SUPREME COURT OF IOWA
No. 11–1551
Filed September 21, 2012
IN RE THE MARRIAGE OF MAGDALEN C. O’BRIEN
and DENNIS R. O’BRIEN
Upon the Petition of
MAGDALEN C. O’BRIEN,
Appellant,
And Concerning
DENNIS R. O’BRIEN,
Appellee.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Black Hawk County,
David F. Staudt, Judge.
In a dissolution-of-marriage proceeding, the respondent seeks
further review of a court of appeals decision awarding 42% of his
monthly pension benefits to the petitioner. COURT OF APPEALS
DECISION VACATED IN PART AND AFFIRMED IN PART; DISTRICT
COURT JUDGMENT AFFIRMED AS MODIFIED.
Linda A. Jensen-Hall of Gallagher, Langlas & Gallagher, P.C.,
Waterloo, for appellant.
Timothy J. Luce of Anfinson & Luce, P.L.C., Waterloo, for appellee.
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PER CURIAM.
We granted further review of this dissolution-of-marriage case to
consider the proper distribution of a retired spouse’s monthly pension
benefits. The district court awarded the entirety of those benefits to the
retired spouse. The court of appeals reversed and divided the benefits
between the spouses to the extent they were accrued during the
marriage. We agree with the court of appeals that the benefits should
have been divided. However, we find that the court of appeals erred in
dividing those benefits without taking into account the remaining
allocation of property between the parties. For these reasons, we now
alter the parties’ respective shares of the pension benefits, we affirm the
district court’s judgment as modified, and we remand for further
proceedings.
Dennis O’Brien and Magdalen O’Brien were married in 1978. They
had three children. In 2010, Magdalen petitioned for dissolution of
marriage. At that time, only one of the children was still a minor, and
she was expected to graduate from high school in May 2012. Dennis had
recently retired from John Deere at age fifty-eight, and Magdalen (age
fifty-four) was working part-time as a customer service specialist.
A trial was held in May 2011 on the contested issues of property
division and spousal support. Following trial, the district court awarded
the marital residence to Magdalen and divided the vehicles and various
financial assets between the parties. This resulted in Magdalen receiving
$196,187 worth of marital property free and clear, and Dennis receiving
$37,707. 1 The district court also ruled, “Given the great disparity in
1The district court said that it was awarding Magdalen $181,169 and Dennis
$52,725 in net marital assets. However, as noted both by the parties and by the court
of appeals, these figures assume that Dennis would receive the $15,018 cash value of
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property division, the court believes [Dennis] should be entitled to receive
his entire [John Deere] pension and ultimately social security payments
each month as compensation for the disparity in the marital asset
distribution.” Finally, the court awarded Magdalen $150 a month in
rehabilitative spousal support for one year, i.e., until the parties’
youngest child was expected to graduate from high school. The court
explained, “[Magdalen] testified that following the minor child’s
graduation she intended to become full time at her place of employment.”
Magdalen appealed. She argued that the district court erred in
failing to grant any part of Dennis’s pension to her, including a share of
the survivor benefits. She also maintained that she should have received
reimbursement alimony for life. We transferred the case to the court of
appeals.
The court of appeals found that Magdalen should receive 42% of
Dennis’s monthly pension benefits from John Deere. It reached this
conclusion by applying the method described in In re Marriage of Benson,
545 N.W.2d 252, 255 (Iowa 1996). Under this method, the number of
months that Dennis accrued benefits during the marriage would be
divided by the total number of months that Dennis accrued pension
benefits, and this percentage would in turn be divided by two. See In re
Marriage of Benson, 545 N.W.2d at 255. Here, Dennis had 450 months
of service at John Deere, 376 of which occurred after he married
Magdalen. Accordingly, under the court of appeals’ analysis, her share
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Dennis’s life insurance, when in fact the district court awarded it to Magdalen. We will
use figures of $196,187 and $37,707, respectively, which reflect the court’s decision to
award the insurance policy to Magdalen. We affirm the district court’s order on the
basis that Magdalen receives the insurance policy.
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was 42%. The court of appeals also affirmed the district court’s ruling on
spousal support.
Dennis has sought further review of the court of appeals decision
on property division. He contends that it is inappropriate to grant
Magdalen 42% of his John Deere pension, without regard to her much
larger share of the other assets.
We agree. The law requires an equitable division of property. See
Iowa Code § 598.21(5) (2009) (“The court shall divide all property, except
inherited property or gifts received or expected by one party, equitably
between the parties . . . .”). Equitable is not the same as equal. See In re
Marriage of Anliker, 694 N.W.2d 535, 542 (Iowa 2005). Still, the division
must be “justified and equitable under all the circumstances and factors
set forth in section 598.21(1).” Id.
In our view, it would be inappropriate to award the entire pension
to Dennis simply because Magdalen is receiving the bulk of the other
marital property, without regard to the respective values of that pension
and the parties’ other assets. However, it would also be inappropriate to
divide that pension without taking into account the allocation of the
other assets. For these reasons, we are not entirely satisfied with either
the district court’s or the court of appeals’ resolution of this case and,
therefore, provide our own.
It is not disputed that the present value of the John Deere pension
at the time of trial was $437,231. As noted by the court of appeals,
under the Benson formula, approximately 16.5% of Dennis’s pension—
i.e., the premarital portion—would not be subject to division. We
therefore remove that share, $72,143, and treat the remaining present
value of $365,088 as a marital asset. To equalize the distribution of
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marital property, Dennis should receive $261,784 of that present value
and Magdalen should receive the remaining $103,304, a difference of
$158,480. This split is used because Magdalen’s share of the other
marital property exceeded Dennis’s by $158,480 ($196,187 vs. $37,707).
This means Magdalen is entitled to 23.6% of Dennis’s monthly pension
benefit ($103,304 divided by $437,231), including 23.6% of any survivor
benefit.
Accordingly, we vacate the court of appeals decision in part. We
affirm the district court’s final decree except that we modify its ruling on
Dennis’s pension by holding Magdalen should have been awarded 23.6%
of Dennis’s monthly pension benefit from John Deere, including 23.6% of
any survivor benefit. We affirm the court of appeals ruling on spousal
support and its award of $1500 in attorney fees to Magdalen.
We remand for further proceedings consistent herewith. We
assume that the district court will enter a qualified domestic relations
order with respect to Dennis’s pension. See In re Marriage of Brown, 776
N.W.2d 644, 647–48 (Iowa 2009). The district court may also order any
other relief it deems appropriate to carry out our decision.
COURT OF APPEALS DECISION VACATED IN PART AND
AFFIRMED IN PART; DISTRICT COURT JUDGMENT AFFIRMED AS
MODIFIED.
This opinion shall not be published.