Opinion
No. 1-666 / 00-2015.
Filed February 6, 2002.
Appeal from the Iowa District Court for Scott County, JAMES E. KELLEY, Judge.
The respondent appeals the property distribution provisions of the parties' dissolution decree. AFFIRMED AS MODIFIED.
Gregory J. Epping of Terpstra, Epping Willett, Cedar Rapids, for appellant.
Kyle D. Williamson, Davenport, for appellee.
Considered by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
Timothy Epping appeals certain property distribution provisions of the parties' dissolution decree. He contends the district court: (1) did not equitably divide the parties' real estate and accompanying debt and (2) should not have ordered him to pay credit card debt incurred by his wife during the dissolution proceedings. We affirm as modified.
I. Background Facts and Proceedings
Timothy and Carol married and had two children, both minors at the time of trial. Timothy worked as a substation supervisor for a utility company, earning $56,488 per year. Carol engaged in home sales of cosmetics, earning gross income of $756.33 per month. The parties purchased a home in 1982 which, by trial, had a market value of $114,030. The remaining mortgage on the property was $36,225, resulting in net equity of $77,805. With the exception of the mortgage, Timothy characterized the parties as essentially debt-free. Carol, in contrast, asserted the parties additionally had two joint credit card debts, one of which was with Fleet for $10,564.97.
Carol sought a divorce. Following trial, the district court granted Carol physical care of the children, awarded no alimony, and equally divided the parties' property. Timothy does not take issue with these portions of the decree. Instead, he focuses on the court's disposition of the home and allocation of the Fleet credit card debt. The court ordered that the home be held by the parties as tenants in common, with Carol having possession and responsibility for payment of the mortgage. The court further ordered Carol to pay Timothy his share of the home equity within thirty-six months of the decree's filing date. In the event she failed to do so, Timothy was given a right of first refusal to purchase her equitable interest. If Timothy chose not to exercise this right, the court ordered the home sold and the net proceeds divided equally. The court also ordered Timothy to pay off the Fleet credit card.
Timothy filed a motion pursuant to Iowa Rule of Civil Procedure 179(b) for enlarged findings and conclusions as well as a motion for new trial, seeking a release of liability on the home mortgage and claiming newly discovered evidence showed Carol mischaracterized the nature of the Fleet credit card debt. The court declined to grant a release but amended the decree to require Carol to hold Timothy harmless on the mortgage once she paid off his equity. The court denied the motion for new trial on the Fleet debt, based on its finding that the debt was incurred to repay household expenses accumulated during the marriage.
Scott appealed. Our review is de novo. Iowa R. App. P. 4.
II. Home
Timothy argues the district court's disposition of the parties' home is untenable because: (1) Carol lacks sufficient income to keep up with the mortgage obligation and other expenses associated with the home and (2) he remains liable on the mortgage and, therefore, will have difficulty obtaining credit to purchase his own home. We agree with Timothy.
A party's ability to meet the financial obligations of a dissolution decree is a relevant factor to consider in determining an equitable division of property. In re Marriage of Siglin, 555 N.W.2d 846, 849-50 (Iowa Ct. App. 1996). Although the court found Carol was capable of earning $24,000 per year, her actual income at the time of trial was less than $9000 per year. Timothy testified that, according to his credit report, Carol had twice failed to timely pay the mortgage, a circumstance that had never occurred before the parties separated. Additionally, Carol's testimony that she could expect to earn sufficient income in three years to pay off Timothy's equity of $37,000 was speculative. Timothy, in contrast, was earning sufficient income to make mortgage and tax payments on the house and had obtained financing for a loan to pay off Carol's share of the equity. In the virtually identical case of In re Marriage of Lovetinsky, 418 N.W.2d 88, 89-90 (Iowa Ct. App. 1987), our court affirmed an order requiring sale of the parties' home because it was unclear that the wife could "afford to maintain the residence and its attendant expenses."
Our court has also expressed a willingness to consider the effect of joint ownership on a party's credit. See Lovetinsky, 418 N.W.2d at 89. Although Timothy was able to obtain financing of $75,000 to pay off Carol's equity, he persuasively argues on the basis of evidence in the record that continued late payments or defaults in mortgage or tax payments will impair his ability to obtain financing to purchase his own home. We believe it is inequitable to hold him liable for obligations over which he has no control. See also In re Marriage of Mentel, 359 N.W.2d 505, 506-7 (Iowa Ct. App. 1984) (noting joint ownership of assets frequently results in problems at later date). For these reasons, we modify the dissolution decree to order the home sold and the proceeds divided equally between the parties.
III. Fleet Credit Card
Timothy next contends the district court should not have held him responsible for payment of the Fleet credit card debt. He seeks a new trial based on post-trial evidence showing the debt was incurred by Carol after the parties separated. He claims this evidence refutes Carol's assertion that the Fleet debt was incurred for household expenses during the marriage.
The district court denied the new trial motion, stating:
[T]he evidence that Respondent claims is newly discovered is not relevant to the Court's decision. The Court divided all of the credit card debt equitably between the parties. The Court's findings that the credit cards were used for marital purposes is not changed and would not be changed were the Court to determine that she received $10,500 as an advance on that credit card in October of 1999.
In this instance, we review the court's ruling for abuse of discretion. See In re Marriage of Wagner, 604 N.W.2d 605, 608 (Iowa 2000).
While the new evidence does show the Fleet credit card debt was incurred after the parties separated, we agree with the district court that it does not refute Carol's assertion that the money was an advance to pay off household bills she charged on other credit cards during the marriage. The district court found Carol's testimony credible on the nature of the expenditures and expressly rejected Timothy's assertion that he did not know about the Fleet credit card or the charges to that card. Although we might have viewed Carol's trial testimony more skeptically in the face of this newly-discovered evidence, we cannot conclude that the court's decision to deny the new trial motion amounted to an abuse of discretion. The court equitably divided all the credit card debts, allocating some to Carol and some to Timothy. After doing so, the net assets awarded each were within a penny. Both parties concede that this essentially equal distribution was equitable. See In re Marriage of Bell, 576 N.W.2d 618, 622 (Iowa Ct. App. 1998) (noting equal property distribution warranted after long-term marriage). Given the length of the marriage and the absence of an alimony award, we agree. Accordingly, we affirm the court's ruling denying Timothy's motion for new trial.
The court allocated $204,408 to Carol and $204,408.01 to Timothy.
IV. Appellate Attorney Fees
Carol requests an award of appellate attorney fees. An award rests within the court's discretion. In re Marriage of Benson, 545 N.W.2d 252, 258 (Iowa 1995). Timothy has prevailed on a key issue and the remaining issue has merit. As Carol was not forced to defend unmeritorious claims, we decline to order Timothy to pay any portion of her appellate fees.
AFFIRMED AS MODIFIED.