In re The Marriage of Prenger
| Decision Date | 29 March 2023 |
| Docket Number | 22-0480 |
| Parties | IN RE THE MARRIAGE OF BRENT A. PRENGER AND KIMBERLY F. PRENGER Upon the Petition of BRENT A. PRENGER, Petitioner-Appellant/Cross-Appellee, And Concerning KIMBERLY F. PRENGER, n/k/a KIMBERLY F. KIEWIET, Respondent-Appellee/Cross-Appellant. |
| Court | Iowa Court of Appeals |
Appeal from the Iowa District Court for Dallas County, Michael Jacobsen, Judge.
Both parties appeal from several provisions of the decree dissolving their marriage. AFFIRMED AS MODIFIED ON APPEAL; AFFIRMED AND REMANDED ON CROSS-APPEAL.
David E. Brick and Allison M. Steuterman of Brick Gentry, P.C. West Des Moines, for appellant/cross-appellee.
Andrew B. Howie of Shindler, Anderson, Goplerud &Weese, P.C. West Des Moines, for appellee/cross-appellant.
Considered by Bower, C.J., and Greer and Buller, JJ.
After the district court dissolved the marriage of Brent Prenger and Kimberly (Kim) Prenger (now Kiewiet), both parties appealed over issues not covered by the stipulation they entered.[1] Brent raises nine separate issues for our consideration, and Kim asks us to address two concerns. We analyze their claims in separate sections and affirm the district court decree, except we modify the language requiring any and all costs of attendance at a private school, the responsibility for the extracurricular expenses of the children, and the amount of the property equalization payment. We remand for a determination of reasonable appellate attorney fees for Kim.
Factual Background.
Brent and Kim were married on May 20, 2006. They had two children born in 2009 and 2012. In September of 2018, they separated, which was followed by Brent's filing for dissolution of marriage in October. The trial occurred several years later in October 2021.
Both parties were forty-four years old at the time of trial. Brent is one of seven owners of Five Star F.A., Inc. (FSFA)[2] and serves as the vice president and treasurer. He graduated from Simpson College with a finance and business degree in 2000. Kim has a bachelor's degree in nursing and maintains her license, but she has not worked as a nurse since 2003. From that year on, Kim had success working in pharmaceutical sales until 2016 but then, with Brent's agreement, quit to work as a stay-at-home mother. Both parties are in good health.
Before marriage, the parties entered into a premarital agreement that allowed each to retain property held before the marriage and also any afteracquired property not placed in joint ownership. No one disputes the validity of the premarital agreement. During the marriage, while Kim and Brent managed to accumulate assets, they also spent a great deal to sustain a high standard of living, which was funded primarily by Brent's earnings after 2015. They now both appeal from several issues related to the support awarded, the additional expenses Brent must pay, the property award, and Kim's attorney fees. As we analyze their claims, other facts important to those issues will be developed.
Standards of Review.
Dissolution-of-marriage actions are reviewed de novo. In re Marriage of Mann, 943 N.W.2d 15, 18 (Iowa 2020) (citing Iowa R. App. P. 6.907). "Accordingly, we examine the entire record and adjudicate anew the issue of the property distribution." In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013). We give weight to the findings of the district court, particularly about the credibility of witnesses, but we are not bound by them. Id. A district court's ruling will be not be disturbed unless the ruling fails to do equity. Id.
We review an award of trial attorney fees in a dissolution-of-marriage action for an abuse of discretion. In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006). "Whether attorney fees should be awarded depends on the respective abilities of the parties to pay." Id. (quoting In re Marriage of Guyer, 522 N.W.2d 818, 822 (Iowa 1994)). "Appellate attorney fees are awarded upon our discretion and are not a matter of right." In re Marriage of Heiar, 954 N.W.2d 464, 473 (Iowa Ct. App. 2020).
Brent's Issues on Appeal.
Brent takes issue with several findings of the district court.
The Support Awards-Determining Net Income.
Three of Brent's appeal points concern the support awards. Two of those three assert the district court erred in the determination of the income used to calculate the awards for child support and alimony-Brent's attributed income is too high and Kim should be attributed some income. The third concern is over the amount of spousal support ordered. The district court ordered Brent to pay $5500 monthly in spousal support for five years. The child support award requires Brent to pay $2209 per month for the support of the two minor children. To arrive at those numbers, the district court based the support awards on the four-year average of Brent's income as reflected on the tax returns and attributed no income to Kim. Although Kim receives income from her family farm partnership, she testified that the cash she is paid is only enough to cover the federal and state taxes due on her income.[3]
Before we dive into the rationale behind each award of support, we examine how the district court determined the parties' earnings. Brent argues that the district court incorrectly calculated his average earnings over the four years (2017 through 2020) at $347,898.[4] From his standpoint, a more equitable approach would be to use the average of income earned in 2019 and 2020; making his average annual gross income $203,932 because those years reflect the reality of his business during the COVID-19 pandemic and after. Because of the pandemic and its impact upon his business, Brent urges he cannot make the income he made in the pre-pandemic years and so 2017 and 2018 should not be taken into account. To support his forecast, Brent also submitted interim reports for 2021 showing a similar slowdown in his company earnings and profit.[5] He emphasizes the reduction in earnings is not self-imposed, appears to be more than temporary, and is not something he can control.
Through his job at FSFA, Brent earns a base annual salary of $108,000. Generally, he is also paid a bonus each year and then the corporation's remaining profit is paid as a dividend payment. He also receives his share of rental income from a real estate holding company, which will be discussed later. The FSFA bonus is based upon the net profit of the company. Brent makes a compelling argument over the declining trend of his income as shown by his tax returns and the company income and expense records. To be sure, the pandemic created hurdles for many businesses, including the shutdown Brent described, labor force concerns, and supply chain issues. He also pointed to increased competition from a national vendor that moved into the retail area shortly before the dissolution trial. We have no way to know if these hurdles are temporary or permanent. Time will tell.
Kim maintains the district court's determination of income for both her and Brent is correct. On top of that, Kim draws our attention to the "perks" received by Brent from his company that were not considered in the calculation of his actual earnings but were referenced by the district court. At no cost, Brent's company provides him a vehicle and covers the cost for insurance, gas, and maintenance; his cell phone, laptop computer, and iPad; family health insurance; "travel points" i.e. airline miles earned from use of the company credit card; $500 per month toward his country club membership; and free tickets for sporting and other entertainment events that are not calculated into his actual earnings for support purposes. We take these payments into account as well. See In re Marriage of Lee, 486 N.W.2d 302, 305 (Iowa 1992) ("The guidelines do not limit the definition of gross income to that income reportable for federal income tax purposes.").
In cases where a spouse has fluctuating income, we have recognized that "it generally is best to use an average of income from a period that accurately reflects the fluctuations in income." In re Marriage of Cossel, 487 N.W.2d 679, 681 (Iowa Ct. App.1992). We afford the district court some discretion in making these computations and do not quibble with the four-year average formula used here. See In re Marriage of Kupferschmidt, 705 N.W.2d 327, 334 (Iowa Ct. App. 2005). Using the four-year term balances the good years with the bad years and assumes not every year will be influenced by pandemic conditions. But, there was a complication in finding the accurate number for one of those years. We note that in 2020, because of cash flow concerns, while Brent reported income of $214,377, $33,333 of that was a loan from his 401(k).[6] Because the loan does not represent earnings, it is fair to only consider his 2020 income less that loan amount, so actual earnings of $181,044. We do not have the benefit of the district court's calculation of Brent's average earnings over the four years, but upon our de novo review, we find Brent's average earnings over the four years is $339,565 annually.[7] In making this calculation, we use these numbers from the tax returns:
YEAR
SALARY + BONUS
DIVIDENDS
TOTAL INCOME
2017
$143,395
$225,943
$369,338
2018
$195,254
$269,692
$464,946
2019
$199,383
$143,548
$342,931
2020
$137,269
$43,775
Thus the district court overstated Brent's average annual income by $8333, or about $694 per month. Considering the other benefits afforded to Brent that are not reported as income but allow him more discretionary income and the fact we are considering pandemic years in this calculation, we do not find the district court's determination of earnings to be so far off base to warrant a modification of the support...
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