Opinion
No. 4-438 / 03-0897.
July 14, 2004.
Appeal from the Iowa District Court for Polk County, Joel D. Novak, Judge.
David J. Meyer appeals, and Phyllis J. Meyer cross-appeals from the April 14, 2003 decree dissolving their marriage. AFFIRMED AS MODIFED AND REMANDED.
Eric Borseth of Borseth, Siebrecht Siebrecht Law Office, Altoona, for appellant.
Leslie Babich of Babich, Goldman, Cashatt Renzo, P.C., Des Moines, for appellee.
Considered by Sackett, C.J., and Huitink and Miller, JJ.
David J. Meyer appeals, and Phyllis J. Meyer cross-appeals from the April 14, 2003 decree dissolving their marriage. Both parties challenge the economic provisions of the decree. David also challenges certain rulings by the district court on issues of contempt. We affirm as modified.
Phyllis, who was born in 1959, and David, who was born in 1955, were married in December of 1982. They have three children born in September of 1983, March of 1988, and July of 1989. In the year prior to the dissolution, Phyllis worked at Peterson Von Maur and earned an annual salary of $23,133. She was still employed there at the time of trial. She is paid $10.35 an hour or a nine percent commission, whichever is the larger sum. At the time of trial Phyllis worked about twenty hours a week and planned to maintain that schedule while she attended school. Prior to marriage Phyllis worked as an aide in a nursing home. She had sought a nursing degree and attended classes for about two and a half years, but apparently did not pass one of her last classes and failed to obtain an anticipated Licensed Practical Nurse (LPN) certification. David testified he paid for all her classes, and she was not employed during this period. In 1997 Phyllis began working for the Des Moines School District as a special education associate. She was paid an hourly wage. She kept that job until the fall of 1999 when she began attending the area college. David provided all the financial support for the family for four semesters while Phyllis attended college. At the time of trial in early March of 2003 Phyllis said she hoped to receive an AA degree in the fall of that year. She apparently started the area community college hoping to work in special education but changed her focus of study. At trial she testified after graduating from the area college she planned to attend Iowa State University to obtain a degree in English, which she thought would take her about five years. While she felt an English degree would provide her with a better-paying job, she did not know what that better-paying job would be.
At the time of the dissolution David worked for the Union Pacific Railroad where he had worked since the mid 1970s. He had made $80,000 in the prior year, but his income varies each year. His income averaged over several years was about $75,000 annually. David testified he expected his income to be about $70,000 in 2003. David is an engineer, has irregular hours, and is paid for different jobs in different ways. Some jobs pay by the hour and others by the mile. He is on call much of the time.
David and Phyllis had cars and clothing at the time of marriage. In addition, David had a retirement account and cash. The parties accumulated some assets and debts. David's family made loans to them, and in addition, made gifts to David and Phyllis and their children.
The district court divided what it called the parties' joint assets and liabilities, and based on its valuations Phyllis received equities of $91,199, and David received equities of $64,325. The court then divided what it referred to as separate property and separate debt so that Phyllis received equities of about $10,000, and David received equities of about $62,000. The property termed separate property allocated to David had all been given to him by his father and/or mother. The debt termed separate debt allocated to David was a credit card debt of about $4,300. The property termed separate property allocated to Phyllis included a Waddell Reed account of nearly $20,000 that was a gift from David's parents. Phyllis's separate property also included a late model Nissan Maxima valued at about $15,000 but encumbered in excess of $20,000. That encumbrance and a credit card debt of about $5,000 were allocated to Phyllis and termed as separate debt. Phyllis apparently purchased the Nissan during the separation period with only a $100 down payment, and she testified she wanted it considered her separate property. The result of the combined division was that Phyllis received approximately $101,000, and David received $126,000.
We have adopted the district court's definition of joint and separate property for the purpose of this appeal only. All property and debts of a divorcing couple are considered before making an equitable division. In re Marriage of Driscoll, 563 N.W.2d 640, 641-42 (Iowa Ct.App. 1997).
The two minor children were placed in Phyllis's primary physical care, and David was ordered to pay child support of $938.64 for two children and $638.01 when the older of the two children was no longer eligible for child support. He was also ordered to pay Phyllis alimony of $1,000 a month for five years. His alimony was deducted prior to fixing his child support obligation, but apparently it was not added to Phyllis's income.
David contends that the distribution of the assets and liabilities of the parties was not equitable. He further contends Phyllis should not have received alimony of $1,000 a month for five years, and he should not have been ordered to pay $7,500 towards Phyllis's attorney fees. Phyllis contends the property division did not treat her equitably and that she should receive alimony for a longer period of time. She also contends she should have more child support because the district court abused its discretion in deducting David's alimony from his income before applying the child support guidelines.
Our review of the economic provisions of a divorce decree is de novo. Iowa R. App. P. 6.4. We examine the entire record and adjudicate anew the issues properly presented on appeal. In re Marriage of Steenhoek, 305 N.W.2d 448, 452 (Iowa 1981). We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses, but are not bound by them. Iowa R. App. P. 6.14(6)(g); In re Marriage of Grady-Woods, 577 N.W.2d 851, 852 (Iowa Ct.App. 1998). We approach this issue from a gender-neutral position avoiding sexual stereotypes. In re Marriage of Pratt, 489 N.W.2d 56, 58 (Iowa Ct.App. 1992); see also In re Marriage of Bethke, 484 N.W.2d 604, 608 (Iowa Ct.App. 1992).
Before making an equitable distribution of assets in a dissolution, the court must determine all assets held in the name of either or both parties as well as the debts owed by either or both. See In re Marriage of Brainard, 523 N.W.2d 611, 616 (Iowa Ct.App. 1994). The assets should then be given their value as of the date of trial. Locke v. Locke, 246 N.W.2d 246, 252 (Iowa 1976); In re Marriage of McLaughlin, 526 N.W.2d 342, 344 (Iowa Ct.App. 1994). The assets and liabilities should then be equitably, not necessarily equally, divided after considering the criteria delineated in Iowa Code section 598.21(1) (2001). In general, the division of property is based upon each marriage partner's right to a just and equitable share of the property accumulated as a result of their joint efforts. In re Marriage of Dean, 642 N.W.2d 321, 323 (Iowa Ct.App. 2002). With these principles in mind we address the parties' challenges.
We first address David's contention that he should have had set aside to him as his separate property about $10,000 he had in a saving account and retirement account prior to marriage. About $7,000 of the amount was used to make a down payment on the current family home, and the balance was used to buy furniture for that home. Phyllis contends that due to the length of the marriage, the fact that David did not segregate the property, and the fact that the parties cohabited for three years prior to the time they married, the division was equitable. Property which a party brings into a marriage is a factor to consider in making an equitable division. In re Marriage of Wendell, 581 N.W.2d 197, 199 (Iowa Ct.App. 1998). This factor "may justify a full credit, but it is not required." In re Marriage of Miller, 552 N.W.2d 460, 465 (Iowa Ct.App. 1996). We consider the property David brought into the marriage in assessing the economic provisions as a whole.
Both parties challenge the district court's treatment of money that came from David's father, who is now deceased. It is conceded that the parties received a $14,000 loan from him. David contends they also received an additional $3,000 loan. The district court found a debt of $8,150 remained on the obligation and considered it as David's debt in allocating assets and liabilities. David contends the debt should be $3,000 more. Phyllis contends David should not have credit at all, because she contends the debt is not collectable. We disagree that the debt is not collectable. Even if it were not, it would be fair to set it aside to David as gifted or inherited property. An equitable distribution of the parties' property must be made according to the criteria set forth in Iowa Code section 598.21(1). In re Marriage of Goodwin, 606 N.W.2d 315, 319 (Iowa 2000). This statute excludes from the court's property division "inherited property or gifts received by one party." Iowa Code § 598.21(1). This exception is qualified later in 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) (emphasis added).
There is no inequity in giving David credit either as a debt or as money received as a gift in making the property division, and we do so, noting also that Phyllis received money given by David's family.
David also contends it was not equitable to him that Phyllis received a $20,000 Waddell Reed account his father gave her, and he only received a $15,000 account because he had taken money from his account to assist with family expenses during the separation. We give this consideration in assessing the economic provisions of the decree.
David next contends the district court erred in weighing the property division more heavily in Phyllis's favor, using as its reason the fact that based on their past earnings and contributions at the time of the dissolution David would receive more in Tier I Railroad Retirement benefits than Phyllis would receive in social security benefits at the time that each of them retired. Phyllis was given a portion of David's Tier II benefits. In arriving at this conclusion the district court said, "Consequently, the court has determined that the Respondent [David] should not receive a lien against the homestead awarded to the Petitioner [Phyllis] that he may otherwise be entitled to receive in the division of the parties' marital net worth."
David contends that such a finding is contrary to federal law because the district court used Tier I Railroad Retirement benefits indirectly in formulating the economic terms of the dissolution decree contrary to Hisquierdo v. Hisquierdo, 439 U.S. 572, 590-591, 99 S. Ct. 802, 812-13, 59 L. Ed. 2d 1, 16 (1972). There is a fine line between consideration of the benefits as they reflect on the overall financial situation of the parties after the dissolution and actually modifying the property division to compensate for what may be a difference in retirement benefits some years later. See In re Marriage of Boyer, 538 N.W.2d 293, 296 (Iowa 1995) (holding the district court did not err in its property division that left the wife who had fewer earnings and consequently lower FICA contributions with about $5,000 more in her property allocation than she would have had if the district court divided the parties assets equally). In holding as it did, the court said:
We agree that a court cannot "divide" the anticipated benefits or establish any exact setoffs on such a basis. But we think a state court is not required to pretend to be oblivious of the fact that one party expects benefits that will not be enjoyed by the other. This contrasting economic security can be weighed as a factor in fixing the economic terms of a dissolution decree.
Boyer, 538 N.W.2d at 293-94.
Here, based on the district court's valuation and division of what it termed joint property and joint debt, Phyllis received about $15,000 more in equities than she would have received had the assets been divided equally. David contends this is not only in violation of federal law, but it also is unfair because he will not receive any benefits until he retires and will not receive them if he dies before retirement, while Phyllis has the current use of the addition monies. We agree with David that his Tier I benefits cannot be divided or used to establish exact setoffs. Id. We need not determine whether the district court properly considered the Tier I benefits in assessing the equities of the property division. We do no more than look at them as one of many economic factors in evaluating the economic provisions. See id.
David also contends the district court should have placed a higher value on the home that was awarded to Phyllis. Phyllis contends the value placed on the home is too high. The home was assessed for real estate tax purposes at $119,430. The district court valued it at $110,000.
Phyllis contended at trial that the house was worth less than the assessed value and the value established by the district court because it needed repair. She contends the home should have been valued at $104,000. Phyllis also contends that the home should be further devalued because she will sell it in four years and be forced to pay a seven percent real estate commission. The court's figure fell within the parties' valuations, and we accept it. While our review is de novo, we will defer to the trial court when valuations are accompanied with supporting credibility findings or corroborating evidence. See In re Marriage of Vieth, 591 N.W.2d 639, 640 (Iowa Ct. App. 1999).
David contends the alimony should be less, and Phyllis contends it should be more. We consider alimony and property division together in assessing their individual sufficiency. They are neither made nor subject to evaluation in isolation from one another. In re Marriage of McLaughlin, 526 N.W.2d 342, 345 (Iowa Ct.App. 1994); In re Marriage of Griffin, 356 N.W.2d 606, 608 (Iowa Ct.App. 1984). There is considerable authority to award the disadvantaged spouse alimony under such circumstances as we find here. See In re Marriage of Friedman, 466 N.W.2d 689, 693 (Iowa 1991); In re Marriage of Hitchcock, 309 N.W.2d 432, 437-38 (Iowa 1981); In re Marriage of Misol, 445 N.W.2d 411, 413-14 (Iowa Ct.App. 1989); In re Marriage of Hayne, 334 N.W.2d 347, 350-51 (Iowa Ct.App. 1983).
In awarding alimony we look to the particular circumstances of the case. The mandate is to achieve an equitable and just result under the circumstances. See In re Marriage of Webb, 426 N.W.2d 402, 405 (Iowa 1988). We look to David's earning capacity and the standard of living the parties have maintained, as well as his relative ability to pay. See In re Marriage of Imhoff, 461 N.W.2d 343, 345 (Iowa Ct.App. 1990). We also look to the factors of section 598.21(3).
While David wishes not to pay alimony, he contends that if he is required to pay alimony, it should be less. Phyllis contends her alimony should be for a longer period of time. The alimony seems to be in the nature of rehabilitative alimony, as Phyllis does need to increase her earnings both to provide for herself and to be available if needed to assist the children with the expenses of higher education. Phyllis, to her credit, does well in sales. Evidence shows that she has difficulties managing money. Among other things, she purchased an expensive car, for which she now owes more than its value, without trading in her current car, which she then provided to a male friend. Her past record shows a lack of perseverance or of a real focus. After two and a half years of nursing training, over four full-time semesters paid for by David and some part-time work at the area college, she still needs additional time to complete the requirements for an AA degree. She anticipates she will need more than five additional years to receive a degree in English. While she testified she believes the degree will increase her employment opportunities, she was unable to testify how this degree should improve her employment opportunities or increase her income.
We find the alimony is justified under the circumstances, but we decrease it to $500 a month and deny Phyllis's claim she should have additional alimony. We also modify the property division and provide that David shall have a lien in the amount of $13,500 on the house that goes to Phyllis. The lien shall draw interest at two percent per annum with the interest payable annually and shall be payable within nine months of his youngest child reaching the age of nineteen or graduating from high school, whichever occurs earlier. In making these adjustments we have considered, together with many other economic factors, the property David brought into the marriage and invested in the home, and the fact that the parties took money during the separation from money given to David by his father, and they left Phyllis's gifted money intact. We have considered the five and one-half years of education Phyllis received during the marriage. We have also considered the trial attorney fees awarded Phyllis, which we affirm. Furthermore, we are not oblivious to David's Tier I retirement benefits. See Boyer, 538 N.W.2d 293-94.
We deny Phyllis's claim that she should have additional property. Now that her alimony has been reduced we remand to the district court to consider her contention that the alimony David pays should not be deducted from his income before applying the child support guidelines.
We consider the other issues raised including, without determining whether we have jurisdiction to do so, David's challenge to the contempt findings, and we affirm the district court. We award no appellate attorney fees. Costs on appeal should be paid one half by each party.
AFFIRMED AS MODIFIED AND REMANDED.