Court Opinion

ID: 4441395
Source: CourtListenerOpinion
Date Created: 2019-09-25 16:06:25.620584+00
Date Added: 2024-06-11T14:26:57.101322
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                    No. 18-2067
                             Filed September 25, 2019

IN RE THE MARRIAGE OF JULIE DALBY
AND DOUGLAS DALBY

Upon the Petition of
JULIE DALBY,
      Petitioner-Appellee,

And Concerning
DOUGLAS DALBY,
     Respondent-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Linn County, Ian K. Thornhill,

Judge.

      The husband appeals from the district court’s division of assets in the

parties’ dissolution decree. AFFIRMED AS MODIFIED.

      Mark D. Fisher of Nidey Erdahl Fisher Pilkington & Meier, PLC, Cedar

Rapids, for appellant.

      Dana A. Judas of Nazette, Marner, Nathanson & Shea LLP, Cedar

Rapids, for appellee.

      Considered by Potterfield, P.J., and May and Greer, JJ.
                                           2

POTTERFIELD, Presiding Judge.

       Douglas Dalby appeals from the decree dissolving his marriage to Julie

Dalby. Douglas maintains the division of marital assets was inequitable and asks

us to modify the equalization payment due to him from the amount of $31,331.55

to $112,770.24.     He also asks for an award of appellate attorney fees.          In

response, Julie maintains the district court’s division was equitable and asks that

we award her appellate attorney fees.

I. Background Facts and Proceedings.

       Douglas and Julie were married in August 2006. Julie has a child from a

previous relationship who lived with Douglas and Julie until the child reached

majority—approximately the first six years of their marriage. No children were

born of the marriage.

       Julie filed a petition for dissolution in January 2018.      Douglas did not

accept service until April 27, 2018.

       Nearly a month later, on May 24, 2018, Julie filed notice of her intent to file

for default judgment. Douglas still took no action, and, on June 5, Julie moved

for entry of default. The clerk entered default against Douglas the next day.

       On July 30, counsel for Douglas filed an appearance, an answer to Julie’s

petition for dissolution, and a motion to set aside the default. Julie resisted the

motion to set aside, asserting she had text messages from Douglas that showed

his failure to respond in a timely manner was not due to mistake or neglect as he

indicated he had no intention of contesting the dissolution.

       Following a hearing on in the issue, the district court denied Douglas’s

motion to set the default aside, ruling:
                                            3

               Douglas clearly decided he was not going to defend this
       action and was going to allow Julie to obtain a default. Thus, after
       accepting service, he did nothing to defend and acknowledged to
       Julie that he understood he would be defaulted. He did nothing to
       contact Julie’s counsel or the court to preserve any rights he might
       have or inquire as to what he should do if he wanted to defend the
       action because he had no intention of defending.
               ....
               . . . On June 18, 2018, a default hearing was set for today’s
       date. Douglas did nothing. Finally, in late July Douglas changed
       his mind and decided he wanted to defend this case. He then filed
       the present motion to set aside default judgment
               ....
               . . . Douglas’ change of mind since entry of the default does
       not justify setting aside the default entered on June 5, 2018.

(Footnote omitted). In the same order, the court recognized that “[a]lthough a

default has been entered, the court must still equitably and fully distribute the

marital assets and debts when it enters a decree.” The court set an additional

one-hour hearing for the limited issue of the equitable distribution of the marital

assets and debts.

       That hearing took place in November.             The parties submitted a joint

stipulation listing all of their marital assets and liabilities and the corresponding

agreed-upon values. Additionally, the parties agreed they had generally kept

their various financial accounts in their individual names and each would keep

their respective accounts.       The issue was the amount of the equalization

payment from one party to another that would be necessary to achieve equity.

The marital assets totaled almost $589,0001 while the debts amounted to

1
 We note that at the hearing, Julie testified that $25,000 of this was what she received in
child support from her child’s father; she seemed to argue this money should be
considered nonmarital and set aside for her daughter. However, on the parties’ joint
stipulation, Julie included the $25,000 in the assets, and the district court considered it
as marital in its division of assets. Julie does not challenge the district court’s
determination it was a marital asset to be divided, so we do not disturb this conclusion.
                                          4

approximately $172,200, resulting in approximately $416,800 in net marital

property.   The marital home was valued at $200,000, and the parties had a

mortgage of $140,000.      Otherwise, a large portion of the marital assets was

located in accounts in just Julie’s name: a combined total of $243,997.23 in a

money market, checking account, and 401k.             In contrast, the accounts in

Douglas’s name amounted to $72,073.69.

       At the hearing, Julie testified she believed she should be able to retain the

money in her accounts because the parties had always made a point to keep

separate accounts; neither party has access to the other’s accounts or tracked

the other’s finances.    According to Julie, throughout their marriage, she and

Douglas shared household bills by Douglas paying the mortgage on the marital

home while she “paid everything else.”             She estimated Douglas paid

approximately $200 more each month on the mortgage than she did on the other

family bills. According to Douglas, he also paid for the family’s insurance, cell-

phone plan, and “the majority of entertainment expenses whenever” the family

would go out.    Julie agreed the parties should split the equity in the marital

residence but also indicated the basement required repairs, for which she

believed Douglas should be responsible.        According to an estimate she had

prepared, the basement repair would cost $23,675. When asked, Julie reported

she was unable to say what the value of the home would be after the basement

repair was completed.2 Based on this request, Julie believed she should be

ordered to make an “equalization payment” to Douglas in the amount of

2
  The $200,000 value the parties agreed upon for the value of the marital home was the
“as is” value.
                                          5

$5121.05, which would result in Julie receiving a net value of $316,016.56 of the

approximately $416,800 of marital property.

       During his testimony, Douglas seemed to take responsibility for certain

issues with the basement that needed fixed.3 However, he claimed that much of

the needed repair was due to water getting into the basement, which Douglas

maintained had been a longtime issue in the home that Julie was aware of before

he moved out. Douglas asked that the court divide the marital estate equally

between the two parties, which would require ordering Julie to make an

equalization payment of $112,770.24 to Douglas.

       In making the division of marital property, the district court relied upon the

stipulated values from the parties.4 Additionally, as the parties agreed, Julie kept

the marital home and took responsibility for the mortgage. Each party kept one

vehicle and took responsibility for the corresponding vehicle loan. The only item

with a disputed value at the time of the hearing, Julie’s defined benefit pension,

was ordered to be divided using the Benson formula.5            Otherwise, the court

refused to divide any of the monies in the parties’ individual accounts. The court

ordered Julie to make an equalization payment to Douglas of $31,331.55, but it

arrived at this figure by giving Douglas half the equity in the marital home 6 plus a

3
  There was evidence some fixtures in the basement bathroom needed to be replaced
due to lack of cleaning and issues involving mold.
4
  The court stated it was adopting the itemization and valuations in the parties’ joint
stipulation—$200,000 value for the home with a mortgage of $140,000. But in doing the
actual calculation, it seems the court used a mortgage value of $142,461.90, which is
close to the amount Julie testified the mortgage was at the time Douglas left the home
and stopped making the mortgage payment. We rely on the stipulated values.
5
  See In re Marriage of Benson, 545 N.W.2d 252, 256 (Iowa 1996).
6
  The court determined half the equity in the home was equal to $28,769.05 rather than
$30,000.
                                          6

“repayment” for “disparity in shared expense agreement” of $14,400 7 and

subtracting half the cost of the estimated basement repair ($11,837.50). This

division of assets left Julie with a net award of $289,806.06 and Douglas with a

net award of $126,928.68 of marital assets.

       Douglas 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.

III. Discussion.

       Douglas does not challenge the district court’s decision not to set aside

the default. He focuses his argument on the claim the division of marital assets

was inequitable.    “[A] defaulting party to a dissolution proceeding may seek

appellate review on the merits. But, our de novo review will generally be limited

to (1) scope of relief granted, and (2) equities of the decree as determined by an

examination of the entire record made at trial.” In re Marriage of Huston, 263

N.W.2d 697, 700 (Iowa 1978).

       As Julie emphasizes, “Iowa is an equitable distribution state.” McDermott,

827 N.W.2d at 678. “An equitable distribution of marital property, based upon the

factors in [Iowa Code section] 598.21(5) [(2018)], does not require an equal

division of assets.” Id. at 682 (citation omitted). “Equality is, however, most often

7
 We assume the court reached this figure by “refunding” Douglas half of the extra $200
he spent each month on family bills multiplied by roughly the number of months the
parties were living together and splitting the expenses.
                                          7

equitable; therefore, we have repeatedly insisted upon the equal or nearly equal

division of marital assets.” Id.

       It seems the district court’s division of assets was predicated on the fact

that Julie saved a large amount of money—much more than Douglas—while

generally earning substantially less than he did each year.8 It seems unlikely

Julie would have been able to save such a large amount without Douglas’s

contributions to the family. Especially when we consider that Julie earned less

than $3000 one year during the parties’ marriage while she went back to school.

Moreover, “[i]t is important to remember marriage does not come with a ledger.”

In re Marriage of Fennelly, 737 N.W.2d 97, 104 (Iowa 2007). “Each person’s

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

“Financial matters make up but a portion of a marriage, and must not be

emphasized over the other contributions made to a marriage in determining an

equitable distribution.” In re Marriage of Miller, 552 N.W.2d 460, 465 (Iowa Ct.

App. 1996). And while even Douglas agreed the parties had a “loose agreement”

to be responsible for their individual finances throughout the marriage, there is no

evidence the agreement contemplated or applied to what would occur in the

event of a dissolution.

8
  According to the tax returns admitting at the hearing, the parties’ incomes from the
several years before filing for dissolution were as follows:
Tax Year       Julie                Doug
2010           $58,608              $111,805
2011           $2540                $115,592
2012           $53,179              $116,636
2013           $93,911              $123,454
2014           $70,998              $98,314
2015           $103,305             $112,151
2016           $118,342             $118,972
                                          8

       In considering the enumerated factors of section 589.21(5), a more-equal

split of the marital property is necessary to achieve equity.         At the time of

dissolution, both Douglas and Julie were in their mid-forties.          Douglas was

unemployed, as he had recently completed treatment for alcohol abuse and had

quit his job; he admitted he had not yet started looking for new employment. Still,

Douglas and Julie seem to have approximately the same earning capacity: in

2016, Douglas earned $118,972 and Julie earned $118,342.                  Other than

Douglas’s issues with alcoholism, it seems both were in good health and would

be able to work for a number of years.

       We modify the district court’s property division to award Douglas half the

marital property. However, we agree with the district court that Douglas should

be required to pay for half the cost of the basement repair, as Douglas admitted

at least some fault in the issues with the basement. We recognize that the value

of the home will likely increase after the repairs are completed, but we agree with

the district court that the amount of the increase is too uncertain for us to

consider it in our division of assets.      Therefore, we modify the equalization

payment Julie owes to Douglas to the amount of $100,932.74.9

       Both Douglas and Julie request appellate attorney fees.

       Appellate attorney fees are not a matter of right, but rather rest in
       this 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.”

9
  We calculated this number by taking the amount of net assets Julie was awarded
($321,137.61) and subtracting the amount of net assets Douglas was awarded
($95,597.13) and dividing the difference in half to get $112,770.24. We then subtracted
half the estimated cost of the renovation ($11,837.50) to get the total owed.
                                         9

In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006) (citation omitted).

We deny Julie’s request because Douglas has been largely successful on

appeal. And we deny Douglas’s request because we believe our adjustment of

the division of property—considered together with the parties’ nearly-equal

earning capacity—allows Douglas to pay his own appellate attorney fees. See,

e.g., In re Marriage of Larson, No. 14-1333, 2015 WL 5965116, at *10 (Iowa Ct.

App. Oct. 14, 2015) (noting that while one party was successful on appeal, the

modification in favor of the successful party “sufficiently equip[ped]” the party to

pay their own fees).

       We affirm as modified the dissolution decree.

       AFFIRMED AS MODIFIED.

       May, J., concurs; Greer, J., concurs specially.
                                       10

GREER, Judge (concurring specially).

      I agree with modifying the decree to increase the equalization payment to

Douglas, but I write separately to address the cost of the basement repair. As

the majority recognizes, Douglas admitted at least some fault for damage to the

basement. To that end, Julie testified Douglas withdrew $20,000 to $30,000 from

one of his accounts to pay for repairs that have yet to happen. Douglas did not

explain or otherwise account for these missing funds. Therefore, I would reduce

the equalization payment to Douglas by an additional $11,837.50, representing

the full amount of the basement repair. I otherwise concur with the majority’s

well-reasoned opinion.