In re Kimbro

• Decision Date: 08 February 2013
• Docket Number: No. 11–1398.,11–1398.
• Citation: 826 N.W.2d 696
• Parties: In re The MARRIAGE OF Diana L. KIMBRO and Steven C. Kimbro. Upon the Petition of Diana L. Kimbro, Appellee, and Concerning Steven C. Kimbro, Appellant.
• Court: Iowa Supreme Court

826 N.W.2d 696

In re The MARRIAGE OF Diana L. KIMBRO and Steven C. Kimbro. Upon the Petition of Diana L. Kimbro, Appellee, and Concerning Steven C. Kimbro, Appellant.

No. 11–1398.

Supreme Court of Iowa.

Feb. 8, 2013.

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

Matthew J. Brandes and Kerry A. Finley of Simmons, Perrine, Moyer, Bergman, P.L.C., Cedar Rapids, for appellee.

WIGGINS, Justice.

On further review, a spouse asks us to determine the fairness of a property distribution and the denial of attorney fees. The court of appeals affirmed the district court decision by upholding the award of an equalization payment, but modified the decision by reducing the amount of the equalization payment from $45,468 to $5000. Additionally, the court of appeals upheld the district court's denial of attorney fees. The court of appeals also denied appellate attorney fees. On the issue of the property distribution, we vacate the court of appeals opinion and affirm the district court decision, because we agree with the district court's calculation of the equalization payment at $45,468. On the denial of trial and appellate attorney fees, we affirm both the court of appeals opinion and the district court decision.

I. Prior Proceedings.

This appeal involves the dissolution of marriage between Steven and Diana Kimbro. The district court entered the decree dissolving the Kimbro marriage. To equalize the property distribution, the district court required Steven to make an equalization payment to Diana totaling $50,060. The district court later amended the decree and reduced the amount to $45,468 to reflect Diana's tax obligation. Second, the district court awarded Diana physical custody of the parties' two minor daughters and granted her child and spousal support.

Steven appealed, arguing the property distribution with the equalization payment was inequitable, because Diana dissipated her share of a joint bank account, which Steven unilaterally divided upon the parties' separation. Diana cross-appealed, contending the district court erred by denying attorney fees. We transferred the case to the court of appeals. The court of appeals affirmed as modified the district court decision on the property distribution by reducing the equalization payment from $45,468 to $5000. Finally, the court of appeals affirmed the district court by denying trial and appellate attorney fees.

Diana then sought further review, which we granted.

II. Issues.

This appeal involves two issues. Diana claims the court erred by decreasing the equalization payment and by refusing to award attorney fees.

III. Standard of Review.

We review appeals regarding dissolution of marriage de novo, because such actions are equitable proceedings. Iowa Code § 598.3 (2009); Iowa R.App. P. 6.907; In re Marriage of Schenkelberg, 824 N.W.2d 481, 484 (Iowa 2012). Under this standard, we defer to the factual findings of the district court. Schenkelberg, 824 N.W.2d at 484. However, those findings are not binding upon us. Id.; see alsoIowa R.App. P. 6.904(3)( g ). We will disturb the district court ruling “when there has been a failure to do equity.” In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005) (citation and internal quotation marks omitted).

We review the denial of attorney fees for an abuse of discretion. Schenkelberg, 824 N.W.2d at 484. We reverse the district court's ruling only when it rests on grounds that are clearly unreasonable or untenable. Id. A ruling is clearly unreasonable or untenable when it is “not supported by substantial evidence or when it is based on an erroneous application of the law.” Id. (citation and internal quotation marks omitted).

IV. Facts.

On our de novo review, we make the following findings of fact. Steven and Diana Kimbro married in Des Moines on August 21, 1993. Over the course of their seventeen-year marriage, they raised three children. These proceedings only affect two minor children, age fourteen and sixteen.

When the couple had their first daughter, they jointly decided Diana, who had graduated with a bachelor's degree in education from the University of Northern Iowa, would stay home to care for the children. Steven's role would be to support the family financially. Steven received his bachelor's degree from Iowa State University and has worked as a sales representative for various pharmaceutical companies throughout the marriage.

One position Steven held was for the pharmaceutical company, Genentech. His benefits package included corporate stock options. Genentech bought out Steven's stock options in March 2009, paying him $351,682 after federal and state withholdings. The Kimbros placed the proceeds into a jointly held account at Bankers Trust.

By the end of March 2010, Steven accepted a position in sales with his current employer, Response Genetics. Steven earns a salary of $115,000 per year plus commissions. He received guaranteed commissions of $4000 per month for the first three months of his employment. He now averages $4200 per month. Steven is also eligible for bonuses with an estimated total of $36,000. At the time of trial, his projected earnings were approximately $170,400 per year.

During the marriage, Diana made little to no income. In fact, she allowed her teaching certificate to lapse. However, after separating from Steven, she successfully renewed her teaching certificate and began substitute teaching during the 2010–2011 school year for $114 per day. In 2010, she earned $3167. In 2011, she made $5400. Diana estimates that if she were able to substitute teach for the full, forty-week school year, she would earn approximately $22,800 annually.

On January 18, 2010, Diana informed Steven she had consulted an attorney and was filing for divorce. By that time, the Genentech stock options in the Bankers Trust account had appreciated from $351,682 to $444,053.

The day after Diana told him about the pending divorce, Steven unilaterally removed $226,518 from the Bankers Trust account and placed it in a Bank Iowa account under his name alone. He left the remaining balance of $217,535 in the Bankers Trust account for Diana. At trial, Steven explained his intent for dividing the Bankers Trust account:

I didn't want to fight about it any further, so I took half of it and put it in there; and I came back and told her I took half out today and your other half is still there and so I didn't want her to be decimated and have nothing. I just said equally right down the middle. That's yours, this is mine.

(Emphasis added.)

On the same day he transferred the funds, Steven informed Diana of what he had done. Steven admitted he divided the Bankers Trust account without consulting Diana. He also testified that the parties had no agreement concerning how to spend the money.

At the time of trial, Diana had $49,000 remaining from her share of the Bankers Trust account. Steven had $179,000 left.

V. Property Distribution.

A. Agreement to Divide the Bankers Trust Account. The court of appeals reduced the equalization payment by finding Steven and Diana had a predissolution agreement to equally divide the funds in the Bankers Trust account. Diana contends the court of appeals erred by decreasing the equalization payment on this basis, because no such agreement existed. On our de novo review, we conclude the record does not support the finding of an agreement.

Steven testified he did not consult Diana before dividing the Bankers Trust account. Instead, he admitted to acting on his own. He further testified there was no agreement with Diana as to how she could spend the money from that account. Steven never alleged such an agreement existed before the district court entered the dissolution decree. The first time Steven claimed any agreement existed was in his rule 1.904(2) motion. There, he stated the only agreement between the parties regarded splitting the tax liability. However, on appeal, Steven did not argue an agreement existed.

Diana's testimony confirmed there was no agreement. She indicated that “Steve made the decision” to divide the account, and she “didn't know that he did it until later.” Furthermore, when asked as to whether there was any agreement regarding the use of the money once Steven divided it, Diana responded the parties had no such agreement.

Accordingly, we find no evidence of an oral or written agreement to substantiate Steven's claim that the parties agreed to divide the Bankers Trust account. See In re Marriage of Johnson, 350 N.W.2d 199, 202 (Iowa 1984) (finding the spouses had an oral agreement to divide the property prior to dissolution). There being no agreement relevant to an equitable property division, we find the court of appeals opinion rests on a finding not supported by the evidence. SeeIowa Code § 598.21(5)( k )(allowing the court to consider “[a]ny written agreement made by the parties concerning property distribution”); id. § 598.21(5)( m ) (permitting the court to consider other relevant factors, including an oral agreement). The record demonstrates Steven unilaterally divided the account between himself and Diana. Therefore, we cannot treat the Bankers Trust account as being subject to an agreement made by the parties when distributing the Kimbro marital estate.

B. Dissipation of Marital Assets Doctrine. Second, the court of appeals reduced the equalization payment upon deciding Diana dissipated marital assets by spending, during the separation period, the majority of the money Steven gave her from the Bankers Trust account. In doing so, the court of appeals adopted Steven's argument that his unilateral division of the Bankers Trust account transformed those funds into the separate property of the respective spouses and resultantly, barred Diana from double-dipping into Steven's remaining funds at the time of dissolution. Diana contends the court of appeals erred by embracing this rationale and subsequently finding the dissipation doctrine applied. We...