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awarding $5500 monthly in traditional spousal support to a fifty-seven-year-old woman after a thirteen-and-one-half year marriage where husband left "with nearly all of his substantial assets intact," and the wife had limited assets and was unlikely to be able to attain the standard of living she had enjoyed during the marriage
Summary of this case from In re Marriage of KohorstOpinion
No. 2-189 / 01-0789.
Filed July 3, 2002.
Appeal from the Iowa District Court for Carroll County, KURT L. WILKE, Judge.
Husband appeals the alimony and property provisions of a dissolution decree, and wife cross-appeals as to certain property issues. AFFIRMED IN PART AND MODIFIED IN PART.
Gary D. Ordway and Janice M. Thomas of Patterson, Lorentzen, Duffield, Timmons, Irish, Becker Ordway, L.L.P., Des Moines, for appellant.
James L. Kramer and Thomas J. Bice of Johnson, Erb, Bice, Kramer, Good Mulholland, P.C., Fort Dodge, for appellee.
Heard by VOGEL, P.J., and MILLER and VAITHESWARAN, JJ.
Robert H. Van Horn appeals certain property, spousal support and cost assessment provisions of the district court decree dissolving his marriage to Marcella A. Van Horn. Marcella cross-appeals as to the enforceability of an antenuptial agreement, and as to the trial court's alleged failure to consider certain assets of Robert's when formulating the property division and alimony amount. Because we find the antenuptial agreement was enforceable, we modify the decree to eliminate the award of attorney fees and the division of the parties' retirement accounts and outstanding loans to the corporate farm. The remainder of the decree is affirmed.
Background Facts and Proceedings . Robert and Marcella Van Horn were married on September 17, 1987. At least one month prior to the marriage the parties discussed entering into an antenuptial agreement, and two days prior to the wedding Robert took Marcella to the office of Attorney Gregory Siemann and presented her with a four-page antenuptial agreement and attached financial statements. During the short appointment, Attorney Siemann informed Marcella he represented only Robert and that she had a right to see her own attorney. He advised her to seek representation if she had any questions regarding the agreement and specifically mentioned the name of Marcella's attorney. These cautions were reiterated in the agreement itself. Marcella testified she understood her right to separate counsel, and chose to sign the agreement without representation after "gandering through" the first portion, as it was "pretty much what we discussed."
The first page stated both parties had been "fully informed" as to the other's financial position. It listed Robert's assets as in excess of $1,000,000, and Marcella's as in excess of $10,000. However, based upon Robert's own calculations, made after Marcella filed for dissolution of the marriage, his actual net worth at the time of signing was at least $2,133,722.
The first page also outlined the intention of each party to waive all rights and interests in the property now held by the other, as well as Marcella's release of her right of dower as a relinquishment of "all of her rights in and to the real and personal property of [Robert] now owned or hereafter acquired. . . ." Similar statements regarding both present and after-acquired property were made on subsequent pages in regard to the control of the parties' separate property and the ownership of property. Other than sections regarding corporate property, funds received for the care of Marcella's son from a prior marriage, and Robert's payment of Marcella's premarital debt, all property provisions were mutual and applied to the parties equally.
On page two of the agreement both Marcella and Robert waived their rights to spousal support and attorney fees in the event of a dissolution of the marriage. The agreement also contained a section entitled "Full Disclosure," which stated the parties had each made a full disclosure of their property to the other and referenced the attached financial statements. Those statements listed various assets, but not their independent values. Two of Robert's assets — an insurance agency and a real estate agency — were not listed. However, evidence was presented that Marcella was aware of the existence both companies.
During the marriage Robert continued to prosper, and his financial situation — his position as CEO of a closely-held corporate bank and his holdings and interests in the bank, a corporate farm, a real estate agency and a life insurance agency — remained fairly constant. In contrast, Marcella's position improved considerably. She received training and education to supplement her prior financial experience, eventually becoming president of a branch office within the corporate bank and earning a yearly salary of $46,000. This salary was supplemented by home and insurance sale commissions made through Robert's insurance and real estate agencies.
Marcella stated her salary was deposited into her personal account and that she never placed any money into a joint account with Robert. According to Robert, Marcella did not make any financial contributions to his personal assets at any time during the marriage. Marcella does not argue that her contributions to the marriage were financial in nature.
At the time of dissolution, Marcella was fifty-seven years old and Robert was seventy-four years old and the couple had been married thirteen and one-half years. The district court found the antenuptial agreement to be enforceable, but nevertheless divided the parties' 401K accounts as well as outstanding loans made to the R.H. Van Horn Farm Corporation. It awarded Marcella alimony in the amount of $5,500 per month, to terminate upon her remarriage or Robert's death, as well as attorney and expert witness fees. The court also noted two life estates granted to Marcella by the farm corporation were not subject to division. Robert appeals and Marcella cross-appeals.
Scope of Review . Our review of dissolution decrees is de novo. Iowa R. App. P. 6.4. We defer to the district court's findings, particularly as to witness credibility, but are not bound by those findings. In re Marriage of Knickerbocker, 601 N.W.2d 48, 51 (Iowa 1999).
Enforceability of Antenuptial Agreement . Iowa law not only allows but favors antenuptial agreements, and such agreements are entitled to the same consideration and construction as other contracts. In re Marriage of Spiegel, 553 N.W.2d 309, 313 (Iowa 1996). The rules governing enforceability of such agreements has been summarized as follows:
The person challenging the agreement must prove its terms are unfair or the person's waiver of rights was not knowing and voluntary. . . . [T]he 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.Id. at 316.
Although the agreement was signed just two days before the wedding, Marcella acknowledged discussing the agreement in advance, was given an opportunity to read the document, and was advised to obtain independent counsel. Under such circumstances, the district court appropriately found the relinquishment of any marital rights was voluntary. In addition, the terms of the agreement were mutual and commensurate with the relative financial positions of the parties prior to the marriage and therefore sufficient to meet the requirement of fairness.
Accordingly, the only real issue for consideration is whether the agreement's failure to disclose Robert's actual and specific worth, and its failure to list certain assets in the attached schedule, demonstrate Marcella's relinquishment of her rights was not a knowing one. Marcella claims the disclosure of Robert's assets was inadequate as, by its own terms, the agreement required Robert to make a "full disclosure" of his property. She argues that, regardless of any standard found in statutory or case law, the use of this language mandates complete and precise disclosure of all of Robert's premarital assets.
To the extent Marcella argues the missing information rendered the agreement unconscionable under Iowa Code section 596.8, the agreement's execution date precludes application of chapter 596's provisions. In re Marriage of Van Regenmorter, 587 N.W.2d 493, 495 (Iowa Ct.App. 1998). To the extent she argues the omissions were tantamount to fraudulent misrepresentation, we find the elements of fraud have not been shown. See In re Marriage of Cutler, 588 N.W.2d 425, 430 (Iowa 1999) (noting that proving fraud is a difficult task, as six separate elements must be shown).
We first note that, within the disclosure section itself, the parties agreed Iowa law would be applied to interpret the agreement. Contrary to Marcella's suggestion, that law is consistent with the concept of full disclosure. Case law has "always required a full disclosure or independent knowledge of the nature and extent of the parties' assets. . . ." Id. at 315. This is to ensure that a party has full knowledge and understanding regarding "the import of his or her actions." Id. at 316. However, such standard does not require "that a party have precise valuations of the other's assets; a general knowledge of the true nature and extent of the other's properties is sufficient." Id. at 317. In spite of the vagueness of Robert's disclosure of his net worth, and in light of the forgoing standard, we conclude Marcella's waiver was knowing. Accordingly, the district court correctly found the antenuptial agreement was enforceable as between the parties.
Property Governed by the Agreement . The antenuptial agreement clearly states the parties hold and retain as their own separate property not only any premarital asset, but also property "at any time acquired after their marriage." The district court properly applied these provisions to find Marcella's interests in the life estates were not subject to division, and we affirm the district court in this regard. However, the property provisions also apply to the parties' separate 401K accounts. Because these accounts were not subject to division under the agreement, that portion of the decree is modified to set aside to each party the full value of their respective plan. The same is true regarding the award to Marcella of one-half of Robert's claim to the outstanding farm loans.
The district court based the award on the fact the loans were made after the marriage and its finding there was "no credible support" for Robert's claims the loans were made with premarital assets. However, with due respect to the district court's credibility findings, the only evidence before it as to the loans' origins indicated they were made from Robert's separate property. Marcella offered no evidence to suggest the loans originated, even in part, from her separate property or property specifically identified as being commingled or having joint ownership. We therefore modify the district court in this particular, and find all outstanding farm loan indebtedness should be awarded to Robert.
Alimony . Although the antenuptial agreement did expressly waive Marcella's right to alimony, that provision does not require the vacation of the alimony award. In re Marriage of Van Regenmorter, 587 N.W.2d 493, 495 (Iowa Ct.App. 1998). Rather, the agreement is just one factor to be considered in determining whether the award was equitable, under the factors of Iowa Code section 598.21(3). Id. We consider the award of alimony in conjunction with the property division. Id.
As noted by the district court, even without reference to the stock held jointly with his children, Robert has significant income. He also left the thirteen and one-half year marriage with nearly all of his substantial assets intact. Marcella left with only slightly more property than she brought to the marriage. Although Marcella's financial position does not appear to be as dire as she would have us believe, the fact remains she is fifty-seven years old, with limited assets. Even though she has good, marketable skills, there is little chance she would be able to even approach the standard of living she enjoyed during her marriage to Robert. Under the circumstances, an award of alimony was appropriate. Given Marcella's need and Robert's ability to pay, we do not find the amount of alimony to be excessive.
Finally, we largely reject the contentions of both parties that the terms of support termination should be altered. Because cohabitation is not "an easily identifiable triggering event," it is inappropriate to use such an event to automatically terminate a spousal support obligation in an original decree. In re Marriage of Wendell, 581 N.W.2d 197, 200 (Iowa Ct.App. 1998). Nor do we find, given Robert's substantial assets and the fact he is already several years past retirement age, that the alimony should terminate with his retirement. To do so would merely provide Robert an arbitrary and unilateral means of terminating the support obligation. Lastly, we find the circumstances of this case do not warrant an exception to the general rule that support terminates upon the payer's death. See In re Marriage of Weinberger, 507 N.W.2d 733, 736 (Iowa Ct.App. 1993). However, for the sake of clarity, we will modify the award to specify that it ends upon the death of Marcella, as well as the death of Robert. In re Marriage of Smith, 573 N.W.2d 924, 927 (Iowa 1998) (noting that alimony is presumed to automatically terminate upon the death of the recipient spouse). We therefore modify the award to Marcella of $5,500 per month in spousal support to terminate upon Marcella's remarriage or upon the death of either party.
Attorney and Expert Witness Fees . The agreement clearly precludes the award of attorney fees. As such, that award was in error, and we modify to eliminate it. The same cannot be said for the award of the expert witness fees.
The award of litigation expenses is an issue traditionally within the district court's discretion. EFCO Corp. v. Norman Highway Constructors, Inc., 606 N.W.2d 297, 301 (Iowa 2000). Here, Marcella's use of experts was largely if not entirely related to the complexity of Robert's assets. Under such facts we cannot find the award of the expert witness fees to Marcella to be an abuse of discretion, and we affirm the district court in this regard.
Marcella also requests appellate attorney fees. Such an award is discretionary, and made in consideration of the needs of the requesting party, the other party's ability to pay, and whether the requesting party was obligated to defend the district court's decision on appeal. In re Marriage of Davis, 608 N.W.2d 766, 773 (Iowa 2000). Applying these considerations in light of the facts in this case, we decline to make an award of appellate attorney fees to Marcella. Each party shall pay their own appellate attorney fees, and the costs of appeal are assessed to the parties equally.
AFFIRMED IN PART AND MODIFIED IN PART.