Court Opinion

ID: 4638129
Source: CourtListenerOpinion
Date Created: 2020-11-30 17:04:45.374055+00
Date Added: 2024-06-11T07:58:45.700284
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                   No. 19-0422
                            Filed November 30, 2020

IN RE THE MARRIAGE OF HEATHER NICOLE BINGAMAN
AND ARNOLD JASON BINGAMAN

Upon the Petition of
HEATHER NICOLE BINGAMAN,
      Petitioner-Appellee,

And Concerning
ARNOLD JASON BINGAMAN,
     Respondent-Appellant.
________________________________________________________________

       Appeal from the Iowa District Court for Dallas County, Michael Jacobsen,

Judge.

       Arnold Bingaman appeals the decree dissolving his marriage to Heather

Bingaman. AFFIRMED.

       Anjela A. Shutts and Tyler L. Coe of Whitfield & Eddy, P.L.C., Des Moines,

for appellant.

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

Des Moines, for appellee.

       Considered by Vaitheswaran, P.J., and Mullins and Ahlers, JJ.
                                           2

MULLINS, Judge.

       Arnold Bingaman appeals certain provisions of the decree dissolving his

marriage to Heather Bingaman. Arnold argues the incomes of both parties were

miscalculated for child- and spousal-support purposes, the district court

miscalculated the value of allegedly dissipated assets, and he should not have

been required to pay past-due taxes. Heather requests an award of appellate

attorney fees.

I.     Background Facts and Proceedings

       Arnold and Heather Bingaman were married in November 2000.                  The

couple shares four children. Arnold owns and operates his own business. Heather

worked outside the home prior to March 2008, but has not been employed outside

the home since that time. Heather filed for dissolution in September 2017. The

district court adopted a stipulation between the parties regarding custody of the

children. The district court imputed the parties’ incomes as $36,000.00 for Heather

and $200,000.00 for Arnold “for the purposes of child support.”            Arnold was

awarded the parties’ marital home, lake property, and rental property. Heather

was awarded the family farm.

       After the district court’s decree was filed, Arnold filed a motion to reconsider,

enlarge or amend pursuant to Iowa Rule of Civil Procedure 1.904(2). The court

reaffirmed its findings on the imputed income of each party but reduced Arnold’s

income and increased Heather’s income by the amount of spousal support and

modified the child-support award. The district court also reaffirmed its finding that

Arnold was in contempt for failing to maintain assets, accounts belonging to the

children.
                                           3

       Both parties filed applications for rules to show cause following the district

court’s ruling on Arnold’s 1.904(2) motion. Among other things, the district court

was presented with evidence that Arnold failed to pay property taxes on the farm

beginning in 2015. Heather was forced to pay the back taxes and penalties to

redeem the property following entry of the dissolution decree. After a hearing on

the applications, the district court issued the following ruling.

       Arnold, being in default of the Court’s Order to Preserve Assets, shall
       pay to Heather one-half of the delinquent taxes and penalties
       Heather paid to redeem the farm. The delinquent taxes and
       penalties totaled $17,939.00. Therefore, Arnold shall pay Heather
       $8969.50 within sixty (60) days to satisfy his portion of the delinquent
       property taxes and penalties.

Arnold appeals and Heather requests appellate attorney fees.

II.    Standard of Review

       Dissolution proceedings are equitable in nature and are reviewed de novo.

In re Marriage of Mauer, 874 N.W.2d 103, 106 (Iowa 2016). “Although we give

weight to the factual findings of the district court, we are not bound by them. But

we will disturb a district court determination only when there has been a failure to

do equity.” Id. We give particular weight to a district court’s determinations on

witness credibility. In re Marriage of Fox, 559 N.W.2d 26, 28 (Iowa 1997).

III.   Discussion

       A.     Income Calculations and Support

       Arnold argues the district court miscalculated the incomes of both parties in

awarding spousal and child support. He argues the spousal-support award failed

to account for the income Heather would receive from the farm, the district court
                                        4

ignored expert testimony regarding Heather’s earning capacity, and the court

miscalculated Arnold’s income.

      Iowa courts may award spousal support in dissolution proceedings after

considering several factors. Iowa Code § 598.21A(1) (2017). Included among

those factors is “the earning capacity of the party seeking maintenance.”       Id.

§ 598.21A(1)(e). Our supreme court is mindful of situations in which one spouse

has been a homemaker because “the economic consequences of absence from

the workplace can be substantial.” In re Marriage of Gust, 858 N.W.2d 402, 410

(Iowa 2015). “In determining need, we focus on the earning capability of the

spouses, not necessarily on actual income.” Id. at 411. “In order to establish

earning capability for persons without work experience or who are arguably

unemployed, the parties may use vocational and other experts to assist the court

in making a determination.” Id.

      Child support is calculated using the guidelines adopted by statute for the

purpose of providing for the best interests of the children. Iowa Code § 598.21B;

Iowa Ct. R. 9.3(1). There is a rebuttable presumption that application of the

guidelines produces the correct amount of child support. Iowa Ct. R. 9.4. The first

step in applying the guidelines is to determine the gross monthly income of each

parent. Iowa Ct. R. 9.14(1). “‘Gross monthly income’ means reasonably expected

income from all sources.” Iowa Ct. R. 9.5(1).

      The district court imputed $36,000.00 for Heather and calculated Arnold’s

income was $200,000.00 “for the purposes of child support.”

      Spousal Support. Heather was awarded the Farm Property and the
      income associated with the farm. The [Conservative Reserve
      program (CRP)] and Rent Payments are not due until October, 2019.
                                        5

      The farm income from the CRP and Rent Payments are part of the
      property division and are not spousal support. Heather will be
      entering the workforce after a 10 year absence as a homemaker.
      Heather shall be awarded spousal support for a period of time to
      assist her in reentering the workforce and building up her experience
      and income to support herself. Arnold shall pay Heather $3,000.00
      per month beginning January 1, 2019 through October 1, 2019.
      Beginning November 1, 2019 Arnold shall pay Heather $1,000.00
      per month through October 1, 2021 at which time the spousal support
      payments shall terminate.

The court did not modify the spousal-support award following post-trial motions.

      Child support was modified following post-trial motions. The decree filed in

January 2019 failed to account for the spousal-support award and farm income

that Heather would receive.    Following Arnold’s motion to enlarge, the court

adjusted the incomes of both parties to reflect the spousal-support and property-

division awards:

              a.   Child Support should be calculated using Arnold’s
      Income of $65,000.00 in self-employment income (the three year
      average) and $135,000.00 taxable income (interest, dividends, rent,
      farm income, and the expenses paid by his business) not subject to
      self-employment taxes. Heather’s income is $36,000.00. Arnold’s
      income should be reduced by $36,000.00 annually to reflect spousal
      support paid to Heather. Heather’s income is increased by
      $36,000.00 annually to reflect the receipt of child support.
              b.   Beginning October 1, 2019. Arnold’s income is
      $65,000.00 in self-employment income and $90,529.00 in taxable
      income not subject to self-employment tax. Heather’s income is
      $36,000.00 in employment income and $44,471.00 in taxable
      income (CRP payments, Rent Payment less real estate taxes and
      expected allowable expenses as reflected on the 2017 tax return).
      Arnold’s income would need to be reduced $12,000.00 per year to
      reflect spousal support paid, and Heather’s income would increase
      $12,000.00 per year to reflect spousal support received.

Arnold was ordered to pay child support at the monthly rate of $622.56 for four

children beginning January 1, 2019. That rate reduced to $348.00 on October 1,
                                          6

2019. The monthly rate will reduce further as children reach adulthood as follows:

$311.51 for three children, $270.26 for two children, and $190.90 for one child.

       In Heather’s last year of employment in the insurance industry, she earned

$46,357.00. Expert testimony regarding Heather’s earning capacity ranged from

$36,000.00 to $60,000.00 annually based on employment in that industry. In order

to earn a higher income, she would need to obtain an insurance license. Heather

testified she also considered becoming a substitute teacher or classroom worker

to accommodate the children’s schedules and avoid childcare costs. The district

court noted “Heather’s education level and prior experience in the insurance field

would allow her to obtain employment with a higher income than working as a

substitute teacher or paraprofessional. Many parents work fulltime and parent

school age children.”

       Although she may have an earning capacity reaching $60,000.00

eventually, no evidence was presented that she would be able to reach that income

level immediately upon entering the workforce. Furthermore, the language used

in the court’s award shows the court considered the farm income, Heather’s

expected reentry into the workforce, and expert testimony. The spousal-support

award is limited in duration and reduces over time, as Heather’s income from

traditional employment is expected to increase. On our de novo review, we agree

with the district court’s calculation of Heather’s income.
                                         7

      The district court specified its calculation of Arnold’s income in the order on

the motion to enlarge. The district court averaged Arnold’s business income in

2015; and business, farm, and investment income in 2016 and 2017.1

       $186,585.00
       $214,409.87
      +$230,319.03
       $631,313.90 / 3 years = $210,437.97.

Arnold’s average income was then reduced based on his testimony that his “2018

income would be less than previous years.” The court reduced the average by

$10,437.97, ultimately finding his income was $200,000.00. The record shows that

Arnold received a traditional income from his company and more than $6000.00

per month for payment of expenses including insurance, gas, cell phone service,

and other costs. Arnold’s expert testified that by October 31, 2018, his income

was $130,000.00 inclusive of all funds available to him through the business. Even

though Heather would receive an equitable share of the parties’ financial

resources, we have no evidence that dividend payments from the Edward Jones

investments would stop altogether. Arnold will also receive rental income from a

property rented by his brother.

      On our review of the record, we agree with the district court that Arnold’s

income was $200,000.00 per year for the purposes of spousal and child support

through September 2019. We further find that in its ruling on the motion to amend,

the court properly calculated support starting October 1, 2019, after expressly

excluding farm income from Arnold and including farm income to Heather. We

1The records of Arnold’s income were highly contested throughout proceedings.
The calculation of his income in 2015 is limited to the business income because
Arnold’s 2015 tax return was not provided to the court.
                                        8

further find the court’s ruling concerning spousal support is equitable and

supported by the evidence of Heather’s transition back into the workforce.

      B.      Asset Dissipation

      Arnold argues the district court double counted certain assets in determining

the amount awarded to Heather in the division of assets and liabilities. Heather

argues the dissipation calculation and remedy are correct.

      Dissipation of assets may be considered for an equitable distribution of

property upon dissolution. In re Marriage of Fennelly, 737 N.W.2d 97, 104 (Iowa

2007). Courts employ a two-part test to determine whether assets have been

dissipated, “(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.” Id. (quoting 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)). In the first part, a court must ask “whether the

spending spouse can show how the funds were spent or the property disposed of

by testifying or producing receipts or similar evidence.” Id. For the second part,

courts consider 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 benefitted 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. (citations omitted). “Courts may also consider ‘[w]hether the dissipating party

intended to hide, deplete, or divert the marital asset.’” Id. (quoting Kondamuri v.

Kondamuri, 825 N.E.2d 939, 952 (Ind. Ct. App. 2006)). Debt acquired by one party
                                          9

over several years may be classified in part as waste, and in other part legitimate

expenses. Id. at 105–06. Debt classified as waste is set aside as debt for the

spending party and is not considered in the distribution of property. Id. at 106.

       The relevant assets are financial. The district court found as follows:

       20. Arnold dissipated assets in violation of the court’s order.
       Specifically dissipating the following assets totaling, $294,200.10:
              a. Charge reversals Scheels Credit Card $40,995.
              b. UTMA Accounts $3,462.00 × 3 = 10,386.00.
              c. CRP Payments in the amount of $47,291.00.
              d. Cash Rent Payments in the amount of $5,035.00.
              e. Wells Fargo Checking $62,000.00.
              f. Two checks from safe $34,141.10.[2]
              g. Edward Jones [ ] $94,352.00.

       Arnold initially argues the Scheels credit card debt in the name of his

business was counted twice—once as debt set aside to Heather and again as a

dissipated asset awarded to Arnold. Arnold argues this is in violation of the rule

set out in Fennelly. See id. At first glance, the debt does appear twice in the

property division. However, the facts of this case are distinguishable. In Fennelly,

the debt was acquired by the husband and was partially waste and partially

legitimate, and the part that was waste was awarded to the husband. Id. at 105–

06. Here, Heather incurred $40,995.00 of marital debt using the Scheels card and

paid it using marital funds, a practice that had been a pattern during the last several

years of the marriage. Arnold, unhappy with her charges, convinced the credit

card company the charges on the business credit card were fraudulent and

convinced it to reverse all payments as allegedly fraudulent.          She was then

2 Arnold did not raise an argument regarding the two checks from the safe in his
brief; he merely deemed the district court’s finding erroneous. Without further
development and reference to supporting legal authority, we deem argument on
the asset waived. See Iowa R. App. P. 6.903(2)(g)(3).
                                         10

required to pay that debt herself, while Arnold’s business account was refunded

the entire amount. In fact, Arnold testified it covered costs of personal expenses

and softball equipment. The district court ordered Heather to pay the credit card

debt, and found the amount the credit card company had refunded to Arnold had

been dissipated by him. The district court did not count this debt twice, as argued

by Arnold. Instead, it made an equitable distribution by ordering that the dissipated

credit card refund was awarded to Arnold, while Heather was assigned the debt.

       Arnold argues the UMTA funds were not dissipated because they were used

to pay for a family vacation, which was a customary pre-dissolution activity for the

family. He argues the history of family vacations should have led the district court

to find the UMTA funds were not dissipated. See In re Marriage of Kimbro, 826

N.W.2d 696, 702–03 (Iowa 2013). Arnold produced records that the accounts

were closed and testified he used the funds to pay for a spring break vacation in

the spring of 2018 but did not provide any documentation to corroborate his

testimony. The district court ordered the parties to maintain the funds in the UMTA

accounts on September 8, 2017. Arnold then closed the accounts on October 31,

2017, alleging he needed the funds to pay for a new furnace for the home. He

then used the funds for the 2018 spring break vacation and had not reopened and

reimbursed the accounts by the time of trial. In the absence of any receipts or

bank records, Arnold’s inconsistent statements over time about how the funds

were spent and his intent, or lack thereof, to reimburse the accounts raise

questions about the credibility of his testimony on this issue. Arnold has not met

his burden to demonstrate how the funds were spent. See Fennelly, 737 N.W.2d

at 104. Even if the vacation was a customary practice for the family and necessary
                                         11

for the mental health and wellbeing of the children, Arnold violated the court order

when he used the UMTA funds following the district court’s order for maintenance.

       Arnold also argues the CRP payments and cash rent were counted twice in

error. Arnold testified the CRP payments were deposited in part into a farm

account and would be used to pay taxes on the farm. He testified that remaining

CRP funds were used to pay other farm expenses. But, in his brief on appeal,

Arnold argues the payments and rent were put into an account at the University of

Iowa Credit Union and are fully accounted for. However, following the dissolution,

Heather learned that property taxes had not been paid on the farm since 2015 and

was forced to pay $17,939.00 to redeem the property. Arnold properly argues that

funds must be accounted for to satisfy the evidentiary prong of the dissipation test.

See id. In this case, the record contains evidence that the majority of the CRP

funds were deposited into University of Iowa Credit Union Account. The account

records end with entries on November 30, 2018, and do not show how the funds

were spent. Furthermore, even though Arnold testified the CRP funds would be

used to pay property taxes on the farm, they obviously were not. Moreover, the

record shows Arnold deposited only $32,000.00 out of $47,291.00 in CRP

payments and $5035.00 in cash rent. Because there is no record of the remaining

funds, Arnold has not carried his burden to show his expenditures and satisfy the

evidentiary prong. See id.

       Arnold argues the district court improperly found he dissipated $62,000.00

from Wells Fargo accounts, insisting $47,000.00 of that sum was actually cash in

the safe that the district found was not dissipated and the remaining $15,000.00

was used to construct a building for his business. Arnold testified he withdrew a
                                       12

total of $62,000.00 from his Wells Fargo checking account in August 2017. He

testified both that he had no record of where the money went and that $30,000.00

was used to purchase a cashier’s check that was eventually cashed by Arnold. On

cross-examination, Arnold indicated a photo of his personal safe was the only

documentation that he was able to produce regarding the portion that was cashed

and placed in his safe.    There is nothing in the record, other than Arnold’s

testimony, to prove how the $62,000.00 was spent.         Arnold’s testimony was

inconsistent and did not account for the entire sum withdrawn in August 2017.

Arnold has not met his burden to satisfy the evidentiary prong. See id.

      Arnold argues the district court also erroneously found more than

$94,000.00 transferred from his Edward Jones account to his business account at

Wells Fargo was dissipated. When asked about funds transferred from the Edward

Jones account on August 24 and September 1, 2017, Arnold testified he needed

the funds for business purposes.

      Because Heather was frauding money from my business account
      into her personal Scheels account that I had nothing to do with. . . .
             But I needed money to pa[y] for materials and contractors and
      run a business, and I moved all . . . of the money out of there and
      close the Edward Jones account down and operate there.

Assuming the transfer of funds from Edward Jones accounts to the Wells Fargo

business accounts was a customary practice for the couple, Arnold still needs to

show how the money from Edward Jones was spent on “legitimate household and

business expenses.” See id. at 106. The record shows the funds were transferred

into an account at Wells Fargo. However, there is no complete record of how the

funds were spent. Arnold’s argument the record shows the funds were “transferred

into the Wells Fargo business account to be used for legitimate business
                                          13

expenses” misses the mark. Furthermore, Arnold places the burden of showing

how the funds were spent on Heather. In fact, after Heather identified the assets

allegedly dissipated, the burden shifted to Arnold to meet the two-prong test

pronounced in Fennelly. See Kimbro, 826 N.W.2d at 701. Arnold has failed to

meet his burden. See Fennelly, 737 N.W.2d at 104.

       C.     Past-Due Taxes

       Pursuant to the dissolution decree, Heather was awarded the Union County

farm “free and clear of any claim of Arnold.” She became solely responsible for

taxes but quickly discovered the property taxes had not been paid since 2015. The

property was sold at a tax sale in June 2017. Heather redeemed the property in

March 2019 for $20,748.00, including $17,939.00 in back taxes. In July 2019, the

district court held a hearing on applications for rule to show cause from both

parties. In its order following the hearing, the district court found both parties were

responsible for and aware of the duty to pay property taxes. The parties had a

practice of Arnold telling Heather when to write the check from the farm checking

account. “Arnold and/or Heather failed to notify the Union County Treasurer of a

current address which led to notices of delinquency not being received by them.

The Union County Farm was a hotly contested asset during the dissolution of

marriage action and each party desired to be awarded the farm.” Although there

was no contempt finding, Arnold was found in default of the order to preserve

assets filed in September 2017. He was ordered to pay Heather $8969.50, half

the delinquent taxes and penalties. Arnold appeals, arguing the order to preserve

assets was not extant during the time the taxes were delinquent and penalties

accrued.
                                           14

       “Our standard of review in contempt actions appears somewhat unique. If

there has been a finding of contempt, we review the evidence to assure ourselves

that the district court’s findings are supported by substantial evidence. The district

court’s legal conclusions are reviewed for errors of law.” In re Marriage of Swan,

526 N.W.2d 320, 326–27 (Iowa 1995). “A different standard of review exists on

appeals from the trial court’s refusal to hold a party in contempt under a statute

that allows the trial court some discretion.” Id. at 327. “The trial court here had

broad discretion and ‘unless this discretion is grossly abused, the [trial court’s]

decision must stand.” Id.

       Iowa Code section 598.23(1) gives a district court discretion to determine

whether a party is in contempt and impose a remedy. “If a person against whom

a temporary order or final decree has been entered willfully disobeys the order or

decree, the person may be cited and punished by the court for contempt . . . .”

Iowa Code § 598.23(1). Thus, we will review the facts of this case to determine

whether the district court grossly abused its discretion. Swan, 320 N.W.2d at 327.

“It is possible for a party to be in default of an obligation without being in contempt”

if that party is in default of a court-ordered obligation. Farrell v. Iowa Dist. Ct., 747

N.W.2d 789, 791–92 (Iowa Ct. App. 2008). The statutory language requires that

an alleged contemnor must disobey “a temporary order or final decree” for

punishment to be imposed pursuant to section 598.23. Iowa Code § 598.23(1).

       The order to preserve assets filed in September 2017 specifically barred

both parties from “selling, giving away, encumbering, destroying, removing from

the family home, or in any other manner disposing of any personal or real property”

without prior permission of the district court. Failing to pay property taxes, and
                                         15

thus subjecting the farm to tax sale, falls within the realm of the order to preserve

assets. The property was held jointly and titled in both parties’ names. Thus, even

though the order to preserve assets was not filed until 2017, we find no gross

abuse of discretion in the district court’s findings that both parties were aware of

their responsibility to pay the property taxes and that both parties were responsible

for doing so. See Swan, 526 N.W.2d at 327. We find no gross abuse of discretion

in the district court’s order for Arnold to pay $8969.50, half the delinquent taxes to

redeem the property, to Heather.

       D.     Attorney Fees

       Heather requests an award of appellate attorney fees.

       Appellate attorney fees are not a matter of right, but rest in [the
       appellate] court’s discretion. Factors to be considered in determining
       whether to award attorney fees include: “the needs of the party
       seeking the award, the ability of the other party to pay, and the
       relative merits of the appeal.”

In re Marriage of Okland, 699 N.W.2d 260, 270 (Iowa 2005) (quoting In re Marriage

of Geil, 509 N.W.2d 738, 743 (Iowa 1993)). Heather’s appellate counsel submitted

an affidavit requesting $21,800.00 in appellate fees.           Heather has been

unemployed for several years and was successful on appeal. At this time, Heather

receives spousal and child support and income from the Union County farm.

Accordingly, we award Heather $15,000.00 in attorney fees.

IV.    Conclusion

       We affirm the district court’s spousal- and child- support awards, finding the

district court correctly calculated the parties’ incomes. We also affirm the district

court’s calculation of assets Arnold dissipated and the default and remedy
                                    16

regarding the Union County farm tax payments. We award Heather $15,000.00 in

appellate attorney fees.

      AFFIRMED.