in-re-the-marriage-of-laurie-dee-haldeman-and-kurt-preston-haldeman-upon ( 2014 )

IN THE COURT OF APPEALS OF IOWA
No. 13-0854
Filed July 30, 2014
IN RE THE MARRIAGE OF LAURIE DEE HALDEMAN
AND KURT PRESTON HALDEMAN
Upon the Petition of
LAURIE DEE HALDEMAN,
n/k/a LAURIE DEE SWANSON,
Petitioner-Appellant/Cross-Appellee,
And Concerning
KURT PRESTON HALDEMAN,
Respondent-Appellee/Cross-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, Sean W. McPartland,
Judge.
Laurie Haldeman, n/k/a Laurie Swanson, appeals the district court’s
dissolution decree with respect to spousal support, dissipation of assets, and
attorney fees, and Kurt Haldeman cross-appeals. AFFIRMED AS MODIFIED.
Carolyn J. Beyer of Beyer Law Firm, P.C., Iowa City, for appellant.
Ryan P. Tang of Law Office of Ryan P. Tang, P.C., Cedar Rapids, for
appellee.
Considered by Vaitheswaran, P.J., and Tabor and Bower, JJ.
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BOWER, J.
Appellant and cross-appellee, Laurie Haldeman, n/k/a Laurie Swanson,
appeals the district court’s decree dissolving her marriage to Kurt Haldeman and
awarding her rehabilitative spousal support, while failing to find a dissipation of
marital assets and declining her request for attorney fees. Kurt, the appellee and
cross-appellant, resists and asserts the court erred when it failed to apply its own
findings of fact and conclusions of law to the decree of dissolution. We modify
the award of spousal support but see no reason to disturb the remainder of the
court’s ruling. Therefore, we affirm as modified.
I. Background Facts and Proceedings
Kurt and Laurie were married October 12, 1985. They had been married
twenty-seven years at the time of trial. Kurt was fifty-years-old at the time of trial
and Laurie was fifty-two. The marriage produced two children, neither of whom
were minors at the time of the trial. Both Kurt and Laurie hold bachelor’s degrees
and Laurie taught both emotionally disturbed teenagers as well as general
population high school children for the first five years of the marriage. Kurt has
maintained employment as an engineer—currently with Rockwell Collins as a
systems engineer—since very early in the marriage.
When the couple’s second son was born, they made the mutual decision
that Laurie would stay home with the boys and home-school them. Laurie
provided home-schooling and primary care services to the children until they
graduated from high school. Additionally, both Kurt and Laurie acknowledge
Laurie is very handy around the home. Laurie maintains she is extremely frugal,
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while Kurt testified that he expressed concerns throughout the marriage that they
were “bleeding” and could not expect to keep up the lifestyle to which they were
accustomed. Kurt’s was the sole income provider during the many years in
which Laurie cared for the children.
In early 2006, while taking a karate class, Laurie was kicked and injured.
She now reports she is in constant pain due to the resulting back injury. She
presented extensive evidence, including her two treating physicians, at trial
regarding her diagnosis, pain levels, and ability to work. One physician, Dr.
Cearlock, testified Laurie had been diagnosed with thoracic myofascial
syndrome, and presents with hyperalgesia—hyper-sensitivity to touch. Dr.
Cearlock testified that while Laurie’s symptoms may come and go, she should
not be expected to maintain full-time work due to her pain level and continuing
need for treatment. Laurie’s other physician, Dr. Hollensend, a chiropractor,
states Laurie has thoracic vertebral subluxation and his adjustments only provide
temporary relief. He too opined this will likely be a permanent state for Laurie.
Kurt did not present any rebuttal evidence concerning Laurie’s physical
condition nor did he cross-examine her physicians. Kurt also agreed Laurie is
entitled to some support but claimed it should be limited in time and amount.
Kurt maintained Laurie would be able to return to work if she recertified as a
teacher. To support his claim, Kurt hired a private investigator who offered
twenty-five minutes of surveillance video of Laurie doing day-to-day tasks such
as shopping and carrying groceries. She did not display any grimaces of pain or
difficulty lifting items in the video. The court noted that Laurie spent much of the
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trial grimacing and moving about the courtroom to the distraction of the
proceedings. The district court, considering these two opposing depictions of
Laurie, concluded she was being disingenuous in the courtroom and
exaggerating her condition for the court.
Throughout the marriage, Kurt maintained an individual retirement account
(IRA) in his name only to which Laurie did not have access. The IRA operated
on a high-risk investment strategy authorized by Kurt. Kurt testified he was
aware Laurie was less comfortable with such a risky investment strategy. The
IRA’s value in 2010 was approximately $180,000, and at the time of trial its value
had decreased to around $70,000. There was also a Fidelity fund which Kurt
stated he cashed out to pay off a joint credit card debt. That account totaled
approximately $12,500 in 2010, and at the time of trial was $9800. Laurie claims
Kurt improperly managed the accounts, causing dramatic losses to her detriment.
Kurt claims the decline in assets was the result of a risky investment strategy and
an overall market decline. Laurie and Kurt presented directly contradictory
expert testimony on this issue at trial.
We also note Laurie received a $200,000 inheritance not long before the
trial. The parties stipulated the inheritance was not subject to distribution with the
other marital assets and its status is uncontested.
The district court awarded Laurie $2000 per month in rehabilitative
alimony for sixty months. The court found it was unlikely Laurie was permanently
disabled to the point she could never undertake gainful employment and her
request for $3000 per month in spousal support for her life was unreasonable.
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The court found no evidence to support Laurie’s claim Kurt inappropriately
dissipated assets and ordered the remaining value of the accounts split between
the parties. Finally, the court ordered each party to pay his or her own attorney
fees and one-half of the court costs. Dissatisfied with the outcome, both parties
appeal.
II. Standard of Review
Dissolutions of marriage are proceedings in equity and, as such, we
review them de novo on appeal. In re Marriage of Kimbro, 826 N.W.2d 696, 698
(Iowa 2013). We defer to the factual findings of the district court, but are not
bound by them. Id. We will alter the district court’s ruling “when there has been
a failure to do equity.” Id. (quoting In re Marriage of Schriner, 695 N.W.2d 493,
496 (Iowa 2005)).
Disputes with respect to attorney fees are reviewed for an abuse of
discretion. Id. The district court’s ruling will be overturned only when it “rests on
grounds that are clearly unreasonable or untenable.” Id.
III. Discussion
Iowa is an equitable distribution state. Iowa Code § 598.21(5) (2009).
“Equitable” does not necessarily mean “equal,” though equal is often the most
equitable result for the parties given each party’s circumstances at the time of
dissolution. See Schriner, 695 N.W.2d at 496. The court will take into
consideration factors such as the length of the marriage, the property brought to
the marriage by each party, the contribution of each party to the marriage—giving
appropriate weight to the economic value of each party’s contribution via
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homemaking and child care—the age and health of the parties, and the earning
capacity of each party. Iowa Code § 598.21(5). Property is then divided by the
court in an effort to reach an equitable outcome for each party. Id.
A. Spousal Support. The district court has considerable discretion in
determining whether a spousal support award is appropriate as well as in
determining its amount. In re Marriage of Schenkelberg, 824 N.W.2d 481, 486
(Iowa 2012). The court considers several factors and many of these factors echo
the factors considered in the overall determination of equitable distribution. The
factors the court considers include: (1) the length of the marriage, (2) the age and
health of the parties, (3) the property distribution, (4) the parties’ education levels,
(5) the earning capacity of the party seeking spousal support, (6) the feasibility of
the party seeking spousal support becoming self-supporting at a reasonably
comparable standard of living as the one enjoyed during the marriage, and (7)
any other factors the court determines to be relevant. Iowa Code § 598.21A.
Because our review is de novo, we view the record as a whole and make
our own determination. There is no dispute this was a long marriage—more than
twenty-five years. The parties are of comparable ages but, while Kurt is in good
health, Laurie’s health is questionable. The couple mutually decided Laurie
would exit the workforce to care for their children. Thus she currently does not
have the required credits to qualify for Social Security. As the district court
noted, Laurie clearly leaves the marriage at a financial disadvantage.
Kurt does not dispute that Laurie should have some amount of spousal
support. However, he contends the support should be limited in duration and
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should not leave him destitute. Laurie is requesting permanent, or traditional,
spousal support in the amount of $3000 per month, to continue even if she
cohabitates or remarries. Although there is some dispute between the parties
concerning Kurt’s annual income, it is undisputed that even if Laurie became
recertified as a teacher, she likely will earn, at most, one-half of Kurt’s salary. To
make up the difference, Laurie would have to work more than full-time or work
multiple jobs. As Laurie’s doctors testified, that is likely not possible.
Iowa recognizes three different types of spousal support: traditional,
rehabilitative, and reimbursement. In re Marriage of Becker, 756 N.W.2d 822,
826 (Iowa 2008). Traditional, the type Laurie seeks, is payable for life so long as
the spouse is incapable of self-support. Id. Rehabilitative support is limited in
duration and is meant to assist the dependent spouse through a period of re-
education in order to become independent. Id. Reimbursement support allows
the supported spouse to share in the independent spouse’s future earnings. Id.
The award of alimony is not an absolute right and is a fact-based determination
by the court. In re Marriage of Fleener, 247 N.W.2d 219, 220 (Iowa 1976).
We conclude $3000 monthly permanent spousal support is inequitable
and unreasonable. Such an award would leave Kurt in a very difficult position
upon his retirement when his income will decrease. However, we recognize
Laurie is likely to be in a difficult position, as well. Given Laurie does not qualify
for Social Security benefits and is now injured, according to the doctors, her
future earning capacity is significantly limited. We conclude an equitable
outcome is to award Laurie $2000 per month in traditional spousal support, which
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shall end upon her remarriage or cohabitation. Based on the testimony of the
doctors, Laurie’s earning capacity will be limited even if she is able to return to
teaching. However, Laurie does have her inheritance and will be able to
supplement her spousal support if she budgets wisely. See In re Marriage of
Stewart, 356 N.W.2d 611, 613 (Iowa Ct. App. 1984) (“[I]nherited or gifted
property can be considered on the issue of alimony.”).
B. Dissipation of Marital Assets. Laurie claims Kurt mismanaged the
IRA and Fidelity accounts, resulting in a significant loss of the marital assets.
Kurt claims the losses were the result of a conscious high-risk investment
strategy and an overall market decline. Laurie and Kurt presented contradictory
expert testimony at trial. Laurie’s expert, Cindy Gleason, testified the
mismanagement of the money made her sick to her stomach. Gleason, on
cross-examination, admitted she could not say the losses were due to any
affirmative action on Kurt’s part. Kurt’s financial expert, his investment advisor,
Stephen Mickelson, testified the accounts’ losses were within acceptable
parameters and could be expected during an economic downturn.
“Dissipation . . . applies when a spouse’s conduct during the period of
separation ‘results in the loss or disposal of property otherwise subject to division
at the time of divorce.’” Kimbro, 826 N.W.2d at 700–01 (quoting In re Marriage of
Burgess, 568 N.W.2d 827, 828 (Iowa Ct. App. 1997)). We use a two-pronged
test in analyzing dissipation of assets. Prong one requires us to decide whether
the alleged purpose of the expenditure is supported by the evidence. Id. at 701.
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If it is supported by the evidence, then we must decide whether the purpose
amounts to dissipation under the circumstances, using the following factors:
(1) the proximity of the expenditure to the parties’ separation, (2)
whether the expenditure was typical of expenditures made by the
parties prior to the breakdown of the marriage, (3) whether the
expenditure benefited the ‘joint’ marital enterprise or was for the
benefit of one spouse to the exclusion of the other, and (4) the
need for, and amount of, the expenditure.
Id. (quoting Lee R. Russ, Annotation, Spouse’s Dissipation of Marital Assets
Prior to Divorce as Factor in Divorce Court’s Determination of Property Division,
41 A.L.R. 4th 416, 421 (1985)).
The more common dissipation scenario is one in which a spouse is
accused of having taken some affirmative action to dissipate assets, such as
spending money on unusual, expensive, or inexplicable items, and/or running up
credit card debt, etc. See In re Marriage of Wendell, 581 N.W.2d 197, 199 (Iowa
Ct. App. 1998). While this may have been a poor or simply overly risky
investment strategy, it is unlikely Kurt meant to lose nearly seventy percent of his
investment. Kurt took no affirmative steps to spend or otherwise disperse the
money. Thus, this case can be easily distinguished from other cases finding a
dissipation of assets during the marriage. We conclude Laurie’s claim Kurt
improperly dissipated assets is without merit.
C. Award of Attorney Fees. Laurie claims that because of her financial
disadvantage leaving the marriage, Kurt should have been ordered by the district
court to pay her attorney’s fees. The district court denied her request. The
award of attorney fees is generally within the district court’s discretion. See In re
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Marriage of Wessels, 524 N.W.2d 486, 491 (Iowa 1995). On review, we see no
reason to overturn that decision.
On appeal, Laurie also requests an award of appellate attorney fees. This
court has discretion in awarding appellate attorney fees and an award is not a
matter of right. In re Marriage of Okland, 699 N.W.2d 260, 270 (Iowa 2005).
“We consider the needs of the party making the request, the ability of the other
party to pay, and whether the party was required to defend the district court’s
decision on appeal.” In re Marriage of Berning, 745 N.W.2d 90, 94 (Iowa Ct.
App. 2007). Under the circumstances of this case, we deny Laurie’s request for
appellate attorney fees.
D. The Findings of Fact and Conclusions of Law as Applied to the
Dissolution Decree. On cross-appeal, Kurt alleges the district court made an
inequitable distribution of assets, particularly with respect to the marital debt.
Kurt claims, despite the court’s proclamation that the distribution of assets and
liabilities should be equal; it distributed the marital debts unequally to his
detriment. He claims that, despite the court awarding Laurie approximately half
of the assets, she was assigned no marital debt while he was assigned more
than $20,000 of debt. He claims the assets and liabilities should be equally split
between the parties. However, we note the court’s decree assigned two debts to
Laurie—the Bank of America debt, as well as the Younker’s debt.
Kurt overlooks the well-established proposition that “equitable”—the law in
Iowa—does not mean “equal.” See Schriner, 695 N.W.2d at 496. The district
court took into account all of the circumstances each party presented. Kurt’s
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claim does not comport with the district court findings regarding the stipulations
of assets and debts. Specifically, by our calculations, the court assigned Kurt
approximately $12,337 in debt, in addition to the $4000 the parties stipulated was
his responsibility. On appeal, Kurt incorrectly claims he was assigned nearly
$21,000 in debt. We calculate closer to $16,000 in total debt.
We agree with Laurie’s reply brief’s characterization of Kurt’s calculation of
the marital debt as “bewildering.” Indeed, we fail to see how Kurt is calculating
nearly $21,000 in debt. However, this court is also somewhat bewildered by the
fact the two debts assigned to Laurie amount to $0 in the parties’ stipulation.
Upon review, we determine, despite the $0 marital debt assigned to Laurie, the
outcome regarding the assignment of marital debt is equitable. Kurt’s short-term
earning capacity and accumulated retirement savings are significantly greater
than Laurie’s, allowing him to easily pay the debt assigned to him. Kurt
characterizes the district court’s calculation as a mathematical error, but we
conclude, in fact, Kurt’s calculations are flawed and the district court’s
assignment of marital debt is equitable.
Kurt’s claim on cross-appeal is therefore denied.
IV. Conclusion
In many ways we defer to the judgment of the district court despite the de
novo character of this review. The district court bore witness to the demeanor
and behavior of the parties and made a judgment as to their sincerity. Because
we cannot do that firsthand, those observations are valuable. We affirm the
district court’s conclusions on the issues of attorney fees and dissipation of
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assets. We deny Kurt’s claim on cross-appeal. Finally, based upon our reading
of the record and in the interests of equity, we modify the district court’s ruling as
to spousal support and award Laurie $2000 per month in traditional spousal
support, to end upon her remarriage or cohabitation.
Costs are assessed equally to the parties
AFFIRMED AS MODIFIED.