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In re Marriage of Galles

Court of Appeals of Iowa

November 22, 2017

IN RE THE MARRIAGE OF TIMOTHY J. GALLES AND DEBRA M. GALLES Upon the Petition of TIMOTHY J. GALLES, Petitioner-Appellee/Cross-Appellant, And Concerning DEBRA M. GALLES, Respondent-Appellant/Cross-Appellee.

         Appeal from the Iowa District Court for Cherokee County, Don E. Courtney, Judge.

         Petitioner and Respondent appeal and cross-appeal from the district court's findings and decree in this dissolution of marriage action.

          Alice S. Horneber of Horneber Law Firm, P.C., Sioux City, for appellant.

          George W. Wittgraf of Wittgraf Law Firm, Cherokee, for appellee.

          Considered by Vaitheswaran, P.J., Bower, J., and Blane, S.J. [*]

          BLANE, SENIOR JUDGE

         The parties appeal and cross-appeal from the district court's findings and decree in this dissolution-of-marriage action. Debra M. Galles contends the court did not properly value and equitably distribute their property and debts, included or failed to exclude inherited and gifted property, failed to award her a portion of Timothy Galles's IPERS pension benefits, erred in allowing property equalization payments to be made in three installments, failed to require the parties to file jointly their 2015 tax returns, failed to award adequate alimony, and failed to award adequate attorney fees. On cross-appeal, Timothy contends the trial court erred in awarding alimony and attorney fees to Debra.

         A. Procedural Background.

         On July 20, 2015, Timothy filed a petition for dissolution of marriage. Debra filed her answer on August 10. Trial was held on March 3, 2016, before the district court. The court issued a decree on November 29. Debra filed a timely notice of appeal on December 27. Timothy filed a notice of cross-appeal on December 29.

         B. Factual Background.

         The parties married on September 10, 1988, and separated in late September 2014. At trial, Timothy was sixty-three years old and a 1971 graduate of Remsen St. Mary's High School in Remsen. After Timothy graduated from high school he became employed with Hoover Oil as a mechanic. When Hoover Oil was sold, he purchased a partnership in a bar/restaurant in Marcus, which he operated until 1983. At that time Timothy found employment with Means Oil, formerly Hoover Oil, and worked for them as a mechanic from 1983 to 1989. Starting in 1989 he was employed with the City of Marcus, and remained there for twenty years, serving in several capacities, including street superintendent, public works director, and city foreman.

         Debra was born in 1956 and is a 1975 graduate of Marcus Community High School in Marcus. After her graduation from high school she worked in nursing homes and restaurants. For approximately seventeen years she worked for K-Products in Marcus, during which time she sustained a work injury which resulted in four surgeries-two on her arm and two on her wrist. These resulted in a workers' compensation permanent partial disability award. Debra was unable to return to employment with K-Products because of her physical limitations. At that point Debra became employed with Heartland Care Center in Marcus. She is employed full time as a cook, working from thirty to thirty-five hours per week, making between thirteen and fourteen dollars per hour. In 2015, she earned $24, 920. If she works an average of sixty-four hours per pay period, which is every two weeks, she qualifies to obtain health insurance through her employer.

         No children were born to this marriage. However, Debra did bring a twelve-year-old child into the marriage. The child lived with the parties full-time. Debra never received any child support from the natural father of the child.

         After Timothy retired from the City of Marcus, he became employed at Marcus Lumber Company in the fall of 2009 in their plumbing and heating department. He works a forty-hour work week and is paid $17.30 per hour. When he reached sixty-two years of age, he collected several Social Security checks before realizing he could only work twenty to twenty-five hours per week without being penalized. If he worked less than full time he would lose all benefits offered through his employer, including insurance coverage. He repaid the Social Security Administration for the payments received and went back to full time, forty hours per week. His intention is to retire when he is sixty-four because his job is physically demanding, but part-time work is possible.

         Upon his retirement from the City of Marcus in 2009, Timothy began receiving IPERS benefits and continues to receive those monthly. He has elected to receive his full IPERS benefits with no payment upon his death to anyone else.

         Timothy purchased a residence on North Ash Street in Marcus, Iowa, in July of 1977 for $24, 500. In 2005, the home was remodeled, which was financed with Timothy's inheritance of $33, 800.86 from his parents and gifts from his older brother.

         During the marriage, the parties shared responsibility for maintaining the residence with Timothy paying the bills and doing repair work. Debra did the laundry, housecleaning, buying groceries, and cooking. During the first half of the marriage the parties each maintained their own checking accounts and shared a joint savings account. Timothy paid for maintenance around the house out of his account and Debra paid for groceries and clothes out of her account. Eventually the parties began sharing joint checking and savings accounts until the fall of 2014 when Debra left the residence. The parties kept a significant amount of cash in the home and when Debra left Timothy wrote her a check for $7000, half of that cash amount.

         At the time of separation at the end of September 2014, Debra moved into her deceased mother's home located on North Maple in Marcus. The home was owned in joint tenancy by Debra's parents. Upon her mother's death, Debra, with the consent of her siblings, moved into the home after making payment to the Iowa Department of Human Services in the amount of $2332.80 for medical assistance debt incurred by her father and owed by her mother. Upon payment of that debt, she began making rental payments to her four sisters beginning in November of 2014. She pays rent of $300 four out of every five months.

         Debra submitted a proposed division of assets and liabilities. With some exceptions, the parties agreed with the division of assets as outlined in the exhibit but disagree on values. Debra's financial affidavit itemizes her expenses at $2131 per month. Following their separation, Timothy continued to pay for Debra's health and car insurance and paid for the maintenance of her car.

         C. Standard of Review.

         Dissolution cases are reviewed de novo. See Iowa R. App. P. 6.907; In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013). "Although we decide the issues raised on appeal anew, we give weight to the trial court's factual findings, especially with respect to the credibility of the witnesses." In re Marriage of Sullins, 715 N.W.2d 242, 247 (Iowa 2006) (citation omitted). "Ordinarily, a trial court's valuation will not be disturbed when it is within the range of permissible evidence." In re Marriage of Hansen, 733 N.W.2d 683, 703 (Iowa 2007). We review an award of attorney fees for an abuse of discretion. In re Marriage of Schenkelberg, 824 N.W.2d 481, 484 (Iowa 2012). An abuse of discretion occurs when the district court exercises its discretion "on grounds or for reasons that are clearly untenable or to an extent clearly unreasonable." Id. "A ground or reason is untenable when it is not supported by substantial evidence or when it is based on erroneous application of the law." Id.

         D. Discussion.

         I. WHETHER THE TRIAL COURT ERRED IN FAILING TO AWARD DEBRA ONE-HALF OF THE IPERS BENEFITS.

         Timothy earned an IPERS pension while employed by the City of Marcus. During the entirety of that employment he was married to Debra. His IPERS payment is $1201.23 per month. We also note that Timothy elected an IPERS benefit that pays him the full amount and does not pay any amount to a survivor upon his death.

         IPERS is a defined benefit program and is therefore a pension. Sullins, 715 N.W.2d at 249. "Pensions are divisible marital property." Id. at 247. Such pensions are to be divided in a dissolution action. See In re Marriage of Benson, 545 N.W.2d 252, 255 (Iowa 1996). The trial court here failed to divide the IPERS pension. Division may be in one of two manners-the present-value method or the percentage method. See id. It is normally desirable to divide a defined-benefit plan by using the percentage method. Sullins, 715 N.W.2d at 250 ("[T]he ...


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