Opinion
No. 1-824 / 00-1432.
Filed March 13, 2002.
Appeal from the Iowa District Court for Washington County, JAMES P. REILLY, Judge.
Helen Bruty appeals the property division portion of a dissolution decree. She contends the district court inequitably distributed the parties' interests in their home. AFFIRMED AS MODIFIED.
H. Michael Neary, H. Michael Neary Law Office, P.C., Ottumwa, for appellant.
Craig A. Davis, Washington, for appellee.
Considered by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
In this appeal from a dissolution decree, the sole issue is whether the district court equitably divided the parties' respective interests in their home. We agree with the wife that she is entitled to a greater share of the home sale proceeds. Accordingly, we affirm as modified.
I. Background Facts and Proceedings
Helen Rojean Black (Jean) owned a home in Sigourney when she married Charles Bruty. Soon after the marriage, Jean sold her home and moved to Washington, Iowa, where Charles owned a home.
Charles' home had a value of $34,630. The parties decided to extensively renovate it. To fund the renovation cost of $63,127.03, the parties obtained a loan for $31,205.00 and Jean contributed the balance of $31,922.03 from her Sigourney home sale proceeds. Jean also spent $9,128.23 of her own money for interior improvements, for a total contribution by her of $41,050.26.
Less than four years after the parties married, Jean sought a divorce. The only issue at trial related to the division of the parties' interests in the Washington home. The parties agreed that $20,579.76 was still owed on the home loan but disagreed on the market value of the home after renovation. Jean estimated it was worth $75,000 to $80,000; Charles used a more conservative figure of $66,500.
The district court determined the market value of the home was $75,000. and closing costs would be $5,000. Using these figures, the court:
1. Subtracted the original value of the home from the fair market value ($75,000-$34,630 = $40,370).
2. Deducted the $5,000 in closing costs from above ($40,370-$5,000 = $35,370).
3. Found Jean should get sixty-seven percent of this value (.67 x $35,370 = $23,679.90).
4. Found Charles should get thirty-three percent of the value (.33 x $35,370 = $11,672.00).
5. Ordered Charles to assume the $20,579.76 mortgage and to pay Jean $23,679.90 in order to obtain clear title.
Jean appeals, contending the district court's award afforded her substantially less than her financial contribution to the home. We review this issue de novo. Iowa R. App. P. 6.4.
II. Determination of Appreciated Value
The key issue is how to determine the appreciated value of the home. Our court has cited several relevant factors to consider. See In re Marriage of Grady-Woods , 577 N.W.2d 851, 852-3 (Iowa Ct. App. 1998). The most important are the "tangible contributions of each party", whether the property appreciation is attributable to "fortuitous circumstances" or the parties' efforts, and the length of the marriage. Id .
We believe the district court's method of distribution failed to recognize Jean's significant role in the renovation and her substantial monetary contribution to the appreciated value of the home. See In re Marriage of Lattig, 318 N.W.2d 811, 815-16 (Iowa Ct. App. 1982). Specifically, it was Jean's idea to renovate the home and her infusion of more than $40,000 during the short marriage that allowed the parties to essentially gut a portion of the existing home and then rebuild it. The district court's decision to subtract the pre-renovation value from the market value before determining the amount of appreciated value subject to division afforded Jean substantially less than her tangible contribution to the home. Id. at 816 (noting district court's methodology has been rejected in some cases because it fails to account for spouse's contribution in enhancing value of the home). Therefore, we agree Jean is entitled to more of the home equity than she received. Id. (rejecting district court's method of subtracting purchase price from present market value before dividing appreciated value).
III. Calculation
We now calculate each party's share of the equity proceeds. Preliminarily, we find no reason to quarrel with the district court's findings that the market value was $75,000, closing costs would be $5,000, and the home loan was $20,579.76. Accepting these figures, we first subtract the closing costs from the market value to arrive at a figure of $70,000. We then subtract the home loan of $20,579.76, arriving at remaining equity of $49,420.24. Next, we determine the percentage of each party's contribution to the home, as follows:
The district court did the same. We do not take issue with this portion of the ruling.
Total contribution by Charles: Total contribution by Jean:
$34,630.00 $41,050.26
$34,630 + $41,050 26 = $75,680.26 (total contribution):
Charles' Contribution $34,630.00 = .457582 or 46%
Total Contribution $75,680.26
Jean's Contribution $41,050.26 = .542417 or 54%
Total Contribution $75,680.26
Finally, we apply the percentages to the remaining equity to arrive at each party's distribution:
. 46 x $49,420.24 (equity) = $22,733.31 to Charles
.54 x $49,420.24 (equity)= $26,686.93 to Jean
The dissolution decree is modified to order that Charles pay Jean $26,686.93 rather than $23,679.90 as specified in the decree.
AFFIRMED AS MODIFIED.