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In Re the Marriage of Deborah Catherine Rhinehart and Richard Scott Rhinehart Upon the

February 13, 2013

IN RE THE MARRIAGE OF DEBORAH CATHERINE RHINEHART AND RICHARD SCOTT RHINEHART UPON THE PETITION OF DEBORAH CATHERINE RHINEHART,
PETITIONER-APPELLEE/CROSS-APPELLANT, AND CONCERNING RICHARD SCOTT RHINEHART, RESPONDENT-APPELLANT/CROSS-APPELLEE.



Appeal from the Iowa District Court for Woodbury County, Kathleen A. Kilnoski, Judge.

The opinion of the court was delivered by: Mullins, J.

A husband and wife appeal the district court's decree following the retrial of some of the provisions of their dissolution. AFFIRMED AS MODIFIED AND REMANDED.

Heard by Vaitheswaran, P.J., and Tabor and Mullins, JJ.

I. BACKGROUND FACTS AND PROCEEDINGS.

Following a trial in September 2003, Richard Scott Rhinehart and Deborah Catherine Rhinehart's marriage was dissolved by the district court in December 2003 by a partial decree, with the court ruling on the economic issues of the dissolution in a supplemental decree filed in March 2004. This decree was appealed and ultimately affirmed by the Iowa Supreme Court in October 2005. See In re Marriage of Rhinehart (Rhinehart I), 704 N.W.2d 677, 684 (Iowa 2005).

Two months later Deborah petitioned to correct, vacate, or modify the decree alleging Scott committed extrinsic fraud by failing to disclose the existence of certain contingency fee cases during discovery-the value of his law practice was at issue in the dissolution. Scott filed a counterclaim alleging Deborah committed extrinsic fraud by failing to disclose the full value of her IPERS retirement account. In October 2008, the district court granted a new trial after finding Scott committed fraud. It vacated the property division, debt allocation, and alimony provisions of the original decree. The court also concluded Deborah did not commit fraud and dismissed Scott's counterclaim with prejudice. This decision was appealed to this court and affirmed. See In re Marriage of Rhinehart (Rhinehart II), No. 09-0193, 2010 WL 446560, at *1 (Iowa Ct. App. Feb. 10, 2010).

The case then returned to the district court for a new trial on the economic provisions of the dissolution that had been vacated. In a pretrial order, the court limited the issues to be tried to determining the value of the [contingency fee] cases Scott failed to reveal by the time of trial September 11 and 12, 2003; the value of his law practice as of September 11 and 12, 2003, if he had disclosed the sexual abuse cases; and how those values should affect property division, debt allocation, and alimony.

The district court limited further discovery to be consistent with this ruling.

The district court filed its retrial decision on December 14, 2011. That ruling repeated the pretrial identification of the limited issues to be considered. Based on the expert testimony from both parties, the court concluded the previously undisclosed contingency fee cases had no effect on the value of the law firm and set the value at $62,568, just as the original dissolution decree had done. The court incorporated by reference all the findings of fact that were included in the March 2004 supplemental decree, which had been affirmed by the Iowa Supreme Court, and incorporated by reference all the findings of fact from the October 2008 fraud ruling, which had been affirmed by this court.

The district court then determined that an equal division of the property was equitable under the facts and circumstances of the case. The court refused to consider any future inheritance or other future economic benefit Deborah would be entitled to from her father's family trust. See Rhinehart I, 704 N.W.2d at 682--84 (considering the value of the family trust when awarding Scott a greater share of the marital property); see also 2007 Iowa Acts ch. 163, § 2 (amending Iowa Code section 598.21(5)(i) in an apparent response to the Rhinehart I ruling to provide that the dissolution court should not consider future interests or expectancies of a party "arising from inherited or gifted property created under a will or other instrument under which the trustee, trustor, trust protector, or owner has the power to remove the party in question as a beneficiary"). The court divided the property the same way as the original decree but used the corrected values of the retirement accounts of both parties.*fn1 This resulted in Deborah owing Scott an equalization payment of $11,279.50.

The court found Scott's annual income to be $200,000, an increase of approximately $77,000 from the original dissolution decree. This upward adjustment was based on consideration of the previously undisclosed contingency fee cases. In setting the alimony amount, the court also considered the testimony from Deborah's father that Deborah was removed as a beneficiary from the family trust in 2004 and that Deborah was repaying him for the financial assistance he had rendered to her during the pendency of this lengthy dissolution action. The court increased the alimony amount from $1800 a month to $2000 a month for five years from April 2004 through April 2009. Thereafter, the amount was reduced to $1100 per month until Deborah reaches the age of sixty-five or either party dies. The court determined Scott had accrued alimony in the amount of $51,500. When given credit for the property equalization payment, Scott owed Deborah $40,221.

The court denied Deborah's request to award attorney fees from the initial 2003 trial. But the court did award her attorney fees for the work done by her present counsel from the filing of the petition to vacate through August 18, 2011, just before the retrial. The court found that since Scott's fraud created the need to relitigate the financial positions of the parties, he should bear the cost of Deborah's fees. The court found Scott received substantial attorney fees from the many contingency fee cases he settled after the original dissolution trial, and it was equitable for him to pay Deborah's attorney fees and expenses in the amount of $178,985.52.*fn2

From this decree both parties appeal, asserting eleven different claims of error, in addition to asking for appellate attorney fees. Scott claims the district court erred by (1) increasing his annual income to $200,000; (2) increasing Deborah's alimony payments for the first five years; (3) considering legislative changes, alleged facts, and events that occurred after the 2003 trial, while refusing to follow the established law of the case; (4) refusing to reconsider the extrinsic fraud issue; and (5) awarding Deborah $178,985.52 in attorney fees. In her cross-appeal, Deborah asserts the district court erred by (1) failing to award alimony in the amount of $4994 per month; (2) undervaluing the Scott's law practice; (3) failing to use the value of her IPERS account as established at the 2003 trial; (4) finding she owed Scott a property equalization payment even though Scott committed ...


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