Opinion
No. 3-971 / 03-0221
Filed February 27, 2004
Appeal from the Iowa District Court for Lucas County, Paul L. Huscher, Judge.
Carolyn Elam appeals and Edward Elam cross-appeals from various economic provisions of the decree dissolving their marriage. AFFIRMED AS MODIFIED.
Andrew Howie of Hudson, Mallaney Schindler, P.C., Des Moines, for appellant.
Verle Norris, Corydon, for appellee.
Heard by Huitink, P.J., and Vogel and Mahan, JJ.
Carolyn Elam appeals and Edward Elam cross-appeals from various economic provisions of the decree dissolving their marriage. Finding the decree equitable in all respects, save for one particular item, we affirm as modified.
I. Background Facts and Proceedings.
Carolyn and Ed were married on October 2, 1991. They had both been married previously, and there were no children born during the marriage. At the time of trial, Carolyn was forty-six and Ed was fifty-one. Carolyn brought substantial assets into the marriage, much of which she received as inheritance following the death of a former husband Ed held an associates of arts degree in mathematics and a bachelors degree in human resources. He also operated a surveying business. When the parties married, he was the city manager of Chariton, Iowa, while Carolyn was employed by Contel (GET). For approximately six or seven years prior to trial, she was employed at a local Farm Bureau Insurance office.
Prior to their marriage, Carolyn had engaged an attorney to draft an antenuptial agreement, the goal of which ostensibly was to protect Carolyn's assets from Ed's children. Ed assisted in preparing a list of the parties' assets for the agreement; however, he did not seek legal advice concerning the agreement. Carolyn maintained she presented Ed with a copy of the agreement at least one month prior to the wedding; Ed claimed he only received a copy of it the day prior to the wedding, when the parties met and signed the agreement at Carolyn's attorney's office.
On May 23, 2002, Carolyn filed a petition to dissolve the marriage. She requested a division of their properties through enforcement of the prenuptial agreement. Following a trial, the court determined the antenuptial agreement was enforceable, rejecting Ed's claims that he had not voluntarily and knowingly entered into the agreement and that they had abandoned it. The court therefore divided the parties' property, which, with few exceptions, was agreed upon by them. In total, the court granted Carolyn $662,393.75 worth of assets and Ed $355,107.22 in assets. Carolyn has appealed, and Ed cross-appealed, from the decree.
II. Scope 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 trial court, especially when considering the credibility of witnesses," but these findings do not bind us. In re Marriage of Knickerbocker, 601 N.W.2d 48, 51 (Iowa 1999).
III. The Antenuptial Agreement.
Before we consider either parties' specific complaints regarding the division of assets, we first take up the portion of Ed's cross-appeal contesting the enforceability of the antenuptual agreement. In particular, Ed claims 1) the parties abandoned the agreement through their course of conduct, 2) he did not knowingly or voluntarily enter into the agreement, and 3) the agreement was not fair. We reject these claims, and hold the court correctly determined the antenuptial agreement to be enforceable.
As a general rule, antenuptial agreements are favored and should be construed liberally to carry out the intention of the parties. In re Marriage of Christensen, 543 N.W.2d 915, 918 (Iowa Ct.App. 1995). We treat such agreements in the same manner as ordinary contracts. Id. Because of the relationship of trust and confidence between the parties, the law requires a full and frank disclosure of all matters bearing upon an antenuptial agreement. In re Marriage of Sell, 451 N.W.2d 28, 30 (Iowa Ct.App. 1989). Whether an antenuptial agreement is reasonable is determined at the time the agreement is executed and not when enforcement is sought. In re Estate of Ascherl, 445 N.W.2d 391, 393 (Iowa Ct.App. 1989). In assessing fairness and validity of the agreement, we apply the following standards:
The person challenging the agreement must prove its terms are unfair or the person's waiver of rights was not knowing and voluntary. Applying the standard of our recent cases, we hold the terms of an agreement are fair when the provisions of the contract are mutual or the division of property is consistent with the financial condition of the parties at the time of execution. Of course, the affirmative defenses of fraud, duress and undue influence are also available to void a prenuptial agreement, as with any other contract.
In re Marriage of Spiegel, 553 N.W.2d 309, 316 (Iowa 1996).
Based on these considerations, we conclude the district court properly found the antenuptial agreement to be enforceable. Ed had every opportunity to consult an attorney regarding the agreement, but apparently chose not to do so. There is no indication Ed did not understand the provisions the agreement; in fact, Carolyn testified she gave him a copy one month prior to the wedding. Even if Ed had only seen the agreement the day prior to the wedding, as he claims, such would be insufficient, standing alone, to invalidate it. See id. at 317 (noting the social embarrassment from potential cancellation of a wedding, even on the eve of the wedding, will not invalidate an antenuptial agreement). The provisions of the contract are mutual. There was full disclosure of Carolyn's financial situation at the time the agreement was signed.
Moreover, we agree with the conclusion the parties did not abandon this agreement. Although as with any contract, a party to an antenuptial agreement may abandon such an agreement, see In re Marriage of Pillard, 448 N.W.2d 714, 715 (Iowa Ct.App. 1989), in this case, the parties' actions and course of conduct do not evidence such an abandonment. The act of abandonment must be unequivocal and decisive. In re Marriage of Christiensen, 543 N.W.2d 915, 918 (Iowa Ct.App. 1995). Here, it is not. Although there certainly was some commingling of funds and properties in this marriage, those actions were not inconsistent with the continuing validity of their agreement. Importantly, the agreement allowed either of the parties to dispose of or transfer their property "as if he or she were single. . . ." Each thus held full control over their own property, while retaining the prerogative to share those assets with the other party as they saw fit. The record reflects that both parties exercised this right on an asset-by-asset basis. Such actions were not inconsistent with antenuptial agreement. Moreover, as Carolyn asserts, they led their marital life as if the marriage would continue indefinitely, not as if they were poised for divorce. Such behavior does not serve to abandon a premarital contract, the purpose of which is to insure against the failure of the marriage.
IV. Division of Assets.
Carolyn contests four particulars of the district court's property distribution. She contends the court improperly granted Ed an airplane, the cash value of an insurance policy on Ed's life, a sum representing the money she contributed to pay off the mortgage on his house at 715 Orchard, and a sum equal to the joint funds Ed used to pay for attorney fees. In his cross-appeal, Ed asserts he should receive credit for lawsuit settlement proceeds and that he should have been awarded a big screen television and a stove. We will address each in turn.
Generally, the partners in the marriage are entitled to a just and equitable share of the property accumulated through their joint efforts. 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. Id. The determining factor is what is fair and equitable in each circumstance. Id. The distribution of the property should be made in consideration of the criteria codified in Iowa Code section 598.21(1) (2003). In re Marriage of Estlund, 344 N.W.2d 276, 280 (Iowa Ct.App. 1983).
A. Airplane. In 1992 Carolyn purchased a 1973 Bellanca airplane for $42,000 using her separate funds. In its dissolution decree, the district court concluded the airplane was a gift from Carolyn to Ed, and therefore granted it to Ed. On appeal, Carolyn contends the court wrongly found the airplane was a gift to Ed, and urges she should be granted sole ownership of the airplane.
Iowa Code section 598.21(1) provides that the court "shall divide all property, except inherited property or gifts received by one party. . . ." To meet the requirements of a gift, a transfer must be accompanied by: (1) donative intent; (2) delivery; and (3) acceptance. Gray v. Roth, 438 N.W.2d 25, 29 (Iowa Ct.App. 1989). The intent of the grantor is the controlling element. Id.
We find Carolyn's "donative intent" is manifested in several of her actions and the surrounding circumstances. Although Carolyn never transferred title, she was not a licensed pilot, and Ed was the party that regularly used the airplane. Ed paid the sales tax on the plane and took charge of all maintenance and repairs, paying for the upkeep of the plane from the parties' joint account. He made nearly every decision related to the airplane after its purchase. Moreover, Carolyn had framed for Ed a picture of the airplane with the words "owned by Ed Elam" superimposed on it. The picture was on public display in Ed's office at City Hall. On our de novo review of the record, we agree with the district court's conclusion Carolyn gifted the airplane to Ed.
B. Ed's lawsuit settlement proceeds, the television, and the stove. Ed asserts generally that the court's division of the marital assets was inequitable. First, he specifically notes the court failed to give him credit for lawsuit settlement proceeds in the amount of $42,646.87, which he received in 1992 from an action pending at the time of the marriage. Second, he contends the court should have awarded him the parties' stove and Panasonic big screen TV. Those items appeared on an exhibit prepared by Carolyn that identified certain items sought by her, and which we agree represents a fair division of personal property. Under the district court's decree, as modified later in this opinion, Ed leaves this marriage with $343,333.44 worth of assets, including the airplane discussed above, valued at $54,000 at the time of trial. Contrasted with the approximately $80,000 in net assets Ed appears to have entered into the marriage with, we believe the total distribution scheme is exceedingly fair and equitable to Ed. We therefore affirm the disposition of these assets.
C. Life Insurance Policy on Ed's Life. In March 1992, Carolyn purchased, with premarital assets, a life insurance policy on Ed's life, with benefits payable to her upon Ed's death. At the time of trial, this policy had a cash surrender value of $5,773.78. The district court awarded full ownership of this policy to Ed. In doing so it stated:
[T]he petitioner will no longer have an insurable interest in the respondent's life after this dissolution, and the court is reluctant to leave one party with a potential windfall resulting from the death of the other. It is equitable to award this asset in such a way that Edward is permitted to designate the persons who will receive the benefits on his death.
Upon our de novo review, we find this reasoning generally persuasive and practical. However, while the district court explained the ownership of the policy, it did not explain why the cash value was not allocated to Carolyn, who clearly paid for the policy with her separate funds early in the marriage and who left the marriage with fewer joint assets than Ed. In light of the fact Ed was awarded the policy itself, we believe equity requires awarding Carolyn the cash surrender value. We therefore modify to award Carolyn, the cash surrender value of the policy of $5773.78. Ed shall be required to make a cash payment to Carolyn in this amount.
D. Ed's Orchard Street House. The district court awarded to Ed the full value of the house at 715 Orchard in Chariton. On appeal, Carolyn contends she should have received some credit for her use of premarital assets to pay off indebtedness on this house, and funds used to repair and increase its value. Although this argument has some superficial appeal, we nonetheless are not persuaded that it would result in improving the equity as between the parties. Importantly, the tracing of the funds from February 2000 back to premarital assets is far from clear in the record. Carolyn testified the funds used to pay off the loan were joint funds, accumulated during the marriage, but originated from her separate funds. We leave this portion of the district court's distribution undisturbed.
E. Attorney Fees. Carolyn argues the district court improperly failed to award her funds representing money that Ed used for his attorney fees from joint funds. She notes Ed withdrew $10,000 from a joint account and used it for attorney fees, gambling, and other personal expenses. She requests we modify the decree to grant her an additional $5,000 based on Ed's actions. We decline to do so. The record indicates Carolyn likewise used some marital funds to pay her attorney fees and other marital funds for various purposes during their separation. The district court's order was equitable in this respect.
V. Conclusion.
The district court stated: "[a]ttempting in this Decree to make explicit findings regarding the paper trail of each of the parties' assets would do little more than add another ream of paper to a file already overburdened with wood pulp." After our de novo review of the record, we echo that statement. Viewed in the larger context, it becomes apparent the district court's allocation of assets and liabilities is the product of a well reasoned and generally fair distribution.
Considering our modification awarding Carolyn $5773.78 representing the cash value of the insurance policy on Ed's life, Carolyn leaves this marriage with $668,167.53 in assets, while Ed leaves with $349,333.44 worth of assets. We contrast this with the fact Carolyn entered the marriage with approximately $406,000 in assets, and Ed entered with approximately $80,000 in assets. Accordingly, although Carolyn's net assets increased by sixty-five percent and Ed's by 337%, both parties increased their assets approximately the same amount in absolute dollars. Under these unique facts, equity has been served. Costs are assessed equally. AFFIRMED AS MODIFIED.
We note the massive appendix contained a great deal of materials not critical to our review. As the entire record is available to us, we urge appellant to comply with Iowa Rule of Appellate Procedure 6.15, by including only relevant portions of the record in the appendix, thereby reducing both printing expense and the burden on the appellate courts in referencing points on appeal. See State v. Oppelt, 329 N.W.2d 17, 21 (Iowa 1983).