IN RE THE MARRIAGE OF KRISTI K. DAY AND KENNETH A. DAY Upon the Petition of KRISTI K. DAY, Petitioner - Appellee/Cross - Appellant, And Concerning KENNETH A. DAY, Respondent - Appellant/Cross - Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 8-763 / 07-1847
Filed October 29, 2008
IN RE THE MARRIAGE OF KRISTI K. DAY
AND KENNETH A. DAY
Upon the Petition of
KRISTI K. DAY,
Petitioner-Appellee/Cross-Appellant,
And Concerning
KENNETH A. DAY,
Respondent-Appellant/Cross-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Humboldt County, Kurt L. Wilke,
Judge.
Kenneth Day appeals from the property division provisions of the decree
dissolving the parties’ marriage, and Kristi Day cross-appeals from the district
court’s denial of her request for spousal support. AFFIRMED.
Dan T. McGrevey, Fort Dodge, for appellant.
Monty L. Fisher, Fort Dodge, and Mark D. Fisher of Nidey, Peterson,
Erdahl & Tindal, P.L.C., Cedar Rapids, for appellee.
Considered by Mahan, P.J., and Vaitheswaran and Doyle, JJ.
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DOYLE, J.
Kenneth Day appeals from the property division provisions of the decree
dissolving the parties’ marriage, and Kristi Day cross-appeals from the district
court’s denial of her request for spousal support. We affirm the judgment of the
district court.
I. Background Facts and Proceedings.
Kenneth and Kristi Day were married in July 1978. Four children were
born during their marriage. Kristi filed a petition for dissolution of marriage in
December 2006. The petition came before the district court for trial in August
2007. Prior to the trial, the parties reached an agreement as to custody, physical
care, and child support for their only remaining minor child.
The issues
presented to the court at trial were thus limited to property division, alimony, and
attorney fees.
Kenneth was the family’s primary income provider.
Although Kristi
occasionally obtained employment outside of the home, her main role was as
caretaker of the parties’ children and residence. At the time of the trial, Kenneth
was fifty-one years old, in good health, and employed at Dodgen Industries
where he earned approximately $36,000 per year. He also engaged in some
part-time carpentry work and farmed about 750 acres during the parties’
marriage with Kristi’s assistance.
Kristi was forty-eight years old and employed at two part-time jobs at the
time of the trial. She worked close to fifteen hours per week earning $10.89 per
hour as a bank teller at Bank of Iowa and ten to twelve hours per week earning
$6.20 per hour at a Hallmark store. Kristi had been working approximately thirty
3
hours per week at Bank of Iowa, but she reduced her hours shortly before the
trial due to back pain she suffered from as a result of a car accident that occurred
in 2000.
Kenneth and Kristi accumulated three tracts of farmland during their
marriage. They purchased their first parcel, which consisted of 77.3 acres, in the
1980s. They referred to this parcel of land as the “Johnson Farm.” In 2001 they
purchased a 160-acre farm that contained their house, some outbuildings, and
145.87 tillable acres. This parcel of land was referred to as the “Home Place.”
Finally, in 2004 they purchased a seventy-seven percent share, or 120 acres, of
a 160-acre farm that had been owned by Kenneth’s grandmother. They used
Kenneth’s cash inheritance from his grandmother, $108,013.92, as a down
payment on their share of that farm, which they referred to as “Grandmother’s
Farm,” and borrowed the remaining amount of the purchase price. In addition to
these three parcels of land, Kristi owned sixty acres of farmland, forty of which
are subject to a life estate held by her mother, which she inherited from her father
early in the parties’ marriage.
The district court entered a decree dissolving the parties’ marriage in
September 2007. The court set aside to Kristi the farmland she inherited from
her father and set aside to Kenneth the $108,013.92 he inherited from his
grandmother. The court then divided the parties’ remaining property equally,
awarding them each one-half of the net value of the three parcels of farmland
that they purchased during their marriage. The court denied Kristi’s request for
spousal support.
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Kenneth appeals. He claims the district court erred in (1) valuing the
parties’ property, (2) not awarding him the appreciation in his inheritance from his
grandmother, and (3) failing to set aside other gifts and inheritances he received
during the parties’ marriage. Kristi cross-appeals, claiming the district court erred
in denying her request for spousal support.
II. Scope and Standards of Review.
We review dissolution cases de novo. Iowa R. App. P. 6.4; In re Marriage
of Fennelly, 737 N.W.2d 97, 100 (Iowa 2007). Although not bound by the district
court’s factual findings, we give them weight, especially when assessing the
credibility of witnesses. Iowa R. App. P. 6.14(6)(g); In re Marriage of Sullins, 715
N.W.2d 242, 247 (Iowa 2006).
III. Discussion.
A. Farmland Values.
Each party hired an appraiser to value their farmland. Kenneth claims the
district court erred in adopting the valuations of the appraiser hired by Kristi,
Wesley Brent Taylor, because Taylor’s appraisals included nontillable acres of
farmland and incorrectly valued buildings located on the properties. He argues
that the values placed on the parties’ farmland by his appraiser, James
Kesterson, were more accurate. We do not agree.
Taylor testified on behalf of Kristi that he valued the Johnson Farm at
$3750 per acre, which resulted in a total value of $289,875.
Taylor further
testified the Home Place was worth $776,000 or $4852 per acre, while the
parties’ share of Grandmother’s Farm was worth $537,868.80 or $4350 per acre.
Taylor included both tillable and nontillable acres in his appraisals of the farms
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because “when you look at sales, you look at gross acres.” According to Taylor,
hardly any farm for sale will include only tillable acres because farms need
nontillable acres for drainage ditches and access roads.
Kesterson, the appraiser hired by Kenneth, reviewed the appraisals
completed by Taylor. Kesterson testified that while he agreed with Taylor’s peracre value, he disagreed with the amount of acres included in the appraisals.
According to Kesterson, Taylor should not have included the nontillable acres in
his valuations of the properties because those acres are not “usable.” Kesterson
accordingly valued the parties’ farmland using Taylor’s per-acre value but
including only the tillable acres, which resulted in a total value of $263,625 for the
Johnson Farm, $724,590 for the Home Place, and $501,000 for Grandmother’s
Farm.
The district court adopted Taylor’s valuations of the parties’ farmland,
concluding his appraisals “were the more accurate.” The court found Taylor
“took into consideration the non-tillable ground in each tract and adjusted the
value per acre to arrive at an overall value that he felt was appropriate for the
entire tract.” Thus, according to the court, “Kesterson’s subtraction of value for
nontillable ground was already factored into Taylor’s appraisal and no further
subtraction is appropriate.”
Although our review is de novo, we will defer to the district court where, as
here, the court’s valuations are accompanied by supporting credibility findings or
corroborating evidence. See In re Marriage of Vieth, 591 N.W.2d 639, 640 (Iowa
Ct. App. 1999). We find the valuations adopted by the court to be well within the
permissible range of evidence despite Kenneth’s arguments to the contrary. See
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In re Marriage of Hansen, 733 N.W.2d 683, 703 (Iowa 2007) (“Ordinarily, a trial
court’s valuation will not be disturbed when it is within the range of permissible
evidence.”).
B. Inherited and Gifted Property.
In allocating the parties’ assets and debts, the court strives to make a
division that is fair and equitable under the circumstances. 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; rather, the decisive factor is what is
fair and equitable in each particular case. Id. In determining what division would
be equitable, courts are guided by the criteria set forth in Iowa Code section
598.21(5) (Supp. 2005). In re Marriage of Goodwin, 606 N.W.2d 315, 319 (Iowa
2000). This statute excludes from the court’s property division “inherited property
or gifts received by one party” unless the court finds exclusion of such property
“is inequitable to the other party . . . .” Iowa Code § 598.21(5), (6); Goodwin, 606
N.W.2d at 319.
The requirement to set aside to a party inherited or gifted property is thus
not absolute, and division may nevertheless occur to avoid injustice.
In re
Marriage of Thomas, 319 N.W.2d 209, 211 (Iowa 1982). Contributions by a party
to the care, preservation, or improvement of inherited property is a factor which
bears on a claim that inherited property should be divided, and the length of the
marriage and the length of time the property was held after it was devised or
given may indirectly bear on the question, for their effect on this and other
relevant factors. Id.
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Kenneth claims the district court erred in failing to award him the
appreciation in value of his $108,013.92 inheritance from his grandmother
realized as a result of its investment in farmland.1
He argues the court’s
treatment of the parties’ inheritances was inequitable because the “court granted
to Kristi all of her inheritance including appreciation in value and to Ken only his
inheritance without appreciation in value.” We do not agree.
Our courts have treated cash inheritances used to purchase real property
during the marriage differently from real property that is simply inherited. In In re
Marriage of White, 537 N.W.2d 744, 746 (Iowa 1995), the court stated that where
an inheritance is in the form of cash and then later used to buy property during
the marriage, “the resulting appreciation or loss may be characterized as marital
property” barring special circumstances. This is so because such “[d]ecisions on
how to use property during the marriage, including inherited property, bear most
of the characteristics of a family decision.” White, 537 N.W.2d at 746. However,
“[r]eal property that has been in the family of one of the parties prior to their
marriage ought, as far as possible, to be permitted to remain in the possession of
that party.” In re Marriage of Wallace, 315 N.W.2d 827, 832 (Iowa Ct. App.
1981).
With these principles in mind, we agree with the district court’s treatment
of the parties’ inherited property. The decision to use Kenneth’s cash inheritance
from his grandmother towards the purchase of a portion of her farm bears all the
characteristics of a family decision. The parties purchased the farm jointly and
1
When the parties purchased Grandmother’s Farm, they paid approximately $2900 per
acre. By the time of the dissolution trial, the farm was worth $4350 per acre.
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borrowed the remaining amount of the purchase price not satisfied by Kenneth’s
inheritance. They thereafter made payments on the farm from their joint marital
funds. The farmland inherited by Kristi from her father, on the other hand, was
maintained separately by Kristi as her own property throughout the parties’
marriage. Furthermore, a portion of that land was subject to a life estate in her
mother. We therefore see no reason to disturb the district court’s decision as to
these items of inherited property.
Nor do we see any reason to disturb the court’s rejection of Kenneth’s
claim that an additional $93,400 in gifts and inheritances should have been set
aside to him.2 The court found that “out of all the machinery” and other items
Kenneth claimed to have received as gifts or inheritances during the marriage,
“the only item remaining is an old grain truck.” See In re Marriage of Schriner,
695 N.W.2d 493, 496 (Iowa 2005) (noting all property of the marriage that exists
at the time of the divorce is divisible property). Furthermore, Kenneth admitted at
trial that “[e]verything from [his] family got comingled” with the parties’ marital
assets during their twenty-nine year marriage. It would thus be difficult, if not
impossible as the district court found, “[t]o attempt to value those items at this
date and determine the percentage used by Kenneth and the percentage used
by Kristi.” See In re Marriage of Muelhaupt, 439 N.W.2d 656, 659 (Iowa 1989)
(discussing the importance of the passage of time in considering the division of
inherited or gifted property).
2
Kenneth initially claimed during the trial that $169,428 should be set aside to him as
premarital, gifted, and inherited property. However, on appeal, he excluded the property
he claimed to have brought with him into the marriage from his assertion that the court
erred in its division of the parties’ property.
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C. Spousal Support.
An award of spousal support 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. In re Marriage of Clinton, 579 N.W.2d 835,
839 (Iowa Ct. App. 1998). It is a discretionary award, dependent upon each
party’s earning capacity and present standard 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, 200 (Iowa Ct. App. 1998). Courts are guided by
section 598.21A(1), which mandates consideration of a number of factors, such
as 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.
The property division and an award of spousal support should be
considered together in evaluating the individual sufficiency of each.
In re
Marriage of Earsa, 480 N.W.2d 84, 85 (Iowa Ct. App. 1991). In a marriage of
long duration, an award of spousal support and a substantially equal property
division may be appropriate, especially where there is a great disparity in earning
capacity. In re Marriage of Geil, 509 N.W.2d 738, 742 (Iowa 1993).
The district court determined an award of spousal support was not justified
in this case because it awarded “Kristi property with a value that approximates
$1,000,000.” The court further determined spousal support was not appropriate
because Kristi “voluntarily reduced her work hours and pay while this divorce was
pending.” Indeed, our review of the record reveals that up until a few months
before trial, she was able to work approximately thirty hours per week at Bank of
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Iowa.
Furthermore, despite her claimed back pain, she was able to assist
Kenneth with the family’s farming operation and work at several part-time jobs
while the parties were married. Finally, we believe it is significant, as Kenneth
notes, that Kristi will receive some income from her share of the property she
was awarded.
Even though our review is de novo, we accord the district court
considerable discretion in making spousal support determinations and will disturb
its ruling only where there has been a failure to do equity. In re Marriage of Kurtt,
561 N.W.2d 385, 388 (Iowa Ct. App. 1997). We do not believe there has been a
failure to do equity in this case for the reasons detailed above. We therefore
affirm the district court’s decision to not award Kristi spousal support.
D. Appellate Attorney Fees.
Kristi requests an award of appellate attorney fees. Appellate attorney
fees are not a matter of right, but rather rest in this court’s discretion. Sullins,
715 N.W.2d at 255. In arriving at our decision, we consider the parties’ needs,
ability to pay, and the relative merits of the appeal. Id. Applying these factors to
the circumstances in this case, we conclude Kristi is not entitled to an award of
appellate attorney fees.
IV. Conclusion.
Upon our de novo review, we affirm the district court’s decree dissolving
the parties’ marriage in all respects. We decline Kristi’s request for an award of
appellate attorney fees.
between the parties.
AFFIRMED.
The costs of the appeal are to be divided equally
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