Opinion
No. 3-088 / 02-1134
Filed May 14, 2003
Appeal from the Iowa District Court for Johnson County, Patrick R. Grady, Judge.
Respondent appeals a district court ruling ordering payment of rehabilitative and traditional alimony to former spouse. Petitioner cross-appeals the district court's non-inclusion of an income tax refund as a marital asset and requests appellate attorney fees. AFFIRMED AS MODIFIED.
Matthew Brandes and Patsy Thimmig of Simmons, Perrine, Albright Ellwood, P.L.C., Cedar Rapids, for appellant.
Margaret Lainson of Meardon, Sueppel Downer, P.L.C., Iowa City, for appellee.
Heard by Sackett, C.J., and Huitink and Vogel, JJ.
Anthony Markham appeals the amount and duration of the district court's award of rehabilitative, reimbursement, and traditional alimony. Barbara Markham cross-appeals the district court's determination to not include a tax refund in the property division. We affirm in part; modify in part.
Background Facts . Anthony, (Tony), and Barbara Markham were married in January 1982. They have four children which at the time of trial were fourteen, eleven, eight and three. Both parties received undergraduate degrees prior to the marriage; Tony received a Bachelor of Science Degree in Chemistry and Barbara received a Bachelor of Business Administration Degree in 1981. Barbara and Tony worked full-time for the first few years of the marriage. Tony then decided to attend medical school at the University of Iowa. Barbara continued to work throughout the first half of the marriage, including the years Tony attended medical school.
After Tony graduated in May 1991, the couple moved to Peoria, Illinois, where Barbara began staying at home, caring for the couple's then two children. Sixteen months later, the family moved back to Iowa, and Barbara continued to stay at home with the children. Their third and fourth children were born. Tony began new employment requiring him to commute between the home in Iowa City and work in Waterloo. When the couple separated in September 2001, Barbara began taking night courses to complete her MBA. Tony and Barbara were both 42 and in good health at the time of trial.
The dissolution decree ordered Tony to pay child support of $2,500 per month, rehabilitative and reimbursement alimony of $2,000 per month for seven years, and traditional alimony in the amount of $3,000 per month until Barbara remarries or either party dies. Tony appeals. Barbara cross-appeals the district court's ruling on a 2001 tax refund and also requests Tony be ordered to pay one-half, or $2,500, of her appellate attorney fees.
Scope of Review . We conduct a de novo review of dissolution proceedings. Iowa R.App.P. 6.4. We defer to the district court's findings, but are not bound by them. Iowa R.App.P. 6.14(6)( g).
Spousal Support . 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). Courts are guided by Iowa Code section 598.21(3) (2001), 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.
There are three types of alimony: rehabilitative, reimbursement, and traditional. The purpose of rehabilitative alimony is "to support an economically dependent spouse through a limited period of education and retraining." In re Marriage of O'Rourke, 547 N.W.2d 864, 866 (Iowa Ct.App. 1996) (citing In re Marriage of Francis, 442 N.W.2d 59, 63-64 (Iowa 1989)). The goal of rehabilitative alimony is self-sufficiency. Francis, 442 N.W.2d at 63-64. "An award of reimbursement alimony is predicated upon economic sacrifices made by one spouse during the marriage that directly enhance the future earning capacity of the other." Id. Traditional alimony is usually payable for the life of the dependent spouse or until the dependent spouse is self-supporting. In re Marriage of Hettinga, 574 N.W.2d 920, 922 (Iowa Ct.App. 1997) (citing Francis, 442 N.W.2d at 62). It serves to provide the receiving spouse with support comparable to what he or she would receive if the marriage continued. Id.
As a backdrop to the review of spousal support we note, in spite of the high income level enjoyed during the marriage, the net assets of the parties accumulated during the marriage was under $270,000. The court, after making an approximate equal division of assets, ordered Tony to pay $2,500.00 per month for the support of the four children. Because Barbara was pursuing her MBA degree, the court did not impute income to her aside from the award of spousal support. Barbara submitted a financial affidavit indicating her monthly expenses with four children was $9,001.00. Tony asserted Barbara's expenses were greatly exaggerated as during the marriage the couple's monthly expenses with four children only ranged from $3,000 to $5,000. To support the award of spousal support, the district court found Barbara's "significant" contributions to the marriage allowed Tony's career to advance to the point where his annual income was $234,000. It also acknowledged Barbara's ongoing financial needs before she would be able to complete her degree and become gainfully employed and surmised, "she will probably never earn even a third of what Tony is likely to earn in the future."
We agree generally with these findings but modify so the traditional spousal support will terminate upon the later of Tony's retirement or when he reaches age sixty-five. See In re Marriage of Bell, 576 N.W.2d 618, 623 (Iowa Ct.App. 1998), abrogated on other grounds by In re Marriage of Wendell, 581 N.W.2d 197, 200 (Iowa Ct.App. 1998) (reducing alimony by fifty percent upon payee's retirement). We also find the amount of permanent support should be reduced to $2,000 per month, notwithstanding the speculation by the district court of Barbara's inability to approach Tony's earning capacity. Barbara will not be a permanently, economically dependent spouse as is frequently described in our case law as one who should be awarded lifetime support. Rather, the basis of her continued support, according to the district court, was to help balance the earning capacity of the parties, presumably to maintain a life style enjoyed during the marriage. See In re Marriage of O'Rourke, 547 N.W.2d 864, 876 (Iowa Ct.App. 1996) (affirming traditional alimony to sustain predissolution life style and accommodate lower earning capacity). While we agree with the court's rationale, we also find merit in Tony's assertion that the monthly expenses submitted by Barbara are exaggerated, and hence her need for support should be reduced to more accurately reflect the lifestyle she enjoyed during the marriage. See In re Marriage of Hayne, 334 N.W.2d 347 (Iowa Ct.App. 1983); see also Iowa Code § 598.21(3) (2001).
Property Division . Although "generally assets acquired during a marriage are nearly equally divided," see In re Marriage of Van Regenmorter, 587 N.W.2d 493, 496 (Iowa Ct.App. 1998), the goal is to assure a just and equitable, rather than equal, distribution. In re Marriage of Dean, 642 N.W.2d 321, 323 (Iowa Ct.App. 2002). The couple overpaid their 2001 federal income taxes and Iowa state income taxes by $11,523 and $4,615, respectively. Tony used the overpayments to apply to the federal and state income tax liability for 2002. Because nearly all of the income earned in 2002 to date of trial was Tony's, and would therefore be so reported on his separate 2002 income tax returns, we affirm the district court's handling of this overpayment. In the same vane, we affirm the district court's award to Tony of a $9,000 "deduction for the first one-third of the second quarter payment based on the date of trial."
Appellate Attorney fees . Barbara seeks attorneys' 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). We find each party should be responsible for his or her own appellate attorney fees. Cost assessed one-half to each party.