IN RE THE MARRIAGE OF TARA LEE MANN DAVID AND TIMOTHY RAY DAVID Upon the Petition of TARA LEE MANN DAVID, Petitioner-Appellee/Cross-Appellant, And Concerning TIMOTHY RAY DAVID, Respondent-Appellan t/Cross-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 6-641 / 06-0239
Filed December 13, 2006
IN RE THE MARRIAGE OF TARA LEE MANN DAVID
AND TIMOTHY RAY DAVID
Upon the Petition of
TARA LEE MANN DAVID,
Petitioner-Appellee/Cross-Appellant,
And Concerning
TIMOTHY RAY DAVID,
Respondent-Appellant/Cross-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Linn County, Thomas M. Horan,
Judge.
Timothy Ray David appeals and Tara Lee Mann David cross-appeals from
the alimony, property division, and attorney fee provisions of the decree
dissolving their marriage. AFFIRMED AS MODIFIED ON APPEAL, AFFIRMED
ON CROSS-APPEAL, AND REMANDED.
Karen Volz of Ackley, Kopecky & Kingery, Cedar Rapids, for appellant.
Sherry Schulte of Crawford, Sullivan, Read & Roemerman, P.C., Cedar
Rapids, for appellee.
Heard by Huitink, P.J., Vogel, J., and Robinson, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
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HUITINK, P.J.
Timothy Ray David appeals and Tara Lee Mann David cross-appeals from
the alimony, property division, and attorney fee provisions of the decree
dissolving their marriage. We affirm as modified on appeal, affirm on crossappeal, and remand.
I. Background Facts and Proceedings.
Tara and Tim were married in October 2001. Their relationship began in
July 1997 when Tara and her co-employee, John Havelock, rented rooms in
Tim’s Cedar Rapids home. At that time Tara’s divorce from Steve Harvey was
pending.
Their divorce was final in December 1997.
Tara, John, and Tim
resided together until Tara and Tim were married in October 2001.
At the time this case was tried in December 2005, Tim was thirty-five
years old. He is a high school graduate. In 1993 Tim founded Executive Home
Care (EHC), a Cedar Rapids based residential cleaning, maintenance, and
commercial snow removal business. Tim operated EHC as a sole proprietorship
until July 1997 when EHC was incorporated. Tim is EHC’s only shareholder. In
his December 7, 2005, “Affidavit of Financial Status,” Tim stated EHC’s market
value was $220,000, its encumbrances were $107,967, and its resulting net
value was $112,033. Tim additionally stated that his estimated gross monthly
income from employment (presumably at EHC) was $5000 and his net monthly
income was $3573.85. Tim’s income from EHC has fluctuated depending on the
volume of business and his personal needs.
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Tara was thirty years of age at trial. She has a substantial medical history,
including a January 2005 diagnosis of fibromyalgia and chronic fatigue syndrome
for which she was being treated with medication and therapy as of the trial date.
At the time she met Tim in 1997, Tara was an engineering student at the
University of Iowa. Tara was hired as a part-time painter at EHC, making seven
dollars an hour. In 1998 Tara began working for EHC as an account specialist.
Her earnings at EHC increased to $28,488 in 1998. Tara was eventually elected
to the board of directors and named EHC’s vice president and chief financial
officer. By the end of 2003, Tara’s salary at EHC increased to $65,613.
After Tara and Tim separated in August 2003, Tara continued to work
part-time at EHC while pursuing an accounting degree at Mount Mercy College.
Tara’s employment with EHC ended when she filed for a dissolution of marriage
in February 2004. Tara was unemployed from February 2004 through December
2004 when she found work as a part-time intern at Aegon in Cedar Rapids.
Aegon paid Tara fifteen dollars an hour for an average of twelve to fifteen hours
per week. As of November 2005, Tara’s earnings were $6693.75. Her internship
at Aegon was scheduled to end in January 2006. As of the December 2005 trial,
Tara was three hours short of finishing her bachelor’s degree in accounting.
At trial the fighting issues included alimony, division of property, and
attorney fees.
The trial court’s decree includes the following findings of fact
related to those issues:
The Petitioner is in poor health.
She suffers from severe
Fibromyalgia, chronic fatigue syndrome, anxiety and depression.
Her physician, Dr. Nicole Nisley of the University of Iowa, testified
that she has recommended that due to Petitioner’s severe
Fibromyalgia that she is limited to working 15 to 20 hours per week.
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The Petitioner was under a good deal of stress during the marriage
and cohabitation with the Respondent.
....
The Court further finds that because the parties have lived
together for approximately seven years, the fact that both parties
were gainfully employed until the Petitioner was terminated from
her job at EHC, Inc., and the Respondent currently has a far
greater earning capacity than the Petitioner and in order for the
Petitioner to complete her education and receive a Master’s Degree
in accounting, which would allow her to support herself, she should
be granted rehabilitative alimony for a period of three years in order
to further her education and be in a position to secure a job in the
accounting field.
The Petitioner and Respondent are owners of real estate
property located at 5865 Robinwood Lane, Marion, Iowa, where the
Petitioner is currently residing. This real estate has a fair market
value at the date of this hearing of $169,000, encumbered by a
mortgage in the amount of $129,610, leaving a net equity in said
property of $39,390.
The Court finds that the Petitioner and Respondent are
owners of homestead property located at 7700 Jandel Court,
Toddville, Iowa. Said property has a fair market value of $378,500,
encumbered by a first mortgage in the amount of $223,593, and
also a second mortgage in the amount of $80,000. Neither the note
nor the second mortgage were signed or consented to by the
Petitioner, Tara Lee Mann David. Therefore, this second mortgage
is void. See Section 561.13, Iowa Code 2005. Consequently, the
net equity of the parties in their homestead real estate is the sum of
$155,007.
....
The Court specifically finds that EHC, Inc., has a fair market
value on December 31, 1997, of $90,000. The Court further finds
that on the date of the filing of this Marriage of Dissolution Decree,
EHC, Inc., had a fair market value of $119,000. The value of EHC,
Inc., has increased in the amount of $29,000 during the time the
parties were cohabitating and living with each other.
Based on these findings of fact, Tara was awarded $2750 per month as
rehabilitative alimony for three years. The trial court made the following division
of the parties’ real estate:
The Petitioner, Tara Lee Mann David, is awarded all interest
of the parties in the real estate located at 5865 Robinwood Lane,
Marion, Iowa, and legally described as Lot 4, Prairie Ridge Estates
First Addition to the City of Marion, Linn County, Iowa.
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The value of the above-referenced real estate is the sum of
$169,000, encumbered by a mortgage in the amount of $129,610,
leaving a net equity in the property of $39,390, which is awarded to
the Petitioner, Tara Lee Mann David. Petitioner Tara Lee Mann
David shall assume and pay all of the mortgage on said property
and all other liens and encumbrances and hold the Petitioner Tara
Lee Mann David harmless thereon.
The Respondent, Timothy Ray David, is awarded all interest
of the parties in their homestead property located at 7700 Jandel
Court, Toddville, Iowa and legally described as Lot 2 and Lot 3,
Wildwood Third Addition to Linn County, Iowa.
The value of said real estate is the sum of $378,500 on the
date of the filing of this Dissolution Decree, encumbered by a first
mortgage in the amount of $223,593, leaving a net equity in the
property of $155,007.
Respondent shall assume and pay the first and second
mortgages on said property and all other liens and encumbrances
and hold the Petitioner harmless thereon.
The Petitioner, Tara Lee Mann David, in order to
compensate her for her interest in the homestead property and in
order to equalize the property settlement, is granted a lien and
judgment against the Respondent, Timothy Ray David, and the
above-referenced homestead property in the amount of $77,503.
This lien and judgment shall accrue interest at the rate of
10 percent per annum until paid.
Tara was ordered to pay debts totaling $210,118. Tim was ordered to pay debts
totaling $284,316. In addition, Tara was awarded
One-half of the increase of value of EHC, Inc., computed between
12-31-97 and the date of the filing of this Dissolution Decree is
$14,500 and the Petitioner, Tara Lee Mann David, is granted a
judgment against the Respondent, Timothy Ray David, for the sum
of $14,500. Interest on this judgment shall accrue at the rate of 10
percent per annum until paid.
Tim was ordered to pay $2500 of Tara’s attorney fees and all of the court costs.
On appeal, Tim raises the following issues:
I.
II.
The court’s award of rehabilitative alimony to the petitioner
was not equitable in view of the respondent’s income, the
petitioner’s education and the short duration of the marriage.
The trial court failed to include the equity in the petitioner’s
residence in calculating the petitioner’s property settlement.
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III.
IV.
The trial court should have used the date of the marriage,
and not the date of cohabitation, for purposes of determining
whether the respondent’s premarital property had increased
in value during the marriage.
The trial court’s order that interest accrue at the rate of 10%
per annum on the property settlement judgments are
punative in nature and do not provide the respondent with a
fair opportunity to pay the judgments without accruing
interest.
On cross-appeal, Tara raises the following issues:
I.
II.
III.
Tara should be awarded alimony for a greater duration of
time and the court should order the respondent to maintain a
life insurance policy benefiting the petitioner.
Tim should have been ordered to refinance [the house in
Toddville] within ninety days and/or have the property sold.
Tara should be awarded attorney fees on appeal.
II. Standard of Review.
Dissolution actions, as equitable proceedings, are reviewed de novo.
Iowa R. App. P. 6.4; In re Marriage of Benson, 545 N.W.2d 252, 253 (Iowa
1996). We give weight to the fact findings of the district court, especially when
considering the credibility of witnesses, but we are not bound by these findings.
Iowa R. App. P. 6.14(6)(g); In re Marriage of Knickerbocker, 601 N.W.2d 48, 51
(Iowa 1999).
III. Alimony.
An award of alimony is a means of compensating the party who leaves the
marriage at a financial disadvantage, particularly where there is a large disparity
in earnings. In re Marriage of Clinton, 579 N.W.2d 835, 839 (Iowa Ct. App.
1998). Alimony is not an absolute right. In re Marriage of O’Rourke, 547 N.W.2d
864, 866 (Iowa Ct. App. 1996). Alimony is a discretionary award that depends
upon each party’s earning capacity and present standard of living, as well as the
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ability to pay and the relative need for support.
In re Marriage of Bell, 576
N.W.2d 618, 622 (Iowa Ct. App.1998), overturned on other grounds by In re
Marriage of Wendell, 581 N.W.2d 197 (Iowa Ct. App. 1998). Iowa Code section
598.21(3) (2003) provides factors for the court to consider when awarding
alimony. The factors include the length of the marriage, the parties’ ages and
health, the earning capacity of the spouse seeking support, and that spouse’s
ability to become self-sufficient. Iowa Code § 598.21(3). Rehabilitative alimony
is awarded for a limited period of time to allow and provide incentive for an
economically dependent spouse to become self-supporting. In re Marriage of
Francis, 442 N.W.2d 59, 63 (Iowa 1989). Rehabilitative alimony is designed to
assist “an economically dependent spouse through a limited period of education
and retraining.” In re Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998).
Although Tara has a substantial education and employment history, her
medical issues and termination at EHC weigh in favor of an award of
rehabilitative or transitional alimony. The length of the parties’ marriage, Tara’s
age, employment experience, and education weigh against an award of
traditional or permanent alimony. We, like the district court, find Tara needs
financial support from Tim to make the transition from newly divorced person to
self-sufficiency. See, e.g., id. at 927.
We also find Tim’s past and current earnings enable him to pay
substantial alimony.
However, neither Tara’s needs nor Tim’s ability to pay
justify the amount of alimony awarded. We accordingly modify the decree to
reduce the amount awarded to $1500 per month. For the same reasons cited
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earlier, we find the duration of the award is equitable and deny both parties’
requests to modify the duration of the award.
IV. Property Division.
Upon the dissolution of marriage, the court must divide the property of the
parties equitably, taking into consideration, a number of factors, including the
length of the marriage, property brought to the marriage by either party, each
party’s contribution to the marriage, and the parties’ ages, physical health, and
earning capacities. Iowa Code § 598.21 (2003). Iowa courts do not require an
equal division or percentage distribution.
In re Marriage of Campbell, 623
N.W.2d 585, 586 (Iowa Ct. App. 2001). The determining factor is what is fair and
equitable in each particular circumstance. In re Marriage of Miller, 552 N.W.2d
460, 463 (Iowa Ct. App. 1996). “If a marriage lasts only a short time, the claim of
either party to the property owned by the other prior to the marriage . . . is
minimal at best.” In re Marriage of Hass, 538 N.W.2d 889, 892 (Iowa Ct. App.
1995). In addition, “[a]n equitable property division of the appreciated value of
the property should be a function of the tangible contributions of each party and
not the mere existence of the marital relationship.” Id. at 893. In other words,
“we consider whether the appreciation which occurred during the marriage was
fortuitous or due to the efforts of the parties.”
In re Marriage of Lattig, 318
N.W.2d 811, 815 (Iowa Ct. App. 1982). We, however, do not limit our focus to
the direct contribution to the increase.
Instead we broadly consider the
contributions of each spouse to the overall marriage. Miller, 552 N.W.2d at 465.
EHC.
As noted earlier, Tim argues the trial court’s use of EHC’s
premarital value was inequitable because the value of EHC arguably declined
9
after the date the parties were married. Tara argues that failure to recognize her
premarital contributions ignores the fact that EHC increased in value from the
time the parties first cohabited in 1997 until the time of trial. Both arguments
miss the essential point. There is no dispute concerning Tara’s contribution to
the overall marriage, as well as her direct contributions to EHC’s daily operations.
Under these circumstances, we find Tara is entitled to at least the $14,500
awarded by the trial court, regardless of any increase or decrease in EHC’s
value. See In re Marriage of Garst, 573 N.W.2d 604, 606-07 (Iowa Ct. App.
1997) (contribution of party not change in value of asset is a critical
consideration). We accordingly affirm on this issue.
Home Equity. The gist of Tim’s argument is that it is not equitable to
divide the equity in his house and award Tara all of the equity in her house.
More specifically, Tim claims the equity in Tara’s home is traceable to the profit
he made on the sale of the home he purchased in 1997. Under our interpretation
of the trial court’s decree, division of the equity in Tim’s home was necessary to
achieve an equitable division of the parties’ property.
Additionally, Tim’s
argument ignores the fact that without the resulting cash payment to Tara, her
share of the property division would be ($32,618), while his share would be
$108,317. We accordingly affirm on this issue.
Judgment Interest. Tim argues that he should be allowed to make any
cash payments required by the trial court’s decree in installments or that he
should have at least ninety days from the date of the entry of our decision to
arrange necessary financing. He also argues that the rate of interest imposed on
any judgments resulting from the trial court’s decree is excessive. We agree.
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Cash payments ordered as part of a property division are money
judgments and, unless otherwise provided, bear interest at the rate allowed by
Iowa Code section 668.13. See Iowa Code § 535.3; Hunt v. Kinney, 478 N.W.2d
624, 626 (Iowa 1991); In re Marriage of Dunn, 455 N.W.2d 923, 925 (Iowa 1990).
Because the interest rate ordered by the trial court exceeds the allowable
statutory rate on money judgments, we modify the decree by limiting the interest
rate on any cash payments to the rate allowed by section 668.13. We also
modify the decree by granting Tim ninety days from the date procedendo issues
herein to make the ordered cash payments to Tara.
Interest shall begin to
accrue on the ninety-first day after procedendo issues.
V. Attorney Fees.
An award of attorney fees is not a matter of right, but rests within the
court’s discretion. In re Marriage of Scheppele, 524 N.W.2d 678, 680 (Iowa
1994); In re Marriage of Kurtt, 561 N.W.2d 385, 389 (Iowa Ct. App. 1997). The
award should be reasonable and fair and based on the parties' respective
abilities to pay. Scheppele, 524 N.W.2d at 680. Tara’s limited earning capacity in
light of her medical problems and desire to continue school compromises her
ability to pay attorney fees. Because Tim enjoys a greater earning capacity, he is
able to contribute to Tara's attorney fees. The trial judge did not abuse his
discretion by ordering him to do so.
Tara requests appellate attorney fees. An award of appellate attorney fees
is not a matter of right, but rests within the court's discretion. Kurtt, 561 N.W.2d at
389. We consider the needs of the party making the request, the ability of the
other party to pay, and whether the party making the request was obligated to
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defend the district court's decision on appeal. In re Marriage of Maher, 596
N.W.2d 561, 568 (Iowa 1999). Because of the mixed results obtained by the
parties on appeal, we deny their respective requests for appellate attorney fees.
Costs are to be shared equally by the parties.
AFFIRMED AS MODIFIED ON APPEAL, AFFIRMED ON CROSSAPPEAL, AND REMANDED.
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