Opinion
No. 4-615 / 03-1881.
September 29, 2004.
Appeal from the Iowa District Court for Scott County, Mark D. Cleve, Judge.
Donna Jones appeals the economic provisions of the dissolution decree. AFFIRMED.
Kyle D. Williamson of Williamson Law Office, Davenport, for appellant.
Steven H. Jacobs and Jean Dickson Feeney of Betty, Neuman McMahon, L.L.P., Davenport, for appellee.
Considered by Mahan, P.J., and Miller and Vaitheswaran, JJ.
At issue in this appeal from a dissolution decree is the district court's property division. Scott Jones, the owner of a dive shop, used loan proceeds to purchase the shop. The proceeds were secured by the home he shared with his wife, Donna. At the time of the dissolution trial, the parties agreed the home had a fair market value of $78,000. They also agreed that the loan secured by the mortgage had a balance of $40,360.71. They disagreed on the value of the shop, with Scott arguing it had a negligible fair market value and Donna contending it was worth $65,000.
The district court assigned the business a value of $4,000. The court then found "that any asset or fair market value of the business is subsumed within the amount of the Petitioner's business loan, which in turn may be treated as the current value of what [Scott] has withdrawn from his equitable interest in the marital home." As Donna wished to remain in the home, the court ordered Scott to deed his interest to her and ordered her to obtain "a new mortgage on the home in the amount required to pay off the existing business loan mortgage."
Donna maintains this result is inequitable. In her view, the asset values of the business and home were "similar," warranting a transfer of the home to her "free and clear of its' loan" and a transfer of the business to Scott subject to the debt and repayment of the home mortgage. Donna also notes that Scott obtained the loan without her knowledge and she suggests that the effect of the district court's ruling is to leave her responsible for discharging his business debt.
Donna was institutionalized at the time of the transaction.
While appealing at first blush, Donna's arguments ignore several key facts gleaned from our de novo review of the record. First, the 2003 balance sheet for the dive shop reveals assets of $73,587.14 but liabilities of $85,735.25, leaving a net book value for the business of negative $12,148.11. Second, Scott testified that, if he sold the business, "he might get a couple thousand for it, but that's about it." Third, Donna's valuation of the business at $65,000 was unsupported by any evidence other than her stated belief that Scott had $80,000 in assets, including "a compressor unit worth $15,000" and "three full computer sets," less one $15,000 loan. This evidence was countered by the business balance sheet and the testimony of Scott's accountant, who noted that Scott had three long-term loans totaling $77,232.46 rather than one $15,000 loan, as well as other liabilities. Based on this evidence, the district court acted equitably in assigning a value of $4,000 to the business. See In re Marriage of Hoak, 364 N.W.2d 185, 192-93 (Iowa 1985) (stating that, although we conduct our own review of the evidence, we are generally not inclined to disturb a district court's valuation if it is within a permissible range of evidence); In re Marriage of Dennis, 467 N.W.2d 806, 808 (Iowa Ct. App. 1991) (stating because the task of valuation is a difficult one, "the law provides much leeway to the trial court, even permitting the trial court to devise its own scheme for valuation").
We are also persuaded that the court's final property disposition was equitable. As the district court stated, the parties' only significant asset was the home. Scott was entitled to a share of the equity in that home, which the court determined should be fifty percent, or $39,000. This amount was close to the outstanding mortgage balance of $40,360.71. The district court required Donna to obtain a new mortgage in lieu of making an equalizing payment to Scott of $39,000. This allowed Donna to keep the home and permitted Scott to salvage what he could from his business. Equity should condone this result.