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In re Marriage of Leo

Court of Appeals of Iowa

May 3, 2017

IN RE THE MARRIAGE OF LORI A. LEO AND MICHAEL A. LEO Upon the Petition of LORI A. LEO, Petitioner-Appellee, And Concerning MICHAEL A. LEO, Respondent-Appellant.

         Appeal from the Iowa District Court for Buchanan County, John J. Bauercamper, Judge.

         Michael Leo appeals various economic provisions of the decree dissolving his marriage to Lori Leo. AFFIRMED.

          Jill A. Dillon of Dillon Law, P.C., Sumner, for appellant.

          Gary J. Boveia of Boveia Law Firm, Waverly, for appellee.

          Considered by Tabor, P.J., Mullins, J., and Goodhue, S.J.

          MULLINS, Judge.

         Michael Leo appeals various economic provisions of the decree dissolving his marriage to Lori Leo. We affirm.

         I. Background Facts and Proceedings

         Michael and Lori were married in Oelwein, Iowa, in February 1982, when neither party had any assets of note.[1] Shortly thereafter, they moved to Austin, Texas. During that time, Lori attended college, worked part time and bore the parties' first child. After graduating in 1985 with a bachelor of science degree in education, Lori worked in Texas as a middle school teacher. Michael has not received any postsecondary education. Instead, while in Texas, Michael was employed in various jobs: as an electrician's assistance, as an employee and part-owner of a construction business, and as an owner of a pizza business. All of Michael's business ventures, which had been funded by loans from Mike's and Lori's relatives, were unsuccessful. Eventually, their respective family members forgave the loans.

         In 1988, Mike moved back to Iowa to work in his father's business and open his own pizza place. At that time, Lori's job in Texas provided the family's health insurance and financial support, so she joined Mike in Iowa later that year after the second child was born and she had completed teaching the school year. Through the end of 1988, the parties worked on opening the pizza business, which launched in January 1989. Lori continued to work at their new business until the fall of 1989. At that time, Lori resumed teaching and she has continued to teach through the date of trial. Lori has been very successful in her field and has received a number of honors and recognitions for her work, one of which included an annual financial award.[2] While teaching, Lori worked less at the restaurant but helped as a hostess on the weekends when needed.

         While running the pizza business, Michael also made and sold food products including Italian sausage and bread. However, Michael's business became competition for his father's business, so Michael closed his business and went to work with his father. When that arrangement ended, Michael formed Leo Foods, Inc., through which Michael sells bread bowls, and opened Leo's Italian Restaurant. Michael also spent a couple of years working as a food broker. In 2007 to 2008, Michael expanded Leo's Italian Restaurant, adding Generation's Lounge. Michael financed this expansion by mortgaging the parties' residence as security for the loan; Lori also signed this mortgage. The district court found Lori had worked in the restaurant and lounge on a very limited, as needed basis. Throughout the couple's time in Oelwein, both parties were active in the community, which garnered goodwill for Michael's businesses.

         In the decree, the district court noted Michael received substantial inheritances from his uncle and aunt, some of Michael's relatives filed suit against him during the administration of the uncle's estate, and the litigation was resolved by a settlement agreement. The first issue Michael raises on appeal is an argument the district court's treatment of gifts and inheritances was inequitable. Thus, the parties' briefs discuss at length their respective views of their involvement with Michael's uncle and aunt and of the money received.

         The parties generally agree that, from early on in their marriage, both Lori and Michael would, along with their children, visit Michael's aunt and uncle and Michael would occasionally make additional visits on his own. At some point when the parties were living in Oelwein, it became clear to Michael that his aunt and uncle should no longer be living by themselves without assistance, so the aunt and uncle were relocated to Michael's father's empty home, near to Lori and Michael. Lori contends she spent considerable time preparing the home for the aunt and uncle's arrival and, after they moved in during the summer, went daily to help them shower, dress, and attend to their daily needs. Michael contends these were joint efforts. Lori further states that, after she returned to teaching in the fall, she continued to pick up their groceries and medications and help them pay their bills. Ultimately, others were hired to help provide care. The parties state the aunt and uncle continued to come to Michael and Lori's home for weekly dinners as well as for holidays and special events. Eventually, the aunt and uncle entered a nursing home. Lori claims she and Michael continued to visit them, purchase clothes and other items for them, and host them.

         Michael asserts that during their time in Oelwein his aunt and uncle gifted him approximately $400, 000. Lori claims she and Michael approached the aunt and uncle and asked for financial help in purchasing their home. She further claims the aunt and uncle provided the requested help and then continued to provide financial gifts to both Michael and her. In 2005, Michael's uncle passed away. Ultimately, after some litigation, the uncle's estate was left to the aunt. Michael's aunt passed away in 2008. Michael reports he inherited approximately $103, 000 from his aunt and uncle after expenses were paid. At the time of trial, approximately $42, 000 of said monies remained.

         Lori also received a $20, 000 inheritance after her mother passed, which was spent on remodeling the kitchen in the parties' marital home and paid for a cruise for the parties. Lori also received an annuity of approximately $19, 500, which still existed at the time of trial.

         In March 2015, after thirty-three years of marriage, Lori filed a petition for dissolution of marriage. At the time Lori filed, both parties were in their mid-fifties, and their children were of majority.

         At trial, the parties disputed, in relevant part, the valuation of Leo's Italian Restaurant and the marital home, the status of the debt secured by the marital home, and the treatment of the gifts received from Michael's aunt and uncle. In March 2016, following trial, the district court entered its decree of dissolution. The district court adopted the valuation of Leo's Italian Restaurant provided by Lori's expert, adopted Michael's valuation of the marital home, and found it would be inequitable not to include a substantial portion of the gifts and inheritances in the division of the assets. In the decree, the ...

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