Opinion
No. 4-728 / 03-2064
Filed February 24, 2005
Appeal from the Iowa District Court for Dallas County, Paul R. Huscher, Judge.
Christine Stanbrough appeals and Daniel Stanbrough cross-appeals from the provisions of a supplemental decree which divided their property after their marriage was dissolved. AFFIRMED AS MODIFIED.
David Roth of Gallagher, Langlas Gallagher, P.C., Waterloo, for appellant.
Doug Gross and Rebecca Brommel of Brown, Winick, Graves, Gross, Baskerville Schoenebaum, P.L.C., Des Moines, for appellee.
Heard by Sackett, C.J., and Vogel, Zimmer, and Hecht, JJ, and Brown, S.J.
Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
Christine Stanbrough appeals and Daniel Stanbrough cross-appeals from a supplemental decree which divided their property following the dissolution of their marriage. Christine claims the district court erred in (1) utilizing the value of the parties' property on the date of the dissolution of their marriage to determine an equitable property division instead of the date of a trial held much later, (2) determining the parties' mediation agreement provided for an equitable division of their property, and (3) failing to award Christine a condominium unit as an unencumbered property. Daniel contends that the district court erred in awarding Christine additional monies beyond the property she was awarded in their mediation agreement. We affirm as modified.
I. Background Facts Proceedings
Daniel and Christine Stanbrough married in 1975. On December 31, 1997, the parties obtained a dissolution of their marriage. Christine was not represented by counsel when the marriage was dissolved. On May 14, 1998, Christine filed a petition to vacate the decree of dissolution, alleging that the decree was the product of fraud and duress. Following hearing, a district court judge concluded that Christine had proven irregularities and extrinsic fraud in conjunction with the decree. The court vacated the economic, custody, and support provisions of the decree. The court did not set aside the dissolution of the parties' marriage. We affirmed the district court's decision on appeal in an opinion filed August 16, 2000.
The court concluded the property division provided for in the decree would have awarded property in excess of $5,000,000 to Daniel and property valued at approximately $850,000 to Christine.
In re Marriage of Stanbrough, No. 99-840 (Iowa Ct.App. Aug. 16, 2000).
The parties engaged in the discovery process after their case returned to district court. Eventually, Daniel and Christine agreed to attempt to resolve their differences through mediation. On July 30, 2001, Daniel, Christine, and their respective attorneys participated in a voluntary mediation session which lasted all day. The mediation process was successful and culminated in a settlement agreement which the parties, their attorneys, and the mediator signed. Under the terms of their mediation agreement, Daniel and Christine were each to receive roughly $3,000,000 in assets. After Christine received the properties and monies listed in the mediation agreement, she refused to sign a consent decree which incorporated the terms of the parties' agreement.
After the mediation, Christine became concerned that she had not been provided with all necessary information and that the values Daniel claimed for real property at the time of the mediation were not accurate.
Following a prolonged period of additional legal wrangling regarding the mediation agreement and other issues, a trial commenced on October 15, 2003, to determine a proper division of the parties' assets. On October 31, 2003, the court entered a Supplemental Decree For Division Of Property. The court concluded there was "no doubt" that the parties reached an agreement at their July 30, 2001, mediation session. The court also found that Christine's subsequent dissatisfaction with the mediation agreement was unwarranted. The court found that the parties had agreed to value their assets and liabilities as of December 31, 1997, the date of the dissolution of their marriage, for purposes of their mediation. The court then concluded that the mediation agreement provided for an equitable distribution as of that date. The court further found that a division of property in this case premised on estimates of property values on the date of trial would be no more equitable than the division proposed in the mediation agreement as supplemented by the court. Finally, the court awarded Christine a money judgment for $207,636.25 because it concluded that the mediation agreement did not account for the passage of time between the original decree and mediation session. The trial court stated,
The parties stipulated that only real property remained subject to division, and that the court did not need to consider the parties' personal property, except the value of an abstract company, in determining an equitable division of property.
Because of a pretrial ruling by another judge, the trial court was required to determine the value of the parties' property as of the date of their October 2003 trial.
[h]ad the division occurred on December 31, 1997, the Respondent would have received the income from the Stein Mart property from that date, and she would have had the use of the cash settlement from that date. An adjustment must be made to account for that loss.
Following the court's ruling, both Daniel and Christine filed motions for enlargement or amendment of findings pursuant to Iowa Rule of Civil Procedure 1.904. On November 14, 2003, the district court corrected two inadvertent omissions from the court's supplemental decree relating to the trial date values of the parties' assets and liabilities. In that same order, the district court denied Daniel's request to amend the interest rate used to calculate the amount Daniel owed Christine and denied Christine's request that she receive an additional $68,750 plus interest to satisfy a condominium unit's mortgage. On December 12, 2003, Christine appealed. On December 16, 2003, Daniel cross-appealed.
II. Scope of Review
Our review of this equitable action is de novo. Iowa R. App. P. 6.4. We give weight to the fact findings of the district court, especially when considering the credibility of witnesses, but we are not bound by these findings. Iowa R. App. P. 6.14(6)( g).
III. Christine's Claims
Christine first claims that the district court erred in utilizing the date of the dissolution of the parties' marriage, December 31, 1997, to determine an equitable property division. She argues that the court should have used October 15, 2003, the date trial commenced, to determine an equitable property division. She claims she should receive an additional award of $1,691,203 to make the distribution equitable. For the reasons which follow, we reject this assignment of error.
In support of her argument, Christine suggests that she is entitled to one-half of 22/28ths of the total assets held by the parties on October 15, 2003. Her calculation is based on the assumption that she had net assets of $4,423,427 at the time of trial and Daniel had net assets of $11,298,002 at the time of trial.
Generally, valuations and divisions of property are to be made at the date of trial. In re Marriage of Muelhaupt, 439 N.W.2d 656, 661 (Iowa 1989). However, like the district court, we recognize that the trial date is not always the proper date for determining values. In In re Marriage of Driscoll, 563 N.W.2d 640 (Iowa Ct.App. 1997), we stated the following:
There may be occasions when the trial date is not the appropriate time to determine values. Equitable distributions require flexibility and concrete rules of distributions may frustrate the court's goal of obtaining equitable results. For example, when parties separate several years before even filing a petition for dissolution of marriage, an alternative valuation date is appropriate. Hence we are not locked into a set date as it is inherent in the court's equitable powers, to make appropriate adjustments, according to the unique facts of each case.
Id. at 643 (citations omitted).
Daniel and Christine had been divorced for nearly six years at the time of trial. During that time, each party accumulated additional property, and each party remarried. Moreover, we note that both parties specifically agreed to use the date of the dissolution of their marriage for valuation purposes during their mediation process. We also note that the district court found that "a division of property in this case premised on the estimates of value on the date of trial would be no more equitable than the division proposed in the mediation agreement as supplemented by this court." Based on the circumstances of this case, we conclude the district court did not err in utilizing the date of the parties' dissolution of marriage as the date for valuing the property subject to division.
Christine next argues that the district court "erred in determining that the parties' mediation agreement was an equitable distribution as of the date of dissolution." In support of her argument she asserts she suffered prejudice because a financial affidavit provided by Daniel in preparation for mediation was inconsistent with another affidavit he provided to a bank immediately after the mediation agreement was reached. She testified the estimates of value her former spouse provided to the bank were substantially higher.
In rejecting this same argument, the district court noted that the parties had agreed to use their dissolution date for purposes of valuing their property during mediation. As the court observed, the parties' personal estimates of the value of their property in 2001 would likely be different than the value of the property in 1997. We also note that Christine had more than enough information to form her own opinions regarding property values. Christine was represented by counsel prior to and during the mediation session. Before mediation occurred, Christine and her attorneys had the opportunity to review all of Daniel's files concerning the various properties at issue. Nothing in the record suggests that Daniel withheld any information requested prior to the mediation, and the parties' written mediation agreement indicates the agreement was entered into with full knowledge of the facts and circumstances surrounding this dissolution. The record also reveals Christine's attorneys consulted with at least two real estate professionals concerning the value of the real estate. Obviously, Christine and her attorneys were free to reject Daniel's estimates of the value of the parties' property and to rely on their own. We conclude that the district court did not err in determining that the mediation agreement effectuated an equitable distribution.
Christine's brief on appeal asserts the court erred when it allowed her former counsel, Tim Pearson, "to testify relative to intentions and values." She asserts, without reference to any authority, that Pearson's testimony violates the attorney-client privilege. The trial court's comments during Pearson's testimony make clear that the court considered Pearson's testimony only with respect to whether or not Christine received and possessed the necessary information before and during the mediation session. Pearson did not specifically testify regarding his discussions with Christine or regarding her "intent" at the mediation session. We reject this assignment of error.
The trial court allowed Pearson to offer his personal opinion regarding the results of the mediation subject to a relevancy objection by Christine's counsel, but the court did not refer to this testimony to support its conclusion that the mediation agreement provided for an equitable distribution of the parties' property.
Finally, Christine maintains that the district court erred in not awarding her the value of a Woodland Villa condominium unit as an unencumbered property. She made this same argument below in her motion for an enlarged or amended judgment pursuant to Iowa Rule of Civil Procedure 1.904. The district court denied her request because the parties were aware of the status of their properties at the time of the mediation agreement, and therefore were aware that the encumbrance on the Woodland Villa unit had not been paid. We find no reason to disagree with the court's conclusion. Accordingly, we reject this assignment of error.
IV. Daniel's Claim
The district court followed the parties' mediation agreement, but entered a supplemental money judgment in favor of Christine. Daniel contends that the district court erred in awarding Christine additional monies beyond the mediation agreement. To support his argument he points out that the district court concluded the parties entered into a valid, enforceable agreement, following mediation, which provided for an equitable distribution of their property. The court rejected Christine's argument that she was defrauded in any way. Based on these findings, Daniels claims the court should have simply enforced the mediation agreement as written and not awarded Christine additional monies. We agree.
A settlement agreement in dissolution proceedings is considered a contract between the parties. In re Marriage of Lawson, 409 N.W.2d 181, 182 (Iowa 1987). Such an agreement is entitled "to all of the sanctity of an ordinary contract if supported by legal consideration." Ask, 551 N.W.2d 643, 646 (Iowa 1996) (quoting In re Property Seized, 501 N.W.2d 482, 485 (Iowa 1993)).
Here, the parties came to a valid agreement following mediation, which was neither unfair nor contrary to the law. Thus, it was binding on both parties and Christine had no legal right to repudiate the agreement. In re Marriage of Ask, 551 N.W.2d at 645. In addition, Christine accepted the property she was awarded and had held the property for over two years by the time of trial. Accordingly, we conclude that the district court erred when it awarded Christine an additional $207,636.25 beyond what was agreed upon by the parties in the mediation agreement. As a result, we modify the district court's supplemental decree by setting aside the money judgment awarded to Christine. All other provisions of the supplemental decree are affirmed. Costs of this appeal are taxed to Christine.