Opinion
No. 5-249 / 04-0739
Filed May 25, 2005
Appeal from the Iowa District Court for Polk County, Artis I. Reis, Judge.
Randy Lee Hoshaw appeals from the property distribution and child support provisions in a dissolution decree. AFFIRMED AS MODIFIED.
Eric Borseth of Borseth, Siebrecht Siebrecht Law Office, Altoona, for appellant.
Alexander R. Rhoads of Babich, Goldman, Cashatt Renso, P.C., for appellee.
Considered by Sackett, C.J., and Zimmer and Hecht, JJ.
Randy Lee Hoshaw appeals from the property distribution and child support provisions in a dissolution decree. We modify and affirm the district court's decision.
I. Background Facts and Proceedings.
Brenda and Randy were married September 3, 1983. Brenda filed her petition for dissolution on February 17, 2003. Brenda is employed as a nurse, and at the time of trial had plans to start her own massage therapy business. Randy is a skilled luthier (one who repairs and restores string instruments). The parties have two minor children. Randy and Brenda entered into a stipulation in advance of the trial providing for joint legal custody of the two minor children, with Brenda retaining physical care responsibilities and Randy receiving extraordinary visitation in excess of 127 overnight visits per year. The parties stipulated before trial that child support should be calculated based on the parties' 2003 incomes. The district court accordingly found Brenda's net monthly income for purposes of the child support calculation is $2,015.69; and found Randy's net monthly income is $3,063.10. After reference to the child support guidelines, the district court ordered Randy to pay child support of $659 per month.
The district court allocated the Hoshaws' real and personal property in accordance with the parties' stipulation. The parties did not agree, however, on the valuation of their assets and debts; and they therefore asked the court to effectuate an equitable division of the property. The district court, after finding the net value of the marital assets allocated by stipulation to the respective parties, ordered Brenda to pay $30,710 to Randy in order to achieve an equitable distribution. Randy appeals, contending the district court erred in the identification of the divisible estate, in the valuation of certain items of property, and in determining Brenda's income for purposes of calculating child support.
II. Scope and Standard of Review.
Our review in dissolution cases is de novo. In re Marriage of Benson, 545 N.W.2d 252, 253 (Iowa 1996); Iowa R. App. P. 6.4. Nonetheless, "we accord the trial court considerable latitude in making this determination and will disturb the ruling only when there has been a failure to do equity." In re Marriage of Spiegel, 553 N.W.2d 309, 319 (Iowa 1996).
III. Discussion.
The district court must first determine the property subject to division. In re Marriage of Schriner, ___ N.W.2d ___, ___ (Iowa 2005). All property, except inherited or gifted property, is subject to division. Id. at ___. Even inherited property and gifts received by one party may be divided if equity demands in light of the circumstances of a spouse or the children. Iowa Code § 598.21(2) (2003). Having identified the property included in the divisible estate, the court must divide the property equitably according to statutorily enumerated factors. See Iowa Code § 598.21(1). The circumstances and underlying nature of the property are among the factors affecting the equitable division. Iowa Code § 598.21(1)(b).
In reviewing the property division ordered by the district court, we do not require an equal division; rather the determining factor is what is fair and equitable in each particular circumstance. In re Marriage of Hoak, 364 N.W.2d 185, 194 (Iowa 1985). Where we find the value placed on a particular item of property by the district court to be well within the permissible range of credible evidence, we will not disturb such valuation on appeal. In re Marriage of Bare, 203 N.W.2d 551, 554 (Iowa 1973); In re Marriage of Driscoll, 563 N.W.2d 640, 643 (Iowa Ct.App. 1997). In reviewing the district court's calculation of child support obligations, the court must endeavor to ascertain the parent's current monthly income from the most reliable evidence presented. In re Marriage of Powell, 474 N.W.2d 531, 534 (Iowa 1991). That parent's right to future income, where speculative, will not be included for purposes of calculating child support. Id.
A. Property Subject to Division.
Iowa is known as an "equitable distribution" jurisdiction "for purposes of dividing property in a dissolution of marriage." Schriner, ___ N.W.2d at ___. Courts divide the parties' property at the time of divorce, except any property excluded from the divisible estate as separate property, in an equitable manner in light of the particular circumstances of the parties." Id.; In re Marriage of McNerney, 417 N.W.2d 205, 207 (Iowa 1987). Inherited property and gifts received by one party are specifically excluded from the divisible estate, but even these categories of property may be divided if equity demands in light of the circumstances of a spouse or the children. Iowa Code § 598.21(1), (2).
Randy appeals the inclusion of certain property in the divisible estate. First, he claims a fishing boat valued at $500 belongs to his employer who authorized him to use the vessel in exchange for storing it for a term that is undisclosed in the record. However, the record establishes that Randy paid $150 for a motor for the boat, and he has had possession of and used the boat — acts seemingly inconsistent with his bailment claim. Although the conflicting evidence on the issue of ownership could support a finding that the boat is owned by Randy's employer, we conclude the district court's finding that the vessel is marital property was necessarily based upon credibility determinations which we choose not to disturb. We therefore affirm the district court's finding that the boat was divisible property with a value of $500.
Randy next assigns as error the district court's finding that a collection of arrowheads valued at $2,500 is divisible property. The collection consists of hundreds of stone arrowheads discovered and collected by Randy over the years. Randy failed to include them in his proposed distribution and explained this by disclosing his mistaken belief that assets acquired before the marriage are not divisible. As our supreme court recently stated:
[p]roperty brought into the marriage by a party is merely a factor to consider by the court, together with all other factors, in exercising its role as an architect of an equitable distribution of property at the end of the marriage.
See Schriner, ___ N.W.2d at ___.
Randy now claims the arrowheads have been earmarked as gifts to his children. However, there is no evidence in the record suggesting Randy no longer possesses the collection, nor is there evidence that the claimed gift was effectuated prior to the trial. Randy also disputes Brenda's opinion of the collection's value which she apparently derived from consultation with an unidentified expert and from Randy's alleged admission that one of the pieces of the collection was worth $1,000. Based on the record before us, we can find no error in the inclusion of the arrowhead collection in the divisible estate. We choose not to modify the district court's valuation which was clearly within the range of the evidence for that asset.
As evidence that the arrowhead collection has been improperly valued, Randy notes Brenda refused to accept the arrowhead collection in the property division for the value she claimed they were worth. We reject Randy's assertion that Brenda's lack of interest in the collection should be viewed as conclusive evidence its value is demonstrably lower than $2,500. Randy provides us with no other evidence of value to challenge the district court's valuation finding.
The decree allocates to Randy the sum of $3,000 for a cello. Randy claims the instrument should not have been included within the divisible estate because he received it as a gift from his employer. Moreover, Randy notes he restored the cello and his employer later sold it for a profit, $3,000 of which Randy reported as income on his income tax return. Randy similarly argues a can of varnish which Brenda valued at $1,000 was a gift from his luthier instructor and should also be excluded from the divisible estate. The district court did not make a specific credibility finding on Randy's testimony about the cello or the varnish. After a review of the record, we find persuasive Randy's claim that the cello, the cello sale proceeds, and the varnish should not be included in the divisible estate. We therefore modify the decree to increase Brenda's equalization payment to $32,710.
B. Property Valuation.
Randy contends the district court erred in finding the value of certain other items of personal property. These include (1) a Ford Ranger valued at $4,500, (2) an air compressor valued at $2,000, and (3) fourteen violins valued at $65,000. We generally will not disturb the valuations of the district court where those values fall within the range of evidence placed before it, assuming the method of valuation is proper. Bare, 203 N.W.2d at 554.
The district court found a value of the Ranger consistent with Brenda's estimate. Although Randy did advance the vehicle's lower trade-in value, the district court was free to reject such evidence as the fair market value of the vehicle. We adopt as our own the district court's finding that the Ranger had a value of $4,500 at the time of trial.
We likewise affirm the district court's valuation of the air compressor that was more than ten years old. While Brenda apparently based her valuation on the purchase price of a new unit, we find no competing evidence of the asset's value in the record. Randy offered no evidence upon which we could rely to find a different market value on de novo review. Thus, we conclude the value placed on the air compressor by the district court was well within the range of credible evidence, and we therefore affirm the district court's finding.
The valuation of violins and violin component parts, however, is more problematic. The court found twelve violins had a value of $50,000 at the time of trial. The existence of those violins and their value based on an appraisal are not disputed on appeal. However, Brenda offered an exhibit claiming fourteen other unappraised violins and assorted component parts for string instruments should be valued by the district court. After hearing the evidence, the district court apparently resolved the factual dispute by finding the value of the component parts should be subtracted from the value of the unappraised violins. The court reasoned the components with a value of $17,800 will be consumed in the restoration of the unappraised instruments and should not be separately valued. Randy contends the district court thus erred by assigning speculative future value to the unappraised instruments. In essence, he contends the unappraised, unrestored instruments and the component parts necessary to maximize their marketable value should be valued separately in their condition as they existed at the time of trial.
Twelve violins were appraised and the court found their value was $50,000. The parties disagreed about the number of other violins, if any, owned by the parties at the time of trial.
The exhibit identified these violins only as "3 not present" and "11 not appraised."
Brenda assigned a value of $17,800 to these components consisting largely of wood to be used for building string instruments.
Although Randy's position has some superficial appeal, we affirm the district court's determination of value. On de novo review, we find Randy failed to provide credible evidence upon which we could reasonably rely to make different findings of value for these assets. We find Randy's criticism of the district court's finding on valuation unfair at best. We will not credit a claim that the court's finding is speculative where Randy failed to make a reasonably complete record from which other findings and a more detailed disposition might have been made. Accordingly, we affirm on this issue.
C. Brenda's Income and Child Support Issues.
Randy's next claims the district court erred in calculating child support because Brenda's 2003 earnings utilized in the calculations did not fairly represent her earnings. He concedes, however, the parties stipulated before trial they would use their 2003 earnings in the child support calculations. The trial was held on March 2-4, 2004. It was disclosed during trial that Brenda planned to increase her primary employment as an intensive care nurse to full-time effective in August 2004. Brenda testified she expected this change would increase her primary job earnings from $26,176 to $35,000 per year. Randy contends the district court erred in failing to calculate Brenda's net income based on her anticipated pay increase at her primary employment and based on anticipated earnings from her work as a massage therapist. We reject these assertions because the district court properly computed child support based on the parties' earnings at the time of trial. If Brenda's net income increases as a consequence of her future nursing or massage therapy services and results in a substantial change of circumstances, Randy may pursue a modification of his child support obligation. In re Marriage of Russell, 479 N.W.2d 592, 595 (Iowa Ct.App. 1991); Powell, 474 N.W.2d at 534. Finding no failure to achieve equity, we affirm the district court's child support determination.
In 2003, Brenda also earned $3,789 from a second job, and the district court found her combined net monthly income for child support purposes was $2,015.69.
We do find merit, however, in Randy's contention that the decree should have obligated Brenda, as the physical care parent, to pay the first $250 per year per child of uncovered medical expenses up to a maximum of $500 per year for the two children. We also conclude the parties should share any uncovered medical expenses in excess of $250 per child, or a maximum of $500 per year for the children, in proportion to their respective net incomes (60/40) as mandated in the child support guidelines, of Iowa Court Rule 9.10. In re Marriage of Goodman, 690 N.W.2d 279, 285 (Iowa 2004).
We find all other claims advanced by Randy on appeal to be without merit. Randy shall pay two-thirds of the costs on appeal; Brenda shall pay one-third of the costs.