Preview:

IN THE COURT OF APPEALS OF IOWA No. 9-714 / 09-0189 Filed December 30, 2009

IN RE THE MARRIAGE OF KATHLEEN ANN JONES AND DAVID ADDISON JONES Upon the Petition of KATHLEEN ANN JONES, Petitioner-Appellant, And Concerning DAVID ADDISON JONES, Respondent-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Poweshiek County, Daniel F. Morrison, Judge.

Kathleen Jones appeals the alimony and property distribution provisions of the parties dissolution decree. AFFIRMED.

Robert L. Sudmeier and Jenny L. Harris of Fuerste, Carew, Juergens & Sudmeier, P.C., Dubuque, for appellant. Bernard L. Spaeth Jr. of Whitfield & Eddy, P.L.C., Des Moines, for appellee.

Considered by Eisenhauer, P.J., Potterfield, J., and Huitink, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2009).

2 POTTERFIELD, J. Kathleen Jones appeals the alimony and property distribution provisions of the parties dissolution decree. We affirm. I. Background. Kathleen and David Jones were married in 1979. David had recently

graduated from the University of Northern Iowa with a degree in economics. In 1980, David began working at Grinnell State Bank (the Bank), a family-run business. In 1983, Kathleen attended school part-time to obtain her LPN degree. She worked for about six months after receiving her degree, but quit to be a homemaker and stay-at-home mother to their three sons. maintained her LPN certification. At the time of the dissolution trial in September 2008, Kathleen and Davids sons were adults. The parties were able to agree on the division of much of the marital property, entering into a stipulation covering several items. However, they could not agree with respect to the value of certain items, spousal support, and Davids interest in the Bank. David is president of the Bank, which has been family-run for more than fifty years. Several family members are employed at the Bank, including one of the parties sons, Davids father, his brother Austin, and Austins daughter. Grinnell Bankshares (Bankshares), a holding company wholly owned by David, Kathleen has

3 his brother Austin, and their parents, owns the majority of the stock of the Bank.1 David owns 624 shares of Bankshares, as does his brother Austin. Each brother received their shares as gifts over time. Kathleen presented evidence valuing Bankshares stock at $9942 per share. Kathleen had moved to Colorado prior to trial. She has numerous health concerns. In 2002 she was diagnosed with advanced coronary artery disease. She had extremely high cholesterol and small blood vessels, which led to several bypass surgeries, angiograms, angioplasties, and vein grafts. She takes several medications and supplements to control her condition and is subject to a twentyfive pound weight restriction. At trial, she submitted doctors reports indicating that although her arteries are again occluded despite extensive angioplasties and stenting, additional surgery was not recommended at this time. She has no

stamina. Kathleen experiences a great deal of anxiety, for which she has been prescribed antidepressant medications. On November 6, 2008, the district court entered its Findings of Fact, Conclusions of Law, and Judgment and Decree. The court found that Kathleen "has no particular skills and given her health and age anything other than minimum wage would be difficult for her to obtain. She is in need of traditional alimony." The court found that David was a recovering substance abuser2 who suffers from sleep apnea, diabetes, high blood pressure, and an irregular heartbeat.
1

Because of his health problems, the court found that David was

The remainder of the stock is apparently in two generation-skipping trusts: one for the benefit of David and Kathleens three sons, and the other for the benefit of Austins children. 2 The district court wrote it was "not optimistic for Davids success [at remaining clean] since he stated at trial ,,most people I know use marijuana."

4 interested in early retirement or cutting back on his working hours. The court noted that the main issue in the dissolution proceeding was whether Davids Bankshares shares should be set aside or divided as marital property. The court found: Davids grandfather initially obtained controlling interest in the bank and his son, Addison, (Davids father) received the controlling interest from him. David has worked at the bank since 1980 and in 2000 was elected president. The Bankshares holding company formed by the Jones[es] now holds 92% of the GSB. No dividends have been paid since 1990. Several of Davids children and nieces work for the bank. David is proud of the fact that GSB is truly a family owned and operated bank. David received 624 shares as a gift from his parents and Kathleen. Davids parents placed 207 shares of stock directly into Davids generation-skipping trust for the benefit of David and Kathleens three sons. The mechanics of the direct gifts consisted of the parents gifting to David and Kathleen enough shares to qualify for the annual gift tax exclusion and then Kathleen transferred her shares to David. This procedure was carried through with Davids brother Austin and Austins wife. . . . The stock increases the wealth of the brothers but does not produce any income. The stock did not improve David and Kathleens lifestyle with the exception that it may have increased their borrowing power. The parties essentially lived on Davids salary, currently a monthly gross of $20,000 plus. Kathleen contends she never was told any financial information about the family stock and didnt understand she was gifting away stock to David when she received shares of stock from his parents and she turned around and gifted them to David. The court has serious doubts about Kathleens lack of knowledge. It is clear from this record that if Kathleen decided not to transfer a gift of stock it would have been the last gift made to her. There was no special or close relationship between Davids parents and Kathleen. Kathleen tolerated the Jones[es] and they tolerated Kathleen. Kathleen did not contribute to the preservation of the stock or to the increase in value of the stock. David as president would have been working toward preserving and growing the stock. The court finds the stock was gifted to David and should be set aside to him prior to dividing the marital property. The court finds the record fails to establish any plainly unfair reason why the stock should not be set aside to David.

5 The district court ordered David to pay Kathleen alimony in the amount of $6000 per month for two years, $5000 per month from December 15, 2010, to January 15, 2016, then $4000 per month until February 15, 2022,3 and then $1000 per month for Kathleens life. David was also ordered to pay an additional $10,000 toward Kathleens attorneys fees.4 The court approved the parties stipulation with respect to the division of real estate, personal property, retirement assets, bank accounts, and indebtedness, making specific findings with respect to the value of certain items. Per that court-approved stipulation, Kathleen was awarded two vehicles valued at $29,000, household contents valued at $23,890, one-half of Davids pension plan with a total current value of $754,590 ($377,295), one-half of Davids 401k, with a total current value of $12,788 ($6394), her checking account ($742), and $18,543 in indebtedness. David was awarded the family residence valued at $338,500, three vehicles and a motorcycle valued at $38,200, household contents valued at $67,534, one-half of his pension ($377,295) and 401k ($6394), his checking accounts ($1400), and $156,1995 in indebtedness.

3

The court noted that at that point, "Kathleen will have the benefit of Social Security and her share of the pension funds and 401k." 4 In a temporary support order, the district court had previously ordered David to pay $4000 per month in temporary support and $10,000 toward Kathleens attorneys fees. 5 In the Stipulated Findings of Fact and Conclusions of law, the courts values of indebtedness allocated to David includes eight debts and notes a total of $132,799. This appears to be a miscalculation. Davids brief makes mention of and includes in his debt total, an additional loan from his father in the amount of $34,000. The district court specifically assigned a "-0-" value to this purported indebtedness.

6 The court noted that David was to provide Kathleen with forms necessary to secure health insurance through COBRA. The court found the cost to her for health insurance for the next three years is $304 per month. Kathleen filed a motion to enlarge and amend the courts findings, seeking among other things, additional alimony, one-half of the equity in the family residence to allow her to make a down payment on a home, a portion of the Bankshares stock, and additional attorneys fees. David resisted, noting that the alimony award, in essence, provides $745,000 in spousal support over the next thirteen years, three months. He argued that when considered in light of the parties respective indebtedness, the distribution of the other assets, and the fact that a substantial portion of the equity in the home could be directly traced to gifts and inheritance from his grandparents, no further award was warranted. The court ruled its prior order concerning spousal support, the Bankshares stock, and attorneys fees was equitable and would not be amended. However, with respect to Kathleens request concerning the residence, it concluded: The court considered the debt assigned to David and the alimony required of David in determining the property settlement. The court considered the $21,000 paid by David to Kathleen to purchase a new automobile as well as the transfer of the Lincoln and van as required by the temporary order filed January 2, 2008. Kathleen requests $116,972 in property settlement for her share of the equity of the Grinnell residence where David resides. She claims she cannot purchase a home in Colorado without a large cash payment. The court believes her son who is a banker in Colorado near his mother, could certainly provide technical assistance in helping her buy a home with little or no down payment particularly given the alimony award. However the court does understand her desire to make a down payment. The decree is hereby amended to require David to pay $25,000 to Kathleen within 60 days.

7 Kathleen now appeals. She argues the district courts alimony award and property division are inequitable. II. Standard of Review. We review dissolution cases de novo. In re Marriage of Fennelly, 737 N.W.2d 97, 100 (Iowa 2007); In re Marriage of Sullins, 715 N.W.2d 242, 247 (Iowa 2006). We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses, but are not bound by them. Iowa R. App. P. 6.904(3)(g). "Precedent is of little value as our determination must depend on the facts of the particular case." Fennelly, 737 N.W.2d at 100 (citation omitted). We accord the trial court with considerable latitude in its determinations and "will disturb the ruling only when there has been a failure to do equity." In re Marriage of Olson, 705 N.W.2d 312, 315 (Iowa 2005) (citation omitted). III. Discussion. We begin our discussion with these general principles. The partners in a marriage are entitled to a just and equitable share of the property accumulated through their joint efforts. In re Marriage of Dean, 642 N.W.2d 321, 325 (Iowa Ct. App. 2002). 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). Under our statutory distribution scheme, the first task in dividing property is to determine the property subject to division. In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005). Iowa Code section 598.21(5) (2007) requires that

8 "all property, except inherited property or gifts received by one party" be equitably divided between the parties. The second task is to divide this property in an equitable manner according to the criteria codified in section 598.21(5), as well as other relevant factors determined by the court in a particular case. Id. "Equitable distribution" essentially means that courts divide the property of the parties at the time of divorce, except any property excluded from the divisible estate as separate property, in an equitable manner in light of the particular circumstances of the parties. In Iowa, two types of property, inherited property and gifts received by one party, are specifically excluded by statute from the divisible estate. This property is normally awarded to the individual spouse who owns the property, independent from the equitable distribution process. Yet, this exclusion is not absolute. Iowa has a unique hybrid system that permits the court to divide inherited and gifted property if equity demands in light of the circumstances of a spouse or the children. Property not excluded is included in the divisible estate. Id., (citations omitted). Section 598.21(5) lists several factors to consider when dividing property, including: (a) The length of the marriage. (b) The property brought to the marriage by each party. (c) The contribution of each party to the marriage, giving appropriate economic value to each partys contribution in homemaking and child care services. (d) The age and physical and emotional health of the parties. .... (f) The earning capacity of each party . . . . .... (h) The amount and duration of an order granting support payments .... (m) Other factors the court may determine to be relevant in an individual case. The court may also order support payments pursuant to Iowa Code section 598.21A. The purposes of property division and alimony are not the

9 same. In re Marriage of Francis, 442 N.W.2d 59, 62 (Iowa 1989). As noted above, property division is based on each partners right to a just and equitable share of the property accumulated as the result of their joint efforts. Dean, 642 N.W.2d at 325. Alimony, on the other hand, is a stipend to a spouse in lieu of the other spouses legal obligation for support. See In re Marriage of Probasco, 676 N.W.2d 179, 184 (Iowa 2004); Francis, 442 N.W.2d at 62. We consider alimony and property distribution together in assessing their individual sufficiency. In re Marriage of Hettinga, 574 N.W.2d 920, 922 (Iowa Ct. App. 1997). "They are neither made nor subject to evaluation in isolation from one another." Id. With these principles in mind, we review the dissolution courts ruling. A. Alimony. Alimony is not an absolute right; an award of alimony depends on the circumstances of the particular case. In re Marriage of Becker, 756 N.W.2d 822, 825 (Iowa 2008) (discussing three types of spousal support-- traditional, rehabilitative, and reimbursement). "Traditional spousal support is

payable for life or for so long as the spouse is incapable of self-support." Becker, 756 N.W.2d at 826. Its purpose "is to provide the receiving spouse with support comparable to what he or she would receive if the marriage continued." Hettinga, 574 N.W.2d at 922. Section 598.21A lists a number of factors the court is to consider in determining whether to order spousal support. Some of these factors include the length of marriage, the age and physical and emotional health of parties, the property distribution, earning capacity, feasibility of becoming self-supporting at a standard of living reasonably comparable to that enjoyed during marriage. See Iowa Code

Download IN RE THE MARRIAGE OF KATHLEEN ANN JONES AND DAVID ADDISON JONES Upon the Petiti

Iowa Law