Opinion
No. 3-656 / 03-0360
Filed November 17, 2003
Appeal from the Iowa District Court for Clay County, Joseph J. Straub, Judge.
Petitioner appeals the dissolution decree challenging the property division, award of alimony, and attorney fees. AFFIRMED AS MODIFIED.
James Redmond, Gregg Williams, and Jeana Goosmann of Heidman, Redmond, Fredregill, Patterson, Plaza, Dykstra Prahl, L.L.P., Sioux City, for appellant.
Bradley Howe and Redge Berg of Berg Howe, Spencer, for appellee.
Heard by Vogel, P.J., and Hecht and Vaitheswaran, JJ.
Cheryl Eastman appeals the dissolution decree challenging the property division, award of alimony, and attorney fees. We affirm as modified.
Background Facts. Norman and Cheryl Eastman were married in July 1993, the first marriage for Norman and the second for Cheryl. No children were born to the marriage. Norman and Cheryl were sixty-five and fifty-five years old, respectively, at the time of the dissolution trial.
Norman is a farmer and sole shareholder of a farm corporation, Eastman Homestead, Inc. At the time of the marriage the corporation owned six farms, and during the marriage the corporation purchased a seventh farm. Cheryl was briefly employed in 1999 when she worked for the Clay County Fair. She also participated in the Mrs. America pageant and attempted to begin her own television show. After the parties separated Cheryl began working part-time at a bank earning $6.75 per hour.
Prior to the marriage, Cheryl moved into Norman's home located on one of his farms. In 1998, the couple built a home in Spencer, solely financed by Norman with a $90,000 loan from his corporation.
The district court concluded that Cheryl's share of the property division was a $61,200 cash settlement to be paid by Norman. The court further ordered Norman to pay traditional alimony of $750 per month for three years and attorney fees of $7,000. Cheryl appeals the district court's decree challenging the property division, valuation of assets, and seeking additional alimony and attorney fees.
Scope of Review. Our standard of review in dissolution of marriage proceedings is de novo. In re Marriage of Wagner, 604 N.W.2d 605, 608 (Iowa 2000). We are obliged to examine the entire record and adjudicate rights anew on the issues properly presented. Id. The partners to a marriage are entitled to a just and equitable share of the property accumulated through their joint efforts. In re Marriage of Russell, 473 N.W.2d 244, 246 (Iowa Ct.App. 1991). Iowa courts do not require an equal division or percentage distribution. Id. The determining factor is what is fair and equitable in each circumstance. Id. Valuation of Assets. Cheryl takes issue with the district court's valuation of the farm corporation and ultimately Norman's net worth both at the time of the marriage and at trial. James Haraldson testified on Norman's behalf regarding the valuation of the farm corporation and Norman's personal finances. Haraldson is the president of the First National Bank and a certified public accountant. He has served as bookkeeper for Norman and the farm corporation since 1978. With his extensive knowledge of area farm operations as well as his close familiarity with Norman's finances, he was able to provide detailed information to the district court of Norman's financial picture. Cheryl presented no credible evidence to undermine the accuracy of the values asserted by Norman. The record supported the valuation findings of the district court, and we will not set aside those valuations that are within the permissible range of evidence. In re Marriage of Driscoll, 563 N.W.2d 640, 643 (Iowa Ct.App. 1997).
Property Division. Cheryl next argues that the property division was not equitable. Her main contention is that in failing to award her an appropriate share of the IRA, the marital residence, and the farm corporation, the district court failed to recognize her contribution to the marriage. Norman contends that the property division was fair and equitable.
The district court set aside Norman's premarital property, only considering the appreciated value of such property in the division of assets. At the time of marriage, Norman's net worth was $2,384,900, which included the value of the shares he owned in Eastman Homestead, Inc. valued at $2,129,697. At the time of trial, Norman's net worth had increased to $2,624,614, increasing his total net worth during the nine and one-half year marriage by $239,714. After taking into consideration Cheryl's contributions during the marriage, the district court determined that "only a small part of the increase in value can be attributable to Cheryl's homemaking and the farm-related tasks performed by her." However, the court concluded that it would be equitable to award Cheryl a portion of the increase in value for the contributions she did make.
The court awarded Cheryl $9,000, which is half of the contributions Norman made to his IRA during the marriage. As for the house in Spencer, the district court determined that Cheryl was "not entitled to any credit for the actual cost of the real estate and the cost of constructing of the house since those funds came from the corporation." Therefore, the court awarded Cheryl $12,500, which is half of the appreciated value of the home. Cheryl also received $3,450 for one-half of the increased cash value of two life insurance policies and $1,250 for one-half of the value of a jet ski purchased during the marriage. In addition the court awarded Cheryl $35,000 for a total cash settlement to Cheryl of $61,200. This is approximately twenty-five percent of the increase of Norman's net worth during the marriage.
In In re Marriage of Grady-Woods, this court stated,
There are several factors given special emphasis when determining an equitable division of property owned prior to the marriage and appreciated during the marriage. First, the "tangible contributions of each party" to the marital relationship are considered. Homemaking is considered a tangible contribution to a marriage. Looking to the tangible contributions prevents entitlement to appreciated property due to the mere existence of the relationship. Second, we look at whether the appreciation of the property is attributed to fortuitous circumstances or the efforts of the parties. Third, we look to the length of the marriage.
In re Marriage of Grady-Woods, 577 N.W.2d 851, 852-53 (Iowa Ct.App. 1998) (citations omitted).
The district court found, and the record supports, that Cheryl minimally contributed to Norman's farm corporation. On a few occasions early in the marriage, she took meals to the workers in the field, wrote checks to pay farm bills, drove workers from one farm to another, fixed meals for workers, drove a tractor and unloaded grain, and ran errands. Cheryl's homemaking contributions were not substantial. The couple had no children and Norman employed a cleaning lady at the farm house and the Spencer home. In addition, the district court found and the record supports that Cheryl was more occupied pursuing her own interests rather than contributing time and effort to the marriage, the household, or to Norman's work. Compare In re Marriage of Garst, 573 N.W.2d 604, 607 (Iowa Ct.App. 1997) (finding wife's contributions substantial where she quit her job at husband's request, supported business ventures, traveled on business trips, and entertained husband's clients and business associates). The appreciation of assets during the marriage was thus almost exclusively due to Norman's efforts or fortuitous inflationary factors. The district court's award of twenty-five percent of the increase in Norman's net worth was equitable, with one exception.
At the time of marriage, Norman owned an IRA valued at $20,802. During the marriage Norman contributed $18,000 to the IRA and at the time of trial, the IRA had increased in value to $54,480. The district court awarded Cheryl $9,000, one-half of the contributions made during the marriage, but Cheryl argues that the equitable division would be one-half of the entire IRA. While we disagree with Cheryl's assertion that she is entitled to one-half of the total IRA, we do conclude she is entitled to one-half of the appreciated amount of the IRA during the marriage ($7,839) in addition to one-half of the contributions made during the marriage as previously awarded by the district court. We modify to increase Cheryl's award by $7,839.
Cheryl next challenges the division of the equity of the residence. Cheryl argues she should not only receive one-half of the appreciated value of the Spencer home as ordered in the decree, but also one-half of the actual value of the home. The district court determined the home was worth $260,000, having increased in value by $25,000 during the marriage. The home was paid for by Norman using premarital funds both corporate and personal. We agree with and affirm the district court's award to Cheryl of one-half of the appreciated value of the home.
Spousal Support. Cheryl contends that the alimony awarded in the dissolution decree was not equitable. The district court ordered Norman to pay alimony of $750 per month for three years, however, Cheryl asserts a more equitable award would be $2,000 per month for seven years. Norman contends that the alimony award was fair and equitable.
An award of spousal support is a balancing of the equities. In re Marriage of Clinton, 579 N.W.2d 835, 839 (Iowa Ct.App. 1998). It is used as a means of compensating the party who leaves the marriage at a financial disadvantage, particularly where there is a large disparity in earnings. Id. It is a discretionary award, dependent upon each party's earning capacity and present standards of living, as well as the ability to pay and the relative need for support. In re Marriage of Bell, 576 N.W.2d 618, 622 (Iowa Ct.App. 1998), abrogated on other grounds by In re Marriage of Wendell, 581 N.W.2d 197 (Iowa Ct.App. 1998). Courts are guided by Iowa Code section 598.21(3) (1999), which mandates consideration of a number of factors, such as the length of the marriage, the age and health of the parties, the earning capacity of the spouse seeking support, and particulars surrounding that spouse's ability to become self-sufficient. Another factor the courts take into consideration when determining alimony is the property division. Grady-Woods, 577 N.W.2d at 854 (citing In re Marriage of Knight, 507 N.W.2d 728, 731 (Iowa Ct.App. 1993)).
Cheryl was not working when she met and married Norman but testified she was taking computer classes at the community college, paid for by Norman. Later she took an interior decorating course. Cheryl admits to having some marketable job skills and stated she may have become a travel agent or worked in some other type of business had she not married Norman. There is no indication Cheryl quit school at Norman's request or left any employment. Compare Garst, 573 N.W.2d at 605 (noting the wife quit her job when the couple married upon the insistence and assurances from her husband that she would be provided for). Although Cheryl's demonstrated earning capacity is limited due to her minimal work record, she is ten years younger than Norman and in good health. Considering Norman is at or near retirement age, Cheryl's capacity to maintain employment, and the length of the marriage, we concur with the district court's setting of amount and duration of alimony.
Attorney Fees. Cheryl argues that the district court's award of part of her attorney fees was not equitable and requests this court to increase the amount to be paid by Norman. Prior to trial, the district court ordered Norman to pay temporary attorney fees for Cheryl of $5,000, as well as $2,500 for Cheryl's retention and payment of services for expert witnesses. In the dissolution decree, the district court ordered Norman to pay an additional $7,000 toward Cheryl's attorney fees, for a total of $14,500.
In setting the award, the district court noted the disparity of attorney fees incurred by the parties: Cheryl $49,372 and Norman $11,271. While the difference is great, it is important to note that Norman and his attorneys had ready access to Norman's and the corporation's financial documents. This was all information that required discovery by Cheryl and her attorney. Nonetheless, we find no abuse of discretion as the total amount of fees and attorney fees already awarded to Cheryl is substantial. See In re Marriage of Romanelli, 570 N.W.2d 761, 765 (Iowa 1997).
Cheryl also seeks attorney fees on appeal. Such an award is discretionary and is determined by assessing the needs of the requesting party, the opposing party's ability to pay, and whether the requesting party was forced to defend the appeal. In re Marriage of Gaer, 476 N.W.2d 324, 330 (Iowa 1991). Again, considering the economic positions of the parties, and the minor modification in Cheryl's favor, we determine Norman shall pay $1,000 towards Cheryl's appellate attorney fees. Costs on appeal shall be paid one-half by each party.
AFFIRMED AS MODIFIED.
Vaitheswaran, J., concurs; Hecht, J., dissents.
I respectfully dissent. My analysis of the relevant factors leads me to conclude the district court's spousal support award should be modified. The marriage of the parties was more than nine years in duration. Although certainly not severely disabled, Cheryl does have some documented multi-level disc disease for which she has obtained physical therapy and chiropractic care from time to time during the marriage. Most significantly, Cheryl's earning capacity is minimal while Norman's ability to pay spousal support is substantial. Furthermore, the insubstantial value of assets allocated by the decree to Cheryl when combined with her earning capacity will not enable Cheryl to be self-supporting. Accordingly, I would increase Norman's spousal support obligation to $1,000 per month for seven years.
I would also modify the district court's attorney fee award. I conclude the district court abused its discretion by ordering Norman to pay only $14,500 towards Cheryl's total attorney fees and expenses of $49,372.05. After carefully considering the amount of time spent by Cheryl's attorneys; the nature, extent, and difficulty of the services they provided; the nature and extent of the property owned by the parties; the customary charges for similar services; the professional standing and experience of Cheryl's attorneys; the ability of the parties to pay; and other appropriate factors, I would order Norman to pay an additional $30,000 under the circumstances of this case.