Opinion
No. 5-366 / 04-1800
Filed June 29, 2005
Appeal from the Iowa District Court for Dubuque County, Monica Ackley, Judge.
Curtis Gerhard appeals the alimony and property division provisions of the parties' dissolution decree. AFFIRMED AS MODIFIED.
Robert Sudmeier and Norman Wangberg of Fuerste, Carew, Coyle, Juergens Sudmeier, P.C., Dubuque, for appellant.
Robert Day Jr. of Day, Hellmer Straka, P.C., Dubuque, for appellee.
Heard by Mahan, P.J., Zimmer, J., and Brown, S.J.
Senior Judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
I. Background Facts Proceedings
Curtis and Marie Gerhard were married in 1990. Marie had four children from a previous marriage, and these children sometimes lived with her until they became adults. In addition, Curtis and Marie raised one of Marie's grandchildren, Jessica, for many years.
At the dissolution hearing the parties testified Jessica had returned to live with her mother, who was Marie's daughter.
Curtis operates Knicker's Saloon in Dubuque. Curtis owned the business prior to the marriage and purchased seventy percent of the real estate, but expanded the business during the marriage. From 2001 to 2003, Curtis's tax returns show average annual income of $82,390 from the bar. He testified the business was worth about $300,000. Curtis is in good health. He was forty-seven years old at the time of the dissolution hearing.
At the time of the marriage, Marie had some assets she acquired in her previous dissolution. Marie worked at FDL Foods for a short period of time after the marriage, then quit to take care of Jessica. From 1994 to 1996, Marie worked at the Diamond Jo Casino, earning approximately $14,000 per year. She did not work outside the home from 1996 until shortly before the dissolution hearing, when she got a part-time job as a waitress at a country bar, earning seven dollars per hour. Marie is two semesters short of a college degree, and she indicated some interest in returning to college. Marie is also in good health. She was forty-eight years old at the time of the hearing.
We note there was evidence Marie may have made $18,000 per year, but for our discussion of this case, we will use the figure of $14,000, which was also used by the district court.
The district court entered a dissolution decree for the parties on October 12, 2004. The court awarded Curtis assets worth $664,872, which included his business which the court valued at $515,000. Marie was awarded assets worth $223,470, which included the marital residence. Marie was ordered to pay debts of $8010. In order to equally divide the assets, the court ordered Curtis to pay Marie a cash property settlement of $214,706. The court ordered Curtis to pay alimony of $5000 per month for two years, then $2500 per month until either party dies or Marie remarries. Curtis appeals.
II. Standard of Review
Our standard of review in this equitable proceeding is de novo. Iowa R. App. P. 6.4. We examine the entire record and adjudicate rights anew on the issues property presented. In re Marriage of Ales, 592 N.W.2d 698, 702 (Iowa Ct.App. 1999). We give weight to the district court's findings of fact, especially in determining the credibility of witnesses, but are not bound by them. Iowa R. App. P. 6.14(6)( g).
III. Alimony
Curtis contends the alimony award is excessive. He asserts the alimony award should be eliminated, or be limited to an award of rehabilitative alimony to allow Marie to finish her college degree. Curtis believes the district court improperly looked at the bar's gross receipts instead of his income. He also believes the court attributed unreported income to him, which was not supported by the evidence.
Alimony is not an absolute right; an award depends upon the circumstances of each particular case. In re Marriage of Kurtt, 561 N.W.2d 385, 387 (Iowa Ct.App. 1997). The discretionary award of alimony is made after considering those factors found in Iowa Code section 598.21(3) (2003). We consider the length of the marriage, the age and health of the parties, the parties' earning capacities, the levels of education, and the likelihood the party seeking alimony will be self-supporting at a standard of living comparable to the one enjoyed during the marriage. In re Marriage of Clinton, 579 N.W.2d 835, 839 (Iowa Ct.App. 1998). When reviewing an alimony award, we give the district court considerable latitude and disturb its ruling only when there is a clear failure to do equity. In re Marriage of Spiegel, 553 N.W.2d 309, 319 (Iowa 1996).
In setting the amount of alimony, the court compared Marie's income of about $14,000 at the Diamond Jo Casino, with the bar's annual gross receipts, which were about $440,000 in 2003. While the court recognized that Curtis was required to pay salaries and other expenses out of gross receipts, the court did not come to any net income number for Curtis. We find the information about gross receipts is largely irrelevant without corresponding information about the bar's expenses. The amount of gross receipts does not necessarily correspond to income available for paying alimony.
From 2001 to 2003, Curtis reported average annual income of $82,390 on his income taxes. Marie claimed Curtis actually made more than this, and that he did not report all of his cash receipts for tax purposes. She testified that in 1999 or 2000 Curtis told her the bar brought in $180,000. It still is not clear, however, whether this is gross receipts or income.
The district court awarded Marie a combination of traditional and rehabilitative alimony. We note that if Marie completed her college degree, she could have the ability to earn much more than she does currently. Rehabilitative alimony was conceived as a way of supporting an economically dependent spouse through a limited period of re-education or retraining following a dissolution. In re Marriage of Anliker, 694 N.W.2d 535, 540 (Iowa 2005) (citing In re Marriage of Francis, 442 N.W.2d 59, 63-64 (Iowa 1989)). We determine Marie is entitled to rehabilitative alimony, but modify the award to $2500 per month for a period of twenty-four months. This should give her time to complete her college degree and become established in a career.
We turn then to the question of whether Marie is entitled to a continuing award of traditional alimony after the period of rehabilitative alimony is completed. Traditional alimony is payable for so long as a spouse is incapable of self-support. Id. Marie currently has the ability to earn annual income of at least $14,560, which would be her income if she worked full-time at seven dollars per hour. Even after she completes her college degree, it is unlikely Marie's income will approach that of Curtis. We also note that Marie is forty-eight years old, and has not contributed much to social security. We conclude that after the period of rehabilitative alimony is completed, Curtis should pay Marie alimony of $1000 per month until Curtis becomes sixty-five years old, either party dies, or Marie remarries, whichever occurs first.
IV. Property Division
Curtis asserts the property division was inequitable to him. He does not object to an equal division of marital property, but claims some property should be set aside to him because he brought it to the marriage. He also claims the district court improperly valued certain items.
The partners to a marriage are entitled to a just and equitable share of the property accumulated through their joint efforts. In re Marriage of Dean, 642 N.W.2d 321, 325 (Iowa Ct.App. 2002). Iowa courts do not require an equal division or percentage distribution. In re Marriage of Campbell, 623 N.W.2d 585, 586 (Iowa Ct.App. 2001). The determining factor is what is fair and equitable in each particular circumstance. In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005).
Curtis claims a portion of the value of Knicker's Saloon should be set aside to him as a premarital asset. Assets which a party brings into a marriage are a factor to consider in making an equitable division of marital property. Iowa Code § 598.21(1)(b) (2003). This is only one factor we consider, as well as other factors, in making an equitable property division. Schriner, 695 N.W.2d at 496; In re Marriage of Wendell, 581 N.W.2d 197, 199 (Iowa Ct.App. 1998). Although Curtis owned the equipment and had paid seventy percent of the real estate costs relating to the bar business prior to the marriage, he substantially expanded the business during the marriage. We also note that Marie performed unpaid labor for the business. We conclude the district court properly considered the business to be marital property.
Curtis also claims the district court improperly valued the bar. Marie presented evidence that at one time, Curtis was approached with an option agreement to purchase the bar for $500,000. Curtis never agreed to the option, and no formal offer was ever made for the bar at that price. The potential purchaser wanted to buy all of the buildings on the block, and was pursuing option agreements on them. Arden "Doc" Johnson, an appraiser, testified the business assets were worth about $259,000. Curtis testified the business was worth $300,000. The district court found the building and lot were worth $500,000, and the business and equipment were worth another $15,000.
Generally, where the district court's establishes a value within the permissible range of the evidence, it will not be disturbed on appeal. In re Marriage of Decker, 666 N.W.2d 175, 180 (Iowa Ct.App. 2003). We find the court's valuation of Knicker's is not supported by the evidence. The option to purchase was never agreed upon, and it looked at the business as part of a total deal involving the entire block. There was no evidence Curtis could now sell the property individually for $500,000. After considering all the evidence, we find the value of the bar is $300,000.
Curtis disputes the district court's valuation of certain other assets, including vehicles, the marital residence, and items in Curtis's new home. We conclude the court's valuation of these assets is within the permissible range of the evidence, and we affirm the court's values. See id.
Curtis asserts that Marie's debts, which arose after the parties' separation, should not be considered marital debts. We consider assets and debts at the time of the dissolution hearing, not the date of separation. In re Marriage of McLaughlin, 526 N.W.2d 342, 344 (Iowa Ct.App. 1994). The district court properly considered Marie's post-separation debts as marital property. Also, although attorney fees are usually separately considered, they may be included in the allocation of debt.
Finally, Curtis points out that prior to the parties' separation they divided an amount of money they received from the sale of a previous home. Marie spent her funds on living expenses prior to the dissolution. There is no evidence any of the expenses were improper or unnecessary. Curtis believes his funds should be set aside to him. As noted above, we look to the parties' assets at the time of dissolution, not the time of separation. Id. We conclude Curtis's share of the house proceeds were properly included as a marital asset.
Based on our valuation of Knicker's Saloon, we reduce the cash property settlement payable from Curtis to Marie to $107,206. We make no other changes to the property division.
V. Guardianship
The dissolution decree mentions, "As a result of taking over guardianship of Marie's granddaughter, the parties decided it was best for Marie to cease her employment so that she would be able to raise Jessica." Curtis asserts that although Jessica lived with the parties for many years, no formal guardianship was ever entered. We believe the court's statement is dicta, and does not create a legal guardianship. The parties' relationship with Jessica remains the same as it was before the dissolution decree.
VI. Appellate Attorney Fees
Marie seeks appellate attorney fees. An award of appellate attorney fees is not a matter of right, but rests within the court's discretion. In re Marriage of Kurtt, 561 N.W.2d 385, 389 (Iowa Ct.App. 1997). We determine each party should pay his or her own appellate attorney fees.
We affirm as modified. Costs of this appeal are assessed one-half to each party.