In Re the Marriage of Scott Lynn Kasik and Debbie Lynn Kasik Upon the Petition of Scott Lynn Kasik, and Concerning Debbie Lynn Kasik

IN THE COURT OF APPEALS OF IOWA
No. 15-1713
Filed August 31, 2016
IN RE THE MARRIAGE OF SCOTT LYNN KASIK
AND DEBBIE LYNN KASIK
Upon the Petition of
SCOTT LYNN KASIK,
Petitioner-Appellee,
And Concerning
DEBBIE LYNN KASIK,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Cedar County, Henry W. Latham II,
Judge.
Debbie Kasik appeals the economic provisions of the decree dissolving
her marriage to Scott Kasik. AFFIRMED AS MODIFIED AND REMANDED.
Kyle R. Maurer, Clarence, for appellant.
Jase H. Jensen of Howes Law Firm, P.C., Cedar Rapids, for appellee.
Considered by Tabor, P.J., and Bower and McDonald, JJ.
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BOWER, Judge.
Debbie Kasik appeals the economic provisions of the decree dissolving
her marriage to Scott Kasik. Debbie claims the district court inequitably allocated
Scott’s IPERS (Iowa Public Employees’ Retirement System) account, inequitably
reimbursed Scott for all the expenses incurred during the separation, inequitably
allocated liability for the parties’ children’s student loans, and incorrectly
calculated the equalization payment. We affirm as modified and remand to the
district court for recalculation of the economic provisions of the decree.
I. BACKGROUND FACTS AND PROCEEDINGS
Scott and Debbie were married in 1993. They have three children, one of
whom is a minor; custody of the child is not at issue herein.
The district court found the following facts concerning the parties:
Scott is a 52-year-old man of good health who is currently
employed as a high school math teacher . . . . In addition to being
employed as a teacher, Scott over the years has at times
supplemented his income through other endeavors. Scott has
been a football and track coach in the school district, has provided
painting services for the school district and has worked in some
capacity in a pageant company. All of Scott’s sources of extra
income have been documented by W-2s but for the painting
services he provides to the school district. In 2014 the painting
services produced income of $8000 and Scott testified in 2015 he
anticipates the painting services to generate income of $2000. The
Court after reviewing Exhibit 1 determines the appropriate level of
gross income attributable to Scott is the amount of $65,297.
....
Debbie is a healthy 47-year-old woman who currently works
as a dental hygienist. There was considerable testimony as to her
current and past employment. Debbie had worked for a previous
dentist offering her essentially full-time employment, but due to the
dentist’s workload, he eliminated her position in April of 2015.
Debbie was able to obtain new employment, but only on a part-time
basis. The Court finds Debbie has made reasonable efforts to
obtain employment. This is the only employment she is currently
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able to retain. Debbie earns $32 per hour for her work and it is
estimated her yearly income is $31,700.
Scott filed a petition for dissolution of marriage on October 10, 2014 and
an amended petition on November 18. On July 15, 2015, the parties filed a
partial stipulation agreeing to legal custody and physical care of the minor child
and to a portion of the marital assets and debts. A trial was held on July 20,
2015. The parties asked the court to determine the amount of child support,
health insurance and the allocation of the tax dependency exemption for the
minor child, post-secondary education subsidy, and an equitable division of the
remaining assets and liabilities. The court entered a decree of dissolution of
marriage on September 17, and ordered Scott to pay child support and provide
health insurance for the minor child. Both parties were granted the tax
dependency exemption on a rotating basis. Both parties were ordered to
contribute to their children’s post-secondary expenses. The court adopted
Scott’s property division proposal except for allowing Scott a credit against the
assets payable on a “family loan” due to a lack of documentation to support the
loan. The court also altered the allocation of Scott’s IPERS account.
Debbie now appeals from this decree.
II. STANDARD AND SCOPE OF REVIEW
We examine the entire record and adjudicate anew the issue of property
distribution. In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013).
We will disturb the district court’s ruling only when there has been a failure to do
equity. Id. Marital property is divided equitably, considering the factors in Iowa
Code section 598.21(5) (2013). Id. at 678. “An equitable distribution of marital
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property, based upon the factors in [section] 598.21(5), does not require an equal
division of assets.” Id. at 682 (quoting In re Marriage of Kimbro, 826 N.W.2d 696,
703 (Iowa 2013)). “Equality is, however, most often equitable,” and Iowa courts
generally insist upon an equal or nearly equal division of marital assets. Id. We
keep in mind that “there are no hard and fast rules governing economic issues in
dissolution actions.” Id. Our decision depends on the particular facts relevant to
each case. Id.
III. MERITS
Debbie claims the district court inequitably allocated Scott’s IPERS
account, inequitably reimbursed Scott for all the expenses incurred during the
separation, inequitably allocated liability for the parties’ children’s student loans,
and incorrectly calculated the equalization payment.
A. IPERS
Pension benefits are marital property and thus subject to equitable
division between the parties to a dissolution proceeding. In re Marriage of
Branstetter, 508 N.W.2d 638, 640 (Iowa 1993). There are two accepted methods
of dividing pension benefits: the present-value method and the percentage
method. In re Marriage of Benson, 545 N.W.2d 252, 255 (Iowa 1996). “[T]here
are two main types of pension plans: defined-benefit plans and defined-
contribution plans.” In re Marriage of Sullins, 715 N.W.2d 242, 248 (Iowa 2006).
“IPERS is, of course, a defined-benefit plan.” Id. (citing Iowa Code
§ 598.21(1)(b)). “Although both methods of dividing pension benefits can be
used with both types of pension plans, it is normally desirable to divide a defined-
benefit plan by using the percentage method.” Id. Under the percentage
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method, “the court awards a spouse a percentage of the pension payable in the
future at the time the benefits mature.” Id. at 249. The “percentage is based on
the number of years the employee accrued benefits under the plan during the
parties’ marriage in relation to the total years of benefits accrued at maturity.”
Benson, 545 N.W.2d at 255.
Here, Scott testified that his IPERS account was valued at $138,633.02.
Scott calculated its premarital value as $10,805.60 and a post separation value
of $8868.67. Scott claimed the total accrued from the date of the marriage to the
separation was $118,957.75. Scott proposed an equal division of the IPERS
account from to the date of marriage to the date of separation. The district court
allocated Debbie thirty-three percent of the IPERS account because that was
“consistent with the determination there [was] a premarital amount to be
excluded from Debbie’s interest and the amount accumulated during the time of
separation of the parties.”
We find the trial court’s use of this approximation method to be incorrect in
two respects. Absent agreement to the contrary, and there is none, Debbie
should receive half of the marital share of the IPERS account. Second, the
marital share is the “percentage is based on the number of years the employee
accrued benefits under the plan during the parties’ marriage in relation to the
total years of benefits accrued at maturity.” Benson, 545 N.W.2d at 255. Absent
an express agreement between the parties stating otherwise, the correct period
of time is from the parties’ marriage to the date the decree dissolved the
marriage. We remand this portion to the district court to divide the IPERS
account pursuant to the Benson formula. See id.
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B. Separation Expenses
Debbie claims the court improperly determined Scott should be
reimbursed for the household expenses incurred from the date of separation to
the dissolution proceeding. Debbie believes Scott is only entitled to a credit for
half of those expenses since she would have been responsible for the other half
of the expenses. Further, Debbie claims the court did not take into account the
fact Scott received six of the vehicles and therefore should have been
responsible for their associated expenses.
Scott claims he incurred expenses from the date the parties separated to
the date of trial and he took all the expenses from the marriage. These expenses
included car insurance, car loans, cell phone bills, for Debbie and three children.
Pursuant to documentation provided by Scott, the separation expenses totaled
$18,331.75. “[T]he allocation of marital debts inheres in the property division.” In
re Marriage of Johnson, 299 N.W.2d 466, 467 (Iowa 1980). “Even though a debt
may have been incurred by a party for family expenses, it is not inequitable to
order that party to be responsible for the entire amount of the debt as long as the
overall property distribution is equitable.” Sullins, 715 N.W.2d at 251. Although
Debbie says she “would” have been responsible for the expenses, Scott paid the
family expenses thus, saving Debbie from paying half and accordingly Scott
should receive credit for the payments. We affirm the court’s allocation of the
expenses incurred during the separation.
C. Student Loans
Debbie claims the court improperly determined she should be partially
responsible for the repayment of existing student loans taken out by Scott for the
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benefit of the parties’ children. At the time of trial, Scott’s credit report showed he
had five Department of Education student loans totaling $57,428. He testified the
loans were taken out in his name and the parties’ children’s names for college
education expenses. The loans were taken out during the marriage, and
therefore are properly considered marital debts. “Debts of the parties normally
become debts of the marriage, for which either party may be required to assume
the responsibility to pay.” Sullins, 715 N.W.2d at 251.
Scott’s property division proposal, as adopted by the district court, listed
the children’s student loan debt solely as his liability. The district court found that
Debbie’s testimony about her lack of knowledge of the loans and other
statements minimizing her awareness of the loans was not credible. Debbie did
testify that she acquired student loans in her own name and for one of the
children. We see no reason to make a different credibility finding concerning this
testimony and affirm the ruling of the district court that Scott be responsible for
the loans but that Debbie share in the responsibility through an equalization
payment.
Having reviewed the ruling of the district court concerning the post-
secondary education subsidy order, we remand, as the ruling does not follow the
statutory scheme for calculating such a subsidy. See Iowa Code § 598.21F; see
also Sullins, 715 N.W.2d at 253. On remand, the district court should apply the
statutory scheme in section 598.21F for each child’s postsecondary education
expenses. The amount to be paid by each party should not “exceed thirty-three
and one-third percent of the total cost of postsecondary education.” Iowa Code
§ 598.21F(2)(c).
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IV. CONCLUSION
We affirm in part and remand the district court’s allocation of Scott’s
IPERS account to apply the correct time period—from the date of the marriage to
the date of the issuance of the decree. The parties are equally responsible for
the expenses incurred during the separation and for the children’s student loans
taken out during the marriage; these debts shall be distributed by an adjustment
to the equalization payment previously ordered for an equitable distribution of the
parties’ marital assets and liabilities. The postsecondary education subsidy shall
be recalculated pursuant to Iowa Code section 598.21F.
AFFIRMED AS MODIFIED AND REMANDED.