Opinion
No. 3-087 / 02-1010.
Filed April 30, 2003.
Appeal from the Iowa District Court for Polk County, JAMES W. BROWN, Judge.
The parties to a dissolution decree appeal the physical care and economic provisions of a dissolution decree. AFFIRMED AS MODIFIED AND REMANDED.
Mary Kiener of Grefe Sidney, P.L.C., Des Moines, for appellant.
Anjela Shutts of Whitfield Eddy, P.L.C., Des Moines, for appellee.
Heard by MAHAN, P.J., and MILLER and VAITHESWARAN, JJ.
The parties to a dissolution decree appeal the physical care and economic provisions of a dissolution decree. We affirm as modified and remand.
I. Background Facts and Proceedings
Joseph and Barbara Galloway married in 1988 and had a son, Carson, two years later. They divorced in 2002. The district court ordered the parties to assume joint physical care of their son. The court additionally addressed various economic issues, including the division of premarital property, the treatment of two savings accounts and cash distributions, and the calculation of child support. The court also addressed certain discovery issues. Both parties appealed following entry of a supplemental decree.
II. Timeliness of Appeal
In her cross-appeal, Barbara claims Joseph's appeal was not timely filed. We disagree. Although Joseph did not file his appeal within thirty days of the court's original decree or its ruling on the parties' Iowa Rule of Civil Procedure 1.904(2) motions for enlarged findings and conclusions, he did file it within thirty days of the court's supplemental decree. The filing of a supplemental decree was contemplated and expressly referenced in the original decree. Therefore, the original decree was not final until the supplemental decree was entered. See In re Marriage of McCreary, 276 N.W.2d 399, 400 (Iowa 1979). The appeal from the supplemental decree was timely.
III. Physical Care
Our legislature has authorized joint physical care if it is in the best interest of the child. Iowa Code § 598.41(5). Joseph contends such an arrangement is unworkable. He asks us to award him physical care.
We decline to do so. Custody evaluator Keri Kinnaird opined that it would "truly be in [Carson's] best interest" to have his parents assume joint physical care. She noted this was what Carson wanted. Although she "rarely" recommended this arrangement, she felt "very strongly" that the Galloways had the ability to implement it. She stated, "these two parents communicate at a very high level of effectiveness. Some of the best communicators I've met, certainly, in a child custody evaluation." On our de novo review, we find Dr. Kinnaird's opinion is supported by the record.
Both parents played an active role in Carson's life. Both attended medical appointments, stayed home with Carson when he was recuperating from surgeries, and assisted in transporting him to school and extracurricular activities. Both kept in touch with Carson's teachers and fostered his educational development both in and out of school. Both saw to Carson's social needs, with Barbara arranging camps and other activities and Joseph serving as assistant soccer coach. Notably, this active parenting continued through the dissolution proceedings, with both parents electing to remain under the same roof and share caretaking functions.
The parties' physical proximity also lends itself to the joint care arrangement. Barbara bought a home just six blocks away from the home in which the parties lived together, allowing Carson to remain in the same school and have continuing contact with his friends and extended family.
Finally, and, most importantly, the record reflects that each party respects the other and has made an admirable commitment to facilitating maximum contact with the other. For example, Barbara testified Joe was "a very good dad" who was always "willing to pitch in to take care of Carson." She spoke highly of his ability to use his vast general knowledge to engage and educate Carson. Joseph testified Barbara was "a very loving, loving parent." When asked whether she should remain a big part of Carson's life, he responded, "[o]h absolutely." In short, the record demonstrates that these parents are well-suited to implementing a joint care arrangement. We decline to modify the arrangement.
IV. Economic Provisions
A. Savings Accounts. The parties had two joint savings accounts. One was in the name of Carson and Barbara and the other was in the name of Carson and both his parents. Together, the accounts had a value of $154,610. Joseph contends the funds in these accounts belong to Carson and are not subject to division. The district court rejected this argument, concluding the parties did not intend to treat the funds as a gift to Carson. We agree with the district court's reasoning.
Whether or not there has been a gift is a question of fact, in which the intent of the alleged donor is material. Yagge v. Tyler, 225 Iowa 352, 357, 280 N.W. 559, 562 (1938). Carson's social security number was used as the tax identification number on both accounts. Both parties stated they planned to use the funds in these accounts for Carson's college education. However, these facts are not dispositive. Joseph acknowledged that, as funds were put into the accounts, he contemplated that some would be withdrawn for vacations. Although no funds were in fact removed for this purpose, his testimony is consistent with Barbara's claim that the parties did not intend the funds to irrevocably belong to Carson. We affirm this aspect of the court's ruling.
B. Set-Off of Premarital Property.
1. Barbara's Brokerage Account. Both parties challenge the district court's treatment of a brokerage account Barbara brought to the marriage. Barbara opened the account in 1985 with inherited funds of $17,700. On the date of marriage, the value of this account was $21,642. By 1994, the account value had increased to $57,000.58.
In 1994, Barbara opened a second brokerage account, expressing an intent to only deposit into this account funds derived from current earnings. She deposited a total of $18,650 of her earnings. She also transferred the funds in the first account to the second account. At the time of the transfer, Barbara's expert testified the value of the first account was $38,633.58 plus an unspecified amount for a limited partnership unit separately rolled over into the second account. The value of this second account at the time of trial was $117,190. Based on the expert testimony, the district court set off $83,528 to Barbara and divided the remaining $33,661.
The expert stated the value of the limited partnership unit at the time of marriage was $5,700. He stated the unit was sold for something less than that.
Joseph contends this disposition is inequitable. He argues that the court should only have set aside to Barbara the value of the premarital funds on the date of the marriage or, at most, the appreciated value of these premarital funds before they were commingled with funds earned during the marriage. In her cross-appeal, Barbara responds that the court should have set off to her the appreciated value of her premarital property as of a month before trial, which her expert estimated to be $107,985.
In determining how to treat premarital property that has appreciated during the marriage, courts are to specially consider: 1) the tangible contributions of each party to the marriage, 2) whether the property appreciated due to fortuitous circumstances or the efforts of the parties, and 3) the length of the marriage. In re Marriage of Grady-Woods, 577 N.W.2d 851, 852-53 (Iowa Ct.App. 1998). Courts will also look to statutory factors, including the age, physical and emotional health, earning capacity, and economic circumstances of the parties. Id.
We believe the amount set off to Barbara was too high. Barbara conceded she commingled her premarital funds with funds earned during the marriage. Additionally, her expert witness admitted his methodology for allocating losses and gains to the "separate" and "marital" accounts was inconsistent. For example, he stated most earnings and losses were apportioned to both the accounts, but he conceded a $10,000 withdrawal by Barbara to cover her attorney fees was solely charged to the marital account.
For these reasons, we believe only the appreciated value of Barbara's premarital funds before they were commingled with post-marriage earnings should have been set off to her. Joseph claims this amount is $42,487. As Barbara does not appear to dispute the manner in which Joseph arrived at this figure, we adopt it. We modify the decree to provide that only $42,487 of the brokerage account value should be set off to Barbara as premarital property and the balance of the account value should be divided between the parties.
He arrives at this figure by adding the account value at the time the funds in the first account were transferred to the second account to a value for the limited partnership. The account statement for this period, however, reflects a net value at the time of transfer of $42,611.43.
2. Joseph's Brokerage Account. Joseph also had a brokerage account at the time of his marriage. The parties stipulated that the premarital value was $7359 and the appreciated value was $9519. The district court treated the appreciation as an asset to be distributed. Consistent with our treatment of Barbara's account, we modify the decree to set off to Joseph all the appreciation in this account.
3. Joseph's Home. The home in which the parties lived during the marriage was purchased by Joseph before the parties married. The parties agreed its premarital value was $81,672 and its appreciated value was $109,870. The district court treated the appreciation as an asset to be distributed, stating "[t]he house was under [the parties'] joint control and management and Barbara contributed to its maintenance and upkeep during the marriage." Joseph takes issue with this determination. He argues the appreciation should have been set off to him. The record supports the district court's determination. We decline to disturb this aspect of the court's ruling.
C. Child Support. In determining child support, the district court imputed to Joseph $82,160 in gross income, the same amount Barbara earned. Joseph takes issue with this aspect of the court's ruling, contending it was inequitable to charge him with an earning capacity of close to double his highest earnings.
To use earning capacity rather than actual earnings in calculating child support, a court must first "make a finding that substantial injustice would result or that adjustments would be necessary to provide for the needs of the child and to do justice between the parties." In re Marriage of Bonnette, 492 N.W.2d 717, 722 (Iowa Ct.App. 1992). The district court made this finding, stating "[i]t is simply unfair to use Joseph's self inflicted failure to produce income to create a large disparity in the respective child support obligations." We disagree with this finding.
Joseph Galloway did business under the name of Joseph Galloway, P.C. The corporation's gross receipts from the sale of services varied from a low of $16,702 in 1994 to a high of $42,213 in 2000. Although Barbara's expert witness opined based on his review of personal and corporate tax returns that "there were monies available" to Mr. Galloway, he did not dispute Joseph's gross receipt figures.
In Bonnette, we declined to impute income to a spouse who voluntarily withdrew from the workforce to care for her children. 492 N.W.2d at 721-22. Although Joseph did not provide full-time care for Carson, the record reflects he maintained a flexible work schedule to accommodate his son's needs. He regularly volunteered at Carson's school, did much of the housework, and was often available to pick Carson up from school. Under these circumstances, we see no reason to deviate from the child support guidelines in calculating the parties' respective obligations. We therefore modify the decree to provide that Barbara shall pay Joseph $307.12 per month in child support, the amount the district court found to be appropriate under the guidelines based on Joseph's highest actual earnings.
D. Cash Distributions. Barbara contends the district court acted inequitably in treating the funds she withdrew from two savings vehicles as assets subject to division. One was a certificate of deposit in the amount of $10,041 and the other was a credit union account containing $8056.
We decline to modify this portion of the court's ruling. Although these funds were in Barbara's name, they were not premarital assets. The court acted equitably in subjecting them to division.
V. Discovery
A. Abusive Discovery On cross-appeal, Barbara claims the district court inhibited the presentation of her case by permitting Joseph to engage in abusive discovery tactics. In support of this contention, she points to his request for over fifteen years of medical records. She concedes, however, that Joseph did not use any of these records at trial. Additionally, the record reflects Barbara raised the issue of her mental health records at trial and made reference to the contents of those records on direct examination. By doing so, she waived error. See McCracken v. Edward D. Jones Co., 445 N.W.2d 375, 378 (Iowa Ct.App. 1989) (holding a party cannot complain of error she invited).
B. Attorney Fees. The district court ordered Barbara to pay $600 of the $872.50 in attorney fees and expenses Joseph incurred in connection with the parties' discovery dispute. Joseph contends the court should have ordered Barbara to pay the full amount of his fees. Barbara responds that she should not have been required to pay any portion.
Iowa Rule of Civil Procedure 1.517(1) (d) authorizes an award of attorney fees and expenses as a discovery sanction. We will not reverse such an award unless there has been an abuse of discretion. Kruger v. Palmer College of Chiropractic, 422 N.W.2d 470, 473 (Iowa 1988). We discern no abuse in the court's decision to grant $272.50 less than Joseph sought.
VI. Appellate Attorney Fees
Barbara requests an award of appellate attorney fees. An award rests within our discretion. In re Marriage of Benson, 545 N.W.2d 252, 258 (Iowa 1996). As Barbara earns substantially more than Joseph and Joseph has raised certain meritorious issues, we decline to order him to pay a portion of Barbara's appellate attorney fees.
VII. Disposition
We affirm the district court's physical care ruling. We also affirm the court's ruling declining to set off the parties' savings accounts to Carson. With respect to the parties' premarital property, we modify the amount in Barbara's brokerage account that was set off to her, as well as the amount in Joseph's brokerage account that was set off to him. We leave the court's ruling concerning Joseph's home intact. We modify the court's child support ruling to provide that Barbara shall pay Joseph $307.12 per month. We affirm the court's ruling concerning cash distributions to Barbara. We also affirm the court's discovery rulings. We remand to the district court for further proceedings consistent with this opinion.
We decline to award appellate attorney fees. Costs of this appeal are taxed equally to each party.