Opinion
No. 5-783 / 05-0333
Filed December 21, 2005
Appeal from the Iowa District Court for Linn County, Thomas L. Koehler, Judge.
David F. Scott appeals and Margaret J. Roller Scott cross-appeals from the alimony and property division provisions of the trial court's decree dissolving their marriage. AFFIRMED AS MODIFIED AND REMANDED.
James Sines of Crawford, Sullivan, Read Roemerman, P.C., Cedar Rapids, for appellant.
Lori Klockau of Bray Klockau, P.L.C., Iowa City, for appellee.
Heard by Huitink, P.J., and Mahan and Hecht, JJ.
David F. Scott appeals and Margaret J. Roller Scott (Peg) cross-appeals from the alimony and property division provisions of the trial court's January 31, 2005, decree dissolving their marriage.
I. Background Facts and Proceedings.
The parties were married in 1972. David is sixty years old, and Peg is fifty-nine. They have three adult children. Although David has a history of heart disease and diabetes, neither he nor Peg have any disability or medical conditions that interfere with their current employment.
David has a bachelor's degree in mathematics. He has been employed at Rockwell Collins in Cedar Rapids since 1974. His 2004 salary and bonus at Rockwell Collins was $112,000. David's benefits at Rockwell Collins include a retirement savings plan and a defined benefit pension plan. The balance of David's savings plan on December 4, 2004, was $443,541. David's December 3, 2004, employee benefit statement indicates his projected monthly defined pension benefit at age sixty-five is $3,235. This statement also projected his social security monthly benefit at age sixty-five is $1,824.
Peg has a master's degree in physical therapy. Her work experience includes four and one-half years of employment, two years at the University of Iowa Hospitals and two and one-half years as a professor at the Chicago Medical School. Peg left her employment in 1974 when the parties' first child was born.
Peg resumed part-time employment in 1980. In October 1986 Peg began working part-time at Grant Wood Area Education Agency where she is currently employed. Peg is considered three-tenths of full time, and her annual salary is $13,342.79. Peg's available benefits include medical insurance at a net cost to her of $241 per month. She is also covered by IPERS. According to her December 2004 IPERS benefit statement, the refund balance of her account is $20,784. Without further contributions, her monthly IPERS benefit at age sixty-six is $394.
In addition to her IPERS account, Peg has a TIAA-CREF account to which she contributed while employed at the University of Iowa and the Chicago Medical School. Peg contributed to this account for three years before she married David and for a year and a half after her marriage. Peg has not contributed to this account since leaving her employment at the Chicago Medical School in 1974. The balance in this account as of the trial date was $109,851.
Peg's statement of projected social security benefits is not in the record. The parties, however, assume that she will receive a monthly benefit equal to one-half of David's monthly social security benefit if she retires at age sixty-six.
The parties stipulated and agreed that the balance of Peg's gift and inherited property ($885,200) should be set aside to her. Although they disagree as to the particulars of the distribution, the parties requested the court make an equal division of their marital property. The court's resulting property division, as described in David's brief, was as follows:
The Court awarded Peg marital assets totaling $400,267.58. These assets are as follows:
1)Marital home with a net value of $135,000;
2)Peg's life insurance policies valued at $14,153.49;
3)Peg's IPERS valued at $20,783.78 which is a lump sum payout of the refund value of the account;
4)Peg's TIAA-CREF account with a value of $109,850.75;
5)Peg's Fidelity Investments Grant Wood Area Retirement Savings 403b account valued at $12,077.70; and
6)24.44% of David's Rockwell Salaried Retirement Savings Plan with an approximate value of $443,542.00 as of December 3, 2004; approximate value of Peg's share is $108,401.66.
Peg was also awarded a portion of David's Rockwell Defined Benefits Plan as follows:
Number of years married and covered by the pension plan × 50% ------------------------------------------------------- Total number of years covered by pension plan at time benefits are paid
Peg's total award of assets from the dissolution of marriage of $885,200 of gifted and inherited assets plus $400,267.58 in marital assets totals $1,285,467.58 plus a portion of David's Rockwell Defined Benefit Plan.
The Court awarded David marital assets as follows:
1) The family cemetery plots with an estimated value of $2,945.00;
2) David's life insurance policies valued at $34,126.94, $5,499.73; $25,679.56, and $1,904.66, which totals $67,310.89
3) 75.56% of David's Rockwell Salaried Retirement Savings Plan with an approximate value of $443,542.00 as of December 3, 2004; approximate value of David's share is $335,140.34
David was also awarded a portion of his Rockwell Defined Benefits Plan as follows:
Number of years married and covered by the pension plan × 50% ------------------------------------------------------- Total number of years covered by pension plan at time benefits are paid
David's total award of marital assets from the dissolution of marriage is $405,396.23 plus a portion of his Rockwell Defined Benefit Plan
The court's decree also provided:
David shall pay Peg the sum of $2,500.00 per month payable on the first day of every month beginning on February 1, 2005. David's obligation to pay spousal support of $2,500.00 per month will end upon the first to occur of (i) the recipient's marriage or death, or (ii) David's death. The amount of spousal support will be reduced by the amount of social security Peg receives when David retires.
On appeal, David argues:
I. The trial court erred in awarding the Respondent/Appellee $2,500 per month in alimony until the Respondent's remarriage or the Petitioner's death.
II. The trial court erred by valuing Respondent's IPERS Defined Benefit Plan at refund value rather than apportioning it as the Petitioner's Defined Benefit Plan was apportioned.
Peg cross-appeals, arguing:
I. The majority of Peg Scott's TIAA-CREF account should have been set aside to Peg Scott as her premarital property and not considered in the distribution of marital property.
II. Standard of Review.
Dissolution of marriage proceedings are equitable actions and are subject to de novo review. Iowa R. App. P. 6.4; In re Marriage of Kurtt, 561 N.W.2d 385, 387 (Iowa Ct.App. 1997). "Although our review of the trial court's award is de novo, 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) (citing In re Marriage of Benson, 545 N.W.2d 252, 257 (Iowa 1996)). "We are not bound by the district court's findings of fact, but we do give them deference because the district court had the opportunity to view, firsthand, the demeanor of the witnesses when testifying." Kurtt, 561 N.W.2d at 387. Prior cases have little precedential value, and we base our decision on the particular circumstances of the parties before us. In re Marriage of Weidner, 338 N.W.2d 351, 356 (Iowa 1983).
III. Property Division.
Our supreme court has recently said:
Under our statutory distribution scheme, the first task in dividing property is to determine the property subject to division. The second task is to divide this property in an equitable manner according to the factors enumerated in the statute, as well as other relevant factors determined by the court in a particular case.
Our statute is written to define divisible property as "all property" of the parties, other than the two classes of excluded property. The statute provides:
Upon every judgment of annulment, dissolution or separate maintenance, the court shall divide the property of the parties and transfer the title of the property accordingly . . . The court shall divide all property . . . equitably between the parties . . .
This broad declaration means the property included in the divisible estate includes not only property acquired during the marriage by one or both of the parties, but property owned prior to the marriage by a party. In re Marriage of Brainard, 523 N.W.2d 611, 616 (Iowa Ct.App. 1994). Property 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. Iowa Code § 598.21(1)( b). More importantly, the statute makes no effort to include or exclude property from the divisible estate by such factors as the nature of the property of the parties, the method of acquisition, or the owner. "All property," except inherited or gifted property, is included, and the circumstances and underlying nature of the included property are generally considered as factors that impact the second task of determining an equitable division, along with all other relevant factors. See id. § 598.21(1)( a)-( m).
In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005) (citations omitted).
David argues that Peg's IPERS account should be divided using the same formula by which his Rockwell Defined Benefit Account was divided. We disagree.
"Pension rights are not easily valued." In re Marriage of Fall, 593 N.W.2d 164, 167 (Iowa Ct.App. 1999). "[T]he preferred method of valuation of these benefits is . . . to divide a plan through a qualified domestic relations order which, in essence, separates the pension rights into two separate accounts." Id. (citing In re Marriage of McLaughlin, 526 N.W.2d 342, 344 (Iowa Ct.App. 1994)). However, the court can assure similar retirement security for each party through allocation of other assets and therefore having no need to divide the pension. Id. "[A] division of pension benefits is not an absolute requirement." Id. "The allocation of a pension, like the allocation of all other property interests, comes only after the pension has been considered in the overall scheme of an equitable division." Id. "We cannot consider the pension in isolation and an equitable division does not necessarily mean an equal division of each asset." In re Marriage of Robinson, 542 N.W.2d 4, 5 (Iowa Ct.App. 1995).
When considered in the overall scheme of the property division, we are unable to say the trial court's valuation and decision to award Peg all of the IPERS account was inequitable. The parties' express preference, and the district court's intention, was to achieve, as nearly as possible, an equal division of the parties' marital assets. Any inequity resulting from the distribution of Peg's account was resolved by David's receipt of a $5,129 greater share of marital property. We affirm on this issue.
We, for the same reason, reject Peg's claim for a greater share of her TIAA-CREF account. The fact that Peg brought the account into the marriage is not dispositive but is one of many factors considered by the trial court in arriving at an equitable division of the parties' assets. After considering all of the relevant factors, we find the trial court's overall division of the parties' marital assets was equitable and accordingly affirm on this issue.
IV. Alimony.
"Alimony is not an absolute right; an award depends upon the circumstances of each case." Kurtt, 561 N.W.2d at 387. "Alimony may be used to remedy inequities in a marriage and to compensate a spouse who leaves the marriage at a financial disadvantage." In re Marriage of Geil, 509 N.W.2d 738, 742 (Iowa 1993) (citing In re Marriage of Earsa, 480 N.W.2d 84, 86 (Iowa Ct.App. 1991)).
"The discretionary award of alimony is made after considering those factors listed in Iowa Code section 598.21(3)." In re Marriage of Miller, 524 N.W.2d 442, 445 (Iowa Ct.App. 1994). These factors include the following:
the age and health of the parties, their educational level and earning capacity, the feasibility of the party seeking alimony becoming self-supporting at a comparable standard of living, any property distribution made in the decree, the tax consequences and the provisions of any prenuptial agreement.
Iowa Code § 598.21(3) (2003); Spiegel, 553 N.W.2d at 320. Inherited or gifted property can be considered on the issue of alimony. In re Marriage of Moffat, 279 N.W.2d 15, 20 (Iowa 1979). "Following a marriage of long duration, we have affirmed awards of both alimony and substantially equal property distribution, especially where the disparity in earning capacity has been great." Geil, 509 N.W.2d at 742 (citing In re Marriage of Hitchcock, 309 N.W.2d 432, 438 (Iowa 1981)). "Traditional alimony analysis may be used in long-term marriages where life patterns have largely been set and the earning potential of both spouses can be predicted with some reliability." Kurtt, 561 N.W.2d at 388 (citing In re Marriage of Francis, 442 N.W.2d 59, 62-63 (Iowa 1989)). "Traditional alimony is payable for life or for so long as a dependent spouse is incapable of self-support." In re Marriage of Grady-Woods, 577 N.W.2d 851, 854 (Iowa Ct.App. 1998).
The spouse with the lesser earning capacity is entitled to be supported for a reasonable time in a manner as closely resembling the standard of living existing during the marriage as possible without destroying the right of the party paying alimony to enjoy at least a comparable standard of living. In re Marriage of Hayne, 334 N.W.2d 347, 351 (Iowa Ct.App. 1983). In other words, the recipient is entitled only to an amount sufficient to maintain the standard of living previously enjoyed, not a higher one. Id.
Based on our de novo review, we find the evidence weighs against an award of alimony in this case. Peg leaves the marriage with $1.2 million in assets and no significant liabilities. These assets include an unencumbered home and at least $885,000 in liquid assets. In addition, Peg has a master's degree in physical therapy and has been actively employed at least part-time in that field since 1986. As far as we can conclude from the record, Peg's only impediments to self-support are self-imposed. She has decided not to seek full-time employment and does not consider her gifted and inherited property available for subsistence expenses. Moreover, Peg was awarded all of her IPERS and TIAA-CREF accounts, as well as fifty percent of David's defined benefit pension and twenty-four percent of his retirement savings plan. As a result, Peg's retirement security is at least equal to, if not greater than David's. Under these circumstances, an award of traditional alimony was inequitable. We accordingly modify the trial court's decree by vacating the relevant provisions awarding Peg traditional alimony.
We realize, however, that Peg's transition from dependent spouse to self-support will require time to restructure her financial affairs. She may also need time to explore other employment opportunities that are more compatible with her education and earning capacity. We accordingly allow Peg to retain as rehabilitative alimony any alimony payments David has made up to and including the date of our decision. See, e.g., In re Marriage of Probasco, 676 N.W.2d 179, 187 (Iowa 2004) (wife denied traditional alimony allowed to keep payments already made as rehabilitative alimony).
V. Attorney fees and court costs.
An award of appellate attorney fees is not a matter of right, but rests within the court's discretion. Kurtt, 561 N.W.2d at 389. We consider the needs of the party making the request, the ability of the other party to pay, and whether the party making the request was obligated to defend the district court's decision on appeal. In re Marriage of Maher, 596 N.W.2d 561, 568 (Iowa 1999). Under these circumstances, the parties are capable of paying their own attorney fees, and we deny both parties' requests for attorney fees. Costs are assessed equally to both parties.
VI. Disposition.
The trial court's decree is affirmed as modified, and we remand this case to the district court for entry of a modified decree in conformity with our opinion.