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IN THE SUPREME COURT OF IOWA
No. 23 / 05-1765 Filed July 20, 2007 IN RE THE MARRIAGE OF MICHELE RENEE FENNELLY AND TED ERNST BRECKENFELDER Upon the Petition of MICHELE RENEE FENNELLY, Appellee, And Concerning TED ERNST BRECKENFELDER, Appellant. ________________________________________________________________________ On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Scott County, Michael R. Mullins, Judge.

Former husband seeks further review of dissolution decree. DECISION OF THE COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED IN PART AND REVERSED IN PART; CASE REMANDED.

Frank Steinbach III of McEnroe, Gotsdiner, Brewer, Burdette & Steinbach, P.C., West Des Moines, and Arthur Buzzell, Davenport, for appellant.

Lori L. Klockau and Chad A. Kepros of Bray & Klockau, P.L.C., Iowa City, for appellee.

2 STREIT, Justice. What is equitable in a divorce is an endless source of debate. Michele Fennelly and Ted Breckenfelder divorced after nearly fifteen years of marriage. They have two children. The district court gave

Michele primary physical care of the children and Ted liberal visitation. The district court equally divided all of their property except property the parties brought to the marriage. Ted argues he should have been awarded primary physical care or at least joint physical care of the children. Ted also complains of the

district court's disparate treatment of their premarital property. Michele kept her premarital property which had significantly appreciated whereas Ted merely got the premarital value of his property. Because Michele is a competent and loving caretaker and both parties testified against joint physical care, we affirm the district court's award of primary physical care to Michele. We reverse the district court's property division because we find it equitable to equally divide the appreciation of all of the parties' premarital assets. However, because Ted dissipated marital assets

through unexplained cash advances on his credit cards, we set aside $22,000 of debt for him. After setting aside the value of their premarital property at the time of the marriage and the $22,000 in cash advances, we order the parties' remaining assets and debts to be divided equally. We vacate the decision of the court of appeals. We remand to the district court so it may modify the decree in accordance with this decision. I. Facts and Prior Proceedings

Michele and Ted were married in December 1990. At the time of the marriage, Michele had obtained a bachelor's degree in management information systems and Ted had obtained a bachelor's degree in finance

3 and a law degree. Michele was a systems engineer at IBM and Ted

practiced law at a Moline law firm. Both parties owned assets at the time of the marriage. Ted owned an encumbered home located on Fairview Drive in Bettendorf, Iowa. Michelle owned IBM stock and an IBM tax deferred savings plan (TDSP). Early on, the parties lived in the home on Fairview Drive. In 1993, they moved to a home on Barcelona Terrace in Bettendorf. The parties kept the Fairview Drive home as rental property. About this time, Ted started his own law firm. In 1994, Michele began working at Lee

Enterprises where she currently is the director of technical support. Michele and Ted have two children: Kevin, born November 25, 1991 and Caroline, born August 9, 1996. The parties utilized day care and baby sitters throughout the children's lives. Michele filed for dissolution of marriage in 2001. reconciled and Michele dismissed her petition. The parties

Thereafter, Ted began

spending more time at home and became more involved in the children's care. In particular, Ted assumed a greater role in supervising the

children after school and preparing meals. Ted also began devoting less time to his law practice. Michele filed a second petition for dissolution in September 2004. Trial was held in June 2005. Michele was forty-two years old and Ted was forty-four. At the time of trial, Michele's annual salary was $101,000 with the potential of earning another $30,000 in bonuses. In 2004, Ted earned $18,454 in net income from his law practice. Ted's average net income between 2001 and 2004 was just under $25,000 per year. The district court awarded physical care of the children to Michele. Ted was awarded liberal visitation. The court also divided the parties'

4 assets and debts. The court set aside for Michele the IBM stock she

owned prior to the marriage and the portion of the IBM TDSP traceable to the premarital value of the account along with appreciation. assets were worth $116,094 on the date of trial. These

Ted was given a

$12,000 credit for the premarital net equity in the Fairview Drive home.1 Thereafter, the court equally divided the parties' remaining debts and assets. In all, the net distribution was $446,326 for Michele and

$354,244 for Ted. Ted appealed. He argued the district court erred (1) by not

awarding him physical care of the children; (2) by not considering joint physical care in the alternative; and (3) by not treating the parties' premarital assets similarly. The court of appeals affirmed the district court's order in its entirety. On further review, Ted reasserts the arguments he made before the court of appeals. For the reasons that follow, we affirm the district court's award of primary care to Michele and reverse the district court's division of property. II. Scope of Review

We review dissolution cases de novo. In re Marriage of Sullins, 715 N.W.2d 242, 247 (Iowa 2006). " `Although we decide the issues raised on appeal anew, we give weight to the trial court's factual findings, especially with respect to the credibility of the witnesses.' " Id. (quoting In re Marriage of Witten, 672 N.W.2d 768, 773 (Iowa 2003)). "Precedent is of little value as our determination must depend on the facts of the

the district court made a specific finding that Ted should receive a $12,000 credit for his premarital equity in the Fairview Drive home, the court did not implement this finding in the final distribution of property. Thus, in response to a motion to enlarge or amend, the court gave Ted an additional $12,000 from Michele's Lee Enterprises retirement fund.

1Although

5 particular case." In re Marriage of White, 537 N.W.2d 744, 746 (Iowa

1995) (citing In re Marriage of Sparks, 323 N.W.2d 264, 265 (Iowa Ct. App. 1982)). III. A. Merits Physical Care of the Children Custody

Iowa law distinguishes custody from physical care.

concerns the legal rights and responsibilities toward the child, including decisions "affecting the child's legal status, medical care, education, extracurricular activities, and religious instruction." 598.1(5) (2005). Iowa Code

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