Marriage of Full, In re, 58004

• Decision Date: 29 June 1977
• Docket Number: No. 58004,58004
• Citation: 255 N.W.2d 153
• Parties: In re the MARRIAGE OF Elliott D. FULL and Merle F. Full. Upon the Petition of Elliott D. FULL, Appellant, and concerning Merle F. FULL, Appellee.
• Court: Iowa Supreme Court

Page 153

255 N.W.2d 153

In re the MARRIAGE OF Elliott D. FULL and Merle F. Full.

Upon the Petition of Elliott D. FULL, Appellant, and concerning Merle F. FULL, Appellee.

No. 58004.

Supreme Court of Iowa.

June 29, 1977.

Patricia C. Kamath, Iowa City, for appellant.

Meardon, Sueppel, Downer & Hayes, Iowa City, for appellee.

Submitted to MOORE, C. J., and MASON, RAWLINGS, REES and McCORMICK, JJ.

MASON, Justice.

Petitioner, Elliott D. Full, appeals from an order of the Johnson District Court denying his application for modification of a dissolution decree. Petitioner asserted as grounds for modification an alleged material change of circumstances since the date of the original decree and an alleged mutual mistake on the part of the parties in valuing property owned by them and distributed by the decree. Petitioner contends the district court erred in denying said application.

Petitioner and respondent, Merle F. Full, were married October 2, 1947. Just a short time before petitioner had invested $4500 in the Johnson County Broadcasting Corporation. This investment was made possible by petitioner using $1500 of his funds and $3000 borrowed from his parents. The loan was repaid after the marriage. At the time of the termination of the marriage on December 14, 1971, petitioner owned 41.3 percent of the outstanding shares of this corporation whose principal business is radio station KXIC in Iowa City. The court found the broadcasting corporation had a fair market value of $750,000.00 at that time, subject to a $60,000.00 indebtedness, and placed an actual value on petitioner's stock in this corporation at $282,900.00.

During the 1950's petitioner and two associates organized the Night Eye Corporation, an Iowa City based security alarm enterprise. The court found this corporation had an actual value of $80,000.00 less an indebtedness of $20,000.00 and that the stock owned by the petitioner, being 48 percent of the stock issued, had an actual valuation of $28,800.00 on December 14, 1971.

The parties had acquired a homestead and furnishings therein which the court valued at.$46,500.00, subject to a mortgage of $7000.00.

In connection with making such division of the assets of the parties as it deemed justified in light of the competent and relevant evidence, section 598.21, The Code, the trial court pointed out that, "The property accumulated by the parties during the marriage shall be treated by this Court as having been accumulated by their joint efforts, and it will be distributed as nearly as possible equally between them."

Petitioner was awarded all of the parties' substantial stock holdings, a 1964 Volkswagen, a boat and his personal effects. Respondent was awarded the sum of $165,725.00 with $2475.00 thereof to be paid forthwith in cash. Petitioner was ordered to transfer to respondent all his right, title and interest in the family residence, including all household goods and furnishings, and in return should receive a credit in the sum of $23,250.00 on the amount due respondent. The balance of $140,000.00 was to be paid respondent at the rate of $10,000.00 or more each year with the first payment due on or before July 1, 1972, and annually thereafter. Such payments were to survive the death of either party and were to be unaffected in any manner by the remarriage of either or both of the parties. Respondent was also awarded a 1967 Dodge automobile, her personal effects and alimony of $200 per month commencing January 1, 1972, and monthly thereafter until such time as respondent remarries or upon the death of either party.

Petitioner filed a notice of appeal subsequent to the filing of the dissolution decree and respondent filed notice of cross appeal. However, neither appeal was prosecuted further.

February 23, 1973, petitioner applied to the Johnson District Court for modification of the dissolution decree, requesting that his alimony obligation be terminated. The basis for the request was respondent's acquisition of employment and her alleged substantial income, which petitioner maintained represented a material change in the circumstances present at the time of the original decree. Respondent resisted petitioner's application and the district court, after taking judicial notice of the inflationary trend since entry of the original decree, concluded that respondent's income of $4,683.00 from March of 1972 to approximately March of 1973 did not constitute a change of circumstances warranting modification of the original decree.

The application for modification which is the subject of this appeal was filed September 27, 1974. Therein petitioner asserted two grounds in support of his contention the property division provisions of the original decree should be modified and requested termination of alimony on the basis of a third and separate ground. The first division of petitioner's application alleged the parties' testimony as to the value of Night Eye was in error and resulted in that entity being grossly overvalued.

Petitioner's second argument concerned the value of Johnson County Broadcasting and asserted that (1) as evidenced by estate tax computations following the death of one of petitioner's business associates, the actual value of the enterprise was significantly lower than that testified to by the parties, and (2) new competition in the KXIC broadcasting area would detrimentally affect the value of the corporation.

The third division of petitioner's application sought termination of alimony payments and asserted in support thereof respondent's financial success in various respects, which allegedly was not an anticipated circumstance at the time of the filing of the original decree.

Respondent resisted the application for modification arguing petitioner's avenue of relief was by direct appeal from the original decree and, in any event, petitioner had not alleged facts indicating a substantial change of circumstances since entry of the original decree.

On January 7, 1975, the district court, in pertinent part, ruled as follows with respect to petitioner's allegation of mutual mistake in valuation of the two corporations:

" * * * Petitioner seeks to modify the existing Decree by reducing the amount of the property settlement * * *, based upon the premise that the stock of the Johnson County Broadcasting Corporation and Night Eye Corporation which was originally awarded to the Petitioner has decreased in value. Both of these corporations are closely held. The Petitioner is an employee, director, and officer of Johnson County Broadcasting Corporation. He is a stockholder, officer, director and active manager of Night Eye Corporation. Obviously, since the stock of neither corporation is available for sale to the public generally, valuation is difficult. Petitioner's evidence relates to the sale of a minority stock interest following the death of Scott Swisher, a stockholder of Johnson County Broadcasting Corporation. This stock was redeemed by the corporation pursuant to a Stock Redemption Agreement more than two years after the Court entered a Decree in this case. Under the circumstances, no competent evidence of valuation has been presented and even if it had been so presented, Petitioner has failed to show any basis for relief of this nature. If the Petitioner was dissatisfied with the original Decree * * *, his remedy was to appeal from it. No mutual or unilateral mistake has been shown which could permit the Court at this time to revalue the stock * * *. If a change in the value of stock could serve as a basis for changing the original award in the Decree, the Courts would be filled with applications for modification based upon the fluctuation in value of property after a Decree is entered. * * *."

With respect to petitioner's requested relief from his alimony obligation, the court ruled in part as follows:

"Petitioner is also asking for modification of the monthly alimony installments * * * based upon a change of circumstances. While Petitioner's claim is properly alleged, no change of circumstances has been shown which would entitle this Court to reduce the monthly alimony payments. The Court has examined the income tax returns of the parties, and it appears * * * Petitioner has increased his income since the original Decree. Respondent's income has been sporadic, and her future income from her business is somewhat uncertain. In any event, there is no evidence of any substantial change in her financial circumstances or that of the Petitioner which would warrant reduction of the monthly alimony payments. She has saved funds obtained by virtue of the original property award and is earning some income from these investments. This evidence is certainly not sufficient by itself to warrant a reduction of alimony, and she should not be penalized for saving a portion of the money she has received or is receiving by virtue of the original Decree * * *. Petitioner has not reduced his standard of living. * * * The Court finds that no change of circumstances has been shown as to warrant a reduction in the monthly alimony payments."

Petitioner appeals from the judgment entered below seeking relief from the alleged financial burdens imposed upon him by the original decree.

Petitioner's contentions herein present the following questions for this court's review:

1. Does the evidence of record herein demonstrate a mutual mistake of the parties in the valuation of their stock holdings at the time of the dissolution proceedings which would justify a modification of the property settlement established therein?

2. Does the evidence of record herein relating to respondent's increased earning capacity and petitioner's decreased net worth demonstrate a change of circumstances unforeseen by the court at the time of the original decree which would justify termination of petitioner's alimony obligation?

I. In equity matters, such as this, where our review is de novo, rule 334, Rules of Civil...