Summary
reversing trial court order which found that if a fifty-five-year-old payor spouse retired before the payee spouse reaches the age of sixty-five, this would constitute a significant change of circumstance meriting modification, reasoning that such a determination was premature and must await circumstances that will prevail at the time of trial of any future modification action
Summary of this case from In re Marriage of GustOpinion
No. 4-880 / 04-1043
Filed February 24, 2005
Appeal from the Iowa District Court for Jackson County, Bobbi M. Alpers Judge.
Helen Maro appeals and Delbert Maro cross-appeals from the decree dissolving their marriage. AFFIRMED AS MODIFIED.
Robert Sudmeier and Norman J. Wangberg of Fuerste, Carew, Coyle, Juergens Sudmeier, P.C., Dubuque, for appellant.
Robert Murphy, Dubuque, for appellee.
Considered by Sackett, C.J., and Mahan and Hecht, JJ.
Helen Maro appeals and Delbert Maro cross-appeals from the decree dissolving their marriage. We affirm the district court's alimony award; however, we modify the property distribution and delete a provision from the district court's decree.
Background Facts and Proceedings.
Helen and Delbert were married on July 3, 1971, and had four children, all of whom are now adults. At the time of the marriage, Delbert was employed at John Deere in Dubuque, while Helen worked at Midland Laboratories in Dubuque. Helen brought to the marriage assets valued at approximately $3,400. Delbert owned a residential building site at the time of the marriage and he used approximately $21,000 in savings he had accumulated before the marriage to purchase building materials used in the construction of the marital home on that site.
Helen quit her job after she became pregnant and did not work outside of the home until 1999. Delbert continued working at John Deere throughout the marriage. Helen filed an action for separate maintenance; and Delbert counterclaimed for a dissolution of the marriage. Both parties were fifty-five years of age at the time of trial.
Helen, a high school graduate, was out of the workforce while the parties raised four children who are all now adults. After she returned to workforce in 1999, Helen was employed in the dietary department at Finley Hospital, as a industrial seamstress, as a substitute teacher's associate in the Dubuque schools, and as a part-time house cleaner. Her highest wage in these jobs has been $8.28 per hour. In 2003 Helen earned W-2 earnings of $13,459 plus $1,080 from housecleaning. She is enrolled in an unaccredited adult education class to learn about computers. Her current employment does not provide health insurance, and she expects COBRA coverage will cost $395 per month. Helen's prescription medications to treat osteoarthritis, gastrointestinal symptoms, and other health related conditions cost approximately one $150 per month. Helen is scheduled to undergo a carpal tunnel surgery.
Helen's job duties in this job include washing pots and pans, preparing and delivering trays to patients, and the like. She was unable to continue working full time in this position because of arthritis and "rash" symptoms.
The insurance coverage provided by Delbert's employer during the marriage has paid for these medications except the co-pay of approximately thirty dollars.
Delbert earns an hourly wage of $26.50, and earned $69,305 for regular and overtime hours in 2003. Having worked more than thirty years for John Deere and attained the age of fifty-five, Delbert is eligible to retire under John Deere's pension plan. Delbert testified he suffers from acid reflux disease, and has a history of numbness and pain in his extremities. He testified that although he experienced symptoms similar to muscular sclerosis for which he consulted a neurologist, he has been doing better in recent years and has continued to work full time. The record does not disclose that Delbert has received recent medical treatment for any of these conditions.
In 2002, Helen separated from Delbert and moved to a home which she had purchased in Dubuque. Delbert remained in the marital home in LaMotte. In October of that year, Helen filed a "Petition for Legal Separation." Delbert responded by filing a counterclaim seeking dissolution of the marriage. Following a trial, the district court entered a decree dissolving the parties' marriage.
The district court allocated to Delbert assets with a net value of $616,823, and allocated to Helen assets with a net value of $72,747. The court then ordered Delbert to pay Helen the sum of $272,038 within thirty days after the dissolution decree was filed. This property divided by the district court included the commingled life insurance proceeds, the inheritance distributions, and the personal injury settlement proceeds received by Helen during the marriage. The decree also ordered Delbert to pay Helen $1000 per month in spousal support until she reaches the age of sixty-five, but specifically held Delbert's earlier retirement would constitute a substantial change of circumstances meriting a modification.
Helen appeals, contending the life insurance proceeds and inheritance distributions should have been set aside to her pursuant to Iowa Code section 598.21(3) (2003). She also claims on appeal that the amount of spousal support ordered by the district court is inadequate, and contends the decretal provision identifying Delbert's retirement as a substantial change of circumstances should be excised. Delbert cross-appeals from the decree, contending the evidence does not support a spousal support award of $1000 per month.
Scope of Review.
We conduct a de novo review of dissolution proceedings. Iowa R. App. P. 6.4. We defer to the district court's findings, but are not bound by them. Iowa R. App. P. 6.14(6)( g).
Division of Gifts and Inheritances.
Helen received an inheritance in the amount of $5,700 from an aunt during the marriage. Those funds were segregated in Helen's name and never commingled with other assets of the parties. In addition, she received during the marriage proceeds from two life insurance policies totaling $7,029.35, distributions from her parents' estates totaling $28,397.98 and a personal injury settlement of $10,000 which were not segregated, and were instead commingled and deposited in accounts with other funds saved by the parties. At trial, Helen asked that the gifts, inheritances, and personal injury settlement proceeds she received during the marriage should be set aside as her separate property. Delbert argued that because they were always commingled in joint accounts and investments, all of the gifted and inherited funds except the $5,700 inherited from Helen's aunt should be subject to equitable distribution. The district court concluded that because the "funds were never deposited in a separate personal account for Helen or otherwise isolated from the joint marital finances . . . the funds . . . lost any intended characterization as gifts to Helen" and thus should be subject to distribution.
Delbert makes no claim to an interest in these funds which were set aside to Helen in the decree.
While these insurance proceeds and inheritances totaled $35,427.33, she claims on appeal that only $35,157 should be set aside to her because she used $270 during the marriage to purchase a typewriter.
Generally, the partners to a marriage are entitled to a just and equitable share of property accumulated through their joint efforts. In re Marriage of Gonzalez, 561 N.W.2d 94, 98 (Iowa Ct. App. 1997). "Property division and alimony should be considered together in evaluating their individual sufficiency." In re Marriage of Trickey, 589 N.W.2d 753, 756 (Iowa Ct.App. 1998). "The court shall divide all property, except inherited property or gifts received by one party. . . ." Iowa Code § 598.21(1). The inherited or gifted property is not subject to division "except upon a finding that refusal to divide the property is inequitable to the other party. . . ." Iowa Code § 598.21(2).
As noted, the district court found the insurance policy proceeds and the inherited distributions from Helen's parents' estates were subject to equitable distribution because (1) they were always treated as joint marital assets for investment purposes, and (2) they were never placed in a separate personal account. On our de novo review, we do not find it would be inequitable to set aside the funds to Helen as her separate property. The record supports that the inherited funds were not spent and were placed directly in interest bearing accounts and investments. Although Delbert did bring into the 1971 marriage approximately $17,000 more in assets than Helen, we find that imbalance offset by Delbert's much greater future earning capacity. We also note that Delbert's parents are still living, and due to the divorce Helen will not be able to share in any potential inheritance from them.
After considering all of the factors enumerated in Iowa Code sections 598.21(1) and (2), we conclude the life insurance proceeds and inherited funds received by Helen from her parents' estates during the marriage should not be subject to equitable distribution. We therefore modify the decree to account for this by ordering Delbert to pay Helen an additional $17,578.50. Therefore, we modify the decree to order Delbert to pay Helen the sum of $289,616.50 within thirty days of the issuance of procedendo in this case.
This adjustment is one-half of the total of insurance proceeds and inheritances received by Helen during the marriage, less the amount spent by Helen to purchase a typewriter. The district court's decree effectively credited the other one-half to Helen by including the entire amount of such funds in the property divided in the decree.
Alimony.
The court ordered Delbert to pay spousal support in the amount of $1000 per month until Helen reaches the age of sixty-five. On appeal, Helen claims this amount should be increased, while on cross-appeal Delbert maintains it should be decreased.
Alimony is not an absolute right; it depends on the circumstances of each particular case. In re Marriage of Dieger, 584 N.W.2d 567, 570 (Iowa Ct.App. 1998). When determining the appropriateness of alimony, the court considers the length of the marriage, the age and health of the parties, and the distribution of property. Iowa Code § 598.21(3)(a)-(c). The court considers other factors including "(1) the earning capacity of each party, and (2) present standards of living and ability to pay balanced against the relative needs of the other." In re Marriage of Hettinga, 574 N.W.2d 920, 922 (Iowa Ct.App. 1997) (citation omitted).
We conclude the court's order of $1000 per month in alimony does equity between the parties. Helen's earning capacity is reflected by her 2003 W-2 wages of $13,459 plus approximately $1,000 from her housecleaning business. When her earning capacity is combined with the $12,000 per year she will receive in alimony from Delbert and the assets she receives in the property division, Helen will be able to maintain a standard of living resembling, to the extent possible under the circumstances of this case, that which she enjoyed during the marriage.
The parties differ as to the effect of Delbert's prospective retirement on his obligation of spousal support. The district court's decree provides: "Should Delbert V. Maro retire before Helen T. Maro reaches the age of sixty-five, this would constitute a change of circumstances to support the filing of a spousal support modification action." Delbert has a work history of more than thirty-four years at John Deere and is now eligible to retire under the company's pension plan. Helen notes, however, that Delbert has not yet retired, nor has he chosen a specific date for retirement. On appeal, Helen urges us to strike the quoted decretal language because it inequitably confers upon Delbert discretion to control the amount of his spousal support obligation by electing early retirement. We agree. We acknowledge that the legislature has identified certain circumstances which the court may or shall consider a substantial change of circumstances. Beyond those circumstances identified by the legislature, however, courts should refrain from identifying in futuro circumstances that will be deemed substantial changes. Any future modification of Delbert's alimony obligation should be determined in light of the circumstances prevailing at the time of trial of any future modification action. We are unable to assess at this time whether Delbert's future retirement, whenever it occurs, will constitute a substantial change because we cannot know now what circumstances will then prevail. Accordingly, we modify the decree to delete the provision declaring Delbert's retirement a substantial change of circumstances if it occurs before Helen reaches age sixty-five. We need not, and do not decide whether Delbert's future retirement will constitute a substantial change of circumstances. Court costs assessed to Delbert.
See Iowa Code § 598.21(8A) (stating the court may consider custodial parent's move of one hundred fifty or more miles a substantial change in circumstances); see also § 598.21(9) (stating a substantial change of circumstances exists when the court order for child support varies by ten percent or more from the amount which would be due pursuant to the most current child support guidelines).
AFFIRMED AS MODIFIED.
Mahan, J., concurs; Sackett, C.J., concurs in part: dissents in part.
I concur in part and dissent in part.
I dissent only from that part of the majority's opinion that increases the amount Delbert is ordered to pay Helen by $17,578.50. The property division made by the district court is equitable and should be affirmed.