Gutcher v. & Concerning Nancy A. Gutcher, 17-0593

• Decision Date: 24 October 2018
• Docket Number: No. 17-0593,17-0593
• Parties: IN RE THE MARRIAGE OF EDWARD D. GUTCHER AND NANCY A. GUTCHER Upon the Petition of EDWARD D. GUTCHER, Petitioner-Appellant, And Concerning NANCY A. GUTCHER, Respondent-Appellee.
• Court: Iowa Court of Appeals

IN RE THE MARRIAGE OF EDWARD D. GUTCHER AND NANCY A. GUTCHER Upon the Petition of EDWARD D. GUTCHER, Petitioner-Appellant, And Concerning NANCY A. GUTCHER, Respondent-Appellee.

No. 17-0593

COURT OF APPEALS OF IOWA

October 24, 2018

Appeal from the Iowa District Court for Monroe County, Randy S. DeGeest, Judge.

Appeal and cross-appeal challenging the economic provisions of a decree of dissolution of marriage. AFFIRMED AS MODIFIED AND REMANDED.

Bryan J. Goldsmith of Gaumer, Emanuel, Carpenter & Goldsmith, P.C., Ottumwa, for appellant.

Heather M. Simplot of Harrison, Moreland, Webber & Simplot, P.C., Ottumwa, for appellee.

Heard by Danilson, C.J., and Doyle and McDonald, JJ.

McDONALD, Judge.

This is an appeal and cross-appeal from the decree dissolving Nancy and Edward (Ed) Gutcher's twelve-year marriage. In Ed's appeal, he contends the district court erred in invalidating the parties' prenuptial agreement and challenges the district court's award of reimbursement spousal support to Nancy. In Nancy's cross-appeal, she contends the district court erred in refusing to hold Ed in contempt for failing to preserve assets, contends the property division was inequitable, seeks an award of traditional spousal support, and requests additional trial attorney fees.

I.

Ed and Nancy began dating in 2002. They began living together in 2003. They married in 2004. This was Ed's second marriage, and it was Nancy's third marriage. Shortly before their wedding Ed presented Nancy with a premarital agreement, which she signed.

The parties' financial circumstances are relatively straight-forward. At the time they married, Nancy worked as a nurse. Ed worked at Pella Corporation and farmed part-time. The farm consisted of four-hundred acres of land used for row crop and livestock. Eventually, Ed ceased employment with Pella to farm full-time. The farm never had a profitable year from the time the parties met until they divorced. Nonetheless, Ed was able to continue to farm due to repeated refinancing of his operating loans and due to Nancy's income. All of Nancy's income was used to pay the parties' living expenses, which subsidized Ed's perpetually unprofitable farming operation. By the time of trial, Ed's farming operation had been reduced to one-hundred-thirty-five acres, but the value of the farmland he owned increased significantly due, in part, to land improvements made over the course marriage.

At the time of trial, Ed suffered from various medical and health conditions. At the time of trial, Ed was sixty-five years old. In 2002, Ed suffered an acute work-related injury while employed with Pella resulting in the loss of several of his fingers. He also suffered and continues to suffer from various cardiovascular ailments. During the course of the marriage, he underwent triple-bypass surgery. Nancy's nursing experience allowed her to provide convalescent care for Ed. The parties dispute to what extent Ed is currently limited by his health conditions. Ed contends he is limited, but he admits he has farmed full-time and intends to farm full time for the next decade.

Nancy suffers from her own medical condition. At the time of trial, Nancy was fifty-nine years old. After the parties married, Nancy developed occipital neuralgia, a form of nerve damage that causes her to suffer pain. Nancy tried several medical treatments to alleviate her near-constant pain, but the treatments were not successful. Eventually, with Ed's approval, Nancy moved to Colorado to manage her pain through the use of legal, medicinal cannabis oil. She testified the cannabis oil treatment is helpful. However, she is now unable to work and receives disability payments.

Ed filed this dissolution action upon Nancy's move to Colorado. With respect to the property division, Ed sought to enforce the premarital agreement to prevent division of the parties' premarital property. The district court invalidated the agreement, noting Nancy did not have legal representation when she signed the agreement and the agreement contained no financial disclosures. When the court divided the parties' property, the district court incorrectly found Ed's farm "was inherited and/or a gift" and incorrectly concluded the property could not be divided. To compensate Nancy for her financial contributions to the marriage, the district court awarded Nancy reimbursement spousal support in the amount of $1200 per month for ten years. It also awarded Nancy her car, personal bank accounts, personal property in her possession, a camping trailer, an ATV (all-terrain vehicle), an Iowa State Fair camping spot, and items of sentimental value.

II.

Dissolution cases are reviewed de novo, including challenges to prenuptial agreements. See In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013) (stating dissolution actions are reviewed de novo); In re Marriage of Shanks, 758 N.W.2d 506, 510-511 (Iowa 2008) (noting "the general rule is that issues concerning the validity and construction of premarital agreements are equitable matters subject to . . . de novo review" even though questions about the validity of a premarital agreement are similar to contract disputes). "Although our review is de novo, we afford deference to the district court for institutional and pragmatic reasons." Hensch v. Mysak, 902 N.W.2d 822, 824 (Iowa Ct. App. 2017); accord In re Marriage of Gust, 858 N.W.2d 402, 406 (Iowa 2015) (noting we give great latitude to the district court in fixing spousal support); In re Marriage of Benson, 545 N.W.2d 252, 257 (Iowa 1996) ("This deference to the trial court's determination is decidedly in the public interest. When appellate courts unduly refine these important, but often conjectural, judgment calls, they thereby foster appeals in hosts of cases, at staggering expense to the parties wholly disproportionate to any benefit they might hope to realize."). As such, we will not modify a decree unless the district court failed to do equity. See In re Marriage of Mauer, 874 N.W.2d 103, 106 (Iowa 2016). "Prior cases are of little precedential value, except to provide a framework for analysis, and we must ultimately tailor our decision to the unique facts and circumstances before us." In re Marriage of Kleist, 538 N.W.2d 273, 276 (Iowa 1995) (citing In re Marriage of Will, 489 N.W.2d 394, 397 (Iowa 1992)).

A.

We first address Ed's contention the district court erred in holding the prenuptial agreement was not enforceable.

Iowa Code chapter 596 (2016) governs the enforceability of a prenuptial agreement executed on or after January 1, 1992. See Shanks, 758 N.W.2d at 511. A prenuptial agreement is not unenforceable merely because it is "a bad fiscal bargain for one party." In re Marriage of Spiegel, 553 N.W.2d 309, 316 (Iowa 1996) ("[W]e will not so grossly interfere with the parties' freedom to contract."), superseded by statute. However, a premarital agreement is unenforceable under any of the following circumstances:

a. The person did not execute the agreement voluntarily.

b. The agreement was unconscionable when it was executed.

c. Before the execution of the agreement the person was not provided a fair and reasonable disclosure of the property or financial obligations of the other spouse; and the person did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other spouse.

Iowa Code § 596.8(1).

We first turn our attention to the question of whether the agreement was unconscionable when executed. "The concept of unconscionability includes both procedural and substantive elements. Procedural unconscionability generally involves employment of sharp practices, the use of fine print and convoluted language, as well as a lack of understanding and an inequality of bargaining power." Shanks, 758 N.W.2d at 515 (citations omitted and altered for readability). When considering if an agreement is procedurally unconscionable, we consider the challenging party's ability to seek independent counsel, the legal and financial sophistication of the parties, the time the challenging party had to consider the agreement prior to the marriage, the use of technical language in the agreement, "and the use of fraudulent or deceptive practices to [secure] the [challenging] party's assent." Id. at 517. "A substantive unconscionability analysis focuses on the harsh, oppressive, and one-sided terms of a contract." Id. at 515 (citation omitted).

Like the district court, we conclude the agreement here was procedurally unconscionable. Here, the parties provided conflicting testimony as to when Nancy received the agreement. Ed stated it was before the wedding. His signature is dated three days prior to the wedding. Nancy testified Ed may have signed the agreement three days prior to the wedding, but he did not present the agreement to her until the day of the wedding. We find Nancy credible on this issue. Nancy was not represented by counsel. Given the short-time between the presentation of the agreement and the wedding, it was not practicable for her to obtain counsel. Nancy did not have particularized knowledge or expertise relating to legal and financial issues. Springing the prenuptial on Nancy on the day of the wedding is procedurally unconscionable.

In addition, Ed failed to make a fair and reasonable disclosure of his assets at the time of the marriage. A fair and reasonable disclosure requires each party have "'adequate knowledge' of the other party's property and financial obligations." See id. at 519 (citing Iowa Code § 596.8(3)). Although the agreement stated financial affidavits were attached to the agreement, there were none. While Nancy knew Ed farmed part-time, there is no evidence she was aware of the scope of Ed's farming operation or the value of Ed's assets at the time the parties married. Her ability to determine the scope of Ed's assets was limited, in part, because Ed owned some farmland and rented other farmland. There is no evidence Nancy had any knowledge...