In Re the Marriage of Laura Geist and Mark Geist Upon the Petition of Laura Geist, N/K/A Laura Frazier, petitioner-appellee/cross-appellant, and Concerning Mark Geist, respondent-appellant/cross-appellee. ( 2016 )

IN THE COURT OF APPEALS OF IOWA
No. 15-0578
Filed May 25, 2016
IN RE THE MARRIAGE OF LAURA GEIST
AND MARK GEIST
Upon the Petition of
LAURA GEIST, n/k/a LAURA FRAZIER,
Petitioner-Appellee/Cross-Appellant,
And Concerning
MARK GEIST,
Respondent-Appellant/Cross-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Scott County, Stuart P. Werling,
Judge.
Former husband and wife contest the property distribution and economic
provisions of the decree dissolving their marriage. AFFIRMED AS MODIFIED.
Nathan M. Legue of Cartee & McKenrick, P.C., Davenport, for appellant.
Wendy S. Meyer of Lane & Waterman, LLP, Davenport, for appellee.
Considered by Vaitheswaran, P.J., and Doyle and Mullins, JJ.
2
DOYLE, Judge.
Mark Geist appeals and Laura Frazier (formerly Geist) cross-appeals from
the decree dissolving their marriage. The parties contest the district court’s
overall property division, including its property valuations and the percentage of
those valuations it included as marital assets. Additionally, Mark challenges the
court’s awards of permanent spousal support and trial attorney fees to Laura,
and Laura contends the court erred in not ordering Mark to purchase or maintain
a life-insurance policy for her benefit, in failing to include a specific hold-harmless
clause, and in not allowing her additional time to remove her personal property
from the marital home. She requests appellate attorney fees. Upon our de novo
review, we affirm as modified.
I. Background Facts and Proceedings.
Mark and Laura Geist married in 1998. They have no children. In April
2014, Laura filed a petition seeking to dissolve their marriage.
In August 2014, the district court filed its “Trial Setting Conference
Memorandum,” indicating spousal support, property, debts, and attorney fees
were issues “that may be contested” at trial, and it set a trial date for February
2015.
Trial was held as scheduled. At the start, the district court stated:
The parties have signed and presented to the court, prior to
going on the record, a statement of uncontested and contested
issues, which the court has received, and a joint statement of
assets and liabilities.
Although the joint statement of assets and liabilities is signed
by the parties, the . . . petitioner has informed the court that there
may be some modification regarding bank account numbers once
the evidence is received.
3
The court then asked the parties if there was “anything else preliminarily we need
to do . . . ?” Both parties’ attorneys answered in the negative, and the testimony
began. Ultimately, neither the statement of the parties’ uncontested and
contested issues nor the joint statement of assets and liabilities made it into the
record.
On March 5, 2015, the district court entered its order and ruling dissolving
the parties’ marriage. The court set forth the following assets as marital property,
and it assigned valuations and distributed the property as follows:1
PETITIONER’S VALUES Court’s Value Mark Laura
[Homestead] $255,300.00 $127,650.00 $127,650.00
[Rental] $190,970.00 $152,776.00 $38,194.00
2000 [car] $2,000.00 $2,000.00
2011 [truck] $20,900.00 $20,900.00
Boat & Trailer $1,500.00
Horse Trailer $500.00
[Pick-up] $1,500.00 $1,500.00
Work Trailer $350.00
[CMFG Insurance] $5,455.00 $5,455.00
[NW Mutual Insurance] $26,473.00 $26,473.00
Prudential
[BF] Stock $56,333.67 $56,333.67
[Bank2] CD $64,552.07 $64,552.07
[Bank] RENTAL DEPOSIT $1,500.00 $1,500.00
[Bank] $14,847.77 $14,847.77
[Bank] $300.00
[Bank] $63,221.12 $31,610.56 $31,610.56
1
We set forth the table as it was presented in the decree except for the alterations
indicated in brackets.
2
We substituted “Bank” for the actual name of the parties’ bank listed in the table of the
district court’s decree. Other than that name, we did not omit or alter any information
concerning the accounts. Stated another way, but for “CD” and “RENTAL DEPOSIT,”
the district court did not otherwise identify which account it was referring to when it listed
a valuation on each “Bank” line, nor did it further explain in its decree how it arrived at its
valuations. Some of the figures are straightforward and correspond to evidence in the
record, but we are unable to determine how it arrived at the values of $64,552.07 and
$14,847.77.
4
[Bank] $1,500.00 $750.00 $1,500.00
[Bank] $29,532.00
[Bank]
[Bank]
Guns & Safe $2,300.00 $2,300.00
Shop Contents $25,000.00 $25,000.00
Tractor $17,413.60 $17,413.60
Appliances $1,500.00 $1,500.00
Furniture $5,000.00 $5,000.00
subtotal $557,911.67 $201,254.56
The court noted the distribution netted Mark $356,657.11 over the assets
awarded to Laura. The court also found the “total marital debt [was] about
$20,000,” and it ordered Mark to pay “all marital debt as identified in the joint
statement of assets and liabilities.” To give Mark credit for the marital debt it
ordered him to pay, the court subtracted $20,000 from the $356,657.11 property
award differential, rounded it off to $337,000, divided it in half, and ordered Mark
pay an equalization payment to Laura of $168,500.
The court found “Mark earn[ed] approximately $92,000 and Laura $22,500
per year in gross income” and ordered Mark to pay Laura permanent spousal
support of $1100 per month. Mark was also ordered to pay $12,000 of Laura’s
attorney fees. The court declined Laura’s request for additional time to remove
her property from the marital property.
Thereafter, Laura filed an Iowa Rule of Civil Procedure 1.904(2) motion
requesting that the court enlarge or amend its decree in numerous respects.
Among other things, Laura requested the court amend the decree to require
Mark to maintain life insurance for her benefit to secure her spousal support.
She also requested the court amend the decree to include a hold-harmless
5
clause concerning the parties’ past tax returns, and she asked for additional time
to remove her property from the marital home.
At this point, the court became aware it did not have the parties’ joint
statement, and at the court’s request, the parties resubmitted the statement on
March 18, 2015. The undated statement, which was signed only by the parties’
attorneys, is as follows:3
ASSETS OWNER Agreed Agreed Values Values
Recipient Value [Laura] [Mark]
[Homestead] J $255,300.00 $217,300.00
[Rental] D $190,970.00
.54 Acres* J $3,000.00 $3,000.00
9.52 Acres J $35,000.00 $35,000.00
2000 [car] W $2,000.00 $2,000.00 $2,000.00
2011 [truck] H $19,946.00
Boat & Trailer* H $3,000.00
2012 [tractor] H $26,600.00
Horse Trailer* H $1,000.00 $800.00
[Pick-up] H $1,500.00 $1,500.00
Work Trailer H $5,000.00 $1,500.00
[CMFG Insurance]* H $5,455.95 $5,455.95 $5,455.95
[Mutual Insurance]* H $26,473.13 $26,473.13 $26,473.13
Prudential (term) W $0.00
[BF Stock] H $56,333.67 $41,499.00
[Bank CD] H $27,864.46 $0.00
[Rental Bank #0898] H $1,500.00 $1,500.00
[Bank #8979 (checking)] H $3,631.89 $3,631.89
[Bank #0365] H $22,252.64 $22,252.64
[Bank #5854] H $63,281.02 $63,281.02
[Bank #7085] W $350.00 $350.00
[Bank #4262] W $300.00 $300.00
[Bank #7751] H $29,532.00
[Bank IRA #2422] H $9,207.08 $9,207.08
[Pension]* H $248.00/mo. $248.00/mo. $248.00/mo.
3
All of the cells crossed-out in this table were crossed-out by hand on the original
statement. At the bottom of each page of the statement was the following: “*Pre-marital
asset.”
6
Shop Contents/Tools* H $50,000.00 $25,000.00
Guns & Safe* H $15,000.00 $2,500.00
Appliances H $5,000.00 $1,000.00
[Livestock] H $1,500.00 $500.00
LIABILITIES OWNER Agreed Agreed Values Values
Recipient Value [Laura] [Mark]
[2009 Federal Taxes] W $11,642.00 $11,642.00
Genesis W
[2009 State Taxes] W $3,843.15 $3,620.00
[Misc. Medical Exps.] W $2,046.95
[Store] Credit Card W $50.00
[Tractor Bank Loan] H $13,409.00
Quad Corporation W $1,439.73
[CS] Recovery W $73.51
[Laura’s Attorney’s Fees] W $12,689.69
[Psych. Assoc.] J $196.00
[Bank Credit Card] H 0.00
Mark filed a resistance to Laura’s motion, as well as his own rule 1.904(2)
motion. Mark requested, among many things, that the court amend its ruling to
“base the property division on the agreed-upon values set forth by the
parties[’] . . . Joint Statement, subject to the evidence on [Bank] account
balances submitted” into evidence at trial. He also requested the court amend
the decree “to take into account the premarital nature” of assets designated as
premarital on the statement. Additionally, he requested the court reevaluate its
property distribution, reduce the income it attributed to him, and reduce the
amount of the spousal support award accordingly.
The district court subsequently entered an order amending its original
order and ruling. “Based on the values stated in” the parties’ joint statement, the
7
court amended its valuations and distributions of assets in the following
respects:4
PETITIONER’S VALUES Court’s Value Mark Laura
[Homestead] $255,300.00 $127,650.00 $127,650.00
[Rental] $190,970.00 $152,776.00 $38,194.00
2000 [car] $2,000.00 $2,000.00
2011 [truck] $20,900.00 $20,900.00
[AMENDED VALUE] $19,946.00 $19,946.00
Boat & Trailer $1,500.00
[AMENDED VALUE TO $3,000 &
DESIGNATED PREMARITAL] $0.00
Horse Trailer $500.00
[AMENDED VALUE] $1,000.00
[Pick-up] $1,500.00 $1,500.00
Work Trailer $350.00
[AMENDED VALUE] $5,000.00
[CMFG Insurance] $5,455.00 $5,455.00
[NW Mutual Insurance] $26,473.00 $26,473.00
Prudential
[BF] Stock $56,333.67 $56,333.67
[Bank] CD $64,552.07 $64,552.07
[Bank] RENTAL DEPOSIT $1,500.00 $1,500.00
[REMOVED FROM ASSETS] $0.00 $0.00
[Bank] $14,847.77 $14,847.77
[Bank] $300.00
[Bank] $63,221.12 $31,610.56 $31,610.56
[IDENTIFIED AS Bank #5854 &
AMENDED VALUE] $31,640.51[5] $15,820.26 $15,820.26
[Bank] $1,500.00 $750.00 $1,500.00
[Bank] $29,532.00
[Bank]
[Bank]
Guns & Safe $2,300.00 $2,300.00
4
A table was not included in the amended order, and we attempt to recreate one as best
we can based upon the district court’s amended numbers expressly stated in its order.
All other figures are the values set out in the court’s original order and ruling.
5
The court found the proceeds from the sale of the Wisconsin property were deposited
in Mark’s Bank #5854 account and that account had a net value of $63,281.02. The
court found half of that value to be the property of Mark’s son. The remaining half was
distributed equally between Mark and Laura.
8
Shop Contents/Tools[6] $25,000.00 $25,000.00
[AMENDED VALUE TO $5,000 &
DESIGNATED PREMARITAL] $0.00
Tractor $17,413.60 $17,413.60
[AMENDED VALUE] $13,191.00 $13,191.00
Appliances $1,500.00 $1,500.00
[AMENDED VALUE] $2,500.00 $2,500.00
Furniture $5,000.00 $5,000.00
[Livestock not included] $0.00 $0.00
[AS AMENDED] $1,000.00
[MARITAL DEBTS] -$20,000.00
subtotal [AS AMENDED] $496,094.77
[UNKNOWN ASSET] $59,320.89
[TOTAL AS AMENDED] $555,415.66[7] $185,464.26
Mark appeals and Laura cross-appeals. We address their claims in turn.
II. Discussion.
Because marriage dissolution proceedings are equitable proceedings, our
review is de novo. See Iowa Code § 598.3 (2015); In re Marriage of Mauer, 874
N.W.2d 103, 106 (Iowa 2016). This requires us to “examine the entire record
and adjudicate anew the issue of the property distribution.” In re Marriage of
McDermott, 827 N.W.2d 671, 676 (Iowa 2013). Nevertheless, “[u]nder this
standard, we defer to the factual findings of the district court,” In re Marriage of
Kimbro, 826 N.W.2d 696, 698 (Iowa 2013), “particularly concerning the credibility
6
The court’s original order and ruling valued “Shop contents” at $25,000, a value upon
which the parties agreed. In its rule 1.904(2) ruling, the court stated: “The Shop and
contents with a net value of $5000 are premarital assets of Mark and are awarded to
him.” From this language it appears the court reduced the value from $25,000 to $5000,
but it is unclear. Laura’s brief suggests the $5000 was in addition to the $25,000, but
Mark’s brief notes the court “found that the shop and its contents were worth $5000.” In
any event, Mark agrees the “[b]usiness asset” was marital property valued at $25,000.
7
We cannot determine how the district court arrived at $555,415.66. The numbers in
this column add up to $496,094.77, as we have indicated on the subtotal line above. We
have simply referred to the difference as an “UNKNOWN ASSET” attributed to Mark of
$59,320.89.
9
of witnesses; however, those findings are not binding upon us,” McDermott, 827
N.W.2d at 676. We will only disturb a district court determination if there has
been a failure to do equity. See Mauer, 874 N.W.2d at 106. However, we review
an award of attorney fees for an abuse of discretion. See In re Marriage of
Sullins, 715 N.W.2d 242, 247 (Iowa 2006).
A. Property Distribution, Valuations, and Equalization Payment.
Iowa Code section 598.21(5) requires marital property be divided
equitably in dissolution-of-marriage cases. See In re Marriage of Hansen, 733
N.W.2d 683, 702 (Iowa 2007). This first requires a determination of which
property is subject to division, and then, considering the factors set forth in
section 598.21(5), that property must be divided equitably. See In re Marriage of
Fennelly, 737 N.W.2d 97, 102 (Iowa 2007).
In determining which property is subject to division, we consider not only
“property acquired during the marriage by one or both of the parties, but property
owned prior to the marriage by a party,” with the understanding that, under
section 598.21, “property brought into the marriage by a party is merely a factor
to consider by the court, together with all other factors, in exercising its role as an
architect of an equitable distribution of property at the end of the marriage.” In re
Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005). Ultimately, any
“[p]roperty not excluded is included in the divisible estate.” Id.“The partners in the marriage are entitled to a just and equitable share of
the property accumulated through their joint efforts,” In re Marriage of Hazen, 778
N.W.2d 55, 59 (Iowa Ct. App. 2009), but it “is important to remember marriage
does not come with a ledger,” Fennelly, 737 N.W.2d at 103. In determining how
10
to equitably divide the property, an “equitable division is not necessarily an equal
division.” Hansen, 733 N.W.2d at 702. Though “it is generally recognized that
equality is often most equitable,” Fennelly, 737 N.W.2d at 102, “[e]quitable
distribution depends upon the circumstances of each case,” Hansen, 733 N.W.2d
at 702. Consequently, precedent is of little value. See McDermott, 827 N.W.2d
at 682. “[K]eeping in mind there are no hard and fast rules governing economic
issues in dissolution actions,” we must apply the factors contained in section
598.21(5) in reaching an equitable division. Id.
1. Undisputed Claims, Valuations, and Division.
The parties do not challenge the district court’s valuation and division of
the following marital assets:
Asset Valuation Mark $ Laura $
Homestead $255,300.00 $255,300.00 $0.00
2000 car $2,000.00 $0.00 $2,000.00
2011 truck8 $19,946.00 $19,946.00 $0.00
Pick-up $1,500.00 $1,500.00 $0.00
Prudential $0.00 $0.00 $0.00
Tractor [net value]9 $13,191.00 $13,191.00 $0.00
Rental Bank #089810 $0.00 $0.00 $0.00
Laura’s Bank #4262 $300.00 $0.00 $300.00
Boat & Trailer $3000.00 $0.00 $0.00
Additionally, the parties agree the court should have valued Mark’s stock
at $41,499, not $56,333.67, based upon the evidence at trial. The parties further
8
Though Mark’s brief states the value of this truck was $19,956, the parties’ joint
statement shows Mark agreed it was valued at $19,946. Laura does not dispute this
value, so we do not modify it.
9
The parties agree the value of the tractor is $26,600, with a lien of $13,409 and thus
has a net value of $13,191. Because we use the net value we do not include the lien in
the liabilities part of the equation.
10
The parties agree this account holds the rental deposit required by statute and is not
marital property. We list it only to show we give it no value in the division.
11
agree the court inadvertently omitted Laura’s second bank account, Bank #7085,
and they agree its value is $350. They also agree Mark’s Bank #8979 account is
marital property valued at $3631.89.11 Finally, they agree the shop and its
contents are marital property valued at $25,000. Insofar as the district court
found otherwise, we modify these valuations and allocate as follows:
Assets Valuation Mark $ Laura $
BF Stock $41,499.00 $41,499.00 $0.00
Laura’s Bank #7085 $350.00 $0.00 $350.00
Bank #8979 $3,631.89 $3,631.89 $0.00
Shop Contents/Tools $25,000.00 $25,000.00 $0.00
The parties also basically agree on the valuations of two of Mark’s other
accounts, Bank #7751 and Bank #2422. Their valuations of the accounts differ
by a few dollars. We use the valuations that match the balances reflected on the
statement Mark provided at trial. Accordingly, insofar as the district court found
otherwise, we modify these valuations and allocate as follows:
Assets Valuation Mark $ Laura $
Bank #7751 $29,532.76 $29,532.76 $0.00
Bank #2422 $9,211.77 $9,211.77 $0.00
Finally, the parties agree the court should have ordered Laura to quitclaim
her interest in the real property to Mark upon payment of the property settlement.
Accordingly, we modify the decree to order that Laura quitclaim her interest in the
real property to Mark upon payment of the property settlement.
2. Disputed Valuations and Property Division.
An agreement between the parties resolving issues in domestic-relations
cases is generally considered valid. See In re Marriage of Briddle, 756 N.W.2d
11Mark’s Bank #8979 account had a balance of $3632.03 at the time of trial, fourteen
cents higher than the parties’ agreed amount. We use the parties’ agreed valuation.
12
35, 40 (Iowa 2008). Nevertheless, the trial court retains “the power to reject the
parties’ stipulation if it is unfair or contrary to law.” Id. Though, the “validity of the
solutions reached in the . . . agreement need not be those the court itself would
have adopted if it were adjudicating the controversy,” id. at 41, the trial court
must determine if the parties’ stipulation “constitute[s] an appropriate and legally
approved method of disposing of the contested issues,” In re Marriage of Jones,
653 N.W.2d 589, 593 (Iowa 2002).
“Valuation is difficult and trial courts are given considerable leeway in
resolving disputes as to valuations.” In re Marriage of Shanks, 805 N.W.2d 175,
177 (Iowa Ct. App. 2011). “Ordinarily, a trial court’s valuation will not be
disturbed when it is within the range of permissible evidence.” Hansen, 733
N.W.2d at 703. Even though our review is de novo, we generally “defer to the
trial court when valuations are accompanied by supporting credibility findings or
corroborating evidence.” Id. Yet, because our review is de novo, we may make
our own findings and conclusions on issues properly raised but not decided by
the district court. See Lessenger v. Lessenger, 156 N.W.2d 845, 846 (Iowa
1968) (noting our review of an equity case is de novo where we may issue fact
findings and legal conclusions on our own review as we deem proper). Stated
another way, because our review is de novo, we need not ascertain the intent of
the district court but conduct our own “review of the statutory factors relevant to
an equitable distribution of marital property.” In re Marriage of Rhinehart, 704
N.W.2d 677, 683 (Iowa 2005). We note that the owner of the property is
considered “a competent witness to testify to its market value.” Hansen, 733
N.W.2d at 703. Additionally, while we recognize that, generally, the value of the
13
assets should be determined as of the date of trial, there may be occasions when
the trial date is not appropriate to determine values. See In re Marriage of
Driscoll, 563 N.W.2d 640, 642 (Iowa Ct. App. 1997). This is because equitable
distributions require flexibility and concrete rules of distribution may frustrate the
court’s goal of obtaining equitable results. See id. Dissipation of assets is also a
proper consideration in dividing property. See Fennelly, 737 N.W.2d at 104.
a. Remaining Bank Accounts.
Excluding the accounts addressed above, three other accounts were listed
on the parties’ joint statement: Bank CD, Bank #0365, and Bank #5854. Though
the parties’ joint statement listed several agreed-upon balances, the court verified
at the beginning of the trial that the balances might be modified “once the
evidence is received.” At trial, Mark provided a February 23, 2015 balance report
from Bank, which he testified showed “all of the current values of everything [he
had] with [Bank].” The report listed the following relevant accounts:
Product Account Number Current Balance
[SB Checking] [Bank #0365] $17,555.51
[PMM Savings] [Bank #5854] $63,292.56
[P3I] [Bank #9732] $0.00
i. Bank CD.
None of the accounts on the report provided by Mark were specifically
labeled as a CD, nor was there any testimony stating which account, if any, was
a CD account. The joint statement provided by the parties had Bank CD listed,
but that account was crossed out or struck through, indicating this account either
no longer existed or had no value. We therefore modify its valuation to zero as
follows:
14
Assets Valuation Mark $ Laura $
Bank CD $0.00 $0.00 $0.00
ii. Bank #9732.
The report listing Mark’s bank accounts and balances show his
Bank #9732 brokerage account had a zero balance at the time of trial. However,
on cross-examination, Mark admitted that when he answered interrogatories the
Bank #9732 account’s balance was approximately $27,000. When asked what
had happened to the $27,000, Mark was not sure, testifying: “I’m confused on
that. I don’t know. Me and [my attorney] had it worked out, and everything was
correct. I don’t know what to tell you on that other than I’m sure he can get you
the answer for that.” Mark provided his Bank #9732 statement for the month of
February 2014, which showed a beginning balance of $73,832.92 and an ending
balance of $0. He also provided another statement for Bank #5854 for the period
of February 21 to March 19, 2014, showing a beginning balance of $1248.70,
and an ending balance of $78,202.57. The statement shows a deposit of
$76,948.07 was made February 25, 2014. Mark was asked if he transferred the
funds from Bank #9732 to Bank #5854, and he testified: “It appears I did, but I do
not remember that, but yes.” Mark’s counsel asked:
Q. Okay. Well, didn’t you have some issues with your
holdings at [Bank], and you were not satisfied— A. Oh, yeah.
Q. —with how they were going? A. Yeah. My investor, yes.
Q. And so you moved them somewhere else? A. Okay.
Q. Is that your recollection? A. Yes, sir.
The court then attempted to clarify, and the following exchange occurred:
THE COURT: Counsel, I’m gonna stop and ask for some
clarification because I am hopelessly confused.[12]
12
Perfectly understandable in our judgment.
15
[MARK’S COUNSEL]: Okay.
THE COURT: We have an account from which the money is
transferred. That’s the money coming out, and I think you’ve
established that that [is the Bank #9732 account]. And in February,
approximately $76,000 comes out of that account.
[MARK’S COUNSEL]: I believe that is correct.
THE COURT: But you’ve given me two different account
numbers into which that money goes in.
[MARK’S COUNSEL]: Okay. And I apologize for that, Your
Honor. The problem is that [Bank] does this uniform statement,
and it puts two accounts on the same statement. So the statement
that I just put in front of him, [Exhibit] AA, is this uniform statement
with both the personal checking account, which is—I better get this
right—
[LAURA’S COUNSEL]: I know what it is. [Bank #8979] is the
account number which is—contains his personal platinum checking
and a money market savings account. So what he did was he took
it out of, allegedly, [Bank #9732] and deposited it into [Bank #8979]
in the money market portion of the account.
[MARK’S COUNSEL]: That is what I’m trying to establish,
yes.
[LAURA’S COUNSEL]: Right. The problem that I see is the
balance which now he says he has in [Bank #8979] of $63,000, in
July he said he had that plus another $27,000 back in
[Bank #9732].
[MARK’S COUNSEL]: Right. So the problem that we have is
this [interrogatory] answer regarding [Bank #9732]. And that was
what you were trying to get at. And I have just established that
there was a lot—
THE COURT: Let’s go off the record here. (Off-the-record
discussion.)
THE COURT: Where are we with the issue of [the Bank
exhibits], counsel?
[MARK’S COUNSEL]: Your Honor, we had a discussion off
the record and would like to request, since we can’t clarify this
discrepancy between the interrogatory answer and the statements,
that I have to request to keep the record open at the close of
testimony and produce the statements from the [exhibits] that I
gave on this account up until . . . the date of this dissolution.
Laura did not object.
After trial, Mark submitted a letter prepared by Bank stating: “In regards to
[Bank #9732] belonging to [Mark], this account was liquidated on 02/25/2014 and
was moved to his linked checking account ending in X5894.” This letter did
16
nothing to clear the muddy waters. No checking account ending in X5894
appears on the Bank’s report listing Mark’s accounts and their corresponding
balances. The Bank’s report does identify Bank #5854 as a money market
savings account, but the Bank’s letter specifically states the account ending in
X5894 is a “linked checking account.” Consequently, we cannot conclude with
any certainty that the Bank’s identification of the account as ending in X5894 was
a typographical error by Bank.
In any event, Mark admitted he had had $27,000 in his account which he
could not account for. He was given an extra opportunity to reconcile the
evidence. On our de novo review of the evidence, we find it would be
inappropriate to use the balance of the account at the date of trial—$0—as the
account’s valuation. Accordingly, $27,000 should be included as marital property
and we modify as follows:
Assets Valuation Mark $ Laura $
Bank #9732 $27,000.00 $27,000.00 $0.00
iii. Bank #0365—Business Account.
Mark’s Bank #0365 account is his business account, and at the time of
trial, its balance was $17,551.51. However, at the time of the parties’ joint
statement, Mark admitted it had a balance of $22,252.64, a difference of
$4697.13. He argues the account should be valued at the lesser figure, while
Laura asserts it should be valued at the higher number.
Mark testified he had paid property taxes of approximately $3000 from the
account, but he admitted he had not yet deposited checks the business had
received for February 2015 sales. He did not give an accounting for the amount
17
of the checks to be deposited, but he testified the balance for the account could
have been “maybe 6 or $7,000 [higher], counting the $3,000 [property tax
payment] and the checks that I have for this month.” Because Mark believed he
had $3000 or $4000 that had not yet been deposited into his account, we believe
the parties’ stipulated balance of $22,252.64 represents the fair valuation of
Mark’s Bank #0365 account, not the balance of the account on the date of trial.
Accordingly, we modify as follows:
Assets Valuation Mark $ Laura $
Bank #0365 $22,252.64 $22,252.64 $0.00
iv. Bank #5854 and Wisconsin Property Proceeds.
At the time the parties entered into their stipulation, the parties agreed
Mark’s Bank #5854 account had a balance of $63,281.02, but they disputed what
percentage of that valuation should be considered marital property and included
in the property distribution equation. At trial, Mark testified that before he married
Laura, his mother gave him a parcel of property she owned in Wisconsin. Mark
“figured someday [he] would give [the property] to [his son],” so when the
property was transferred from his mother, Mark titled the property jointly with his
son. Mark and his son sold the property in 2004 and received net proceeds of
$75,416.45 from the sale. Mark testified he put all of the sale proceeds into his
Bank #5854 account and argued that, because half of the sale proceeds
belonged to his son, only half of the account’s value, $31,640.51, should be
included in the property division. The district court agreed with Mark in its ruling
on the parties’ motions to amend and enlarge, finding “[h]alf of that value is the
18
property of Mark’s son,” and it appears to have distributed the remaining half
between Mark and Laura.
Laura argued Bank #5854 should be considered marital property and
100% of its balance included in the property division equation. She believed
Mark was attempting to improperly set aside assets rightly belonging to the
couple, pointing out it had been over eleven years since the sale, and Mark had
purportedly not turned over any of these funds to his son. She also noted Mark
admitted the property’s value at the time of their marriage was only $17,900, and
they paid taxes on and made improvements to the property during the marriage.
Upon our de novo review, we agree with Laura that the entire valuation
should be included in the property division equation. As we noted in our
discussion of the value of Mark’s Bank #9732 account, he provided his statement
for his Bank #5854 account for the period of February 21 to March 19, 2014,
which had a beginning balance of $1248.70. Though we have no doubt his son
was entitled to half of the sale proceeds of the Wisconsin property, Mark has
failed to establish the money in his Bank #5854 account is the same money he
received from the sale of the Wisconsin property over eleven years ago.
Therefore, the entire balance of the account should be included as marital
property. Accordingly, we modify as follows:
Assets Valuation Mark $ Laura $
Bank #5854 $63,281.02 $63,281.02 $0.00
b. Log Cabin Rental Property.
The parties agree with the district court’s total valuation of the log cabin
rental property at $190,970, but they disagree with the court’s division of the
19
asset. Mark contends the court did not err in determining 60% of the property’s
value should be set aside as premarital property and not included in the property
distribution equation, but he argues the district court failed to carry out that
determination in its calculation. Laura argues the entire valuation should be
included in the calculation.
Mark testified he took ownership of the property in 1978 and built the
cabin on the land the same year. Thus, he owned this property twenty years
before the parties’ marriage in 1998. The parties then lived there after their
marriage until they moved in 2005. Laura testified not many improvements were
made to the property while she lived there with Mark, but they did put a roof on it
and did a lot of dirt work and blacktop, “stuff like that.” She also testified that
after they moved, they decided to rent out the property and made improvements,
such as adding new vinyl, carpet, paint, and stain.
The district court found “Laura has a 20% marital interest in the rental
property,” explaining that though the property “was purchased and paid for by
Mark prior to the marriage” and “marital funds were used to remodel and update
that property from time to time.” It allocated $38,194 in Laura’s column,
representing 20% of the $190,970 valuation, but it appears to have included the
remaining 80% of the valuation in Mark’s column and, therefore, included all of
the asset’s value in its marital estate calculation.
On our de novo review, we have considered the applicable section
598.21(5) factors in this case—including but not limited to the length of the
parties’ marriage, as well as each party’s age, health, earning capacity,
premarital property, contribution to the marriage and to the other’s increased
20
earning power, and other economic circumstances—and we find the district
court’s division of the property’s value to be inequitable. Mark owned the
property for twenty years before he married Laura, and then another sixteen
years during the marriage. Twenty of thirty-six years is 55%, and the remaining
sixteen of thirty-six years is 45%. Taking the valuation of $190,970 times 55%,
we conclude equity requires $105,033.50 of the asset be set aside as Mark’s
premarital property and not included in the division. The difference of
$85,936.50, or 45%, should be included as a marital asset. We therefore modify
the valuation for purposes of the division of the asset as follows:
Assets Valuation Mark $ Laura $
Log Cabin Rental Property $85,936.50 $85,936.50 $0.00
c. Remaining Property.
Mark disputes the court’s valuations of his work trailer, guns, appliances,
furniture, and livestock. He argues that “as the owner of such property, he was
competent to credibly set its value.” However, the work trailer, appliances,
furniture, and livestock were marital property owned by both parties, and Laura
was also a competent witness to set their valuations. Concerning the value of
Mark’s guns, the court assigned the line item “guns and safe” a value of $2300.
Mark asserts on appeal the value of his guns was $1200, but he does not give
any valuation of the safes’ contents. Moreover, Mark himself valued the items
together on the parties’ joint statement at $2500. Reviewing the record de novo,
we find the district court’s valuations of all of these items to be within the range of
evidence presented and therefore do not disturb these valuations.
21
Mark also disputes the court’s inclusion of the value of his horse trailer in
the distribution equation, noting the parties stipulated the item was premarital
property. He also argues the entirety of the value of his two insurance policies
should not be included in the division. He asks that only the difference in the
policies’ values between 1998 and the current valuation be used as the value for
the policies. Considering all of the relevant factors, including that these items
were Mark’s property prior to the marriage, we agree with the district court that
equity requires these values be included in their entirety in the property
distribution equation. Accordingly, we affirm these valuations and the allocation
of each asset as follows:
Assets Valuation Mark $ Laura $
Work Trailer $5,000.00 $5,000.00 $0.00
Horse Trailer $1,000.00 $1,000.00 $0.00
Guns & Safe $2,300.00 $2,300.00 $0.00
Appliances $2,500.00 $2,500.00 $0.00
Furniture $5,000.00 $5,000.00 $0.00
Livestock $1,000.00 $1,000.00 $0.00
NW Mutual Insurance $26,473.00 $26,473.00 $0.00
CMFG Insurance $5,455.00 $5,455.00 $0.00
3. Property Distribution Summary.
Concerning the liabilities to offset the marital estate, the parties do not
challenge the district court’s inclusion of $20,000 as the value of the marital debt.
Based upon all of the valuations above, we reconcile the total as follows:
Asset Valuation Mark $ Laura $
Homestead $255,300.00 $255,300.00 $0.00
Log Cabin Rental Property $85,936.50 $85,936.50 $0.00
2000 car $2,000.00 $0.00 $2,000.00
2011 truck $19,946.00 $19,946.00 $0.00
Boat & Trailer (not included) $0.00 $0.00 $0.00
22
Tractor $13,191.00 $13,191.00 $0.00
Horse Trailer $1,000.00 $1,000.00 $0.00
Pick-up $1,500.00 $1,500.00 $0.00
Work Trailer $5,000.00 $5,000.00 $0.00
CMFG Insurance $5,455.00 $5,455.00 $0.00
NW Mutual Insurance $26,473.00 $26,473.00 $0.00
Prudential $0.00 $0.00 $0.00
BF Stock $41,499.00 $41,499.00 $0.00
Bank CD $0.00 $0.00 $0.00
Rental Bank #0898[13 $0.00 $0.00 $0.00
Bank #8979 $3,631.89 $3,631.89 $0.00
Bank #0365 $22,252.64 $22,252.64 $0.00
Bank #5854 $63,281.02 $63,281.02 $0.00
Laura’s Bank #7085 $350.00 $0.00 $350.00
Laura’s Bank #4262 $300.00 $0.00 $300.00
Bank #7751 $29,532.76 $29,532.76 $0.00
Bank #2422 $9211.77 $9211.77 $0.00
Bank #9732 $27,000.00 $27,000.00 $0.00
Shop Contents/Tools $25,000.00 $25,000.00 $0.00
Guns & Safe $2,300.00 $2,300.00 $0.00
Appliances $2,500.00 $2,500.00 $0.00
Livestock $1,000.00 $1,000.00 $0.00
Furniture $5,000.00 $5,000.00 $0.00
Asset Subtotal $648,660.58 $646,010.58 $2,650.00
Marital Debt $20,000.00 $20,000.00 $0.00
Marital Estate (Difference) $628,660.58
Half Marital Estate $314,330.29
Less Property in Laura’s Possession $2,650.00
Equalization Payment Due $311,680.29
Accordingly, we modify Mark’s equalization payment to Laura to $311,680.29.
13
The parties agree this account holds the rental deposit required by statute and is not
marital property. We list it only to show we give it no value in the division.
23
B. Mark’s Remaining Claims.
1. Spousal Support.
“Whether spousal support is justified is dependent on the facts of each
case.” Shanks, 805 N.W.2d at 178. Though not mandated, the district court may
order spousal support be paid if it determines support payments are warranted
after considering all of the following factors together:
a. The length of the marriage.
b. The age and physical and emotional health of the parties.
c. The distribution of property made pursuant to section
598.21.
d. The educational level of each party at the time of marriage
and at the time the action is commenced.
e. The earning capacity of the party seeking maintenance,
including educational background, training, employment skills, work
experience, length of absence from the job market, responsibilities
for children under either an award of custody or physical care, and
the time and expense necessary to acquire sufficient education or
training to enable the party to find appropriate employment.
f. The feasibility of the party seeking maintenance becoming
self-supporting at a standard of living reasonably comparable to
that enjoyed during the marriage, and the length of time necessary
to achieve this goal.
g. The tax consequences to each party.
....
j. Other factors the court may determine to be relevant in an
individual case.
Iowa Code § 598.21A(1); see also In re Marriage of Gust, 858 N.W.2d 402, 407
(Iowa 2015); Shanks, 805 N.W.2d at 178. The trial court is “in the best position
to balance the parties’ needs, and [appellate courts] should intervene . . . only
where there is a failure to do equity.” Gust, 858 N.W.2d at 416.
Here, the parties were married for over sixteen years. At the time of the
parties’ marriage in 1998, Mark was unemployed. Laura “had been on disability
for four years when [they] married,” having been diagnosed with chronic fatigue
24
syndrome, and her only sources of income at the time of the marriage were
social security disability and private disability insurance. After they married, Mark
started and continued to grow his own small engine repair business. Laura
performed bookkeeping for the business and answered its phone for a period of
time.
In 2000, Laura had surgery on her back to alleviate some of her medical
conditions. Ultimately, the surgery was not only unsuccessful, it increased
Laura’s pain and required physical therapy thereafter. At the time of trial, Laura
had numerous medical conditions requiring medication.
At trial, the parties’ 2013 joint federal tax return was submitted as
evidence. That return shows Mark reported an adjusted gross income of
$18,015. Schedule C of the return reported Mark’s business had gross sales or
receipts of $54,870; gross income of $36,819; total expenses of $35,198; and a
net profit of $1621, which is included in the adjusted gross income. Laura also
submitted the Schedule C of the parties’ 2011 federal tax return, which reported
Mark’s business had gross sales or receipts of $54,400; gross income of
$29,695; total expenses of $22,720; and a net profit of $6975.
The parties agreed that at the time of trial, Laura’s gross income was
$13,260 annually. However, Mark’s income was disputed. Mark’s financial
affidavit stated his gross income was $36,174 per year. At trial, Laura testified
Mark “kept a lot of cash out of the business when customers would pay him that
way,” but she was unsure of the amount because she “never saw the cash
tickets.” Laura testified Mark kept cash in one of the safes, but she did not have
access to the safe to total the cash. She also testified Mark “always had
25
thousands of dollars on him.” Mark denied failing to report all of the cash he
received, and he testified his business was paid in cash only approximately 10%
of the time. He testified he only kept between $500 and $600 of petty cash.
Additionally, Laura submitted as evidence of Mark’s income a copy of an
October 2013 “Note and Security Agreement with Guaranty” Mark executed in
obtaining a loan with Bank for the purchase of the tractor. That document stated
Mark’s “Gross Annual Sales” were $100,000. Mark admitted that was what the
document stated, but he testified he did not “remember telling them $100,000,
but [he] didn’t really fill [the form] out.” Mark also received income from the rental
property of $12,600 per year, but he testified he expected to sell the property to
pay for the property settlement, so he did not expect to continue receiving this
income after the dissolution.
In its decree, the district court found “[t]he parties most current income tax
returns show that Mark earns approximately $92,000, and Laura $22,500 per
year in gross income.” The court found Laura should receive spousal support
based on all the statutory factors . . . and considering the parties’
medical conditions and ability to earn income . . . . Further, Laura
has no ability to earn income from her own efforts and her sole
means of support, the $1100 per month she receives in disability
benefits, cannot maintain her in any meaningful level of comfort
relative to her lifestyle during the marriage. Mark can work and his
ability to earn an income is not significantly reduced by his current
conditions, including his health and age.
The court first used the guidelines suggested in Gust, though it acknowledged
the Gust guidelines contemplated marriages of over twenty years’ duration. See
Gust, 858 N.W.2d at 416 n.2 (“The [American Academy of Matrimonial Lawyers
(AAML)] urges a guideline approach where marriages over twenty years qualify
26
for unlimited spousal support.”). The court determined 30% of Mark’s income of
$92,000 to be $27,600, and subtracted 20% of Laura’s income of $22,500, or
$4500, from that amount to reach the figure of $23,100. See id. (“The amount of
unlimited spousal support is determined by taking 30% of the payor’s gross
income minus 20% of the payee’s gross income.”). Dividing $23,100 by twelve,
the court found “the Gust guidelines for support would result in Mark owing Laura
a permanent support award of in excess of $1900 per month.”14 The court
reduced the amount and ordered that Mark pay to Laura permanent spousal
support of $1100 per month.
On appeal, Mark challenges the district court’s finding that he earned
$92,000 per year, arguing the evidence only supported that he earned about
$38,400 annually, and he suggests the court’s figure was inadvertently copied
from the Gust opinion, where the supreme court found that exact figure in its
income determination. See id. at 415 (“Steven, on the other hand, earns $92,000
per year.”). Mark disputed his income in his rule 1.904(2) motion, but the court
did not modify his income. It did, however, at Laura’s request, reduce her
income to $13,200 annually.
14
In Gust, 858 N.W.2d at 416 n.2, our supreme court suggested the AAML guidelines
might “provide a useful reality check with respect to an award of traditional alimony.”
Later, the court explained it did not use the AAML guidelines to determine whether the
spousal support award in Gust was equitable—it “used the section 598.21A(1) factors
and principles suggesting the comparative weight of those factors derived from our
relevant caselaw,” and its resolution “of a spousal support issue was consistent with the
presumptive result under the AAML guidelines.” Mauer, 874 N.W.2d at 109. The court
cautioned that “the AAML guidelines are not Iowa law and therefore clearly not binding
on Iowa courts.” Id. at 108. The court made it clear that “any court, including our
appellate courts, must apply the section 598.21A(1) factors in making spousal support
determinations.” Id. at 109. It now appears the Gust footnote was a mere aside and
easily misconstrued. We note the Mauer clarification was filed in January 2016—long
after the district court entered its order and ruling.
27
Here, we agree with the district court that spousal support is justified, and
Mark does not contest this. Mark has substantially supported the parties during
their sixteen-year marriage. Upon our de novo review—taking into account the
income from the rental property, reported business earnings, dividends, Laura’s
testimony of Mark’s unreported earnings, and his income as stated on the
security agreement—we find the evidence supports the determination that Mark’s
earning capacity is at least $52,000 per year.15 Considering all of the relevant
section 598.21A(1) factors—including but not limited to the parties’ ages, health
conditions, and disparate income earning abilities, along with the length of the
marriage and the property distribution above—we conclude the district court’s
monthly spousal support award of $1100 per month is both compatible with the
requirements of section 598.21A(1) and equitable. Accordingly, we affirm the
district court’s award.
2. Trial Attorney Fees.
Mark contends the district court abused its discretion when it ordered him
to pay $12,000 of Laura’s trial attorney fees. “[W]e give the district court
considerable discretion in determining whether it should award fees at the district
court level.” In re Marriage of Michael, 839 N.W.2d 630, 639 (Iowa 2013). An
abuse of discretion occurs when the district court exercises its discretion “on
grounds or for reasons that are clearly untenable or to an extent clearly
unreasonable.” State v. Nelson, 791 N.W.2d 414, 419 (Iowa 2010); Graber v.
City of Ankeny, 616 N.W.2d 633, 638 (Iowa 2000).
15
We recognize Mark testified he planned to sell the property, but no evidence beyond
this was provided in support of his claim.
28
Upon our review, we find the award reasonable and therefore find the
district court did not abuse its discretion. Accordingly, we affirm on this issue.
C. Laura’s Remaining Claims.
1. Life Insurance Policy.
Laura argues the district court should have required Mark to secure his
spousal support obligations with life insurance. Generally, the permanent
spousal support award terminates upon the death of either party. See Gust, 858
N.W.2d at 412; In re Marriage of Lytle, 475 N.W.2d 11, 12 (Iowa Ct. App. 1991);
In re Marriage of Hayne, 334 N.W.2d 347, 352 (Iowa Ct. App. 1983). However, a
requirement to maintain life insurance to secure spousal support is permissible.
See In re Marriage of Olson, 705 N.W.2d 312, 318 (Iowa 2005); In re Marriage of
Weinberger, 507 N.W.2d 733, 736 (Iowa Ct. App. 1993); see also Stackhouse v.
Russell, 447 N.W.2d 124, 125 (Iowa 1989) (“A provision in a dissolution of
marriage decree to maintain life insurance is enforceable.”). If the party
requesting the security has demonstrated a need and the cost of such a policy
would not be unduly burdensome, the court may order the security of a life
insurance policy. See Olson, 705 N.W.2d at 318; see also In re Marriage of
Muow, 561 N.W.2d 100, 102 (Iowa Ct. App. 1997); In re Marriage of Stepanek,
No. 13-1592, 2014 WL 4937435, at *3 (Iowa Ct. App. Oct. 1, 2014).
Upon our de novo review, we find Laura has not demonstrated a clear
need for continued support such that Mark must secure her support after his
death. Laura has been awarded a substantial equalization payment by way of
the property division. Wise preservation and investment of the payment should
be sufficient to enable her to subsist in reasonable comfort, even if Mark should
29
predecease her. Accordingly, we affirm the district court’s declination to require
Mark carry life insurance to secure his spousal support obligations after his
death.
2. Hold-Harmless Clause.
Laura also asserts the district court should have ordered “that Mark hold
Laura harmless with regard to any liability arising from income tax returns filed
with Mark during the course of the marriage.” However, given that the returns
were filed jointly, we decline to include this clause. We therefore affirm the
district court on this issue.
3. Additional Time.
At trial, Laura requested ninety days to remove any household goods
awarded to her in the decree, testifying she could not “do very much at one time.”
The district court declined her request, noting she had “been well aware that this
marriage was ending for some months and has had ample opportunity to remove
her property prior to the entry of this decree. Extending her rights to the home
farm will only exacerbate the conflicts between these parties.” In her rule
1.904(2) motion, Laura asked for thirty days from the date she receives payment
of the property settlement to remove her personal property and possessions from
the former marital residence and property, but the court denied her request.
On appeal, Laura again asks for thirty days from the date she receives
payment from Mark to pick up her property, explaining her health does not allow
her to move her personal items herself and she has limited financial means to
hire others to do so until she receives the payment. In response, Mark stated he
had set aside the items Laura wanted from the marital home and stored them in
30
the garage to await Laura’s pick up. He also stated he “remains willing to allow
Laura to pick up her items, but there is no reason for her to have unfettered
access to the marital home.”
Here, Mark has agreed Laura may come pick up her property, and there is
no reason not to give her thirty days to do so. If all of her property is set aside in
the garage, we modify the decree to allow Laura thirty days after receiving the
settlement payment to pick up her property from the garage, with no other access
to the marital home, unless the parties agree otherwise. If all of Laura’s property
as awarded is not in the garage, we modify the decree to allow Laura thirty days
after receiving the settlement to pick up her items from the garage and, with
advance notice to Mark, from the marital home without otherwise disturbing the
home, unless the parties otherwise agree.
4. Appellate Attorney Fees.
Finally, Laura requests an award of appellate attorney fees. Appellate
attorney fees are discretionary, not a matter of right, and we consider the
requesting party’s need, the ability of the other party to pay, as well as the
appeal’s relative merits in deciding whether to award such fees. See McDermott,
827 N.W.2d at 687. Here, both parties advanced successful and unsuccessful
claims. Considering the relevant factors, we decline Laura’s request for
appellate attorney fees in this appeal.
III. Conclusion.
For the reasons discussed above, we modify Mark’s equalization payment
to Laura to $311,680.29, give Laura thirty days to remove her property as set out
above, and order Laura to quitclaim her interest in the real property to Mark upon
31
payment of the property settlement. We affirm the decree in all other respects.
Costs on appeal shall be taxed one-half to Mark and one-half to Laura.
AFFIRMED AS MODIFIED.