Court Opinion

ID: 4203106
Source: CourtListenerOpinion
Date Created: 2017-09-13 16:10:59.179006+00
Date Added: 2024-06-11T14:40:56.687930
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                      No. 16-2120
                               Filed September 13, 2017

IN RE THE MARRIAGE OF ANGELA MAY THOMAS
AND STEVEN RAY THOMAS

Upon the Petition of
ANGELA MAY THOMAS,
      Petitioner-Appellee,

And Concerning
STEVEN RAY THOMAS,
     Respondent-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Jasper County, Randy V. Hefner,

Judge.

      The husband appeals from the economic provisions of the parties’

dissolution decree. AFFIRMED.

      Barry S. Kaplan and C. Aron Vaughn of Kaplan & Frese, L.L.P.,

Marshalltown, for appellant.

      Lucas W. Otto of Otto Law Office, P.L.L.C., Newton, for appellee.

      Considered by Danilson, C.J., and Potterfield and Bower, JJ.
                                          2

POTTERFIELD, Judge.

       Steven Thomas appeals from the economic provisions of the decree

dissolving his marriage to Angela Thomas. In response, Angela asks us to affirm

the district court’s decree and award her $2500 in appellate attorney fees.

I. Background Facts and Proceedings.

       Angela and Steven were married in May 2009, when they were

approximately thirty-five and forty-four years old, respectively.

       Steven has a high school degree and “some college.”              He has been

unemployed at times during his adult life, but he has been employed generally in

the construction industry. At the time the parties were married, Steven had been

recently injured at a construction job; he was receiving $1400 each month in

worker’s compensation benefits as well as some unemployment benefits. After

the parties married, Steven underwent surgery for his back injury; he has not

returned to work since. He testified he remains in “considerable” pain and is able

to work “only intermittently.” In 2011, Steven received a lump sum settlement of

$200,000 that was placed in the parties’ joint account.          By the time of the

dissolution   hearing—September       2016—the      settlement      funds   had   been

exhausted. Steven testified he has no income and no way to support himself; he

intended to apply for Social Security Disability but was advised to wait until after

the dissolution proceedings were completed.

       Angela works approximately twenty hours per week stocking shelves at a

local grocery store and earns approximately $12,000 annually. Angela is in good

health; however, she has a sixteen-year-old son (from a previous relationship)

with severe physical and intellectual disabilities who requires around-the-clock
                                        3

care. Angela was receiving approximately $745 per month in Social Security

benefits on behalf of her son until sometime in 2014 or 2015, when Social

Security informed Angela it was seeking approximately $25,000 from her for

overpayment of benefits. While there is a dispute over whether Angela reported

Steven’s lump sum settlement to Social Security when he received it in 2011, it is

undisputed the debt was caused by the receipt of the settlement funds. Once the

debt is paid, Angela will begin receiving monthly benefits again, but she receives

nothing while the outstanding debt remains. She testified she currently has no

way to pay the debt.

      Before the parties knew each other, Angela’s parents bought the home

next door to their own. They intended for Angela and her son to live there so

they could help her when she needed them. The parents put $3000 down and

financed $27,000 in the form of a mortgage. Angela was responsible for making

the monthly mortgage payments. Additionally, before Angela moved in, Angela’s

parents spent approximately $15,000 on updates and repairs, including putting in

a new furnace, replacing all of the windows, and fixing a water line. The home

has been made accessible for Angela’s son by adding a ramp and installing a

shower into which his wheelchair can be rolled directly.

      With part of the $200,000 settlement, Steven and Angela paid off the

remaining mortgage on the home—approximately $21,500—and paid Angela’s

parents $5000. Steven estimated the parties spent another $50,000 in additional

repairs and renovations to the home, including redoing the kitchen and a

bathroom and adding insulation. In his pretrial report, Steven claimed he had
                                             4

completed $50,000 worth of labor on the home. Nevertheless, at the time of trial,

the home was worth $66,000.1

       Additionally, the parties bought a second property, which they intended to

“flip.” They spent $16,500 purchasing the home in a foreclosure action and at

the time of trial, the home was worth $34,000. Steven testified the home could

not be sold without further work completed because in its current state, it did not

qualify for a mortgage. Steven did not testify as to the amount of money spent

on repairing the home,2 but he claimed in his pretrial report that he had “put in

hundreds of hours of sweat equity on [the] property.” He believed the home

needed $47,000 more in repairs and then it could be sold for approximately

$130,000. Steven was living in the home at the time of the trial.

       At trial, Steven asked the court to find the $25,000 debt owed to Social

Security was not marital and order Angela to pay it. He also claimed he had

$20,000 of tools that he had brought into the marriage that he believed should be

returned to him without considering them to be marital property.               Finally, he

maintained the two homes should be sold, with money from the sale of the

marital home being put toward further repairs in the second property. He testified

that once the second property was sold and any proceeds were realized, he

1
  An appraisal completed on the home showed it had a value of $66,000, and the district
court accepted this value. Steven testified with $4,000 more work completed, the
property had a “maximum value they didn’t figure would be more than 120[,000 dollars],
but 110[,000 dollars] was not unrealistic.” He also testified his adult daughter was willing
to buy the home for $66,000.
2
  When asked, Steven testified at trial that he estimated “somewhere around 120,
130,000” dollars was used “towards the purchase and/or development of these two real
estate properties.” He did not have any supporting documentation, and it was unclear if
he included any of his own labor in the estimate.
                                          5

believed it was “not unreasonable” for him to be awarded 60% with Angela

awarded 40%.

        Angela asked the court to award her the marital home and award Steven

the other property. She also stated she would accept the Social Security debt,

but she asked the court to consider it as marital when dividing their assets.

        The court dissolved the parties’ marriage by decree on November 21,

2016.    The court found the Social Security debt was marital, noting “the

overpayment went into the family coffers and was spent for family purposes.”

Angela was awarded the marital home, the wheel-chair accessible van, and a

1984 pickup her father had originally owned. Steven was awarded the other

property, a 1994 Honda Accord, as well as multiple four wheelers, and a ski boat.

Steven admitted to selling one of the parties’ other vehicles for $6000 during the

pendency of the divorce; he kept those proceeds.          Additionally, Steven was

awarded “his tools, building materials, air compressor, engine, and white

cupboard presently in Angela’s possession.”

        Steven appeals.

II. Standard of Review.

        “In this equity action involving the dissolution of a marriage, our review is

de novo.”    In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013).

“Accordingly, we examine the entire record and adjudicate anew the issue of the

property distribution.”   Id.   We give weight to the district court’s credibility

determinations, but we are not bound by the court’s findings. Id. “Although our

review of the trial court’s award is de novo, we accord the trial court considerable

latitude is making this determination and will disturb the ruling only when there
                                          6

has been a failure to do equity.” In re Marriage of Romanelli, 570 N.W.2d 761,

763 (Iowa 1997).

III. Discussion.

       A. Division of Marital Property.

       Here, although the district court did not place specific values on all of the

parties’ property, it appears each party was awarded approximately the same net

value of marital assets and debts. Steven claims this was in error. First, he

maintains we should not consider the $25,000 Social Security debt as marital.

Additionally, he maintains an equal split is not equitable in this case because of

his poor health, lack of earning capacity, and the amount he contributed to the

parties’ assets through the use of the settlement funds and his labor.

       First, we consider whether the Social Security debt should be considered

marital.   Steven suggests we consider Edmonds v. Edmonds, No. A-13-051,

2013 WL 5976336, at *3–4 (Neb. Ct. App. Nov. 12, 2013), in reaching our

decision. In Edmonds, the court determined the Social Security debt was marital

because the overpayment had been received by the family while the parties were

still married and “both [husband] and [wife] benefitted from this overpayment as it

was included in their marital income before their separation.” 2013 WL 5976336,

at *4. We reach the same conclusion here. It is undisputed the overpayment

was received by Angela while the parties were still married—after Steven

received the settlement in 2011 until Social Security realized the mistake

sometime in 2014 or 2015. Even crediting Steven’s claim that the Social Security

benefits were placed in an account to which he did not have access, there has

been no indication those funds were used for anything other than family
                                           7

expenses. See In re Marriage of Fennelly, 737 N.W.2d 97, 105–06 (Iowa 2007)

(determining debt that was incurred for the benefit of the family was marital in

nature and should not be considered waste).            As the district court did, we

determine the debt should be included in the division of marital assets and debts.

       Now, we consider whether the court’s division was equitable. In doing so,

we consider the factors enumerated in Iowa Code section 598.21(5) (2015). We

also “remember marriage does not come with a ledger.”              Id. at 103.   “Each

person’s total contributions to the marriage cannot be reduced to a dollar

amount[, and] ‘[f]inancial matters . . . must not be emphasized over the other

contributions made to a marriage in determining an equitable contribution.’” Id. at

104 (quoting In re Marriage of Miller, 553 N.W.2d 460, 464 (Iowa Ct. App. 1996)).

Additionally, while Steven focuses on the money spent from “his” worker’s

compensation settlement and maintains he should be allowed to “recoup” as

much as possible of what has been spent, “once received and retained during

the marriage, the [workers’ compensation] proceeds become property of the

marriage.” In re Marriage of Schriner, 695 N.W.2d 493, 498 (Iowa 2005). In

other words, “the benefits become part of the divisible estate when received and

retained during the marriage, just as other income becomes property when

received and retained during the marriage.” Id. “Settlement proceeds thus do

not automatically belong to either party.” In re Marriage of McNerny, 417 N.W.2d

205, 206 (Iowa 1987).

       Although the marriage was of a short duration and does not necessarily

require an equal division of assets and liabilities, the district court’s decision to do

so here was equitable. Angela received the more expensive home, but she also
                                             8

agreed to be responsible for the entire $25,000 Social Security debt. Even more

important, that was the home that was located next to Angela’s mother, who was

then able to help Angela with her son’s care—as was intended even before

Angela met Steven.          Additionally, the other property was not wheelchair

accessible, as Steven testified he removed the wheelchair ramp from the home.

         While Steven argues the district court should have ordered both homes to

be sold, we cannot fault the district court’s decision to provide each party with a

rent-free home instead. Neither party has a large earning capacity. The number

of hours Angela can work is limited by the amount of care her son continues to

need. And while Steven maintains he had zero earning capacity going forward,

we do not believe that is necessarily the case. First, Steven stated he intended

to apply for Social Security Disability benefits after the dissolution and he

believed those benefits would be approximately $900 each month (which would

place his income at nearly the same level as Angela’s). Second, although there

was testimony from Steven and his daughter that he was unable to work, Angela

questioned whether that was actually the case, noting the number of hours of

physical labor Steven had completed on their properties—a fact to which Steven

also testified. Moreover, Steven testified he had a high school degree and “some

college.” It is possible he may return to work in a new, less physically demanding

field.

         We cannot say the district court “failed to do equity,” and we will not

disturb its ruling.3

3
  We note part of Steven’s argument the division of assets was inequitable rests on his
claim Angela retained some of his tools. The district court ordered that all of his tools be
                                           9

        B. Appellate Attorney Fees.

        Angela asks us to award her $2500 in appellate attorney fees. “Appellate

attorney fees are not a matter of right, but rather rest in this court’s discretion.” In

re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006).               “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.’” Id. (quoting In re Marriage of Okland, 699 N.W.2d 260,

270 (Iowa 2005)). Here, the record does not establish that Steven has the ability

to pay Angela’s attorney fees. We decline to award Angela appellate attorney

fees.

        We affirm.

        AFFIRMED.

returned to him. If Angela retained his tools, there may be grounds for a contempt
proceeding. It does not, however, make the district court’s division inequitable.