Court Opinion

ID: 9377713
Source: CourtListenerOpinion
Date Created: 2023-03-08 16:05:37.21232+00
Date Added: 2024-06-11T17:17:15.745443
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 22-0084
                              Filed March 8, 2023

IN RE THE MARRIAGE OF JOANN L. BARTEN
AND TROY T. BIGELOW

Upon the Petition of
JOANN L. BARTEN,
      Petitioner-Appellee/Cross-Appellant,

And Concerning
TROY T. BIGELOW,
     Respondent-Appellant/Cross-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Story County, James M. Drew,

Judge.

      Troy Bigelow appeals and JoAnn Barten cross-appeals the economic

provisions of the decree dissolving their marriage. AFFIRMED AS MODIFIED.

      Joseph R. Cahill of Cahill Law Offices, Nevada, for appellant.

      Andrew B. Howie of Shindler, Anderson, Goplerud & Weese, P.C., West

Des Moines, for appellee.

      Heard by Vaitheswaran, P.J., and Greer and Chicchelly, JJ.
                                         2

CHICCHELLY, Judge.

      Troy Bigelow appeals and JoAnn Barten cross-appeals the economic

provisions of the decree dissolving their marriage. Troy challenges the validity of

the parties’ premarital agreement, and both parties challenge property division.

Following a de novo review, we agree the premarital agreement is valid and

enforceable. We affirm the dissolution decree but modify the value assigned to

some of the marital property.

      I. Background Facts and Proceedings.

      JoAnn is an attorney in private practice. She began practicing law in 1999

and opened her own firm in 2005.        JoAnn entered the marriage owning two

commercial real estate properties: (1) the building in which her law firm is located

and (2) a duplex that earns rental income. At the time of marriage, the net equity

value of the commercial building was less than $1500 and the net equity of the

duplex was about $30,000.         During the marriage, both mortgages were

extinguished and the value of each property increased. At the time of dissolution,

the net equity increased to $529,000 for the commercial building and $162,000 for

the duplex.

      Troy is a veterinarian and works for the United States Department of

Agriculture. When the parties married, Troy owned a home worth $214,500 that

was encumbered by a $170,704 mortgage. During the marriage, he sold the home

and used the proceeds to buy ten acres of property. After the Iowa Department of

Transportation took the property under eminent domain, Troy bought the home

that became the marital residence. The home is appraised at $750,000 with no

encumbrance.
                                         3

       The parties planned to elope during a trip to Las Vegas in November 2009.

It was the second marriage for each. JoAnn told Troy she wanted a premarital

agreement to protect their assets, and Troy provided JoAnn a list of his assets and

debts in the weeks leading up to their Las Vegas trip. JoAnn drafted the premarital

agreement and signed it on October 24, 2009. She emailed the document to Troy

on October 27. They planned to leave for Las Vegas on October 30.

       JoAnn told Troy that he should consult with an attorney about the premarital

agreement. Troy contacted the attorney representing him in a personal injury

case, but that attorney told Troy that he did not specialize in premarital agreements

and advised him to seek counsel from another attorney. Instead, Troy signed the

agreement on October 29 without obtaining independent legal advice.

       The premarital agreement lists the property each party owned before

marrying and its value.    The property is divided into three categories.1      The

agreement states that property listed under categories A1 and B1 is protected from

all claims by the other party and not subject to division. That property includes the

parties’ vehicles, personal property, commercial property and accounts, and

professional property and accounts. For property listed under categories A2 and

B2, the agreement protects the equity value of each asset at the time the parties

signed the agreement but provides any increase in that value during the marriage

is divisible as marital property. The property listed under A2 and B2 includes the

parties’ retirement accounts, personal bank accounts, and residential real estate.

1 Numbers are used to differentiate the categories of property and letters are used
to designate the owner of the property. Troy’s premarital property and debts are
listed under A1, A2, or A3, while JoAnn’s are listed under B1, B2, or B3.
                                         4

Any unsecured debts owed at the time the agreement was signed are listed under

categories A3 and B3. The premarital agreement provides that those debts would

remain the debts of the individual and neither party is entitled to a setoff for any

extinguished during the marriage. The total net worth for Troy at the time of

marriage was $229,214.2 JoAnn had a negative net worth of $18,811.3

       JoAnn and Troy jointly acquired real estate during the marriage. They

bought an apartment building for rental income and a commercial lot.           Troy

managed and maintained these properties, along with JoAnn’s premarital

properties. Troy also started a side business hauling pigs to slaughterhouses in

2019 called Big Bart Logistics (Big Bart).

       JoAnn petitioned to dissolve the marriage in May 2020. The focus of the

trial was the enforceability of the premarital agreement and the division of marital

property.   The district court determined the agreement was enforceable and

divided the premarital property under its terms.      It also divided the property

acquired during the marriage. After both parties moved to enlarge or amend the

decree, the court amended the decree to correct errors and miscalculations. As

calculated in the amended decree, Troy received net marital assets valued at

$1,048,565.50 and JoAnn receiving net marital assets valued at $986,686.50.

2 The total equity value of Troy’s premarital property was $23,875 under A1,
$212,955 under A2, and -$7616 under A3.
3 The total equity value of JoAnn’s premarital property was $30,364 under B1,

$51,289 under B2, and -$93,855 under B3.
                                        5

      II. Scope of Review.

      We review dissolution proceedings de novo. In re Marriage of Shanks, 758

N.W.2d 506, 510 (Iowa 2008). This scope of review also applies to determinations

about the validity of a premarital agreement. Id. at 510–11.

      III. Premarital Agreement.

      We first address Troy’s challenge to the premarital agreement. Iowa law

generally favors premarital agreements. See In re Marriage of Gonzalez, 561

N.W.2d 94, 96 (Iowa Ct. App. 1997). There are only three circumstances in which

a premarital agreement is not enforceable:

             a. The person did not execute the agreement voluntarily.
             b. The agreement was unconscionable when it was executed.
             c. Before the execution of the agreement the person was not
      provided a fair and reasonable disclosure of the property or financial
      obligations of the other spouse; and the person did not have, or
      reasonably could not have had, an adequate knowledge of the
      property or financial obligations of the other spouse.

Iowa Code § 596.8(1) (2020). Troy contends the premarital agreement is not

enforceable under Iowa Code section 596.8(1)(b) because it is procedurally and

substantively unconscionable. See Shanks, 758 N.W.2d at 515 (“The concept of

unconscionability includes both procedural and substantive elements.”).

      A. Procedural unconscionability.

      Procedural unconscionability occurs when one party exploits another’s lack

of understanding or unequal bargaining power. Id. at 517.

      Courts have found the following factors, among others, are relevant
      to procedural unconscionability: 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
                                         6

       fine print, and the use of fraudulent or deceptive practices to procure
       the disadvantaged party’s assent to the agreement.

Id. (internal citations omitted).

       Troy cites several factors that he claims render the premarital agreement

procedurally unconscionable. He notes that JoAnn was an attorney and drafted

the agreement while he was unrepresented. He points to the limited time he had

to review the agreement and obtain counsel, as JoAnn emailed him the agreement

only three days before they left for Las Vegas.        He argues that under this

abbreviated timeline, he was unable to obtain independent counsel to review the

agreement and advise him. Instead, he claims that he detrimentally relied on

JoAnn’s assurance that the agreement she drafted was fair to both parties.

       The circumstances under which Troy entered the premarital agreement

were less than ideal. As an attorney and the person who drafted the agreement,

JoAnn had more insight into its terms and provisions than Troy, an unrepresented

layperson. We also note that based on the date of her signature on the document,

JoAnn finished drafting the premarital agreement at least three days before she

emailed it to Troy. Because they planned to fly to Las Vegas on October 30 and

marry on November 1, Troy had just slightly more than two days to get the

agreement reviewed by independent counsel. Certainly, his likelihood of obtaining

independent legal advice would have increased if JoAnn had emailed the

document to him on the day that she signed it.

       But while the less-than-ideal circumstances surrounding the signing of the

agreement give us some pause, we do not find that they amount to procedural

unconscionability. Our supreme court has made clear that a premarital agreement
                                            7

is not unconscionable simply because one party is an attorney and the other party

is unrepresented.      See id. at 518 (stating that “legal representation is not a

condition of enforceability” under section 596.8). That JoAnn urged Troy to obtain

independent legal advice before signing the agreement weighs against an

unconscionability finding. Troy claims he was not afforded enough time to obtain

an independent review, which can support an unconscionability claim. See id.

(“Temporal considerations can in some instances support a finding of

unconscionability.”). Although Troy was afforded considerably less time than the

ten days that was found sufficient in Shanks, id., he had enough time to consult

his own attorney. Nothing in the record shows he made any attempt to do so after

his personal injury attorney declined to advise him.4 That failure will foreclose on

an unconscionability claim. See id. at 518 (“Equitable principles will not permit a

party to eschew an opportunity to consult counsel as to the legal effect of a

proposed contract, execute the contract, and then challenge the enforceability of

the agreement on the ground she did not have adequate legal advice.”); In re Est.

of Kloster, No. 20-1245, 2021 WL 3076546, at *2 (Iowa Ct. App. July, 21, 2021)

(denying claim of procedural unconscionability based on premarital agreement that

4   Troy’s testimony on this matter is limited:
                 Q. And when did you first lay eyes on a prenuptial agreement?
         A. JoAnn sent it to me for review on October 27th.
                 Q. And when you say she sent it to you for review, was that
         by way of handing to you or email? A. Email. She sent it to me in
         email October 27th.
                 ....
                 Q. Did you get any legal counsel concerning this prenup?
         A. Mark was a personal injury attorney I had at that time, because I
         had gotten hit by a car riding bicycle, and Mark informed me . . . he’s
         a personal injury attorney and not an expert in this.
         Q. So you didn’t get any legal advice concerning— A. No.
                                        8

was presented and signed one day before marriage when the party making the

claim failed to read the agreement or review it with independent legal counsel).

      In reaching our conclusion that the agreement was not procedurally

unconscionable, we also note that the premarital agreement was not a surprise as

Troy testified that JoAnn “mentioned prior to marriage that she would ask me to

sign a prenup” and he provided her with a list of his assets in the weeks leading

up to their trip for the purpose of drafting one.     See In re Est. of Rhoten,

No. 18-0573, 2019 WL 1056831, at *4 (Iowa Ct. App. Mar. 6, 2019) (finding no

procedural unconscionability because a party “had the opportunity to seek

independent counsel during the four and one-half days between when she

received the premarital agreement on Monday evening to when she got married

on Saturday” and the parties had discussed signing one so there was no surprise

when it was presented). Even if Troy did not understand the terms of the premarital

agreement, he understood the nature of the document and what it purported to do.

If he had concerns about the fairness of the agreement, he did not need to rely on

JoAnn’s statements about it. Despite the parties’ plan to marry on November 1,

Troy was under no obligation to follow through. See In re Marriage of Spiegel, 553

N.W.2d 309, 317 (Iowa 1996) (stating that presenting a premarital agreement just

before wedding to put pressure on the other party “may be criticized as unkind, but

cannot be deemed illegal”). There is less pressure in delaying an out-of-state

elopement than an elaborate wedding ceremony for family and friends. For these

reasons, Troy has failed to show the agreement was procedurally unconscionable.
                                           9

       B. Substantive unconscionability.

       We next turn to the question of substantive unconscionability.                “A

substantive unconscionability analysis focuses on the ‘harsh, oppressive, and one-

sided terms’ of a contract.” Shanks, 758 N.W.2d at 515 (citation omitted). Because

“premarital agreements are typically financially one-sided in order to protect the

assets of one prospective spouse,” our supreme court has cautioned us to “resist

the temptation to view disparity between the parties’ financial circumstances as

requiring a finding of substantive unconscionability.” Id. at 516. Instead, “the focus

of the substantive unconscionability analysis 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. (citation omitted).

       Troy argues the agreement was not mutual because the categorization of

the assets benefited JoAnn. For example, he notes that the real estate the parties

owned when they married was not treated the same. JoAnn’s real estate was

listed as B1 and is not divisible, while Troy’s real estate was listed as A2 and any

increase in equity during the marriage is divisible. But the premarital agreement

does not categorize assets so broadly. Instead, property is categorized by use.

Because JoAnn’s real estate consisted of commercial property, it was listed with

the parties’ commercial and professional property under categories A1 and B1. In

contrast, Troy owned his personal residence, which was listed along with the

parties’ personal financial accounts under categories A2 and B2. In this way, the

agreement was consistent in its categorization of the parties’ property.

       Troy also argues substantive unconscionability is shown because the

property division “is not consistent with the financial condition of the parties” at the
                                         10

time the parties signed the premarital agreement. He notes that the net worth of

his assets far exceeded JoAnn’s negative net worth at the time of marriage.5 He

complains that the value of JoAnn’s assets increased substantially because she

convinced him to use his financial resources and construction skill to improve her

real estate while he retains none of that benefit.

       The premarital agreement is clear that the property listed as A1 and B1

remains the property of the party bringing it into the marriage; the other party would

have no claim for reimbursement resulting from “efforts to preserve, increase,

maintain, improve, sell, trade or convey” the property. Troy undertook these efforts

despite signing the agreement. Although he now perceives a disparity, we judge

the validity of the agreement at the time it was executed rather than when

enforcement is sought. See Gonzalez, 561 N.W.2d at 96. The agreement was

not unconscionable when the parties signed it. Troy may regret his decision now,

but that regret does not make the agreement unconscionable. See Shanks, 758

N.W.2d at 515 (“It is not sufficient that a party made an imprudent bargain . . . .”);

see also id. at 516–17 (stating the concept of unconscionability “is not a means by

which a party may escape the requirements of an unfavorable contract after

experiencing buyer’s remorse”).

       C. Conclusion.

       The premarital agreement was not obtained by “sharp practices” like “the

use of fine print and convoluted language” or “a lack of understanding and an

5The debts JoAnn owed at the time of marriage exceeded the net value of her
combined assets largely because of the amount she owed in student loans, which
exceeded $50,000.
                                        11

inequality of bargaining power.”     Id. at 515 (citation omitted).   Nor was it

oppressively one-sided. Id. Troy has not met his burden of showing the agreement

is unconscionable.     We affirm the district court’s ruling finding it valid and

enforceable.

       IV. Property Division.

       Having found the premarital agreement enforceable, we turn to the parties’

claims that the property division is inequitable. We begin by noting the guiding

principles of property division:

       Iowa is an equitable division state. An equitable division does not
       necessarily mean an equal division of each asset. Rather, the issue
       is what is equitable under the circumstances. The partners in the
       marriage are entitled to a just and equitable share of the property
       accumulated through their joint efforts. Iowa courts do not require
       an equal division or percentage distribution. The determining factor
       is what is fair and equitable in each circumstance. The distribution
       of the property should be made in consideration of the criteria
       codified in Iowa Code section 598.21(5). While an equal division of
       assets accumulated during the marriage is frequently considered
       fair, it is not demanded.

In re Marriage of Hazen, 778 N.W.2d 55, 59 (Iowa Ct. App. 2009).

       A. Troy’s claims.

       Troy complains that he should receive a larger share of the property

distribution because he entered the marriage with a larger net worth. He states

that most caselaw involves a party with greater assets “foisting” a premarital

agreement on a party with a small or negative net worth while the facts before us

are “just the opposite.” His argument rehashes his unconscionability argument.

As stated above, we find no merit to his claim.

       The provisions of the premarital agreement extinguish most of Troy’s

arguments. For instance, Troy wants to receive compensation for contributions he
                                          12

made that increased the value of JoAnn’s premarital property and extinguished her

premarital debt. But the premarital agreement explicitly provides that he is not

entitled any credit for contribution to the increase in equity of property listed in B1

or to set off for payment of any debts listed in B3. By signing the premarital

agreement, Troy entered a contract by which he forfeited property he may

otherwise have been entitled to. See Gonzalez, 561 N.W.2d at 96 (stating that we

treat premarital agreements “in the same manner as ordinary contracts”).

       In the same vein, Troy also seeks to increase his share of the marital

property based on his greater financial contribution during the marriage and the

“sweat equity” he spent managing and maintaining the property acquired during

the marriage.      The supreme court has rejected similar arguments for

reimbursement:

              It is important to remember marriage does not come with a
       ledger. 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 over the other contributions made to a
       marriage in determining an equitable distribution.”

In re Marriage of Fennelly, 737 N.W.2d 97, 103–04 (Iowa 2007) (internal citation

omitted).

       Troy complains that the district court failed to set aside the $251,830 net

equity value of the assets listed in A1 and A2, which he argues he is entitled to

under the premarital agreement. But the district court did not include any of the

assets listed as A1 in the property division, so there is no need to set off the equity

value of those assets.      For the property listed as A2 or B2, the premarital

agreement states that the net value of the property at the time of marriage should
                                         13

be set off from the property distribution even if “the property is sold, transferred,

traded or conveyed, and a new form of property is obtained” during the marriage.

It appears the district court set off these amounts from most of the property listed

in A2 and B2. But we do not find a setoff for the $43,796 in net equity for the

residence that Troy brought into the marriage.6 That property was sold, and the

proceeds were used first to buy ten acres of land and later the residence that

became the marital home. The marital home was awarded to Troy, but he did not

receive a credit for the $43,796 he brought into the marriage and later used to buy

it. We modify the decree to set off $43,796 from the marital property, reducing the

total value of Troy’s share of the marital property by that amount.

       Finally, Troy complains that the court failed to include some property in the

property distribution:

                                          Value
       2013 Chevrolet pickup truck        $27,000
       Ex Mark Turning Mower              $7199
       Finish Line 5th Wheel Trailer      $8900
       Bobcat Skid Steer                  $31,565
       2018 Tesla Model 3                 $48,000
       Miscellaneous items                $12,104

These items are owned by the limited liability corporations that own JoAnn’s

commercial real estate. Because the real estate is classified as separate property

in the premarital agreement, the district court agreed the corporations and the

property they own belong to JoAnn and did not include it in the marital distribution.7

6 The proceeds from the sale of that home were later used in purchasing the marital
home, which the court awarded to Troy.
7 The court made an error in the original decree by mistaking JoAnn’s transfer of a

different property as a transfer of an undivided one-half interest in the rental real
estate to Troy. As a result, the court at first considered the rental real estate as
                                          14

       We agree that this property is not marital property subject to division. JoAnn

testified that she purchased the disputed items with rental income and profits from

the real estate she brought into the marriage. The premarital agreement states

that premarital property, including “all interest, rents and profits” derived from it,

remains in the sole ownership of the party who brought it into the marriage. It also

states that any new form of property obtained from the premarital property

maintains the same status as if it were originally listed as premarital property in the

parties’ agreement.

       B. JoAnn’s claims.

       JoAnn contends the court made two errors in determining the net value of

the marital assets awarded to each party. Both errors concern the valuation of Big

Bart, the business Troy started in 2019. JoAnn seeks an equalization payment to

balance the inequities she believes result from these errors.

       JoAnn’s first argument concerns a $141,000 loan for Big Bart. The parties

used the apartment complex they bought during the marriage to secure that loan.

At the time of dissolution, they owed $95,525 on the loan. The court awarded

JoAnn the apartment complex, which it assigned a net value of $297,656. 8 JoAnn

argues the court failed to include the $95,525 debt in that valuation.

marital property but later amended the decree to remove the rental real estate from
the property distribution.
8 The fair market value of the apartment complex was $425,000. The property was

encumbered by a $120,937 mortgage for an equity value of $304,063. From this
amount, the court added $664 of personal property associated with the complex.
It then subtracted the accrued property tax and income tax preparation costs of
$7071 to arrive at the net value of $297,656. Subtracting the $95,525 debt secured
by the property results in a net value of $202,131.
                                          15

       In amending the decree, the court acknowledge that it erroneously deducted

the outstanding loan from the valuation of Big Bart equipment, which it awarded

Troy. The court stated it intended to allocate the debt to JoAnn because she was

awarded the apartment complex that secured the loan. The court adjusted the

value of Big Bart by adding back the $95,525 it erroneously deducted in the original

decree, but it failed to reflect that debt in JoAnn’s property distribution by deducting

that amount from her net assets. We modify the decree to deduct $95,525 from

the total value of JoAnn’s share of the marital property.

       JoAnn’s second argument concerns a deduction from the value of Big Bart

equipment that the district court added when it amended the decree. As stated

above, the court amended the decree to eliminate a $95,528 loan secured by the

apartment complex. But the court subtracted $148,403 of debt9 from the $147,667

value of its tractors and trailers, resulting in a negative net value of $738. JoAnn

argues that $98,824 of this debt should not be deducted because it was credit card

debt that Troy incurred during the dissolution proceedings. Under paragraph eight

of the premarital agreement, “any credit cards incurred by either party during a

separation shall be the responsibility of the party incurring the debt.” JoAnn agrees

the court correctly assigned the debt to Troy but argues it is not marital and should

not be included to lower the total value of property Troy received in the property

distribution. We agree and modify the decree to increase the total value of Troy’s

share of the marital property by $98,824.

9 In his rule 1.904 motion, Troy characterized this debt as “liens” against the
equipment.
                                         16

       C. Conclusion.

       We affirm the dissolution decree but modify the amended decree to correct

the valuation errors set out above. After modifying those values, Troy’s share of

the marital property is $1,103,593.50 and JoAnn’s share of the marital property is

$891,161.50. The value of the marital property awarded to Troy is $212,432 more

than the value of the property awarded to JoAnn. JoAnn asks that we balance the

inequity by ordering Troy make an equalization payment equal to one-half the

difference in the value of the distributed property, which is $106,216. But as stated,

we are required to make an equitable distribution of property, not an equal one. In

doing so, we may consider the property each party brought into the marriage and

economic circumstances of the parties. See Iowa Code § 598.21(5)(a), (i). Under

the modified values of the property division, Troy receives around 55% of the

marital property while JoAnn receives about 45%.10 But because JoAnn’s overall

assets are significantly greater than Troy’s, we find the division of marital property

is equitable and decline to order any equalization payment.

       AFFIRMED AS MODIFIED.

10The total value of the marital property awarded to each party does not include
Troy’s pension, which the district court distributed under the percentage method
set out in In re Marriage of Benson, 545 N.W.2d 252, 255 (Iowa 1996) (describing
the formula for determining what percentage of the payable benefit a spouse will
receive when a pension matures rather than a present-value method). Factoring
in JoAnn’s share of Troy’s pension would decrease the difference in the
percentage of marital property awarded to each party.