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. The parties 

reconciled and Michele dismissed her petition. 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. These 

assets were worth $116,094 on the date of trial. 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 

 1Although 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. 
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. Merits 

A. Physical Care of the Children 

Iowa law distinguishes custody from physical care. Custody 

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.” Iowa Code § 

598.1(5) (2005). Physical care, on the other hand, is “the right and 

responsibility to maintain a home for the minor child and provide for the 

routine care of the child.” Id. § 598.1(7). When considering the issue of 

physical care, the child’s best interest is the overriding consideration. 

We are guided by the factors set forth in Iowa Code section 598.41(3) as 

well as those identified in In re Marriage of Winter, 223 N.W.2d 165, 166–

67 (Iowa 1974). If joint physical care is not appropriate, “the court must 

choose one parent to be the primary caretaker, awarding the other 

parent visitation rights.” In re Marriage of Hynick, 727 N.W.2d 575, 579 

(Iowa 2007). 

 Ted argues the district court should have awarded him physical 

care so the children may continue to live in the Barcelona Terrace home, 

which was awarded to him. Additionally, Ted argues he is better suited 

to be the primary physical caretaker because he spends less time 

working in comparison to Michele. 

 The district court found both parents to be suitable caretakers for 

the children. We agree. The record is replete with evidence of both 

parties’ love and devotion to their children. At the end of the trial, the 

court noted the conundrum it faced in deciding who should be awarded 
6

physical care because both parties are great parents. The district court 

had the opportunity to observe the witnesses and concluded primary 

care should be awarded to Michele. The district court awarded Ted the 

following visitation schedule: every third weekend (Friday 5 p.m. through 

Sunday 5 p.m.) and weekly “mid-week” visitation (Sunday 5 p.m. through 

Tuesday morning while school is in session and 5 p.m. when it is not). 

We see no reason to disturb the district court’s decision. Ted conceded 

Michele is a competent caretaker and acknowledged plans to “ramp up” 

his law practice. 

Alternatively, Ted claims the district court erred by not awarding 

the parties joint physical care of the children. Under Iowa Code section 

598.41(5)(a), 

the court may award joint physical care . . . upon the 

request of either parent. If the court denies the request for 

joint physical care, the determination shall be accompanied 

by specific findings of fact and conclusions of law that the 

awarding of joint physical care is not in the best interest of 

the child. 

Contrary to Ted’s assertion on appeal, this passage does not create a 

presumption in favor of joint physical care. In re Marriage of Hansen, 

733 N.W.2d 683, 692 (Iowa 2007). Rather, our statutory scheme simply 

makes joint physical care a viable option if it is in the child’s best 

interest. We recently said “[t]he critical question in deciding whether 

joint physical care is . . . appropriate is whether the parties can 

communicate effectively on the myriad of issues that arise daily in the 

routine care of a child.” Hynick, 727 N.W.2d at 580. 

The parties dispute whether Ted requested joint physical care in 

the original proceedings. Ted’s answer to Michele’s petition sought “the 

parties’ joint shared physical custody of their children.” In his opening 

statement at trial, Ted’s attorney stated the court needed to decide 
7

“whether shared physical custody is appropriate in this case.” Since the 

parties previously agreed to joint legal custody, we find it obvious Ted 

was requesting “joint physical care” even though he did not use those 

exact words. Moreover, the term “physical” connotes something more 

than the right to make legal decisions. We have never held a party must 

use magic words to convey a desire for “joint physical care.” Nor are we 

interested in creating a trap for the unwary with respect to something so 

paramount. 

Because the court did not award joint physical care, it normally 

would be required to specifically explain why joint physical care is not in 

the children’s best interest. Iowa Code § 598.41(5)(a). However, no 

specific finding was required in the present case because Ted abandoned 

his request for joint physical care during the trial. In his testimony, Ted 

asked for primary physical care of the children. He stated joint physical 

care was not appropriate due to Michele’s “tremendous amount of 

unresolved anger towards [him].” Similarly, Michele testified joint 

physical care was not appropriate because communication with Ted was 

“nearly impossible.”2 She also stated she believed joint physical care 

would be too disruptive and worried Ted would not provide a structured 

environment for the children. In sum, both parties conceded joint 

physical care was not preferable. Given the parties’ apparent difficulty in 

communicating, joint physical care would not have been suitable. See 

Hynick, 727 N.W.2d at 580 (finding joint physical care inappropriate due 

to the parties’ lack of mutual respect and inability to communicate). 

 2As evidence of their communication difficulties, Michele testified most of their 

discussions were in writing. 
8

B. Premarital Property 

Under our statutory distribution scheme, the first task in dividing 

property is to determine the property subject to division. In re Marriage 

of Schriner, 695 N.W.2d 493, 496 (Iowa 2005). The second task is to 

divide this property in an equitable manner according to the enumerated 

factors in section 598.21 of the Iowa Code. Id. “Although an equal 

division is not required, it is generally recognized that equality is often 

most equitable.” In re Marriage of Rhinehart, 704 N.W.2d 677, 683 (Iowa 

2005) (citing In re Marriage of Conley, 284 N.W.2d 220, 223 (Iowa 1979)). 

Section 598.21(1) requires “all property, except inherited property 

or gifts received by one party,” to be equitably divided between the 

parties. We have previously held “[t]his broad declaration means the 

property included in the divisible estate includes not only property 

acquired during the marriage by one or both of the parties, but property 

owned prior to the marriage by a party.” Schriner, 695 N.W.2d at 496 

(citing In re Marriage of Brainard, 523 N.W.2d 611, 616 (Iowa Ct. App. 

1994)). The district court “may not separate [a premarital] asset from the 

divisible estate and automatically award it to the spouse that owned the 

property prior to the marriage.” Sullins, 715 N.W.2d at 247. Instead, 

“property brought to the marriage by each party” is merely one factor 

among many to be considered under section 598.21. Other factors 

include the length of the marriage, contributions of each party to the 

marriage, the age and health of the parties, each party’s earning 

capacity, and any other factor the court may determine to be relevant to 

any given case. Iowa Code § 598.21(1). 

In the present case, the parties agreed to equally divide all property 

acquired during the marriage. However, the parties disagreed on how to 

divide their premarital property. Prior to the marriage, Ted owned the 
9

Fairview Drive home and Michele owned 118 shares of IBM stock and an 

IBM tax deferred savings plan (TDSP). All of these assets increased in 

value during the marriage: 

ASSET PREMARITAL VALUE VALUE AT TRIAL 

Fairview Drive home (Ted) $12,000 (equity) $29,900 (equity) 

IBM stock (Michele) $13,334 $37,894 

IBM TDSP (Michele) $12,311 $78,2003

 Ted approved of the court setting aside the value of the parties’ 

premarital contributions. However, Ted advocated the equal division of 

any appreciation that occurred during the marriage. Michele, on the 

other hand, asked the court to set aside her premarital assets as well as 

any appreciation in value during the marriage. 

The district court found it “equitable that Ted receive credit for the 

premarital value of the equity in [the Fairview Drive home],4 and Michele 

receive the premarital value of the IBM stock and IBM retirement plan 

and each party should receive the benefit or burden of any change in the 

respective values over which they had no particular control and to which 

neither made any particular contributions.” Michele was awarded both 

her premarital assets and their appreciation (worth $116,094 on the date 

of trial) while Ted only received $12,000 for the premarital value of the 

Fairview Drive home. The court found it was justified in dividing the 

appreciation of the Fairview Drive home because the parties serviced the 

mortgage and maintained the home during the marriage while Michele’s 

 3The total value of Michele’s IBM TDSP at trial was $153,084. Michele 

acknowledged $74,884 was either contributed during the marriage or was appreciation 

of contributions made during the marriage. Thus, she asked for $78,200 to be set aside 

for her and agreed to split $74,884 with Ted. 

4At the parties’ request, Michele was awarded the Fairview Drive home and Ted 

was awarded the Barcelona Terrace home. 
10

premarital assets increased “as a result of factors entirely beyond the 

control of the parties.” 

The court of appeals upheld the district court’s disparate treatment 

of the parties’ premarital assets. It stated: 

 In this marriage of moderate length, it is Michele who 

has made the greatest tangible contributions, undertaking 

primary responsibility for the home, the children, and the 

parties’ finances. In addition, it appears that, overall, she 

has made greater financial contributions to the marriage. 

Moreover, the record is clear that Michele’s IBM stock and 

IBM TDSP, which have been kept separate from the family 

finances, appreciated purely due to fortuitous 

circumstances. In contrast, during the marriage the 

Fairview Drive home was used as rental property. Unlike a 

purely financial asset, an encumbered home must be 

maintained and its mortgage must be serviced. . . . In light of 

the foregoing circumstances, we find the property division to 

be equitable. 

We do not find the parties’ respective contributions to the marriage 

justify treating the parties differently. Michele’s biggest criticism of Ted 

is his “failure without good cause to contribute financially to the 

marriage consistent with his earning capacity.” However, we have never 

held or even insinuated that spouses should maximize their earning 

potential or risk being punished in the distribution of the parties’ 

property. Iowa is a no-fault state. In re Marriage of Williams, 199 N.W.2d 

339, 345 (Iowa 1972). 

It is important to remember marriage does not come with a ledger. 

See In re Marriage of Miller, 552 N.W.2d 460, 464 (Iowa Ct. App. 1996). 

Spouses agree to accept one another “for better or worse.” Each person’s 

total contributions to the marriage cannot be reduced to a dollar amount. 

Many contributions are incapable of calculation, such as love, support, 

and companionship. “Financial matters . . . must not be emphasized 
11

over the other contributions made to a marriage in determining an 

equitable distribution.” Id. at 465. 

In the present case, both parties contributed in countless ways to 

the marriage. Both worked outside the home, cooked, cleaned and 

looked after the children. We presume they found solace in one another, 

at least in the earlier years of their marriage. Although each party’s 

contribution to a marriage is an appropriate factor affecting property 

division, it is not “useful to analyze the exact duties performed by the 

marriage partners.” In re Marriage of Grady-Woods, 577 N.W.2d 851, 

853 (Iowa Ct. App. 1998). Suffice it to say, neither party shirked his or 

her duties so as to justify disparate treatment. 

Nor do we find it appropriate when dividing property to emphasize 

how each asset appreciated—fortuitously versus laboriously—when the 

parties have been married for nearly fifteen years. Property may be 

“marital” or “premarital,” but it is all subject to division except for gifts 

and inherited property. Iowa Code § 598.21(1). 

Considering all of the facts and circumstances of this case, we find 

it equitable to equally divide the appreciation of the parties’ premarital 

assets. We need not decide whether it was appropriate to award the 

parties the value of their premarital contributions because both parties 

requested at least the value of their respective premarital property to be 

set aside. See In re Marriage of Wendell, 581 N.W.2d 197, 199 (Iowa Ct. 

App. 1998) (noting some circumstances may justify a full credit for 

premarital property but such a credit is not required). Thus, $12,000 

should be set aside for Ted and $25,645 should be set aside for Michele. 

These figures represent the value of their premarital property on the date 

of their marriage. 
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C. Dissipation of Assets 

Michele urges us to take into account Ted’s “unreasonable 

accumulation of debt.” The district court found Ted’s spending “behavior 

does not rise to the level of ill will or inappropriate conduct sufficient to 

justify variance” from an equal property division. 

We have previously held dissipation of assets is a proper 

consideration when dividing property. In re Marriage of Olson, 705 

N.W.2d 312, 317 (Iowa 2005) (citing In re Marriage of Goodwin, 606 

N.W.2d 315, 321 (Iowa 2000)). In determining whether dissipation has 

occurred, courts must decide “(1) whether the alleged purpose of the 

expenditure is supported by the evidence, and if so, (2) whether that 

purpose amounts to dissipation under the circumstances.” Lee R. Russ, 

Spouse’s Dissipation of Marital Assets Prior to Divorce as Factor in Divorce 

Court’s Determination of Property Division, 41 A.L.R.4th 416, 421 (1985). 

The first issue is an evidentiary matter and may be resolved on the basis 

of whether the spending spouse can show how the funds were spent or 

the property disposed of by testifying or producing receipts or similar 

evidence. See id. The second issue requires the consideration of many 

factors, including 

(1) the proximity of the expenditure to the parties’ 

separation, (2) whether the expenditure was typical of 

expenditures made by the parties prior to the breakdown of 

the marriage, (3) whether the expenditure benefited the 

“joint” marital enterprise or was for the benefit of one spouse 

to the exclusion of the other, and (4) the need for, and the 

amount of, the expenditure. 

Id.; see In re Marriage of Burgess, 568 N.W.2d 827, 829 (Iowa Ct. App. 

1997) (stating when one spouse has dissipated marital assets, the critical 

question is “whether the payment of the obligation was a reasonable and 

expected aspect of the particular marriage”). Courts may also consider 
13

“[w]hether the dissipating party intended to hide, deplete, or divert the 

marital asset.” Kondamuri v. Kondamuri, 852 N.E.2d 939, 952 (Ind. Ct. 

App. 2006); see In re Marriage of Cerven, 335 N.W.2d 143, 146 (Iowa 

1983) (holding property transferred by a spouse to avoid support 

obligation may be considered on the issue of property distribution as well 

as alimony). 

Michele alleges Ted indirectly dissipated their marital assets—

rather than depleting the parties’ assets, Ted accumulated large amounts 

of debt. Nevertheless, the result is the same. The parties’ assets will 

eventually be needed to repay Ted’s debt. 

The parties kept their respective earnings and debt separate for the 

last several years of their marriage. Ted maintained a line of credit and 

several credit cards which were all in his name alone. Michele was not 

aware of the extent of Ted’s debt until shortly before she filed her second 

dissolution petition. At trial, Ted owed approximately $85,633.5 Ted 

acknowledged his debt had substantially increased since the first time 

Michele filed for dissolution in 2001. He said his debt was necessitated 

by his firm’s obligations and household expenses. He attributed the 

increase to his need to borrow money to service his debt. However, Ted 

did not provide any evidence concerning his firm’s expenses and 

obligations, nor did he specify his contributions to the household by way 

of this debt. 

While Ted asserted about half of the debt is related to the family 

household, the record shows Michele paid the vast majority of those 

expenses for the last several years. Moreover, Ted’s claim that he 

 5This does not include a substantial loan which is listed on petitioner’s exhibit 

40 (First MW Line of Credit in the amount of $80,100). There is no discussion of this 

loan in the decree. Since the parties have not addressed it on appeal, we likewise do 

not address it. 
14

“ha[s]n’t been able to make enough money from the course of [his] 

practice . . . to cover current expenses and additionally retire the debt on 

top of that” is contrary to his assertion that his law firm is profitable. 

Nevertheless, it is not unexpected Ted could not account for 

exactly how this money was spent considering the debt accumulated over 

several years. Ted, however, should have been able to explain how he 

spent the $22,000 he took out on his credit cards after Michele filed her 

second petition for dissolution. Ted offered no explanation why his debt 

suddenly accelerated at the end of the marriage although he taunted 

Michele she was going to have to pay it all. Ted’s living expenses did not 

increase because the parties remained in their home on Barcelona 

Terrace while the dissolution action was pending. We also know the 

cash advances were not used to pay Ted’s legal expenses because the 

district court ordered Michele’s attorney to transfer half of Michele’s 

$15,000 retainer to Ted’s attorney. 

It is not appropriate to label all of Ted’s debt as waste because we 

find Ted’s testimony credible to prove at least some of this debt benefited 

the family or Ted’s firm. Given the timing of the cash advances and Ted’s 

vague explanation, we find it equitable to set aside $22,000 of debt for 

Ted. This amount should not be included in the distribution of the 

parties’ assets and debts.6 Ted failed to prove the cash advances were 

the result of legitimate household and business expenses. Although all 

debt is not wasteful, we find this amount unreasonable because he failed 

to adequately explain it. See Goodwin, 606 N.W.2d at 322 (holding 

$9,000 which the wife spent but could not account for should be 

 6Typically, a dissipated asset is included in the marital estate and awarded to 

the spouse who wasted the asset. See, e.g., Goodwin, 606 N.W.2d at 322. However, 

where the dissipation is debt, it is appropriate to set aside the debt for the spouse who 

incurred the debt and not include it in the marital estate. 
15

included in the division of the parties’ assets); In re Marriage of Hunter, 

639 P.2d 489, 492–93 (Mont. 1982) (holding $51,000 husband withdrew 

from joint bank account should be included in the marital estate because 

he produced no evidence to support his claim that the money was spent 

on business and living expenses). In other words, Michele made a prima 

facie case for dissipation and Ted failed to rebut it. 

In summary, the value of the parties’ premarital contributions 

should be set aside. Ted should receive a $12,000 credit and Michele 

should receive a $25,645 credit. Additionally, $22,000 of debt should be 

set aside for Ted. That leaves $866,750 worth of marital assets and 

$81,824 worth of marital debts to be equally divided. All together, 

Michele should receive $418,108 and Ted should receive $382,463 based 

on the following calculations: 

Michele Ted 

Premarital assets $ 25,645.00 $ 12,000.00 

Marital assets $ 433,375.00 $ 433,375.00 

Marital debt $ (40,912.00) $ (40,912.00) 

Dissipation debt $ - $ (22,000.00) 

Totals $ 418,108.00 $ 382,463.00 

The district court shall enter an order in conformance with these findings 

modifying the original decree as follows: the appreciation of Michele’s 

premarital assets should be included in the division of marital property 

and $22,000 of Ted’s debt should be excluded from the division of 

marital property. These modifications give Michele $28,218 less than the 

district court’s original decree. The district court shall hold a hearing to 

determine how the parties’ property should be redistributed in light of 

our holdings. 
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IV. Conclusion

We find no reason to disturb the district court’s decision to award 

primary care of the parties’ children to Michele. We set aside the value of 

the parties’ premarital contributions because both parties asked for at 

least that much to be set aside. Because Ted dissipated marital assets 

through unexplained cash advances on his credit cards at the end of the 

marriage, we set aside $22,000 worth of debt to Ted. We order the 

parties’ remaining assets and debts, including appreciation of the parties’ 

premarital assets, to be divided equally. Costs of this appeal shall be 

split equally between the parties. 

DECISION OF THE COURT OF APPEALS VACATED; DISTRICT 

COURT JUDGMENT AFFIRMED IN PART AND REVERSED IN PART; 

CASE REMANDED. 

All justices concur except Hecht, J., who takes no part.