In Re the Marriage of Matthew Jahnke and Cynthia Laflame-Jahnke Upon the Petition of Matthew Jahnke, and Concerning Cynthia Laflame-Jahnke

IN THE COURT OF APPEALS OF IOWA
No. 13-1382
Filed May 29, 2014
IN RE THE MARRIAGE OF MATTHEW JAHNKE
AND CYNTHIA LAFLAME-JAHNKE
Upon the Petition of
MATTHEW JAHNKE,
Petitioner-Appellee,
And Concerning
CYNTHIA LAFLAME-JAHNKE,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Black Hawk County, Kellyann M.
Lekar, Judge.
Cynthia LaFlame-Jahnke appeals the district court ruling dissolving her
marriage to Matthew Jahnke. AFFIRMED.
Rebecca A. Feiereisen of Arenson & Maas, P.L.C., Cedar Rapids, for
appellant.
Mark R. Hinshaw, West Des Moines, for appellee.
Considered by Vogel, P.J., Mullins, J., and Goodhue, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2013).
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GOODHUE, S.J.
Cynthia LaFlame-Jahnke appeals the district court ruling dissolving her
marriage to Matthew Jahnke. Cynthia contends the district court should have
awarded her one-half of the unvested stock options earned by Matthew during
the marriage, should not have treated the 2012 tax debt resulting from Matthew’s
employment and the American Express bill as marital debts to be born equally by
the parties, and should have awarded Cynthia’s claim for attorney fees.
I. Background Facts and Circumstances
The parties were married in 1980 and have two adult children. Matthew
has a degree in mechanical engineering and an MBA from the University of
Chicago. Matthew worked while acquiring his degrees. He has consistently held
well-paying jobs, and at the time of trial was working in a remote part of China as
a project manager for John Deere. The China assignment resulted in extra pay
because of separation, unusual expenses, and the lack of amenities Americans
have come to expect. The China assignment is expected to end shortly.
Matthew has worked at John Deere since 1998 and was assigned to the China
project in 2010.
Cynthia worked full time from 1980 to 1983, did not work from 1983 to
1993, but in 1993 while the parties were living in Mexico, started a business to
help foreign companies relocate their families in Mexico. Matthew’s employment
moved from Mexico in 1998 and Cynthia became unemployed, and remains
unemployed at this time. Cynthia has an associate degree and was fifty-two at
the time of trial. There is no indication she suffers from any disability or is
unemployable.
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Matthew filed for dissolution on April 17, 2012, and trial was held
December 18, 2012. The parties do not have appreciable assets, except for
Matthew’s 401(k) and any pension rights he might have from John Deere or
previous employers. The parties do have significant indebtedness. The trial
court left the debt due on Cynthia’s auto bill as her sole liability, obviously
because of the difference in value of the automobiles each party received. In
addition each party was left with the credit card debts in their individual names.
Otherwise, the trial court ordered that Matthew make a withdrawal from his
401(k) plan in an amount sufficient to pay all of the remaining marital debt,
including the amount necessary to pay the tax on the withdrawal. Matthew was
sixty on August 24, 2013, so no penalty is anticipated. The amount remaining
after payment of the debt and presumably the tax due was to be divided equally
between the parties. The court attempted to divide the remaining property on a
fifty-fifty basis, except that it left Matthew the unvested stock options in Deere
& Co. Pursuant to an exhibit admitted at trial these options had a value of
$33,987 if they had been vested so that they could have been exercised at that
time.
Matthew was required to pay Cynthia’s medical insurance through a
COBRA arrangement as long as possible, and to continue to pay for a policy
when COBRA was no longer available. He was also ordered to pay Cynthia
$6000 a month in alimony until he retired and began drawing his John Deere
pension. He was ordered to continue the existing life insurance policy with
Cynthia named as beneficiary as long as alimony was due. All of Matthew’s
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pensions were divided according to the Benson formula. See In re Marriage of
Benson, 545 N.W.2d 252, 255 (Iowa 1996).
II. Standard of Review
In equitable proceedings we review the trial court’s ruling de novo. Iowa
R. App. P. 6.907. However, weight is to be given to the findings of the trial court,
but we are not bound by them. In re Marriage of Sjulin, 431 N.W.2d 773, 776
(Iowa 1998).
III. Discussion
A. Unvested Stock Options
Cynthia asserts that the unvested stock options should have been divided
between the parties on a fifty-fifty basis, the same as the other assets. Unvested
stock options are by definition contingent upon what happens between now and
the time of vesting. Matthew testified that vesting was delayed for three years
after the issuance of the options. The trial court stated, “the value of the
unvested stock options is difficult to virtually impossible to establish as the value
will be determined at the time the stock vests.” Matthew also testified he is
considered an insider, and his sales of the options or stock after having
exercised the option are restricted to be sold in a ten-day period every three
months. Whether these stock options could be transferred and exercised by
Cynthia as a non-employee is not clear from the record. The trial court noted the
alimony awarded to Cynthia is substantial and Matthew is providing medical
insurance for Cynthia until she reaches the age of sixty-five, and that these
awards offset any interest that she might have in the unvested stock options.
Considering the speculative nature of the stock options the trial court felt the
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alimony and medical coverage was more appropriate. We see no error in the
trial court’s reasoning.
B. Consideration of the 2012 Income Tax Debt as a Marital Obligation
Cynthia cites In re Marriage of Sullins, 715 N.W.2d 242 (Iowa 2006), for
support of her contention that Matthew’s tax debt should be paid solely by him.
In Sullins the court explicitly stated that Sullins’ tax problems were “self-imposed
and largely the result of imprudent business practices.” Sullins, 715 N.W.2d at
252. In this case the tax obligation is a current tax liability with the added
complexity that it was created by Matthew’s employment outside the United
States. Sullins has little or no application to the current facts or situation.
The record is replete with Matthew’s efforts to provide an adequate source
of income to Cynthia during the pendency of this dissolution. She had no other
resources except joint assets and what Matthew provided. Provisions for her
during the last year included a $2500 per month rental home, a $400 per month
country club membership, and housekeeping assistance. Taxes accruing on an
income earned during the pendency of a dissolution and used to support the
parties or used to reduce their other marital obligations are appropriately
considered a marital expense.
C. The American Express Obligation
The parties had entered into a document entitled Stipulation Regarding
Asset Transfer on September 20, 2012. The document provided that Matthew
would be permitted to use the American Express card during the pendency of the
action, but all charges he incurred “after April 17, 2012 were to be his sole
responsibility.” The agreement ended with an inconsistent provision stating,
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“nothing in the aforementioned stipulation precludes the parties from asserting
their individual rights to any ultimate financial matter at trial.” The trial court
considered the American Express debt to be a marital debt and assessed one-
half of it to each of the parties. The court has an obligation to divide the property
of the parties equitably after considering among many other things “any written
agreements made by the parties concerning property distribution.” Iowa Code
§ 598.21(5)(k) (2011). The American Express account was used by Matthew as
his living expenses and as such it was used to pay a marital obligation in the
same manner as Cynthia’s living expenses were considered a marital obligation.
The inconsistent provisions in the agreement provide no guidance that affects the
property division made.
D. Cynthia’s Attorney Fee Claim
In a dissolution matter an award of attorney fees is within the discretion of
a trial court and will not be disturbed, absent an abuse of discretion. In re
Marriage of Romanelli, 570 N.W.2d 761, 765 (Iowa 1997). An award or
disallowance of attorney fees is reversed only when the trial court’s ruling is
clearly unreasonable or untenable. Boyle v. Alum-Line Inc., 773 N.W.2d 829,
832 (Iowa 2009). Cynthia received fifty percent of the net assets of the parties
and $6000 per month in alimony, medical insurance until she is sixty-five, and a
share of Matthew’s retirement benefits per the Benson rule. As Cynthia asserts,
Matthew currently has a significantly higher income than Cynthia has earning
capacity. Nevertheless Matthew’s foreign assignment is temporary in duration
and his actual take home pay difficult to compute. Finally Cynthia does have the
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ability to be gainfully employed. The ruling denying Cynthia an award of attorney
fees cannot be said to be clearly unreasonable and untenable.
Matthew seeks attorney fees for this appeal. “Appellate attorney fees are
not a matter of right, but rather rest in this court’s discretion.” Sullins, 715
N.W.2d at 255. We determine the parties should pay their own appellate
attorney fees.
AFFIRMED.