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In re the Marriage of Bishop

Court of Appeals of Iowa
Mar 26, 2003
665 N.W.2d 440 (Iowa Ct. App. 2003)

Opinion

No. 2-768 / 02-0174

Filed March 26, 2003

Appeal from the Iowa District Court for Delaware County, Lawrence H. Fautsch, Judge.

Respondent appeals various economic provisions of the parties' dissolution decree. AFFIRMED AS MODIFIED.

Stephen Jackson and Stephen Jackson, Jr. of Jackson Jackson, P.L.C., Cedar Rapids, for appellant.

Robert Sudmeier of Fuerste, Carew, Coyle, Juergens Sudmeier, P.C., Dubuque, for appellee.

Heard by Vogel, P.J., and Miller and Eisenhauer, JJ.


Mary Bishop appeals various economic provisions of the parties' dissolution decree. She contends the trial court failed to award her a fair and equitable share of the property. She also claims she is entitled to alimony. We affirm as modified.

I. Background Facts and Proceedings. Richard and Mary Bishop were married in 1988. This was the second marriage for both parties. No children were born to the marriage. Both Mary and Richard had children from their first marriages. Three of the parties' four children were in high school at the time of the marriage.

Prior to the parties' marriage, Mary was employed as the head nurse of a critical care unit in Lake Forest, Illinois, where she earned $45,000 per year. Mary had worked in the nursing field for twenty years. At trial, Mary disclosed she had a pension from her nursing job. The value was never disclosed. When she married Richard, Mary quit her job and moved to Manchester, Iowa, where Richard farmed. Mary received $113,500 in proceeds from the sale of her Illinois home. Approximately $100,000 of the proceeds was used to pay a balance due to Richard's ex-wife.

During the marriage, Mary was a homemaker, taking care of the home and the children. She also lent some assistance to Richard's farming operation. Mary kept her nurse's certification current and performed some paramedical work for insurance companies, earning between $20 and $30 per physical, although the number of physicals she performed per week varied.

In 1993, Richard's son, Doug, began assisting Richard in his farming operation. Richard allows Doug the use of his farm machinery in exchange for labor. Richard owns 555 acres of the 1100-acre farm. During the marriage, Richard transferred the land he owned to Mary and himself as tenants in common for estate planning purposes.

In January 2001, Richard filed for divorce. The parties agreed to the distribution of their household goods, but trial was held to determine the division of the parties' debts, the farm, and other property. The district court determined that the transfer of Richard's farmland was for estate planning purposes and that as such, Mary was only entitled to any appreciation of the property to which she contributed. Although the value of the farmland appreciated greatly during the marriage, the court found the appreciation was a result of inflation and not the efforts of the parties. The court concluded that Mary was therefore not entitled to a percentage of the appreciation.

Mary requested an award of spousal support. The court declined to make such an award, finding that although Mary had not worked in the nursing profession since 1988, she was capable of obtaining employment as a registered nurse. Although Mary testified that she doubted she could earn $45,000 per year, she took no steps to seek employment after the parties separated in January 2001. The court found rehabilitative alimony was not appropriate because there are no courses Mary could take to orient her to the current standards of practice in the nursing profession.

Mary requested an equalization payment of $797,795. The district court found that awarding Mary such a sum would require Richard to sell the farm, which would have drastic tax consequences. However, over the course of the parties' marriage, the parties' debts had been reduced $185,000. The court awarded Mary one-half of the debt reduction figure, as well as the $113,500 she received from the sale of her home for a total cash award of $206,000.

II. Scope of Review. Appeals of economic provisions of a divorce decree are reviewed de novo. See In re Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998). This standard requires us to examine the entire record and adjudicate anew rights on the issues properly presented. In re Marriage of Ruter, 564 N.W.2d 849, 851 (Iowa Ct.App. 1997). We recognize the value in listening to and observing the parties and witnesses. See Iowa R.App.P. 6.14(6)( g). Consequently, we give weight to the findings of the trial court, although they are not binding. Id. III. Property Division. Mary contends the district court erred in dividing the property. She claims she was not awarded a fair and equitable share. She argues the court failed to adequately recognize her contribution to the marriage and the fact that she gave up her career. She also argues the court treated the farmland Richard brought into the marriage differently than the property she brought into the marriage. Finally, Mary contends the court erred in failing to divide the value of the homestead she and Richard acquired during the marriage, and in failing to award her one-half of the value of the farm equipment, livestock, and growing crops.

The partners to a marriage are entitled to a just and equitable share of property accumulated through their joint efforts. In re Marriage of Hass, 538 N.W.2d 889, 892 (Iowa Ct.App. 1995). Iowa courts do not require an equal division or percentage division in determining a just and equitable share of property. In re Marriage of Gonzalez, 561 N.W.2d 94, 98 (Iowa Ct.App. 1997). Instead, each particular circumstance determines what is fair and equitable. Id.

Mary claims she is entitled to one-half the amount in which the farmland appreciated during the marriage. Although the value of the farmland increased during the marriage to a total of $1.3 million, the district court found this appreciation was due solely to inflation. This finding is within the permissible range of the evidence and we are not inclined to disturb it. See In re Marriage of Versluis, 521 N.W.2d 760, 761 (Iowa Ct.App. 1994). Because the appreciation was merely fortuitous, Mary is not entitled to a percentage of the appreciation. See In re Marriage of Lattig, 318 N.W.2d 811, 815 (Iowa Ct.App. 1982).

We also find no fault with the district court's finding that the transfer of title to the farmland does not change the way the property should be treated. Joint ownership of an asset originally owned by one party in a marriage cannot be demonstrated by merely affixing the other party's name to that asset. See In re Marriage of Hoffman, 493 N.W.2d 84, 89 (Iowa Ct.App. 1992). "The donor must have a clear intention to pass all right, title, and dominion over the gift to the donee." Raim v. Stancel, 339 N.W.2d 621, 624 (Iowa Ct.App. 1983). Here, the transfer was made simply for estate planning purposes. We agree that the farmland should not have been divided.

The court awarded Mary one-half of the $185,000 amount that the parties had paid to reduce their debts over the course of their marriage. The court also awarded Mary the $113,500 she brought into the marriage, part of which contributed to pay Richard's ex-wife. Mary complains the district court should have awarded her an additional $113,500 to account for appreciation in the same way that the farmland appreciated. We conclude Mary is entitled to the $113,500 she brought into the marriage, as well as $35,750, which equals one half of the $71,500 debt reduction figure to which the parties jointly contributed. We also believe Mary is entitled to the same return on her $113,500 as Richard received on his farmland. Therefore, Mary should be awarded a cash settlement of $262,750.

Mary also argues she is entitled to one-half of the value of the farm equipment, livestock, and growing crops. She contends the farm equipment and livestock that was replaced during the marriage is "marital property," as well as the crops that were in the ground during the trial. As Richard notes, these commodities are part of a continuing farm operation. The equipment and livestock purchased during the marriage replaced equipment and livestock that Richard owned prior to the marriage. Mary benefited from this property without having to contribute to it. She likewise benefited from the crops that were already planted at the time of marriage. It was equitable for the district court to award these assets to Richard.

Finally, Mary argues she is entitled to one-half of the value of the homestead that was built during the marriage. However, reviewing the property settlement as modified, we find that it is equitable. In addition to the $262,750 cash settlement, Mary has received assets worth approximately $170,000. Mary has also retained her pension with an unknown value. She worked at the nursing job for twenty years, so her pension should be a significant amount.

We modify Richard's equalization payment to Mary to $262,750, an increase of $56,750. Awarding Mary the $797,795 she requests would require Richard to sell the farm, thus depriving him of his livelihood in addition to the tax consequences contemplated by the district court. It would also unfairly subject property owned prior to the marriage to division. We conclude a $262,750 equalization payment renders a fair and equitable distribution of the property.

IV. Alimony. Mary also contends the district court erred in declining to award her alimony.

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). Rather, it is a discretionary award made after considering those factors listed in Iowa Code section 598.21(3) (2001). In re Marriage of Applegate, 567 N.W.2d 671, 675 (Iowa Ct.App. 1997). We consider property division and alimony together in evaluating their individual sufficiency. In re Marriage of Tzortzoudakis, 507 N.W.2d 183, 186 (Iowa Ct.App. 1993). When determining the appropriateness of alimony, the court must consider "(1) the earning capacity of each party, and (2) present standards of living and ability to pay balanced against the relative needs of the other." In re Marriage of Gonzalez, 561 N.W.2d 94, 99 (Iowa Ct.App. 1997) (citations omitted).

We find Mary has failed to demonstrate a need for alimony. She failed to seek employment, or to present evidence of her ability to find employment or the

compensation she would receive. As a result, we affirm the district court's refusal to grant Mary alimony.

AFFIRMED AS MODIFIED.

Miller, J., concurs; Vogel, P.J., concurs in part and dissents in part.


I write separately on two issues to comment on how the trial court and the majority reached their separate conclusions. I would award Mary approximately $114,250 more in net assets than does the majority.

I. Paid debt.

The majority credits Mary with paying a substantial portion of Richard's debt that was satisfied early in the marriage. The trial court used a different formula, but still considered this past paid debt in its calculations. Discussion of the paid debt is useful to demonstrate the willingness of Mary to pour her assets into the marriage and help pay off Richard's premarital indebtedness to his former wife. It also helps trace Mary's premarital property, because unlike Richard's farmland, cash is fungible and harder to identify and recoup when the marriage dissolves. However, other than as an indicator of a contribution to the marriage, or as an aid to trace premarital assets, I am not clear why we should give Mary, or any party in a dissolution, a cash equivalent to a debt long since paid. Instead, we should look to the assets and debts currentlybefore the court and make an equitable distribution, equipped with an understanding of the history of the parties' premarital and marital finances. See In re Marriage of Campbell, 623 N.W.2d 585, 588 (Iowa Ct.App. 2001); In re Marriage of Garst, 573 N.W.2d 604, 606-07 (Iowa Ct.App. 1998).

Therefore, I would eliminate the credit Mary received for paying down Richard's premarital debt and look to fashion an equitable distribution of assets through other means. The majority credited Mary with the same percentage increase in her premarital cash ($113,500) as Richard enjoyed with the increase of his farm land (100%). I concur and would therefore award to her $227,000.

II. Marital home and acreage.

Neither the trial court nor the majority awarded Mary any of the value of the farm acreage upon which the marital home was built. The 5.89 acres was a gift from Richard's parents to the parties during their marriage. The couple built a home on the land and added some outbuildings with marital funds, giving the acreage a value of $300,000 at the time of trial. The majority does not grant Mary a portion of this homestead in part because she received a cash settlement of $262,750 (which I would reduce to $227,000), assets of approximately $170,000 (of which approximately $112,000 was premarital investments), and a pension in an unknown amount from her former nursing career in Illinois. While it may be interesting to speculate on the value of the premarital pension, it should not justify denying Mary her fair share of the marital homestead. Even Richard testified the acreage, house, and outbuildings should be treated as marital property. I find no justification for not awarding Mary one-half of its value, or $150,000, as the efforts of both parties clearly went into building their marital home and improving this acreage.

In addition, had Mary not foregone her nursing career to marry Richard, we must assume her pension today would be substantially greater than the unknown value the majority assumes it has.

I would award Mary the return on her premarital cash ($227,000); one-half the value of the homestead ($150,000); and miscellaneous assets including premarital accounts ($170,000), for a total of $547,000. The equalization payment from Richard to Mary would be $377,000 ($227,000 plus $150,000), which could be a structured in such a manner so as to not impair Richard's ability to continue farming.

I have considered the foregoing as well as the length of the marriage and the sacrifices and contributions of both parties, and believe equity would be better served with this property distribution. After the debt assigned by the trial court, which the majority leaves undisturbed on appeal, and a cash settlement of $377,000, Richard would leave the marriage with approximate net assets of $1,252,935 and Mary with approximate net assets of $547,000.

In all other matters, I concur with the majority.


Summaries of

In re the Marriage of Bishop

Court of Appeals of Iowa
Mar 26, 2003
665 N.W.2d 440 (Iowa Ct. App. 2003)
Case details for

In re the Marriage of Bishop

Case Details

Full title:IN RE THE MARRIAGE OF DICK BISHOP and MARY K. BISHOP Upon the Petition of…

Court:Court of Appeals of Iowa

Date published: Mar 26, 2003

Citations

665 N.W.2d 440 (Iowa Ct. App. 2003)

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