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In re Marriage of Sterner

Court of Appeals of Iowa

March 6, 2019


          Appeal from the Iowa District Court for Madison County, Richard B. Clogg, Judge.

         The wife appeals the provisions of a dissolution decree involving spousal support, the division of farmland, the husband's inheritance, a personal-injury award, the filing of the parties' 2016 taxes, and possible bonuses and retirement contributions from the husband's employer that were to be received after dissolution took place.

          Van T. Everett and Anjela A. Shutts of Whitfield & Eddy, PLC, Des Moines, for appellant.

          Ted Engel of Engel & Maharry, Clive, and Jami J. Hagemeier of Williams & Hagemeier, PLC, Des Moines, for appellee.

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

          POTTERFIELD, Presiding Judge.

         Mary Sterner appeals from the decree dissolving her marriage to Robert Sterner Jr. Mary challenges a number of provisions in the decree, including those involving spousal support; the division of farmland; setting aside Robert's inheritance as non-marital; the determination Mary's personal injury awards were marital property; the filing of their 2016 taxes; and Robert's bonus and retirement contributions from 2017-the year of the dissolution. Additionally, she asks for an award of appellate attorney fees. Robert asks that we affirm the decree, deny Mary's request for appellate attorney fees, and award him fees instead.

         I. Background Facts and Proceedings.

         The parties were married in 1986. They had two children; both reached maturity before the time of the dissolution trial-in the summer of 2017.

         At the time of trial, Mary was fifty-seven years old. She had worked outside of the home as a nurse at the beginning of the parties' marriage but had not done so since approximately 1990. Mary was injured in two car accidents: one in 2006 and one in 2010. She testified about a number of ongoing medical problems she suffered as a result.

         Robert was fifty-nine years old at the time of trial and was employed as a national sales manager, which required him to travel approximately ten days a month. Robert earned a base salary of $150, 000 annually and was eligible for monthly and annual bonuses-contingent on whether he met his sales goals. Robert testified that he did not anticipate earning an annual bonus for 2017.

         At different times during the parties' marriage, they acquired several pieces of farmland, ultimately amassing approximately 640 contiguous acres. Mary's parents and brother live nearby. Robert and Mary eventually built the marital home on one of the parcels. Robert testified the parties bought the land as part of a long-term investment strategy for their retirement. During their marriage, Robert and Mary rented out some of the tillable land, rented a building to a local company, and participated in the government's Conservation Reserve Program (CRP). Robert estimated the farm income from rentals and CRP payments to be $66, 395 annually. Additionally, Mary ran a livestock operation. At the time of dissolution, the farm included cattle, miniature horses, poultry, water fowl, and goats. Mary testified, and Robert did not dispute, that all of the poultry and waterfowl, all but one goat, and about half of the miniature horses belonged to the parties' children. The district court did not consider the worth of these animals when dividing the marital estate. The parties also owned approximately 100 cattle. Both parties testified the farm did not earn enough to be self-sustaining.

         Robert and Mary disagreed as to the value of the various parcels of land and how they should be divided. Each hired an expert to appraise the land, and both experts testified at trial. Mary expressed her desire to continue operating the farm. She proposed she be awarded more of the farmland-including specific parcels-in order to continue the farming operation or, alternatively, that she be allowed to take out a bank loan to purchase the rest of the land from Robert. Robert proposed dividing the land into two-each made up of four parcels. He testified he would be willing to take either of the two sections.

         Robert asked the court to set aside the inheritance he received from his mother in 2014, and Mary asked the court to set aside the amounts she received for personal injury claims from both the 2006 and 2010 car accidents. Robert also asked the court to order the parties to file their 2016 tax returns as married filing jointly; he testified he believed the parties would receive the largest refund if they filed that way. Mary asked the court to order the parties to file their returns separately and agreed that if they did so, Robert could keep any refund he received.

         Additionally, Mary asked the court to award her traditional spousal support in the amount of $9000 monthly until she reached age sixty-five, then $5000 per month for two years, and then $3500 per month until she remarried or one of the parties' died.

         In the dissolution decree, [1] the court set aside Robert's 2014 inheritance from his mother. The court determined all other property of the parties was marital and equally divided it between Robert and Mary. The court valued the parties' land at a total of $3, 447, 077 and accepted Robert's proposal for the land division. Based on the court's valuation of the various parcels, Robert received approximately $283, 000 more in land value than Mary, but Mary received more than half of Robert's retirement accounts[2] and almost all of the funds in the parties' bank accounts.[3] Robert was ordered to pay Mary an additional $35, 285 in an equalization payment, which was to be paid from one of Robert's retirement accounts. Each party was ultimately awarded approximately $2, 175, 850 in marital assets. Additionally, Robert was ordered to pay Mary traditional spousal support in the amount of $3500 per month until she turns sixty-five, then $2500 per month for two years, and then $1500 until her remarriage or either party's death.

         Mary appeals.

         II. Standard of Review.

         Because an action for dissolution is an equitable proceeding, we review de novo. In re Marriage of Thatcher, 864 N.W.2d 533, 537 (Iowa 2015). While we examine the entire record and adjudicate the issues anew, we will only disturb the ruling of the district court if there has been a failure to do equity. See In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013).

         III. Discussion.

         Mary challenges the economic provisions of the dissolution decree. She maintains the court was wrong to set aside Robert's inheritance as non-marital and argues the amounts she received from two personal injury suits should have been set aside. Additionally, she challenges the amount of spousal support she was awarded; argues the farmland should have been divided differently or she should have been allowed to purchase the rest of the farmland from Robert; asks us to adjust the court's order in regard to how the parties' 2016 taxes were to be filed; and maintains the court should have divided Robert's 2017 bonuses and retirement contribution.

         A. Inheritance.

         We begin by considering whether the district court properly set aside the full amount Robert inherited from his mother two years before the dissolution action- approximately $134, 000. See In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005) (noting the court's first task in ensuring an equitable distribution "is to determine the property subject to division"). Mary maintains it was inequitable to set the money aside, as it was commingled with marital funds and ultimately spent before the dissolution. Alternatively, she maintains the court should have set aside only the net amount of inheritance Robert received after paying taxes, penalties, and fees resulting from withdrawal of the funds from an IRA- approximately $94, 000.

         Pursuant to Iowa Code section 598.21(5) and (6) (2016), any property inherited by one party during the marriage is generally not subject to division unless refusal to divide the property will result inequity. When determining whether it would be unjust to ...

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