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In re Marriage of Duffy

Court of Appeals of Iowa

June 21, 2017

IN RE THE MARRIAGE OF LISA ANNE DUFFY AND MICHAEL J. DUFFY Upon the Petition of LISA ANNE DUFFY, n/k/a LISA ANNE MORRISON, Petitioner-Appellant, And Concerning MICHAEL J. DUFFY, Respondent-Appellee.

         Appeal from the Iowa District Court for Linn County, Robert E. Sosalla, Judge.

         Petitioner appeals from the provisions of the dissolution decree dividing the parties' property, awarding spousal support, and awarding attorney fees. Petitioner also appeals the trial court's denial of her motion for new trial. AFFIRMED AS MODIFIED.

          Laura E. Bergus of Hayek, Moreland, Smith & Bergus, L.L.P., Iowa City, for appellant.

          Rebecca A. Feiereisen of Arenson Law Group, P.C., Cedar Rapids, for appellee.

          Considered by Potterfield, P.J., and Doyle and Tabor, JJ.

          POTTERFIELD, Presiding Judge.

         Lisa Duffy appeals the property provisions of the dissolution decree and the denial of her motion for new trial. She claims the trial court erred in dividing the property, awarding attorney fees, and determining the amount of spousal support. We affirm the district court's property division and award of attorney fees, but we modify the equalization payment from $69, 817.30 to $74, 439.83. We affirm the trial court's denial of Lisa's motion for new trial.

         I. Background Facts and Proceedings.

         Lisa and Michael Duffy were married in 1992. At the time of trial, Lisa was forty-five and Michael was forty-six years old. Four children were born of the marriage, but the children reached the age of eighteen before the time of trial.

         Michael earned a bachelor's degree. After college, Michael worked multiple jobs to support the family. Eventually, Michael and Lisa purchased Match Play Tennis Centers (Match Play) for five dollars. At the time of trial, Michael was a fifty percent owner[1] in Match Play, where he also worked full-time and received a salary of $85, 819.76. He also received a management fee of $32, 500. Michael's income was based on a management agreement between Match Play and Rockwell Collins, which requires Match Play to furnish recreation services to Rockwell's employees. Michael also entered into a buy-sell agreement with the other Match Play owner in which each owner agreed to a buyout price of $86.67 per share. It is unclear how the owners came up with the valuation. Match Play has no other management or service agreements.

         Lisa also earned her bachelor's degree. The parties both decided that Lisa would care for the house and children. Beginning in1998, Lisa worked for United Parcel Service (UPS) for approximately five years. She also worked at Coe College for approximately three months in 2007. Lisa was not employed at the time of trial.

         Lisa suffers from multiple health-related issues, including arthritis, chronic sinusitis, recurring MRSA infections, ADHD, hypothyroidism, Steven Johnson syndrome, depression, and anxiety. Lisa applied for social security disability benefits based on her medical conditions. The request was initially rejected and Lisa's appeal was pending during trial. After the trial ended and the decree had been filed, Lisa received a notice of award letter granting Lisa's appeal, in which it was determined she became disabled on April 13, 2007.

         On January 22, 2014, Lisa filed a petition for dissolution of marriage. At trial, the court heard contradicting testimony about multiple assets and liabilities. The parties disagreed about the value of the home, whether $25, 000 from Michael's mother was a loan, and whether the Match Play credit card balance was marital debt.

         The court also heard testimony from Denny Redmond, Match Play's accountant. Redmond testified that Match Play had no value. His opinion was based on Match Play's status as an S-corporation, which passes all the net income and expenses through to the shareholders based on a pro-rated share of the stock ownership. Redmond confirmed the business had no assets other than a contract that paid the owners a management fee. The contract could be terminated at any time with sixty days' notice. Redmond also testified that owners' salaries should not not used to determine a corporation's value.

         On June 27, 2016, the court issued its decree dividing the parties' assets equally, awarding attorney fees, and requiring an equalization payment from Michael to Lisa. The court determined the $25, 000 from Michael's mother was a loan and assigned the debt to Michael. The court also determined the Match Play credit card balance was marital debt and assigned the debt to Michael. Based on its valuation of the assets, the court concluded Michael should pay Lisa an equalization amount of $74, 439.83. However, the court's order instructed Michael to pay only $69, 817.30. The court also awarded Lisa $5000 in attorney fees.

         Based in part on the discrepancy between the equalization payment amounts in the decree, Lisa filed a motion to reconsider, amend, and enlarge the trial courts filings. She also filed a motion for new trial arguing the "newly discovered" disability award would have changed the results of the trial. The trial court denied both motions. Lisa appealed.

         II. Standard of Review.

         An action for the dissolution of marriage is an equitable proceeding. Iowa Code § 598.3 (2014). Therefore, our review is de novo. Iowa R. App. P. 6.907; In re Marriage of Schenkelberg, 824 N.W.2d 481, 484 (Iowa 2012). Although we give weight to the factual determinations of the trial court, especially regarding credibility determinations, its findings are not binding upon us. Iowa R. App. P. 6.904(3)(g); In re Marriage of Brown, 776 N.W.2d 644, 647 (Iowa 2009). We examine the entire record and adjudicate anew rights on the issues properly presented. In re Marriage of Ales, 592 N.W.2d 698, 702 (Iowa Ct. App. 1999). We give the trial court ...


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