In re the Marriage of Holtkamp ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 17-0940
Filed October 24, 2018
IN RE THE MARRIAGE OF ASHLEY DAWN HOLTKAMP
AND NATHAN WADE HOLTKAMP
Upon the Petition of
ASHLEY DAWN HOLTKAMP,
Petitioner-Appellant,
And Concerning
NATHAN WADE HOLTKAMP,
Respondent-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Des Moines County, John G. Linn,
Judge.
Ashley Holtkamp appeals from the decree dissolving her marriage to
Nathan Holtkamp. AFFIRMED AS MODIFIED
Marlis J. Robberts of Robberts & Kirkmann, LLLP, Burlington, for appellant.
Michael D. Clark of Clark & Schroeder, PLC, North Liberty, for appellee.
Heard by Vogel, P.J., and Vaitheswaran and McDonald, JJ.
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VOGEL, Presiding Judge.
Ashley Holtkamp appeals from the decree dissolving her marriage to
Nathan Holtkamp. She argues the trial court erred in finding their prenuptial
agreement enforceable and in establishing Nathan’s visitation schedule with the
parties’ minor children. Because Ashley failed to prove the prenuptial agreement
was executed involuntarily, was procedurally unconscionable, or lacked a financial
disclosure, we agree with the district court that the prenuptial agreement is
enforceable. Additionally, we modify the visitation schedule on Tuesday nights
and weekends and otherwise agree the visitation schedule is in the best interests
of the children. Therefore, we affirm the decree as modified.
I. Background Facts and Proceedings
Nathan and Ashley Holtkamp married on May 13, 2006. The marriage
produced two children, born in September 2006 and December 2007.
Nathan was born in November 1968. He graduated from high school in
1987, and he began building his highly successful trailer repair business while still
in high school. At the time of trial, he had owned and operated Holtkamp Trailer
Repair as a sole proprietorship for approximately thirty years. According to his
May 9, 2006, Personal Financial Statement, he had a total annual income of
$600,000 and Holtkamp Trailer Repair had a present net value of $2,750,000.
According to his tax returns, he reported gross receipts of $574,969 in tax year
2006, which grew to $1,325,013 in tax year 2015.1 He has previously divorced
1
The district court noted the difficulty in calculating Nathan’s true disposable income,
stating he only reported a net profit of $3450 in tax year 2015 due to significant reductions
from cost of goods, depreciation, and other expenses. He maintains a single checking
account for his personal and business finances, despite advice from his tax preparer,
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twice after marriages of five years each, and he was previously engaged to two
other women without marrying either.
Ashley was born in July 1981. She graduated from high school in 2000 and
became a licensed cosmetologist in 2001. She worked as a cosmetologist and as
a paraeducator in the local school before and after the marriage. The district court
noted her income in 2016 was $7437.
One of the issues on appeal is the enforceability of a prenuptial agreement,
which both parties signed on May 11, 2006, two days before the wedding. Among
its provisions, the agreement states both parties shall retain separate ownership
of the property and liabilities they separately acquired both before and during the
marriage. The agreement also states that, in the event of dissolution, each party
shall have no interest in the other’s separate property. The separately-owned
property acquired prior to marriage specifically includes the personal property
listed in Nathan’s attachment titled “Personal Financial Statement.” Additionally,
the agreement states each party “has received full and complete answers to all
questions the other has asked about the other's income and assets,” and “each
has carefully considered their right to be represented by separate attorneys.”
The parties offered differing testimony about the events preceding the
signing of the prenuptial agreement. According to Ashley’s testimony, she met
Nathan around May 2005, they began dating in August 2005, and a couple months
which creates challenges in sorting personal and business expenses. Suspecting
improper deductions and unreported income, Ashley believed his true annual income was
close to $200,000. The district court estimated his true annual earning capacity was
$80,000 to $140,000, and it imputed an annual earning capacity of $100,000 for
calculating his child support obligation.
4
later she moved from her parents’ home into Nathan’s home. They became a
serious couple in November 2005 when he gave her a ring, and they had set their
wedding date by Christmas 2005. She learned she was pregnant with their first
child in mid-January 2006. Also in January 2006, she began planning for their
“very small wedding” with about fifty guests at their home. She first learned he
wanted her to sign a prenuptial agreement on the morning of May 11. However,
she claimed Nathan simply told her she “needed to sign something because he
was going to get sued and” the document would protect them. Later that afternoon,
she met him at the office of attorney Bryan Schulte, who had drafted the agreement
for Nathan. She was inside the office for about fifteen minutes, during which time
she met with Nathan and Schulte, they read through the agreement, and she
signed it. She claimed no one told her she should consult another lawyer before
signing; she did not know what a prenuptial agreement was, she did not
understand the importance of the document, and she never received a copy of the
document until these divorce proceedings.
Nathan presented a very different account of the events leading up the
signing of the prenuptial agreement. He testified he bought Ashley’s engagement
ring in early November 2005; however, she did not begin wearing the ring until
Christmas 2005. They became engaged around Christmas 2005, but they did not
discuss marriage at the time. To him, “engaged” means “[t]hat possibly you would
get married, that you’re a couple.” They only began discussing marriage after they
learned she was pregnant in January 2006. Ashley and her parents then began
pressuring him to marry her before she gave birth to their child. In late March or
early April 2006, he told her he would marry her but only if she signed a prenuptial
5
agreement. He denied telling her the agreement was meant to protect them from
a lawsuit. From his standpoint, Ashley indicated she understood the agreement
and told him “she didn’t want anything of mine, business and/or anything like that,
that she wasn’t that type of person; she knew she was coming into the marriage
with nothing.” He recalled Schulte gave her a chance to read the agreement,
offered to let her take it to another attorney, and offered to give her a copy. She
declined the offers of consulting another attorney or receiving a copy, and “she
scanned through some of it” and signed it.
Fast forward to September 15, 2015, when Ashley filed the petition for
dissolution of marriage. The prenuptial agreement made its appearance during
the discovery phase of these proceedings and became a primary issue during trial
and now on appeal. Trial was held on January 10, 11, and 12, 2017. On April 12,
the court issued the decree of dissolution, which decided the prenuptial agreement
was enforceable, granted physical care of the children to Ashley, and entered a
schedule for the children to visit Nathan overnight on Tuesdays and alternating
weeks in the summer. Both parties then filed motions asking the court to
reconsider or enlarge its decree, which the court subsequently denied on May 16.
Ashley now appeals, arguing the court erred in finding the premarital agreement
enforceable and in establishing the visitation schedule.
II. Standard of Review
We review dissolution proceedings de novo. In re Marriage of Shanks, 758
N.W.2d 506, 510 (Iowa 2008). Our de novo review extends to “issues concerning
the validity and construction of premarital agreements.” Id. at 511. “We give
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weight to fact findings of the district court, particularly as to witness credibility, but
are not bound by them.” Id.III. Prenuptial Agreement
Iowa Code chapter 596 (2015) applies to prenuptial agreements executed
on or after January 1, 1992. Id. In addition to the statute, we generally apply
contract law in evaluating prenuptial agreements. See id. at 511–19. A prenuptial
agreement is not unenforceable merely because it is “a bad fiscal bargain for one
party.” In re Marriage of Spiegel, 553 N.W.2d 309, 316 (Iowa 1996) (“[W]e will not
so grossly interfere with the parties’ freedom to contract.”), superseded by statute
on other grounds as recognized by Shanks, 758 N.W.2d at 512. A premarital
agreement is unenforceable if a person involved proves any of the following:
a. The person did not execute the agreement voluntarily.
b. The agreement was unconscionable when it was executed.
c. Before the execution of the agreement the person was not
provided a fair and reasonable disclosure of the property or financial
obligations of the other spouse; and the person did not have, or
reasonably could not have had, an adequate knowledge of the
property or financial obligations of the other spouse.
Iowa Code § 596.8(1). Ashley argues the prenuptial agreement is unenforceable
under all three paragraphs.
A. Voluntariness
A premarital agreement is unenforceable as involuntarily executed if one
party proves duress or undue influence. Shanks, 758 N.W.2d at 512–13. Duress
occurs if “(1) one party issues a wrongful or unlawful threat and (2) the other party
had no reasonable alternative to entering the contract.” Id. Ashley does not point
to a specific threat Nathan made, and his statement that he would not marry her
without a prenuptial agreement is not a wrongful or unlawful threat. See id. In
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addition, Ashley had the option of cancelling the wedding. While she testified she
had been planning for their May wedding since January, she also acknowledged it
was a “very small wedding” in their home, and cancellation is generally a
reasonable alternative to signing a prenuptial agreement. See id.; see also
Spiegel, 553 N.W.2d at 318 (“[W]e do not think social embarrassment from the
cancellation of wedding plans, even on the eve of the wedding, renders that choice
unreasonable.”). Therefore, Ashley has not shown duress.
Undue influence is influence that deprives one person of his
or her freedom of choice and substitutes the will of another in its
place. Mere importunity that does not go to the extent of controlling
the will of the grantor does not establish undue influence. Freedom
from undue influence is presumed.
Shanks, 758 N.W.2d at 513 (internal quotation and quotation marks omitted).
Ashley points to the lateness of the agreement, her being five-months pregnant,
the lack of explanation provided to her, and problems with the financial disclosures
as proof of undue influence. None of these issues show Nathan controlled her will
to the extent he unduly influenced her to sign the agreement. See id. (“The facts
presented here simply do not demonstrate the improper or wrongful constraint,
machination, or urgency of persuasion required for a finding of undue influence.”
(internal quotation and quotation marks omitted)). Therefore, Ashley has not
shown she executed the prenuptial agreement involuntarily. See Iowa Code
§ 596.8(1)(a).
B. Unconscionability
Unconscionability may be procedural or substantive. Shanks, 758 N.W.2d
at 515. Ashley only claims the prenuptial agreement was procedurally
unconscionable. “Procedural unconscionability generally involves employment of
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‘sharp practices[,] the use of fine print and convoluted language,’ as well as ‘a lack
of understanding and an inequality of bargaining power.’” Id. (quoting Rite Color
Chem. Co. v. Velvet Textile Co., 411 S.E.2d 645, 648 (N.C. Ct. App. 1992)). “[T]he
primary focus of the procedural unconscionability inquiry is the advantaged party’s
exploitation of the disadvantaged party’s lack of understanding or unequal
bargaining power.” Id. at 517. Our supreme court has provided the following
factors for identifying procedural unconscionability:
the disadvantaged party’s opportunity to seek independent counsel,
the relative sophistication of the parties in legal and financial matters,
the temporal proximity between the introduction of the premarital
agreement and the wedding date, the use of highly technical or
confusing language or fine print, and the use of fraudulent or
deceptive practices to procure the disadvantaged party’s assent to
the agreement.
Id. (citations omitted).
The district court found the factor weighing most heavily for
unconscionability here is the temporal proximity of two days between introduction
of the prenuptial agreement and the wedding.2 See id. Even if we accept Nathan’s
testimony that he generally discussed an agreement with Ashley as much as six
weeks before the wedding, she could not consider a specific agreement—or even
know if he still demanded an agreement—until two days before the wedding.
Relatedly, the short temporal proximity also limited Ashley’s opportunity to
seek independent counsel. See id. Nathan first presented the prenuptial
2
As was discussed during oral argument, Iowa Code section 596.8 does not provide a
minimum amount of time for a prenuptial agreement to be presented before the wedding.
While such a bright-line rule could negate temporal attacks as procedurally
unconscionable, we believe the legislature is best equipped to decide whether and where
to draw that line.
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agreement late in the afternoon of Thursday, May 11, 2006. As a result, Friday
was essentially the only business day for her to locate and consult with
independent counsel before the wedding on Saturday, May 13. However, she
does not claim Nathan or anyone else discouraged her from seeking independent
counsel; she merely claims no one discussed an independent counsel with her.
Regardless of whether anyone verbally discussed an independent counsel with
her, the prenuptial agreement she signed specifically mentions the parties’ “right
to be represented by separate attorneys,” and she testified she had an opportunity
to ask questions of Schulte.3
Nathan was undoubtedly more sophisticated in financial and legal matters
than Ashley. See id. At the time of marriage, he was thirty-seven years old, he
had operated his successful business for about twenty years prior to the marriage,
and he had navigated marriage and divorce twice before in addition to two other
engagements. By contrast, she was twenty-four years old with no sophistication
in financial or legal matters. While she lacked his previous experience in these
matters, she is a high school graduate who completed postsecondary vocational
training, and she testified her health is good and her intelligence is at least average.
The prenuptial agreement is a legal document; as such, some level of legal
training or guidance is likely needed to fully understand it. However, it is not an
excessively technical or confusing legal document. See id. The agreement spans
three pages plus a notary page and Nathan’s attached Personal Financial
3
Schulte testified via an evidentiary deposition that Ashley “was very comfortable with the
proceedings, and she appeared to understand what was going on and what she was
signing, and never requested time to contact a lawyer or be represented in any manner.”
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Statement. The agreement contains nine provisions in ordinary typeface, each
separately numbered with a bold summary title. The agreement announces its
nature by being titled a “PRENUPTIAL AGREEMENT” in bold at the top of the first
page.4 While prenuptial agreements are legalistic, their general concept is not new
or uncommon. See, e.g., Jacobs v. Jacobs, 42 Iowa 600 (1876) (finding a
prenuptial agreement enforceable).
Finally, Ashley testified Nathan deceived her about the nature of the
prenuptial agreement. See Shanks, 758 N.W.2d at 517. This evidence is limited
to her testimony that he told her the agreement would protect them from a lawsuit.
Because the record contains no other evidence of deceit, we agree with the district
court, Nathan did not intentionally misrepresent the agreement. Furthermore, any
misunderstandings were mitigated by discussing and signing the agreement in the
office of Schulte, who testified the signing was unremarkable and is professionally
obligated to avoid engaging “in conduct involving dishonesty, fraud, deceit, or
misrepresentation.” Iowa R. Prof’l Conduct 32:8.4(c).
Taking the factors together, the two-day gap between introduction of the
prenuptial agreement and the wedding is troubling. However, Ashley never
testified the late introduction caused her to rush her decision to sign or created
difficulty finding independent counsel to advise her. Instead, she argues she did
not fully understand the agreement before signing. Despite her lack of
4
Ashley questioned whether the agreement was titled “PRENUPTIAL AGREEMENT”
when she signed it. However, she also testified she did not read the agreement carefully.
The first full page of the prenuptial agreement bears the appropriate title, and the rest of
the document would make no sense with that page not included. We agree with the district
court that the agreement contained the title “PRENUPTIAL AGREEMENT” at the time of
signing.
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sophistication in legal and financial matters, her own testimony shows her capable
of generally understanding the effect of a prenuptial agreement, even if she did not
fully understand all implications of this specific agreement. Nathan did not
intentionally cause her to misunderstand the agreement, the plain appearance of
the agreement revealed itself to be a prenuptial agreement, and she had
opportunities to clarify her misunderstandings from Schulte or an independent
counsel. Furthermore, she never testified that she would have acted differently
even with additional time and perfect understanding prior to signing. Therefore,
we find the prenuptial agreement was not procedurally unconscionable.
C. Financial Disclosure
A prenuptial agreement is unenforceable if one “person was not provided a
fair and reasonable disclosure of the property or financial obligations of the other
spouse.” Iowa Code § 596.8(1)(c). The record contains Nathan’s “Personal
Financial Statement” as an attachment to the agreement. This statement provides
values for his personal property, including a specific valuation for Holtkamp Trailer
Repair of $2,750,000. Ashley complains the financial disclosure was not attached
to the prenuptial agreement before signing. However, both Nathan and Schulte5
asserted it was attached to the agreement, and the district court agreed.
Moreover, the disclosure need only be “fair and reasonable.” Id.; see also Shanks,
758 N.W.2d at 519 (stating the complaining spouse does not need complete
“personal bank account and pension information” because section 596.8(1)(c)
“does not impose such an exacting standard”).
5
Schulte testified the financial statement “was provided to Ashley because I provided each
of the parties a copy of the agreement with that financial statement attached.”
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Even if we assume for the moment Nathan’s financial statement was not
attached, the prenuptial agreement is only unenforceable if Ashley also did not
have “an adequate knowledge of the property or financial obligations of” Nathan.
Iowa Code § 596.8(1)(c). She testified she knew he was “a very wealthy man”
prior to marriage. She also testified she knew he owned all of the assets listed on
the Personal Financial Statement except his firearms and jewelry collections
valued at $125,000 total. While she claims she did not know the precise value of
all of his assets, she had an adequate knowledge of his assets at the time of
signing. Therefore, we agree with the district court Nathan made the proper
financial disclosure prior to the prenuptial agreement both because Ashley was
“provided a fair and reasonable disclosure” of his property and obligations and
because she had “an adequate knowledge of” his property and obligations. See
id.D. Conclusion
Ashley has not shown she executed the prenuptial agreement involuntarily,
the agreement was procedurally unconscionable, or Nathan failed to provide a
proper financial disclosure. See id. § 596.8(1). Therefore, the parties’ prenuptial
agreement is enforceable.
IV. Visitation
Ashley also appeals the visitation schedule in the decree. On October 19,
2015, the district court entered a temporary order placing physical care with her
and granting visitation with Nathan on Tuesdays from the end of school until 8:00
p.m. and alternating weekends from the end of school on Friday until 7:00 p.m.
Sunday. In the April 12, 2017 decree, the court entered additional visitation
13
provisions—including a summer visitation provision—and extended visitation with
Nathan on Tuesdays until 8:00 a.m. the next morning and on alternating weekends
until 8:00 a.m. Monday. In the May 16 ruling on post-trial motions, the court
specifically denied Ashley’s request for a right of first refusal for caring the children
when the other parent is unavailable. Ashley asks us to restore the Tuesday and
weekend visitation schedule from the temporary order and to grant a right of first
refusal during the summer.
In a dissolution action involving children, the Iowa Code states:
The court, insofar as is reasonable and in the best interest of the
child[ren], shall order the custody award, including liberal visitation
rights where appropriate, which will assure the child[ren] the
opportunity for the maximum continuing physical and emotional
contact with both parents after the parents have separated or
dissolved the marriage, and which will encourage parents to share
the rights and responsibilities of raising the child[ren] unless direct
physical harm or significant emotional harm to the child[ren], other
children, or a parent is likely to result from such contact with one
parent.
Iowa Code § 598.41(1)(a). “[S]tability and continuity of caregiving are important
factors that must be considered in custody and care decisions.” In re Marriage of
Hansen, 733 N.W.2d 683, 696 (Iowa 2007).
Regarding visitation, Ashley points to her role as the children’s primary
caretaker during the marriage. The court agreed with her characterization, noting
in the decree, “[i]n some respects, she might be considered the children’s sole
caretaker based on Nathan’s overriding commitment to his business operation.”
The court praised her for providing for the children’s material and financial needs,
providing for their emotional development, and encouraging their participation in
extracurricular activities and church. The temporary order largely continued the
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parties’ marital arrangement, placing the children in Ashley’s care the majority of
time and granting visitation with Nathan on Tuesday evenings and weekends. On
our review of the record, we find the Tuesday and weekend visitation schedule in
the temporary order provides continuity and stability in the best interests of the
children. Therefore, we modify the Tuesday visitation provision in the decree to
allow Nathan to visit with the children every Tuesday from the time they are out of
school until 8:00 p.m. We also modify the weekend visitation provision in the
decree to allow Nathan to visit with the children every other weekend from Friday
at the time they are finished with school until 7:00 p.m. the following Sunday. 6
Regarding the right of first refusal, the district court found such a provision
unnecessary and instructed the parties “to implement their own agreed upon
provision for first option to care for the children.” On our review of the record, we
agree with the district court that a right of first refusal is unnecessary. Therefore,
we deny Ashley’s request to add a right of first refusal.
V. Conclusion
We agree with the district court that the prenuptial agreement is
enforceable. We modify the decree regarding Tuesday visitation to allow Nathan
to visit with the children every Tuesday from the time they are out of school until
8:00 p.m. We also modify the decree regarding weekend visitation to allow Nathan
to visit with the children every other weekend from Friday at the time they are out
of school until 7:00 p.m. the following Sunday. We otherwise agree the visitation
6
We do not modify other visitation provisions in the decree.
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schedule is in the best interests of the children. Therefore, we affirm the decree
of dissolution as modified.
AFFIRMED AS MODIFIED.