In re Marriage of Swalley, No. 3-650/03-0175 (Iowa App. 2/11/2004)
| Decision Date | 11 February 2004 |
| Docket Number | No. 3-650/03-0175,3-650/03-0175 |
| Parties | IN RE THE MARRIAGE OF KEVIN JON SWALLEY and LINDA KAY SWALLEY Upon the Petition of KEVIN JON SWALLEY, Petitioner-Appellee/Cross-Appellant, And Concerning LINDA KAY SWALLEY, Respondent-Appellant/Cross-Appellee. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Grundy County, George L. Stigler, Judge.
The respondent appeals, and the petitioner cross-appeals, from the economic provisions of the decree dissolving their marriage.
AFFIRMED AS MODIFIED ON APPEAL; AFFIRMED ON CROSS-APPEAL.
Kevin Engels of Correll, Sheerer, Benson, Engels, Galles & Demro, P.L.C., Cedar Falls, for appellant.
Thomas Langlas of Gallagher, Langlas & Gallagher, Waterloo, for appellee.
Considered by Sackett, C.J., and Miller and Hecht, JJ.
Linda Kay Swalley appeals from the dissolution decree entered by the district court dissolving her marriage to Kevin Jon Swalley. She contends the court erred in failing to require Kevin to pay an additional amount of support for her anticipated costs of health insurance and her monthly medical expenses, and in failing to require him to designate her as a beneficiary on one of his life insurance policies or his executive supplemental income benefit. Kevin cross-appeals, contending the court erred in not taking into consideration the tax consequences to each party in its division of marital assets. We affirm as modified on the appeal and affirm on the cross-appeal.
Background Facts and Proceedings.
Kevin and Linda were married August 17, 1977. They are the parents of one child, Zachary, born March 7, 1988. The parties separated in January 2001 and Kevin filed a petition for dissolution of the marriage on August 13, 2001. The case proceeded to trial and the court entered a dissolution decree on August 20, 2002. Both parties filed motions to enlarge or amend the court's findings and conclusions pursuant to Iowa Rule of Civil Procedure 1.904(2). The court entered a ruling on the motions on January 7, 2003.
Kevin was forty-five at the time of the dissolution trial and Linda was forty-four. Kevin has a B.A. in accounting and is a CPA. He is currently the chairman and CEO of the Grundy National Bank, the Ackley State Bank, and their related holding company. In 2001 Kevin had a base salary of $93,000, plus an additional $10,488 in director's fees. Kevin has been diabetic since age thirteen, but controls it with daily insulin shots and the trial court found him to be in good health.
Linda has one year of post-secondary education but quit college to get married. At the time of the trial Linda was working two days per week as an office assistant in an optometrist's office earning $550 per month, or approximately $6,600 per year. The court found Linda's health to be poor. She has suffered from rheumatoid arthritis since 1977. It severely limits her ability to do many activities. She was diagnosed with ulcerative colitis in 1976 and had her colon removed in 1983. She also suffers from osteoporosis and allergies. The court found that Linda's medical conditions limit her ability to work and that due to these conditions she will likely never be able to work In any job that pays a substantial wage and may not be able to work for any substantial amount of time.
Linda has no health insurance available through her present, part-time employment. She has health insurance costs of $240 per month for a "COBRA" plan through Kevin's employer. In addition she has prescription medicine costs of $80 per month which are not paid by insurance.
The trial court awarded Kevin and Linda equal amounts of property, with each receiving $509,770. In dividing property the court equally divided 3,850 shares of Grundy National Bank stock, with each party receiving stock with a value of $148,706, and the court awarded Kevin $251,609 and Linda $150,052 of Kevin's KSOP with GNB Bancorporation.1 Kevin was ordered to pay as child support $750 per month plus 10% of the gross amount of any bonus he receives or stock options he exercises.
The only issues on appeal deal with spousal support and the income tax consequences of the trial court's division of assets. Kevin proposed that he pay alimony of $1,250 per month for eight years (but to cease if either party died or Linda remarried), plus 25% of his net (after tax) additional income from bonuses and stock options. Linda proposed that Kevin pay alimony of $2,500 per month until either party died or Linda remarried. The trial court ordered that Kevin pay alimony of $1,000 per month, increased to $1,500 per month when his child support obligation ends, until either party dies or Linda remarries or cohabitates with another. It ordered that Kevin also pay as alimony 25% of the net amount of any bonuses he receives and 25% of the net gain (gain less state and federal income taxes) from stock options he exercises. The decree does not require Kevin to pay any amount specifically designated for Linda's health insurance costs.
Linda also proposed in the trial court that Kevin be required to designate her as the beneficiary of $100,000 of the death benefits of one of his life insurance policies, and also designate her as a beneficiary under any deferred compensation plan in effect at the time, such as his Executive Supplemental Income Plan Agreement. The trial court did not require Kevin to do so. Linda renewed the request in a post-trial motion. The trial court again did not require Kevin to do so.
Linda appeals from the dissolution decree contending the court erred in failing to require Kevin to pay an additional amount of support for her anticipated costs of health insurance and other monthly medical expenses. On appeal she requests that Kevin's monthly alimony obligation be raised to $1,500 per month, plus the 25% of his net bonuses as already ordered. She contends she is requesting this additional amount rather than requesting an order for a separate amount from Kevin specifically designed for health insurance, an order which would be supported by precedent, or an order directing Kevin to continue paying for her health insurance. Linda asserts this increase will enable her to pay for her health care expenses, including health insurance, and still meet her other monthly expenses. She also contends the court erred in failing to require Kevin to designate her as a beneficiary on one of his life insurance policies or his executive supplemental income plan.
Kevin cross-appeals contending the court erred in failing to take into consideration the tax consequences to each party in its division of marital assets. Kevin provided the court with evidence, in a document attached to his pretrial statement, regarding the tax consequences to each party based on his proposed division of assets and argues on appeal the court erred in failing to take this into consideration in the decree. It appears undisputed that adverse tax consequences will be unavoidable when each party withdraws their respective share of the retirement funds from Kevin's KSOP. Kevin contends that because his tax bracket is much higher than Linda's the tax consequences to him will be more severe and the court should have addressed this issue in the decree. On appeal he requests we award $70,910 more of the KSOP to him in order to make up for the difference in tax consequences the parties will incur as a result of the division of the KSOP and the trial court's allocation of other assets, thus equalizing the property distribution.
Scope and Standard of Review.
Dissolution actions, as equitable proceedings, are reviewed de novo. Iowa R. App. P. 6.4; In re Marriage of Benson, 545 N.W.2d 252, 253 (Iowa 1996). We give weight to the fact findings of the district court, especially when considering the credibility of witnesses, but we are not bound by these findings. Iowa R. App. P. 6.14(6)(g); In re Marriage of Knickerbocker, 601 N.W.2d 48, 51 (Iowa 1999).
Alimony.
"Alimony is an allowance to the spouse in lieu of the legal obligation for support." In re Marriage of Sjulin, 431 N.W.2d 773, 775 (Iowa 1988). Any form of spousal support is discretionary with the court. In re Marriage of Ask, 551 N.W.2d 643, 645 (Iowa 1996). Spousal support is not an absolute right; an award depends on the circumstances of each particular case. In re Marriage of Dieger, 584 N.W.2d 567, 570 (Iowa Ct. App. 1998). The discretionary award of spousal support is made after considering the factors listed in Iowa Code section 598.21(3) (2001). Id. Property division and alimony should be considered together in evaluating their individual sufficiency. In re Marriage of Trickey, 589 N.W.2d 753, 756 (Iowa Ct. App. 1998).
When determining the appropriateness of spousal support, a court must consider, among other things, the parties' present standards of living and ability to pay balanced against their relative needs. In re Marriage of Williams, 449 N.W.2d 878, 883 (Iowa Ct. App. 1989). In marriages of long duration where the earning disparity between the parties is great, both spousal support and nearly equal property division may be appropriate. In re Marriage of Weinberger, 507 N.W.2d 733, 735 (Iowa Ct. App. 1993).
The trial court awarded Linda $1,000 per month in alimony plus 25% of any net bonuses received and 25% of the net gain, minus taxes, of stock options exercised by Kevin in the future. In making its determination the court specifically noted that Kevin's earning capacity far exceeds Linda's and that because of Linda's medical problems, "She will never be able to work any job that pays a substantial wage or indeed may not be able to work any job for any substantial period of time." All of the evidence of Linda's medical problems and the costs that accompany these problems, including the cost of her health insurance and prescription medicines, was presented to the court. The court found Linda's health to be poor, noted her numerous medical problems, and found she will in fact need...
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