In Re the Marriage of Sandi K. Meurer and Charles H. Meurer Upon the Petition of Sandi K. Meurer, and Concerning Charles H. Meurer ( 2014 )

IN THE COURT OF APPEALS OF IOWA
No. 13-1236
Filed August 27, 2014
IN RE THE MARRIAGE OF SANDI K. MEURER
AND CHARLES H. MEURER
Upon the Petition of
SANDI K. MEURER,
Petitioner-Appellee,
And Concerning
CHARLES H. MEURER,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Scott County, Nancy S. Tabor,
Judge.
Respondent appeals the economic provisions of a decree of dissolution of
marriage. AFFIRMED AS MODIFIED.
Michael J. McCarthy of McCarthy, Lammers & Hines, Davenport, for
appellant.
Maria Waterman and Melinda Eshbaugh, Davenport, for appellee.
Heard by Danilson, C.J., and Potterfield and McDonald, JJ. Tabor, J.,
takes no part.
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MCDONALD, J.
Charles Meurer appeals the decree dissolving the marriage between him
and his former spouse Sandi Meurer. On appeal, Charles argues the district
court improperly included as marital property and divided two separate
inheritances he received during the course of the marriage. He also challenges
the district court’s award of spousal support and attorney’s fees.
I.
We review dissolution of marriage proceedings de novo. See Iowa R.
App. P. 6.907; In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013).
We examine the entire record and decide anew the issues properly preserved
and presented for appellate review. See id. While we give weight to the findings
of the district court, those findings are not binding. See Iowa R. App. P.
6.904(3)(g); McDermott, 827 N.W.2d at 676. We afford the trial court
considerable latitude in determining spousal support awards. See In re Marriage
of Benson, 545 N.W.2d 252, 257 (Iowa 1996). We will disturb the district court’s
ruling only where there has been a failure to do equity. Id. We review an award
of attorney fees for an abuse of discretion. In re Marriage of Sullins, 715 N.W.2d
242, 255 (Iowa 2006).
II.
A.
“Upon every judgment of annulment, dissolution, or separate
maintenance, the court shall divide the property of the parties . . . .” Iowa Code
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§ 598.21(1) (2011). As a general rule, the court shall divide all property of the
parties equitably between the parties. See Iowa Code § 598.21(5). However,
[p]roperty inherited by either party or gifts received by either party
prior to or during the course of the marriage is the property of that
party and is not subject to a property division . . . except upon a
finding that refusal to divide the property is inequitable to the other
party or to the children of the marriage.
Iowa Code § 598.21(6). This provision “does not demand that property acquired
by gift or inheritance must always be set aside to the donee and omitted
altogether from consideration in the division of property. To avoid injustice
property inherited by or given to one party may be divided.” In re Marriage of
Muelhaupt, 439 N.W.2d 656, 659 (Iowa 1989).
We look at several factors in determining whether inherited or gifted
property should be divided. “The intent of the donor and the circumstances
surrounding the inheritance control whether the inheritance is to be set off in the
dissolution.” In re Marriage of Higgins, 507 N.W.2d 725, 727 (Iowa Ct. App.
1993). We also consider:
(1) contributions of the parties toward the property, its care,
preservation or improvements;
(2) the existence of any independent close relationship between the
donor or testator and the spouse of the one to whom the property
was given or devised;
(3) separate contributions by the parties to their economic welfare
to whatever extent those contributions preserve the property for
either of them;
(4) any special needs of either party;
(5) any other matter which would render it plainly unfair to a spouse
or child to have the property set aside for the exclusive enjoyment
of the donee or devisee.
Muelhaupt, 439 N.W.2d at 659. The length of the marriage is also an “important
factor.” See In re Marriage of Hoffman, 493 N.W.2d 84, 89 (Iowa Ct. App. 1992).
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There are two inheritances at issue in this proceeding. The first: in 1993,
Charles inherited $178,000 from his uncle Herbert Frick. The district court found
the Frick inheritance should not be excluded from the property division, which
Charles contends was improper. After considering all relevant factors, we
conclude it would be inequitable to exclude the Frick inheritance from the marital
property subject to division.
From the time of its receipt, the Frick inheritance was comingled with
assets Charles and Sandi had accumulated as a couple. A portion of the
inheritance was used to satisfy the couple’s mortgage. Charles testified the
remaining money was not segregated because “our marriage was rock solid. I
never anticipated that we would ever divorce.” Other than payment on the
mortgage, neither party could trace the use of the Frick inheritance. The fact the
inheritance was used as marital property to provide for Charles, Sandi, and their
children for an extended period of time without segregation of the funds would
render any other disposition inequitable:
Our obligation to respect and give effect to the wishes of
those who convey gifts and bequeath inheritances demands of us
that those wishes not be rendered nugatory by the mere fact that
the intended recipient happens to be married.
On the other hand, as time goes on, the benefits of such
property are enjoyed by the married couple; it is both natural and
proper for the expectations of the other spouse to rise accordingly.
A sudden substantial rise in the couple’s standard of living made
possible by a gift or inheritance to the husband or the wife will
naturally and reasonably lead the other spouse to anticipate that
that standard of living will be maintained, particularly if it is
sustained over a lengthy period of time. Changes in habit, in dress,
in associates and friends, in manners, in leisure activities, in work
or study aspirations—in short, in one’s entire life-style—can be
brought about by significant improvements in one's access to
substantial financial resources. With time such changes become
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ever more deeply ingrained, and eventually it becomes virtually
impossible to return to a world long since renounced and forgotten.
In re Marriage of Wallace, 315 N.W.2d 827, 831 (Iowa Ct. App. 1981); see In re
Marriage of Goodwin, 606 N.W.2d 315, 320 (Iowa 2000) (stating “where the
parties have enjoyed, over a lengthy period of time, a substantial rise in their
standard of living as the result of gifts or inheritances, then any division of
property should enable the parties to continue that lifestyle, even if that goal
requires the division of gifted property”).
The second inheritance: one year prior to the parties’ dissolution trial,
Charles inherited approximately $282,000 from his stepmother Eda. The
inheritance was comprised of cash and 2000 shares of Exxon stock. Initially,
Charles held the inheritance in Charles’ and Sandi’s joint brokerage account, but
Charles almost immediately transferred the stock to his individual brokerage
account. The trial court awarded the Exxon stock to Charles without division as
inherited property. However, the trial court determined the cash portion of the
inheritance, plus interest and dividends earned on the inheritance, should be
considered marital property and divided equally between the parties. Sandy
does not cross-appeal the award of Exxon stock to Charles. Charles contends
the district court erred in concluding the cash portion of the inheritance was
marital property subject to division. We agree with this contention.
Unlike the Frick inheritance, the inheritance from Eda was received shortly
prior to the dissolution of the parties’ marriage. While it is true the inheritance
was temporarily held in a joint account, Charles quickly transferred the
inheritance from that account. Thus, unlike the Frick inheritance, the funds were
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not comingled and used to support the standard of living of the family.
Nonetheless, Sandi contends it was proper to divide the cash component of the
inheritance because she had a close relationship with Eda. There is no doubt
that Sandi enjoyed a close relationship with Eda and Charles a poor one. After
Charles’ dad died and left his money to Eda, Eda changed the executor of her
will. According to Sandi, Charles “fully expected that he was not going to inherit
anything. He thought for sure that she had changed the will and he was out.”
Sandi believes if she had told Eda she was leaving Charles, Eda would have
changed her will to leave the money to Sandi instead of Charles. That is simply
speculation. Like the district court, we find and conclude Eda devised the stock
and cash to Charles, despite their poor relationship, to honor Charles’ father’s
wishes. The Exxon stock and cash was earned by Charles’ father, and it was his
desire it be passed to his children.
While the district court found the cash portion of the inheritance was
comingled with other assets and not traceable, that is inconsistent with Charles’
testimony that all of the funds in brokerage account ***9199 were solely from the
inheritance. The district court’s conclusion the funds were comingled and not
traceable is also inconsistent with the property division in the decree. The
decree specifically identifies the cash portion of the inheritance plus accumulated
interest or dividends as $107,549.40 and equally divides the same, $53,774.70 to
each party. Although neither party did exemplary work in providing
documentation regarding their financial accounts, on de novo review, we are able
to conclude all of the funds in brokerage account ***9199 derived solely from the
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inheritance. Accordingly, the decree is modified to award Charles an additional
$53,774.70, which represents the remainder of the inheritance improperly
awarded to Sandi.
B.
Spousal support is a stipend paid to a former spouse in lieu of the legal
obligation to provide financial assistance. See In re Marriage of Anliker, 694
N.W.2d 535, 540 (Iowa 2005). A party does not enjoy an absolute right to
spousal support after dissolution of the marriage. See Iowa Code 598.21A(1)
(providing that “the court may grant an order requiring support payments to either
party”); Anliker, 694 N.W.2d at 540. The criteria for determining the entitlement
to, and the amount of support, if any, include, but is not limited to, the length of
the marriage, the age and health of the parties, the property distribution, the
parties’ educational level, the earning capacity of the party seeking support, the
feasibility of that party becoming self-supporting at a standard of living
comparable to that enjoyed during the marriage, and the length of time
necessary to achieve this goal. Id.The determination of the need for spousal support and the amount of any
such support cannot be reduced to a mathematical formula; the facts and
circumstances of each case are too varied for the support determination to be
reduced to a table or grid. See In re Marriage of Brown, 776 N.W.2d 644, 647
(Iowa 2009) (stating precedent is of little value because the decision to award
support and the determination of the amount of such support is based on the
unique facts and circumstances of each case). Instead, the court must equitably
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balance the spouses’ respective prospective needs and means viewed in the
light of the standard of living they enjoyed while married. See In re Marriage of
Tzortzoudakis, 507 N.W.2d 183, 186 (Iowa Ct. App. 1993) (stating “the ability of
the one spouse to pay should be balanced against the needs of the other
spouse”); In re Marriage of Hayne, 334 N.W.2d 347, 351 (Iowa Ct. App. 1983)
(stating a party is entitled to receive support only in an amount sufficient to
maintain the standard of living previously enjoyed without destroying the other
party’s right to enjoy a comparable standard of living). “A trial court has
considerable latitude when making an award of spousal support.” In re Marriage
of Schenkelberg, 824 N.W.2d 481, 486 (Iowa 2012). “Therefore, we will only
disturb the trial court's award of spousal support if it fails to do equity between the
parties.” Id.The district court awarded Sandi spousal support in the amount of $3000
per month until she turns sixty-two or first becomes eligible for social security, at
which point the amount of alimony would be reduced to $2500 per month. On de
novo review, considering all of the relevant factors, we conclude the spousal
support award does not do equity between the parties. Sandi and Charles had
been married for over thirty-four years. At the time of the decree, Charles was
sixty-three years old and in good health. Charles is employed as a chemical
engineer, earning approximately $110,000 per year in addition to bonus
opportunity. Sandi was fifty-five years old and suffers from a myriad of health
conditions, some resulting in lifting and twisting work restrictions that will one day
require further surgery. Although Sandi has a postsecondary education, the
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parties agreed she would remain at home as the primary caretaker of the parties’
now adult children. While she has a license as a certified nail technician, she
has not been successful in making that a profitable business endeavor. Sandi
currently works at PetSmart making approximately $569 per month.
We conclude the award of spousal support should be reduced to $2000
per month until Sandi deceases or remarries or Charles deceases, whichever
occurs first. Relevant considerations supporting this modification include
Charles’ decreased future income as he approaches retirement age. In addition,
Sandi will receive a substantial property settlement of approximately
$635,445.04. The property settlement combined with the adjusted alimony
award will place her in the position of enjoying approximately the same standard
of living she enjoyed prior to the dissolution of the parties’ marriage without
denying Charles the same opportunity.
We address an additional concern. Charles requests the decree make
clear his alimony obligations terminate at his death. Sandi requests the alimony
obligation extend beyond Charles’ life, if necessary, due to her limited income
and future needs. “The general rule followed in Iowa is that alimony payments
are presumed to terminate at the death of the payor.” In re Marriage of
Weinberger, 507 N.W.2d 733, 736 (Iowa Ct. App. 1993). However, section
598.21A “is broad enough to permit alimony payments after death.” Id.; see Iowa
Code § 598.21A(1) (providing “the court may grant an order requiring support
payments to either party for a limited or indefinite length of time”). After
considering the ages of the parties and the amount of property awarded to Sandi,
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we conclude it would be equitable for Charles’ alimony obligation to terminate
upon death and not pass to his estate but to require Charles to purchase and
maintain an insurance policy insuring his life with a death benefit of at least
$100,000 naming Sandi as beneficiary until such time as his obligation to pay
alimony terminates. See, e.g., In re Marriage of Bonnichsen, No. 13-0436, 2014
WL 251905, at *3 (Iowa Ct. App. Jan. 23, 2014) (affirming alimony award and life
insurance requirement).
C.
Charles challenges the district court’s award of attorney’s fees to Sandi.
“An award of attorney fees rests in the sound discretion of the [district] court and
will not be disturbed on appeal in the absence of an abuse of discretion.” In re
Marriage of Romanelli, 570 N.W.2d 761, 765 (Iowa 1997). Whether attorney
fees should be awarded depends on the parties’ respective abilities to pay, and
any fees awarded must be fair and reasonable. See In re Marriage of Guyer,
522 N.W.2d 818, 822 (Iowa 1994). Here, we cannot conclude the district court
abused its discretion in awarding fees.
With respect to appellate costs, “[a]ll appellate fees and costs shall be
taxed to the unsuccessful party, unless otherwise ordered by the appropriate
appellate court.” Iowa R. App. P. 6.1207. Appellate fees and costs do not
include appellate attorney fees. We direct that each party be responsible for their
own costs. See Lewis Elec. Co. v. Miller, 791 N.W.2d 691, 696-97 (Iowa 2010)
(affirming it is an “abuse of discretion to divide costs equally between the parties
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when one party was fully successful on appeal”). Likewise, we direct that each
party be responsible for their own appellate attorney fees.
III.
For the foregoing reasons, the decree of dissolution of marriage is
affirmed as modified. Specifically, the inheritance Charles received from Eda
should not be considered marital property and is excluded from division. This
results in Charles receiving additional cash property from account ending ***9199
in the amount of $53,774.70. Charles shall pay to Sandi spousal support in the
amount of $2000 per month until Sandi deceases or remarries or Charles
deceases. Further, Charles shall purchase and maintain an insurance policy
insuring his life with a death benefit of at least $100,000 naming Sandi as
beneficiary until such time as his obligation to pay alimony terminates.
AFFIRMED AS MODIFIED.