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In re Marriage of Hanna

Court of Appeals of Iowa

September 27, 2017

IN RE THE MARRIAGE OF GEORGE E. HANNA AND BETH A. HANNA Upon the Petition of GEORGE E. HANNA, Petitioner-Appellant, And Concerning BETH A. HANNA, Respondent-Appellee.

         Appeal from the Iowa District Court for Johnson County, Carl D. Baker, Judge.

         George Hanna appeals from the economic provisions of the decree dissolving his marriage to Beth Hanna. AFFIRMED.

          Karen A. Volz of Ackley, Kopecky & Kingery, Cedar Rapids, for appellant.

          Daniel L. Bray and David M. Cox of Bray & Klockau, P.L.C., Iowa City, for appellee.

          Heard by Vogel, P.J., and Potterfield and Mullins, JJ.

          VOGEL, Presiding Judge.

         George Hanna appeals from the economic provisions of the decree dissolving his marriage to Beth Hanna. Because we find the valuation of the marital assets within the permissible range of the evidence, and the amount and duration of spousal support reasonable, we affirm.

         I. Background Facts and Proceedings

         George and Beth's thirty-one-year marriage was dissolved by decree entered in June 2016.[1] The couple had two children, who are now both adults, with the youngest projected to have graduated from college in December 2016.

         George began working as a dentist in 1982. He purchased the practice of an experienced dentist in Cedar Rapids and began splitting his time between the practice and teaching as an adjunct professor at the University of Iowa. In 1982, Beth received a nursing degree and worked at the University of Iowa Hospitals and Clinics. She received her master's degree in nursing in 1992. In 2000, the couple mutually decided Beth would leave her position and become a stay-at-home mother.

         George incorporated his dental practice in the late 1990s, taking on an associate and constructing a new building for the practice. The couple enjoyed a comfortable marital lifestyle, including going on a couple of vacations per year, joining the local country club, saving for retirement, as well as making improvements to their home. For investment purposes, they purchased an interest in a Cedar Rapids restaurant and an interest in a Galena, Illinois, condo with a friend. Further, they supported their children's college education and purchased a condo for them to occupy during their college years.

         For retirement planning, George's dental office had a defined benefits pension plan, to which George contributed. The defined plan lost significant value during the economic downturn of 2008-2009. As a result, the IRS directed George to pay $212, 000 to fully fund the plan. George borrowed money to fund the plan. George also borrowed money from the dental practice for family expenses, a debt he continues to repay each year. In January 2005, George's associate bought a one-half interest in the practice for $287, 000. It was understood by George, Beth, and the associate that over time George would be bought out by the associate's wife, who was also a dentist, and George would stay on as an associate. At the time of trial, that had not occurred.

         The marriage began to erode in 2009, and from 2010 to 2015, George's W-2 income decreased from $413, 950 to $221, 500; however, the associate testified George's production and gross revenues inexplicably remained as high in 2015 as they had been in 2011.

         Beth returned to the workforce in 2010, performing administrative tasks for George's dental practice. After two years, she left the practice and at the time of the dissolution trial was employed by the University of Iowa. Beth earns a base salary of $91, 762 and receives retirement contributions of $9176.

         George filed for dissolution of marriage on December 10, 2014, with the matter coming on for trial on April 19-20, 2016. In its decree, the court noted both George and Beth are in excellent health and both have received advanced degrees. The court highlighted Beth's contributions to the marriage and George's greater earning capacity. The court divided marital assets between George and Beth, and with the equalization payment taken into account, Beth received 49.5% of the assets, and George received 50.4%. Of Beth's approximate $67, 000 of inherited funds, which she received during the marriage, $41, 000 was set aside to her. Each was awarded various pension and retirement accounts, and each agreed to pay various debts. George was awarded his interest in the dental practice. The dental practice appraiser valued the practice before the 2005 sale to the associate and again prior to the dissolution. Both parties agreed the appraised value of the practice is $1, 361, 000, or $680, 550 for George's one-half share. However, George disputes the value of the practice set by the district court, which included accounts receivable, a loan receivable from George's personal loan from the practice, and proceeds from the practice's loan to George's sister. George asserts his share should be assessed at $598, 884, [2] and debt totaling $289, 217 should be deducted from his share.

         The court ordered George to make an equalization payment to Beth of $250, 000, in four equal installments of $62, 500. The court also ordered George to make spousal support payments of $3500 per month until Beth reaches sixty-five years of age and then $2000 per month thereafter. In determining spousal support, the court noted:

As noted in the discussion of the division of property, this is a 31-year marriage. George and Beth are in excellent health. Both have received advanced degrees in dentistry and nursing respectively. Beth gave up her employment in 2000 so she could be home with their children. George agreed with this decision.
George has a known earning capacity of $400, 000 per year. Beth has a yearly salary of $91, 762. In 2011, George earned $424, 750 from his dental practice. In 2012, his income dropped to $254, 750. Over his career, George has earned an average of $299, 000 per year. The Court concludes that George can earn $300, 000 per year or more.
The contributions to the marriage by Beth and George's greater earning capacity make this an appropriate case for traditional alimony, which will allow Beth to have a standard of living reasonably comparable to that enjoyed during the marriage.

         On June 27, 2016, George filed a posttrial motion under Iowa Rule of Civil Procedure 1.904(2), disputing several aspects of the marital assets valuation by the court, as well as the spousal support. The court reduced George's spousal support payments to $3000 per month until Beth reaches age sixty-five, then $1500 per month until the death of either party or until Beth remarries. The court supported the reduction because Beth "was awarded cash and retirement assets from which she can withdraw income upon her retirement."

         George appeals both the equalization payment stemming from the property ...

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