Court Opinion

ID: 6226368
Source: CourtListenerOpinion
Date Created: 2022-02-16 17:05:26.21806+00
Date Added: 2024-06-11T08:57:38.990657
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                   No. 20-1121
                             Filed February 16, 2022

IN RE THE MARRIAGE OF LORI JEAN MCCABE
AND BRANDON ROBERT MCCABE

Upon the Petition of
LORI JEAN MCCABE,
      Petitioner-Appellee/Cross-Appellant,

And Concerning
BRANDON ROBERT MCCABE,
     Respondent-Appellant/Cross-Appellee.
________________________________________________________________

       Appeal from the Iowa District Court for Floyd County, Chris Foy, Judge.

       Brandon McCabe appeals, and Lori McCabe cross-appeals, the decree

dissolving their marriage. AFFIRMED AS MODIFIED AND REMANDED.

       Judith O’Donohoe of Elwood, O’Donohoe, Braun, White, LLP, Charles City,

for appellant.

       Andrew C. Johnston of Laird Law Firm, P.L.C., Mason City, for appellee.

       Considered by May, P.J., Ahlers, J., and Mullins, S.J.*

       *Senior judge assigned by order pursuant to Iowa Code section 602.9206

(2022).
                                         2

MULLINS, Senior Judge.

       Brandon McCabe appeals, and Lori McCabe cross-appeals, the decree

dissolving their marriage. Brandon argues the district court erred in failing to

enforce the parties’ premarital agreement, inequitably distributing property,

calculating the amount of child support, and awarding attorney fees. Lori argues

on cross-appeal that the district court erred in failing to award spousal support, a

premarital property credit should not have been given, and the district court

miscalculated Brandon’s income for the purposes of child support.

I.     Background Facts and Proceedings

       The parties were engaged to be married in 2008. The parties discussed

marrying in August, but then agreed to be married on December 4, 2008, when

Lori was eight months pregnant with the couple’s first child. The ceremony was

cancelled because Brandon refused to get married without a premarital

agreement.    The parties rescheduled the ceremony for December 29.             That

morning, Brandon presented Lori with a form premarital agreement printed from

the internet. Brandon listed his assets on Exhibit A and told Lori to complete a list

of her outstanding debt on Exhibit B, although she testified she never did so. The

parties signed the agreement with no further review or legal advice, it was

notarized, and they were married.

       The parties share four children. Over the course of the marriage, the parties

accumulated two farms and sixteen residences. At the time the decree was

entered, Lori moved back into the home she owned prior to the marriage and

Brandon lived in the most recent marital home. The other fourteen residences are

income-generating rental properties. The most recent marital home, farms, and
                                          3

rental properties are owned jointly by the parties through McCabe Properties and

McCabe Holdings. The parties agreed that Lori would provide childcare and care

for the home while Brandon maintained employment outside the home. At the time

of dissolution, Brandon maintained his employment and Lori provided in-home

childcare for the couple’s children and two other children.

       Lori petitioned for dissolution in January 2019. Trial was held in February

2020. The parties’ entered into a partial stipulation that was incorporated into the

decree.1 The court found the premarital agreement was both procedurally and

substantively unconscionable and, thus, unenforceable. The district court also

declined to trace any of the residential and farm properties acquired during the

marriage to Brandon as premarital property and found that “[o]ther than [Lori’s

premarital] home, all of the real estate involved in this case is marital property and

is subject to equitable division.” It did, however, consider the value of premarital

property as a factor in equitable distribution of the parties’ property. The court

awarded no spousal support. The district court found that Lori’s position as the

primary caregiver and continued daycare provider for the children was grounds for

an upward deviation from the child support guidelines and ordered that Brandon

pay $1240.00 per month in child support. Brandon was also ordered to pay

$6500.00 toward Lori’s attorney fees.

1The stipulation established joint legal custody and shared physical care of the
children, parenting time and holiday schedules, how the parties would claim the
children for tax purposes, and that Brandon would provide health insurance for the
children, among other provisions not disputed on appeal.
                                           4

II.    Standard of Review

       “Dissolution proceedings are equitable actions, which we review de novo.”

In re Marriage of Shanks, 758 N.W.2d 506, 510 (Iowa 2008). “[I]ssues concerning

the validity and construction of premarital agreements are equitable matters

subject to our de novo review.” Id. at 511. “We give weight to fact findings of the

district court, particularly as to witness credibility, but are not bound by them.” Id.

“We will disturb the district court ruling ‘when there has been a failure to do equity.’”

In re Marriage of Kimbro, 826 N.W.2d 696, 698 (Iowa 2013) (quoting In re Marriage

of Schriner, 695 N.W.2d 493, 496 (Iowa 2005)). We review an award of attorney

fees for an abuse of discretion. In re Marriage of Guyer, 522 N.W.2d 818, 822

(Iowa 1994). Our review asks whether a ruling “rests on grounds that are clearly

unreasonable or untenable.” Kimbro, 826 N.W.2d at 698.

III.   Discussion

       A.     Premarital Agreement Enforceability

       Brandon argues the premarital agreement executed by the parties on the

day of their marriage in 2008 is enforceable and should have been enforced. This

premarital agreement is governed by the Iowa Uniform Premarital Agreement Act

(IUPAA). See Iowa Code § 596.12 (2019). The IUPAA states, in part, that:

             1. A premarital agreement is not enforceable if the person
       against whom enforcement is sought proves any of the following:
             a. The person did not execute the agreement voluntarily.
             b. The agreement was unconscionable when it was executed.

Id. § 596.8(1)(a), (b). On appeal, Lori argues both that she did not voluntarily

execute the agreement and that it was unconscionable at the time of execution.
                                           5

Because the district court found the agreement unconscionable, we will focus our

analysis on the unconscionability argument.

       When determining whether a premarital agreement was unconscionable at

the time of execution Iowa courts rely on principles pronounced in contract law.

Shanks, 758 N.W.2d at 514–16.

              The concept of unconscionability includes both procedural
       and substantive elements. Procedural unconscionability generally
       involves employment of sharp practices[,] the use of fine print and
       convoluted language, as well as a lack of understanding and
       inequality of bargaining power. A substantive unconscionability
       analysis focuses on the “harsh, oppressive, and one-sided terms” of
       a contract.

Id. at 516 (citations and quotation marks omitted). Courts consider a number of

factors   to   determine   whether    a   premarital    agreement     is   procedurally

unconscionable, including:

       the disadvantaged party’s opportunity to seek independent counsel,
       the relative sophistication of the parties in legal and financial matters,
       the temporal proximity between the introduction of the premarital
       agreement and the wedding date, the use of highly technical or
       confusing language or fine print, and the use of fraudulent or
       deceptive practices to procure the disadvantaged party’s assent to
       the agreement.

Id. at 517 (citations omitted). When considering substantive unconscionability “the

focus . . . is upon whether ‘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.’” Id. at 516 (citation omitted).

       The record reveals that the premarital agreement had been a topic of

discussion between the parties for months before the parties married in December

2008. But there was no evidence presented that the parties ever fully discussed

the contents of the agreement or sought the advice of an attorney. Furthermore,
                                          6

Brandon presented Lori with the agreement the day of their wedding, when Lori

was eight months pregnant, and had no time to seek legal advice or properly

complete Exhibit B, detailing her assets and debts. Moreover, neither party had

any legal experience to interpret the terms of the agreement, leaving important

legal terms undefined, and inconsistencies and inaccuracies that would have been

obvious to competent legal counsel. Based on our review of the facts, Lori carried

her burden to prove the premarital agreement was procedurally unconscionable,

and therefore unenforceable. See Iowa Code § 596.8(1); Shanks, 758 N.W.2d at

517; In re Marriage of Gutcher, No. 17-0593, 2018 WL 5292082, at *2 (Iowa Ct.

App. Nov. 7, 2018).

       B.     Property Distribution

       Brandon argues the district court’s property division is wrong in multiple

ways. He argues a premarital credit given to Lori for the home she owned before

the marriage was improper, the division of rental and farm properties was

inequitable, and the district court failed to consider the impact the property division

would have on his income.

       When a court divides property due to a dissolution, “[t]he property brought

to the marriage by each party” is a factor it considers in making an equitable

distribution. Id. § 598.21(5)(b). An equitable division “does not require an equal

division of assets.” Kimbro, 826 N.W.2d at 703. Instead of making an equal

division, courts consider the particular facts of each case and apply the factors in

section 598.21(5). See id. at 704.

              1.      Premarital Property Credit
                                           7

       Brandon received a credit of $71,656.00, one-half of the present value of a

Fidelity rollover IRA, to reflect his alleged net worth prior to the marriage. Lori

received a credit of $15,132.00, one-half of the present equity in the home she

owned prior to the marriage. Brandon argues no credit should have been given to

Lori because she had a negative net worth at the time the parties were married,

based on the terms of the premarital agreement. Lori argues that neither party

should have received a credit for premarital property.

       Iowa law “does not give credit to a party for the value of the property owned

prior to the marriage. To the contrary, the property brought to the marriage by

each party is only a factor to consider with the other relevant factors in determining

an equitable property division.” In re Marriage of Brainard, 523 N.W.2d 611, 616

(Iowa Ct. App. 1994). “[I]nherited property and gifts received by one spouse” are

the only types of property that are not subject to equitable division. In re Marriage

of Hansen, 886 N.W.2d 868, 871 (Iowa Ct. App. 2016) (quoting In re Marriage of

Keener, 728 N.W.2d 188, 193 (Iowa 2007)); but see Iowa Code § 598.21(6)

(except if refusal to divide the inherited or gifted property is inequitable to the other

party or to the children).

       The district court made a finding that it was equitable to award Lori “half of

the present equity in [her premarital] home . . . as her separate property,” and “half

the present value of the Fidelity rollover IRA to Brandon as his separate property.”

The district court did not merely award each party the value of their premarital

assets. The district court considered the premarital value of assets in its complete

analysis of equitable distribution of the parties’ assets.            See Iowa Code

§ 598.21(5)(b). We find no inequity in the court’s decision to give each party one-
                                           8

half of the value of their respective premarital assets and to distribute the other half

of each asset as part of the marital estate. Brainard, 523 N.W.2d at 616.

              2.      Distribution of Real Property

       Brandon argues the district court erred in distributing all of the rental

properties to Lori, while he received low-income-producing farmland and a home

that is too expensive for him to maintain. He also argues the district court failed to

consider the impact the distribution would have on his income. Lori argues the

distribution was equitable. Both parties agree that the value the district court

placed on the properties is appropriate and we will accept those values.

       “Our focus is on what is equitable under the circumstances in consideration

of the factors set forth in Iowa Code section 598.21(5).” Hansen, 886 N.W.2d at

873. “Under our statutory distribution scheme, the first task in dividing property is

to determine the property subject to division. 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.” In re Marriage of Fennelly, 737 N.W.2d 97, 102 (Iowa

2007) (citation omitted). The factors are:

              a. The length of the marriage.
              b. The property brought to the marriage by each party.
              c. The contribution of each party to the marriage, giving
       appropriate economic value to each party’s contribution in
       homemaking and child care services.
              d. The age and physical and emotional health of the parties.
              e. The contribution by one party to the education, training, or
       increased earning power of the other.
              f. The earning capacity of each party, including educational
       background, training, employment skills, work experience, length of
       absence from the job market, custodial responsibilities for children,
       and the time and expense necessary to acquire sufficient education
       or training to enable the party to become self-supporting at a
       standard of living reasonably comparable to that enjoyed during the
       marriage.
                                          9

               g. The desirability of awarding the family home or the right to
       live in the family home for a reasonable period to the party having
       custody of the children, or if the parties have joint legal custody, to
       the party having physical care of the children.
               h. The amount and duration of an order granting support
       payments to either party pursuant to section 598.21A and whether
       the property division should be in lieu of such payments.
               i. Other economic circumstances of each party, including
       pension benefits, vested or unvested. Future interests may be
       considered, but expectancies or interests arising from inherited or
       gifted property created under a will or other instrument under which
       the trustee, trustor, or trust protector, or owner has the power to
       remove the party in question as a beneficiary, shall not be
       considered.
               j. The tax consequences to each party.
               k. Any written agreement made by the parties concerning
       property distribution.
               l. The provisions of an antenuptial agreement.
               m. Other factors the court may determine to be relevant in an
       individual case.

Iowa Code § 598.21(5).

       Brandon specifically targets the rental properties the parties own. The

district court found the marital contributions of both parties to be comparable, with

Brandon accepting a role making economic contributions while Lori performed

roles within the family home including child care and maintaining the home. The

court found “it would be most equitable for the parties to share equally in the net

worth they built up during the marriage.” Although Lori received rental properties

that generate more income than the farms distributed to Brandon, tax records show

both of the farms are generating some income. Furthermore, Brandon’s income

potential and history has always been significantly greater than Lori’s. On our de

novo review of the record, we find the district court carefully considered the factors

contained in section 598.21(5), including the effect the distribution would have on
                                          10

Brandon’s income, in distributing the property owned by the parties.            The

distribution was equitable and we will not disturb it.

       C.     Spousal Support

       Lori argues on cross-appeal that she should have been awarded spousal

support. When making a spousal-support award, courts are to consider the factors

listed in section 598.21A(1). Caselaw provides “whether to award spousal support

lies in the discretion of the court, that [it] must decide each case based upon its

own particular circumstances, and that precedent may be of little value in deciding

each case.” In re Marriage of Gust, 858 N.W.2d 402, 408 (Iowa 2015).

       Brandon and Lori were married less than ten years. Both parties are healthy

and may continue to work in the foreseeable future. The property distribution

granted significant income-generating property to Lori, which will supplement her

childcare income and allow her to become self-supporting.          Furthermore, for

reasons explained below, Brandon was ordered to pay child support higher than

the guidelines because Lori provides childcare for the four children, thus relieving

Brandon from finding and paying for childcare on workdays when he has physical

care. On our de novo review of the record, we find the district court carefully

considered the statutory factors and declined to award support, which is equitable

in light of the circumstances of these parties. Id.

       D.     Child Support

       Brandon argues the district court incorrectly calculated the income of each

of the parties and erred in deviating from the child support award determined by

the guidelines and in calculating Lori’s income. Lori argues the district court erred
                                           11

in calculating Brandon’s income, but its decision to order Brandon to pay child

support at a rate higher than the guidelines was correct.

       A parent has a duty to support children financially based on the parent’s

ability to pay. In re Marriage of Salmon, 519 N.W.2d 94, 97 (Iowa Ct. App. 1994).

Even though Lori has the ability to care for more children in her home, she has no

plan to do so or take on the additional burdens that would be required to care for

extra children. Our review of the record reveals that the district court’s income

calculation for Lori, adding the income from rental properties to the income she

earns from in-home childcare, was an appropriate calculation of her actual income

for the purposes of determining child support.

       Iowa courts have used average earnings rather than a parent’s actual

earnings for purposes of calculating child support when that parent’s income is, or

has been, subject to fluctuation. In re Marriage of Hagerla, 698 N.W.2d 329, 332

(Iowa Ct. App. 2005).       “Iowa case law supports the proposition that in the

determination of child support or modification of a support order, a party may not

claim inability to pay child support when that inability is self-inflicted or voluntary.”

In re Marriage of Foley, 501 N.W.2d 497, 500 (Iowa 1993) (collecting cases). The

spirit of that proposition is “to prevent parents from gaining an advantage by

reducing their earning capacity and ability to pay support through improper intent

or reckless conduct.” Id. Lori argues that Brandon’s income fluctuates and he has

expressed a desire to work less in order to spend more time with the children,

meaning an average income should have been used for the child-support

calculation. She also argues that the average income should have been used

because Brandon lost a high-earning job due to a license suspension following an
                                          12

arrest for driving while intoxicated.2     Brandon did not deny the fact of his

indiscretion, nor is there any record that his conduct was intentionally directed at

reducing his ability to pay child support. We do not minimize the multitude of harms

that result from impaired driving, but there is nothing in the record indicating

Brandon engaged in “improper intent or reckless conduct” that would give rise to

the use of an average income for the purposes of calculating child support. Id.

       “Special circumstances can call for an adjustment up or down when

necessary to do justice between the parties. Any request for variation [from the

guidelines] should however be viewed with great caution.” In re Marriage of

Nelson, 570 N.W.2d 103, 108 (Iowa 1997) (citation omitted). The district court

made a finding that deviation was “necessary to do justice between the parties and

provide for the needs of the children.” Iowa Ct. R. 9.11(2). The decision was

based on the fact that, pursuant to the terms of the partial stipulation of the parties,

and approved by the court, Lori would provide childcare for the parties’ four

children and Brandon would not be required to employ a daycare provider when

he has physical care of the children but is at work. The guideline calculation for

shared physical care required that Brandon pay Lori $665.00 per month. The

district court considered Brandon’s exhibit evidence that child care would cost him

more than $850 per month, and noted that the partial stipulation of the parties

required Lori to provide daycare of their children when they are in Brandon’s care

under the shared care arrangements.3 Based on Lori’s daycare responsibilities,

2 Charges filed against Brandon were dropped, and no conviction occurred. He
was released from employment because of the license suspension.
3 We note the partial stipulation was silent on financial arrangements relating to

the daycare provisions.
                                         13

including providing food and other supplies, and the corresponding daycare

savings to Brandon, the court concluded an economic adjustment was necessary

to account for the daycare responsibilities and made findings to deviate from the

guideline child support by increasing the child support by $575 per month.

       On our de novo review of the record, we have several concerns about the

district court’s deviation from the child support guidelines to accomplish its

objective. At the time of trial the children were two, seven, nine, and eleven years

old. Obviously, daycare requirements vary as children age, and we are unable to

discern from the record or the court’s decree how, or even whether, that

circumstance was factored into the calculation of $575 per month. We also note

the court ordered child support adjustments as each child is no longer eligible for

child support, but we are unable to determine whether there was any adjustment

relating to the time each child ages out of the need for daycare, or any

corresponding adjustment in the deviation amount.           If such adjustment is

incorporated into the district court’s calculations, there is inadequate rationale to

facilitate our review. Consequently, we are unable to determine whether the

deviation is justifiable under the guidelines.   See Iowa Ct. R. 9.4.      Also, the

evidence indicates Lori may be contemplating ceasing to be a daycare provider in

the foreseeable future.

       Based on the foregoing, we modify the decree to vacate the $575 per month

deviation and remand to the district court for further proceedings on this limited

issue. The district court has the discretion to either hold a further hearing, decide

the issue on the record made, or request additional submissions from the parties.

We do not retain jurisdiction.
                                          14

       E.     Attorney Fees

       Brandon argues the district court erred in ordering that he pay $6500.00 of

Lori’s attorney fees. Lori also requests an award of appellate attorney fees.

       “Trial courts have considerable discretion in awarding attorney fees,” which

depends upon the parties’ ability to pay, fairness, and reasonability. Guyer, 522

N.W.2d at 822.

       On appeal, Brandon admitted that the $6500.00 award was modest and he

was able to pay. He even appeared to concede the issue if we adopted his plan

to redistribute the property. The district court noted, “taking into account the child

support he is obligated to pay, the after-tax income of Brandon is greater than that

of Lori.” Even in the absence of adoption of Brandon’s distribution plan, we defer

to the sound judgment of the district court in its award of trial-attorney fees. Id.

       When considering a request for appellate attorney fees, we consider the

same factors listed above. See In re Marriage of Okland, 699 N.W.2d 260, 270

(Iowa 2005). We also consider the merits of an appeal. Id. Brandon initiated this

appeal and Lori raised her own claims on cross-appeal. Both parties prevailed in

different areas. Brandon has already been ordered to pay some trial-attorney fees

and child support at a rate higher than the guideline calculation. Each party shall

be responsible for their own attorney fees and costs on appeal shall be split equally

between the parties.

IV.    Conclusion

       On our de novo review of the record, we find the parties’ premarital

agreement was unconscionable at the time of execution and is unenforceable. The

district court’s property distribution appropriately considered the value of assets
                                        15

the parties brought to the marriage as a factor in its exercise of equitable

distribution. The distribution of real property was equitable. The district court’s

award of child support was appropriate and equitable, but we modify the decree to

vacate the upward deviation and remand to the district court for further

proceedings. Following our consideration of the property distribution, we agree

that no spousal support was warranted. We affirm the award of trial attorney fees

and find each party should be responsible for their own appellate attorney fees.

Costs on appeal shall be split equally between the parties.

      AFFIRMED AS MODIFIED AND REMANDED.