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In re Marriage of Bechthold

Court of Appeals of Iowa

November 7, 2018

IN RE THE MARRIAGE OF DARREN M. BECHTHOLD AND ANGELA J. BECHTHOLD Upon the Petition of DARREN M. BECHTHOLD, Petitioner-Appellant/Cross-Appellee, And Concerning ANGELA J. BECHTHOLD, Respondent-Appellee/Cross-Appellant.

          Appeal from the Iowa District Court for Black Hawk County, David P. Odekirk, Judge.

         Darren Bechthold appeals, and Angela Bechthold cross-appeals, a decree of dissolution of marriage

          John R. Walker, Jr. of Beecher, Field, Walker, Morris, Hoffman & Johnson, PC, Waterloo, for appellant.

          Timothy M. Sweet and Maria L. Hartman of Sweet & Hartman, PLC, Reinbeck, for appellee.

          Heard by Tabor, P.J., and Mullins and Bower, JJ.

          MULLINS, Judge.

         Darren Bechthold appeals, and Angela Bechthold cross-appeals, a decree of dissolution of marriage. Darren challenges the tax-liability, property-distribution, child-support, spousal-support, and attorney-fee provisions of the decree as inequitable. Angela argues the awards of spousal support and attorney fees in her favor are inadequate, the district court's consideration of new evidence in conjunction with Darren's post-trial motions was improper, and Darren's child-support obligation should be increased on appeal in light of new Iowa Court Rule 9.11A. Angela seeks an award of appellate attorney fees.

         I. Background Facts and Proceedings

         Darren and Angela met in high school and were married in 1994. The marriage produced four children, three of whom were minors at the time of trial: JB1 (born in 2000), JB2 (born in 2003), and JB3 (born in 2011).

         At the time of trial, Darren was forty-four years of age. He has a bachelor's degree and works as a maintenance engineer for an implement manufacturer, a position in which he earns $95, 046.33 per year. In recent years, Darren has averaged just over $16, 000.00 in annual voluntary contributions to his 401k plan. In addition to his regular employment, Darren has assisted his father with farming for most of his life and the two have operated a farming partnership, Bechthold Farms. In the early 2000s, Darren started his own angus-breeding business. The business has "progressed" over the years, and Darren has developed a reputation in the industry based on the high quality of the cattle he produces. Angela has never taken part in the farming or breeding operations and she had very little involvement with the banking and financing arrangements associated with the same. In fact, Darren advised Angela in the past that she "would never figure out what he was up to financially." Darren's income from his regular employment was applied to family expenses. Darren's agricultural ventures did not support the family financially. Any profits from those ventures were generally applied to keep the agricultural operations themselves afloat or pay off related debt. Darren's loan officer opined Darren has a spending issue when it comes to agricultural equipment and his cattle operation and Darren's spending habits create cash-flow problems for the operations. During the marriage, the parties' income from their regular employment was used to subsidize the agricultural operations and related debt.

         Angela was forty-one years old at the time of trial. She has a bachelor's degree in elementary education and works as an elementary school teacher, a position in which she earns $47, 022.48 per year. With the exception of one or two summers in which Angela taught summer school, Angela does not work in the summer months. The parties mutually agreed that it would be more beneficial for Angela to spend her summers with the children. Darren suggested on numerous occasions that Angela give up teaching altogether in order to stay home with and raise the children and maintain the home full time. Unquestionably, Angela has served as the primary caregiver to the parties' children in every respect and has maintained the home throughout the marriage.

         In 1995, Darren and Angela, together with Darren's parents, purchased roughly 160 acres of farm land for $937.50 per acre; Darren's father covered the down payment. In 1996, Darren and Angela purchased the marital home, a roughly six-acre acreage with a residence, on contract from Darren's parents. Later, the parties granted a mortgage on the property, received a loan, and paid off the contract. Over the years, the parties made several improvements to this property. In 2010, Darren and Angela purchased an additional 28.5 acres on contract from a neighbor to use as a pasture. At the time of trial, the balance on the pasture contract was $32, 300.80.

         Darren began engaging in an extramarital affair with Vanessa in or around 2011.[1] Angela learned of the affair in late 2012. Efforts were made to save the marriage, but Darren continued his affair with Vanessa. In May 2014, Darren filed the petition for dissolution of marriage in this matter. For a time, the parties continued to reside together in the marital home. In May 2015, however, Darren vacated the marital home and moved in with Vanessa, where he lived free of charge. Darren continued to pay for the bulk of the fixed expenses relating to the marital home, while Angela continued to pay for groceries, daycare, and fees relating to the children's schooling and extracurricular activities.

         In late June 2015, a restructure note previously signed by both parties reached maturity. Darren sought an extension on the note, and the bank advised it would need signatures on the extension from both Darren and Angela. Angela agreed to sign the extension after some hesitation, which stemmed from her concern for the agricultural operations' continuing viability. After the extension was granted, the restructure note came due again in October. Darren sought another extension, but this time Angela, in fear of accumulating any more debt associated with the agricultural operations, declined to sign for the extension. In any event, emails between Angela and Darren's loan officer at Farmers State Bank (FSB), Kelly Peyton, indicate Peyton was skeptical about offering another extension and if he were to do so, he would need board approval. The bank decided to call the restructure note and an additional operating note of which Angela was not a signatory, which were cross-collateralized. Both notes were secured by, among other things, the marital acreage. Darren was unable to borrow any additional money from the bank in the fall of 2015, he farmed significantly fewer acres in 2016 as a result of being unable to cover the input costs, and the bank placed liens on all of Darren's farming sales and most of his cattle sales. In March 2016, in order to lessen the debt, Darren sold 80 acres of land to his father for $516, 750.00. Darren additionally sold his one-half interest in the equipment owned by the Bechthold Farms partnership for $95, 000.00. The total proceeds of $611, 750.00 were applied to debt at FSB. Around the same time, FSB discharged Angela's liability under the remaining debts.

         In April 2016, Angela vacated the marital home as a result of Darren's frequent visits to the home and his behavior toward Angela during some of those visits. Angela moved into a home that Darren's parents purchased for her, where she lived for very little, if any, cost.[2]

         A dissolution trial was held in May 2016. The court entered its decree in February 2017. The court granted the parties joint legal custody of all three children and joint physical care of JB1, as was requested by the parties. The court granted Angela physical care of JB2 and JB3, with liberal visitation for Darren. Angela was awarded monthly child support in the amount $1339.53 so long as all three children are eligible, $1125.42 so long as two children are eligible, and $791.34 when only one child is eligible. The court noted no award of cash medical support was going to be made because the children were already covered by Darren's employer-provided health insurance. The court divided the assets and liabilities of the parties and ordered Darren to pay an equalization payment in the amount of $168, 122.50 and an additional contempt offset in the amount of $3447.50. Angela was awarded traditional alimony in the amount of $500.00 per month. As to taxes, the court decreed, "Darren shall be responsible for any capital gains taxes resulting from the parties' sale of land and machinery in 2016 and shall indemnify and hold Angela harmless therefrom." Finally, the court ordered Darren to pay $15, 000.00 toward Angela's attorney fees.

         Angela filed a motion to enlarge or amend requesting the court to, among other things, correct an error in the court's property-distribution calculation concerning life insurance. Darren filed his own motion to enlarge or amend in which he took issue with a number of the court's findings and conclusions. Among other things, Darren requested the court to reconsider its valuation of the marital acreage and the remaining liability under the pasture contract, the spousal-support award in favor of Angela, its decision to assign to Darren the tax liability resulting from the March 2016 sale of land and equipment, the calculation used to reach Darren's child-support obligation, and the award of attorney fees in favor of Angela. Darren also alleged the court erred in including cash medical support in its child- support calculation and challenged the provision in the decree requiring him to maintain Angela as the primary beneficiary of his pension. Darren requested that both parties receive marital-share survivor benefits in one another's pensions. Finally, Darren requested "further clarification" on the sharing of expenses for JB1.

         Thereafter, Darren filed a petition to modify pursuant to Iowa Rule of Civil Procedure 1.1012. Therein, Darren alleged his tax liability flowing from the 2016 sale of land and equipment would amount "to approximately $81, 000 which essentially nullifies the court's distribution attempting to balance equities between the parties." Darren attached to his petition allegedly "newly discovered evidence" for the court's consideration-a projected tax return for 2016 and an affidavit from Darren's accountant stating, "the anticipated tax liability to the marital estate is approximately $81, 000." Angela moved to dismiss the petition to modify, arguing the tax consequences did not amount to newly discovered evidence, as is required by rule 1.1012(6), as the sale occurred prior to trial and the tax consequences of the sale could have been estimated at that time and presented as evidence at trial.

         Nearly two months after filing his motion to enlarge or amend, Darren submitted a filing entitled "evidentiary documents in support of petitioner's motion to enlarge or amend" on the issue of valuation of the marital acreage. Attached to this filing was a March 2017 "appraisal report" for the marital home. Angela moved to strike, arguing the introduction of new evidence not submitted at trial in conjunction with a motion to enlarge or amend is inappropriate.

         Following a hearing on the post-trial motions, the court entered a ruling on the issues. The court amended its decree to assign the cash value of Darren's life insurance policy to Darren instead of Angela. This modification resulted in an increase of Darren's equalization payment to $177, 744.06. The court declined Darren's requests as to valuation of the marital acreage and the liability under the pasture contract, the spousal-support award in favor of Angela, its decision to assign to Darren the 2016 tax liability, the calculation used to reach Darren's child-support obligation, and the award of attorney fees in favor of Angela. As to Darren's pension, the court modified its decretal language to state "Angela is awarded survivor benefits in the same proportion as her marital share of the pension . . . ." The court denied Darren's request that he receive survivor benefits in Angela's IPERS pension. The court also denied Darren's request to remove cash medical support from the child-support calculation. As to expenses for JB1, the court clarified the parties were to split expenses on a pro-rata basis, with Darren paying sixty-one percent and Angela paying thirty-nine percent.

         As to Darren's petition to modify, the court concluded "assignment [to Darren] of all the [tax] liability was a known, possible result of the dissolution," Darren had all the information to determine the potential tax liability, and, as such, the information was not newly discovered evidence within the meaning of rule 1.1012. The court denied Angela's motion to strike.

         As noted, both parties appeal.

         II. Standard of Review

         Review of dissolution cases is de novo. Iowa R. App. 6.907; In re Marriage of Larsen, 912 N.W.2d 444, 448 (Iowa 2018). While we give weight to the factual findings of the district court, especially when considering the credibility of witnesses, we are not bound by them. Iowa R. App. P. 6.904(3)(g); Fennelly, 737 N.W.2d at 100. Because the court bases its decision on the unique facts of each case, precedent is of little value. In re Marriage of Brown, 776 N.W.2d 644, 647 (Iowa 2009).

         III. Analysis

         The parties raise various and interrelated challenges to the district court's rulings in the dissolution proceedings. ...

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