Opinion
No. 6-101 / 05-0795
Filed March 29, 2006
Appeal from the Iowa District Court for Webster County, William C. Ostlund, Judge.
David E. Brown appeals the district court's ruling on his petition for dissolution. AFFIRMED.
Blake Parker and Marcy Lundberg of Blake Parker Law Office, Fort Dodge, for appellant.
Dan McGrevey of McGrevey Law Office, Fort Dodge, for appellee.
Heard by Sackett, C.J., and Vogel and Mahan, JJ.
David E. Brown appeals the district court's ruling on his petition for dissolution. He argues the ruling is, on the whole, inequitable. Specifically, he argues the district court erred in its distribution of marital assets because it incorrectly (1) attributed wasted assets to him; (2) considered fault in making the distribution; and (3) assessed gifted property. He also argues the district court erred in its allocation of marital debt because it (1) failed to impute earning based on capability; (2) failed to consider his other court ordered obligations; (3) incorrectly calculated his spousal support obligation; and (4) incorrectly awarded attorney fees. We affirm.
I. Background Facts and Proceedings
David and Jolene Brown were married on April 12, 1976. They have two children who are now ages nineteen and twenty-one. They separated on July 2, 2004, and have maintained separate residences ever since. Both parties were forty-eight years old at the time of trial. David has his own insurance business. His average income from approximately 2000 to 2005 was $116,719.40. He claims he is in poor health because he is overweight, has suffered from cardiac stress, has a history of cardiac problems in his family, and has experienced depression. Jolene works as an office nurse thirty-two hours per week and earns $14.66 per hour. Both parties agree she could be earning approximately twenty dollars per hour in a forty-hour work week if she obtained a different job.
The main issue at trial was the couple's marital assets and debt. First, the court determined that David had diverted significant funds from the marital assets to benefit his relationship with his girlfriend. It wrote that this finding was reflected in the award of personal property and real estate.
Second, the two have significant debts from both credit cards and home equity loans. According to the parties' calculations, the debts range from $325,000 to $366,000. The court divided the joint debt between the parties based on their respective incomes. As a result, David was assigned ninety-one percent of the debt and Jolene was assigned nine percent of the debt. Again, the court cited its credibility findings in coming to its conclusion.
Second, both parties claimed various items should be kept out of the distribution because they qualified as gifts. The valuations of the various items were also disputed. The district court awarded several items to each of the parties, then ordered the rest of the property to be divided, each party alternately picking one item until the property was extinguished. If the parties could not agree, any remaining property was ordered to be sold or liquidated and the expenses and proceeds divided equally.
Third, the court awarded Jolene the homestead in recognition that the parties' first home, purchased by Jolene's parents, was a gift to her alone. Again, the court cited its credibility determination in coming to its conclusion.
Fourth, the court awarded Jolene traditional spousal support of $1,600 per month until her remarriage or death.
Fifth, given the disparity of the parties' incomes, David's lack of candor during discovery, and the voluminous records necessary to pursue the matter, the court awarded Jolene $5,000 in attorney fees.
Finally, the court ordered David to fulfill his agreement, made during the trial, to continue providing college expenses for the couple's children. He was also ordered to pay for their health insurance.
David filed a request for reconsideration of the ruling. In response, the court first reiterated that its conclusions were significantly affected by David's lack of candor throughout the proceedings. It then recalculated the parties' debt percentages, attributing eighty-three percent to David and seventeen percent to Jolene. The court also lowered David's alimony obligation to $800 per month when he turns sixty-six. Finally, the court emphasized its belief that there were thousands of dollars for which David did not account and that amounted to wasted assets. David appeals.
II. Standard of Review
We review dissolution cases de novo. In re Marriage of Schriner, 695 N.W.2d 493, 495 (Iowa 2005). However, the trial court has considerable latitude in making its award, and we will disturb the ruling only when there has been a failure to do equity. Id. at 496. Further, although we are not bound by them, we give weight to the trial court's credibility determinations. In re Marriage of Rhinehart, 704 N.W.2d 677, 680 (Iowa 2005).
III. Merits
David's primary argument is that the district court's order was inequitable. He claims, for various reasons, both the division of assets and the allocation of debts was unfair. He also argues he should not be required to pay traditional alimony or attorney fees. We address each of his arguments in turn.
A. Division of Assets
At the time of dissolution, parties to a marriage are entitled to a "just and equitable share of the property accumulated from their joint efforts." In re Marriage of Siglin, 555 N.W.2d 846, 849 (Iowa Ct.App. 1996). The parties, however, are not necessarily entitled to an equal split of the property. Id. Instead, an equitable distribution depends upon consideration of the parties' particular circumstances and the criteria of Iowa Code section 598.21 (2003). Id.
David argues the division of assets was incorrect because (1) he did not dissipate marital assets; (2) the court should not have considered fault; (3) gifts were improperly set aside; (4) gifts that were properly set aside should have been considered in determining an equitable settlement; and (5) the court should have considered Jolene's future earning capacity.
We note from the outset that the court's order is rife with references to David's lack of credibility throughout the proceedings. We also note his combative and evasive behavior apparent even from the trial transcript. Again, though its credibility determinations are not binding on us, we consider the trial court's experience with and observation of witnesses to be quite valuable. In re Marriage of Brainard, 523 N.W.2d 611, 614 (Iowa Ct.App. 1994).
First, there indeed are several thousand dollars for which David cannot account. He claims the checks and money exchanged between him and his girlfriend were reimbursements for various items she purchased for him. However, he can neither present the items nor the necessary documentation. Therefore, we agree with the district court's assessment of wasted assets attributable to David.
Second, David claims that the distribution was so inequitable that the district court had to have incorrectly attributed the fault of the divorce to him. He points to no other evidence in the record supporting his allegation. The court stated it determined both that David was not candid in his financial disclosures and that he diverted assets for the benefit of his relationship with his girlfriend. We do not interpret these statements as an allocation of fault for the divorce, but instead as factual findings properly made by a trial court.
Third, David argues the court did not properly assess gifted property. Under Iowa Code section 598.21, inherited property or gifts received by one party are exempt from the division of the marital property. According to the statute,
Property 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 under this section 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(2). David's argument is twofold: First, property was incorrectly labeled gifts by the court and second, even the property properly determined to be gifts should have been included in determining an equitable settlement.
As to his first complaint, David focuses specifically on the court's determination that Jolene should have the couple's home. The court reasoned the home was partially purchased with a $50,000 gift from her parents. David presents a persuasive argument that, given the improvements and debts on the original gift, the gift has been subsumed in the marriage. Jolene's father testified that he intended the gift to Jolene alone, because he had helped her brother and wanted to make gifts between his son and daughter equal. The court found Jolene's father to be credible. Documents indicate that the couple's first home remained in Jolene's parents' names. We note the court also awarded Jolene the couple's home in an effort "to neutralize the unaccountable expenditures made by [David]." Further, we also note Jolene acquires the home subject to mortgages. We therefore conclude awarding Jolene the homestead is equitable.
David also argues Jolene should not have been awarded all of her collectibles, including Hummel and Lladro figurines, and Waterford, Wedgewood, and Lalique pieces. The court's ruling, however, does not specifically indicate these items are reserved as "gifts." Instead, the court divided the parties' personal property in its belief that some items were the result of gifts and others were part of an equitable distribution. In other words, the language of the court's order indicates to us the court did in fact consider the value of the items set aside to each party. Thus, to address both of David's complaints, given the parties' slippery value assessments of each other's property, we think the court's distribution was as equitable as possible.
Finally, David argues the court did not consider Jolene's future earning capacity. The court acknowledged in its first ruling, however, that the parties did not dispute that Jolene could be making twenty dollars an hour in another job. It also devoted an entire paragraph to the discussion of Jolene and her earning capacity. David cannot point to a reason to believe the court did not consider her earning capacity, and we can think of none.
In short, we conclude the district court's allocation of marital property between the two parties was equitable.
B. Division of Debts
David argues that the district court erred in allocating the marital debt because it failed to account for both Jolene's potential future earnings and David's other court-ordered obligations. Because we adequately addressed his argument about Jolene's earnings above, we only address his second argument here.
At trial, David agreed to continue paying his sons' college expenses. In fact, when asked what he thought the judge should order in terms of post-education support, he said he had no problem with paying for the sons' educations himself. When the court warned him it would not give him credit for the expense if it ordered alimony, David testified he would still pay college expenses. The court simply included his agreement in its order. We must therefore conclude David waived this argument through his testimony at trial.
C. Spousal Support
Spousal support, also known as alimony, "is a stipend to a spouse in lieu of the other spouse's legal obligation for support." In re Marriage of Olson, 705 N.W.2d 312, 315 (Iowa 2005) (quoting In re Marriage of Spiegel, 553 N.W.2d 309, 319 (Iowa 1996)). Alimony is not a right, and like property distribution, depends upon the parties' particular circumstances. Id. In making an award of alimony, we consider
(a) the length of the marriage;
(b) the age and physical and emotional health of the parties;
(c) the distribution of property;
(d) the educational level of each party at the time of the 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 during the marriage, and the length of time necessary to achieve this goal;
(g) the tax consequences to each party;
(h) any mutual agreement made by the parties concerning financial or service contributions by one party with the expectation of future reciprocation or compensation by the other party;
(i) the provisions of an antenuptial agreement; and
(j) other factors the court may determine to be relevant in an individual case.
Iowa Code § 598.21(3); Olson, 705 N.W.2d at 315-16.
David argues the court should have, at best, awarded Jolene rehabilitative alimony. He claims the district court improperly attributed the fault of the breakdown of the marriage to him, and awarded alimony accordingly. He also claims the court failed to consider the property division and debt allocation in awarding Jolene alimony.
We have addressed most of David's arguments above. He presents no support for his allegation that the court incorrectly considered fault. Further, we have already determined that both the property division and debt allocation were entirely equitable. The court, in making its award, attributed a $40,000 income to Jolene in recognition of her potential earning capacity. David's income, on the other hand, is nearly three times Jolene's potential income. Considering this difference in their incomes, as well as the length of the marriage and the parties' accustomed lifestyle, we affirm the district court's award of alimony.
D. Attorney Fees
An award of attorney fees is within the court's discretion. In re Marriage of Scheppele, 524 N.W.2d 678, 680 (Iowa 1994). The award should be reasonable and fair and based on the parties' respective abilities to pay. Id. We conclude the district court did not abuse its discretion in awarding trial attorney fees. Given the disparity in the parties' incomes, David's lack of cooperation during discovery, and the voluminous record, an award of attorney fees was proper.
With regard to appellate attorney fees, if it is necessary to make an evidentiary record, we will remand to the district court for a reasonable determination of the amount. Markey v. Carney, 705 N.W.2d 13, 26-27 (Iowa 2005); Lehigh Clay Prods., Ltd. v. Iowa Dep't of Transp., 545 N.W.2d 526, 530 n. 2 (Iowa 1996). It is, however, appropriate for us to initially determine the fees. Lehigh Clay Prods., 545 N.W.2d at 530 n. 2. The record in this case is sufficient for us to make such a conclusion. We award Jolene $1000 in appellate attorney fees. Costs are taxed to David.