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In re Marriage of Johnston

Court of Appeals of Iowa

January 11, 2017

IN RE THE MARRIAGE OF ANGELA RENEE JOHNSTON AND JEREMY JAMES JOHNSTON Upon the Petition of ANGELA RENEE JOHNSTON, Petitioner-Appellant, And Concerning JEREMY JAMES JOHNSTON, Respondent-Appellee.

         Appeal from the Iowa District Court for Audubon County, Jeffrey L. Larson, Judge.

         Angela Johnston appeals from the district court orders dismissing her application for contempt and denying her application for declaratory judgment.

         AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

          Joel C. Baxter of Wild, Baxter & Sand, P.C., Guthrie Center, for appellant.

          Gregory J. Siemann of Green, Siemann & Greteman, P.L.C., Carroll, and Jessica A. Zupp of Zupp & Zupp Law Firm, P.C., Denison, for appellee.

          Considered by Danilson, C.J., and Doyle and McDonald, JJ.

          DANILSON, Chief Judge.

         Angela Johnston appeals from the district court orders dismissing her application for contempt and denying her application for declaratory judgment asserting her former husband, Jeremy Johnston, was in contempt for failure to refinance debts and pay her a portion of the proceeds from 2012 corn sales as ordered in the decree of dissolution of marriage. Angela contends the district court orders are illegal because they are not supported by substantial evidence. We find the district court did not err in refusing to find Jeremy in contempt and affirm. We reverse the district court order as to its findings regarding the division of the proceeds from the 2012 corn sales, and remand for entry of an order granting the application for declaratory judgment and for further proceedings.

         I. Background Facts & Proceedings.

         Angela and Jeremey were married in July 2007. Angela filed the petition for dissolution of marriage on December 2, 2012. Trial was held July 16 and 17, 2013, and the district court entered the decree of dissolution of marriage on August 19, 2013. Among other provisions, the decree ordered:

All corn on hand shall be sold within ninety days after the date of this Decree of Dissolution is filed . . . The debt owing to FSA on the sealed corn shall be paid first from the gross sale proceeds. . . . After the deduction of commissions and hauling expenses, the balance of the sale proceeds from the corn shall be divided equally between Jeremy and Angela. Jeremy and Angela shall be separately responsible for any income taxes due and owing as a result of the sale of the corn.

         The court found there were 90, 487 bushels of corn on hand. The court also ordered Jeremy to refinance the debt on the marital residence within ninety days of the date of the decree so as to remove Angela's name from that debt. Jeremy was also ordered to hold Angela harmless as to the debts on a vertical till and his vehicle, 2013 prepaid seed, 2013 operating note, and bin loans.

         At an October 2, 2013 hearing on posttrial motions filed by the parties, [1]the district court learned that in February 2013, Jeremy entered into contracts for the sale of 3000 bushels of the 2012 corn crop, ultimately selling 2980.35 bushels and earning a net amount[2] of $16, 987.38; and that in June 2013, Jeremy entered into a contract for the sale of 15, 000 bushels, selling 14, 943.94 bushels and earning a net amount of $83, 550.78. The district court also learned Angela had executed a security agreement with Landmands National Bank (Landmands) in February 2013 to secure the bank's security interest in property, including all accounts and other rights to payment, inventory, farm products, and "all rights to crop related income or assets from the 2013 growing season." A check was issued to Jeremy, Angela, and Landmands for the August/September sale of 58, 994.60 bushels[3] of the 2012 corn crop in the net amount of $336, 070.94. Despite her initial refusal to do so, Angela endorsed the check shortly after the October 2, 2013 hearing. The proceeds of the check were applied to the principal of the debt to Landmands in the amount of $187, 710.12 and to the accrued interest in the amount of $5774.50.

         On October 15, 2013, the district court entered an order clarifying portions of the dissolution decree. The court acknowledged in the October 15, 2013 order that Jeremy was "to hold Angela harmless from all debts owing to Landmands National Bank." The court stated:

Angela is not a signor on Jeremy's 2013 operating note with the Bank. Jeremy expects to realize over $741, 000 from the 2013 crop. Jeremy does not intend to share income from the 2013 crop with Angela, and that position is reasonable given the agreement to sever her from the farming operation as of December 31, 2012. In light of that agreement, it is not equitable that money drawn against the 2013 operating note be deducted from Angela's portion of marital assets.

         Despite this understanding, the remaining proceeds from the August/September sale of 2012 corn were put toward Jeremy's 2013 operating loan debt with Landmands.

         With respect to the amount of bushels of 2012 corn on hand that were sold, the court stated:

Jeremy asserted in his motion for court to take additional evidence, which was filed July 20, 2013-twelve days after the trial, that "[t]he parties own 90, 487 bushels of corn which is in storage, waiting to be sold." In his September 3, 2013 motion, Jeremy suggested that there may be as little as 64, 771 bushels on hand. At the October 2, 2013 hearing, Jeremy presented evidence that 3000 bushels of the 2012 corn crop had been sold in February 2013, that 15, 000 bushels of the 2012 corn crop had been sold in June 2013, and that 72, 000 bushels of the 2012 corn crop had been sold in August 2013.
While these various numbers and positions reflect on Jeremy's reliability as a witness, the court concludes that Jeremy has sufficiently accounted for the 2012 corn crop. The three sales during 2013 amount to 90, 000 bushels. Some corn was used for silage and there is a shrinkage factor as the corn dries. Angela's allegations that corn is missing or was commingled with corn owned by Jeremy's father have not been ...

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