Marriage of Hitchcock, In re
| Decision Date | 26 August 1981 |
| Docket Number | No. 65452,65452 |
| Citation | 309 N.W.2d 432 |
| Court | Iowa Supreme Court |
| Parties | In re the MARRIAGE OF W. P. HITCHCOCK and Necia A. Hitchcock. Upon the Petition of W. P. Hitchcock, Appellee, And Concerning Necia A. Hitchcock, Appellant. |
John A. Templer, Jr., of Davis, Hockenberg, Wine, Brown & Koehn, Des Moines, for appellee.
Considered by REYNOLDSON, C. J., and UHLENHOPP, McGIVERIN, LARSON, and SCHULTZ, JJ.
In this marital dissolution case the trial court divided the parties' property sixty percent to the husband and forty percent to the wife, but denied alimony to the wife due to "the adequate property settlement." The wife, respondent Necia A. Hitchcock, appeals from these and other decree provisions. The husband, petitioner W. P. "Pat" Hitchcock, filed a cross-appeal, inter alia, from trial court's valuation of stock in a closed corporation. We affirm in part, reverse in part, and remand with directions.
These parties were married December 10, 1947. The marriage was dissolved August 19, 1976. In In re Marriage of Hitchcock, 265 N.W.2d 599, 607 (Iowa 1978) (Hitchcock I), we set aside portions of the decree "dealing with the distribution of the assets of the parties and the maintenance of Mrs. Hitchcock" and remanded, but did not disturb the dissolution decree. This appeal and cross-appeal challenge rulings in the November 1979 trial of the economic issues on remand.
Our review is de novo. In order to equitably determine these parties' financial or property rights, we apply the general formula announced in Schantz v. Schantz, 163 N.W.2d 398, 405-06 (Iowa 1968), as modified in In re Marriage of Williams, 199 N.W.2d 339, 345 (Iowa 1972) (). 1 E. g., In re Marriage of Callenius, 309 N.W.2d 510, 514 (Iowa 1981); In re Marriage of Williams, 303 N.W.2d 160, 165 (Iowa 1981).
Pat is sixty-one years old and generally in good health. He has high blood pressure that is under control and receives treatment for allergies. As a result of service in the Marine Corps during World War II, Pat has a minor health problem for which he receives disability income of $44 a month from the Veterans' Administration. However, his health has had no adverse effect on his ability to earn an income.
Pat is a high school graduate and attended Saint Thomas College for one year. After his discharge from military service, he began employment with A. E. Staley Manufacturing Company as a salesman in 1946, continuing until 1948. In November 1948 he was hired as a salesman by Davis Marketing. His duties were to call on retail stores and sell products represented by Davis Marketing as broker. In 1951 he transferred to Davenport where he organized a separate Davis Marketing division. Pat prospered and moved up to the top of the corporate ladder. Ultimately he became president and principal stockholder of Davis Marketing Co., Inc. (Davis Marketing), a position he continues to enjoy.
Necia is sixty-eight years old (seven years older than Pat), has a high school equivalency certificate, and has taken some college level courses. Prior to the marriage, she was in the Marine Corps and after her discharge worked in a record store. Necia was not employed when she and Pat were married and she did not work outside the home during the marriage.
During the nearly thirty years of their marriage, Pat devoted himself almost exclusively to achieving success at Davis Marketing. Necia remained home, maintained the household of the parties, and suffered through several miscarriages. In 1951 she gave birth to a child, Bridgett. Necia reared Bridgett and otherwise helped Pat achieve his career objectives unimpeded by family considerations.
Pat's career demanded substantial travel. Often he was absent from home on important family occasions. His employment involved moving from Des Moines to Omaha in 1948, back to Des Moines the same year, to Davenport in 1951, and back to Des Moines in 1965. In each of the homes occupied or owned by the parties, Necia made substantial improvements such as making curtains and painting. She testified that she never hired such work done until 1973, when the parties had a sizable net worth.
The record reflects these parties considered their marriage a joint undertaking. For example, when Necia received a substantial sum as a result of a personal injury claim, she gave this money to Pat to enable him to attend a veterans reunion in Japan and the Philippines.
As chief executive officer and majority owner of Davis Marketing, Pat earns a large direct and indirect income. His direct income as reported for tax purposes in the calendar years 1970 through 1978 is summarized as follows.
In addition to a salary and bonuses, Pat also receives a valuable package of fringe benefits. These include: (1) medical and dental plans; (2) term life insurance in the amount of $150,000; (3) a pension plan, which at trial time would allow him retirement benefits of $1600 per month at age sixty-five; (4) a profit sharing plan through which he had accumulated about $42,000; (5) the expense paid use of a late model Cadillac automobile (he pays $35 a month for personal use); and (6) an expense allowance of $500 per month. He testified most of his expenses were charged on a company credit card.
Since their separation, Necia's income has been derived almost exclusively from Pat's court-ordered payments. Her income in 1976 was $6,062; in 1977, $21,730; and in 1978, $21,626. Necia has no present earning capacity nor a reasonable likelihood of achieving any measurable earning ability, in view of her background, education, and age. Her support, pursuant to the original decree of August 1976, was $1,500 per month. On April 16, 1979, the temporary support was increased to $1,700 per month. In addition, Pat has been paying the mortgage on the residence occupied by Necia.
Pat argues the marital assets should be valued, and the property distribution and alimony determined, as of August 1976, the date of the dissolution decree. The trial court valued the assets as of November 1979, the date of the trial after remand.
In In re Locke, 246 N.W.2d 246 (Iowa 1976) (Locke I), we held "the date of trial is the only reasonable time at which an assessment of the parties' net worth should be undertaken." Id. at 252 (emphasis added). Pat contends that here, as in Locke I, we did not alter the dissolution decree, thus the first trial date is the required valuation date. It is true the appendix filed in Locke v. Locke, 263 N.W.2d 694 (Iowa 1978) (Locke II), shows that the farmland involved was appraised for the date of the dissolution trial. However, a valuation-date rule for dissolution cases was not promulgated in Locke I. The relevant issue in Locke I was whether an inherited tract of farmland should be considered in the property division. Locke I, 246 N.W.2d at 251-54. In Locke II the parties stipulated the value of the farmland. Locke II, 263 N.W.2d at 694. The issue whether this valuation date was proper was not raised. Therefore, these cases are not controlling here. Nor is it appropriate for this court to develop a general rule concerning valuation dates in disjointed dissolution proceedings, when property settlements are within this court's equitable jurisdiction.
In this case there was no "first trial" concerning the marital assets in the sense that a court received and weighed evidence of the value of the marital assets, made findings of fact, and formed conclusions of law. Pat was the only witness in the half-day proceeding. His testimony was not completed when, during a recess, the trial court induced the settlement we later set aside. Hitchcock I, 265 N.W.2d at 600, 602 607. We observed "the decree in this case is not the result of a trial on the merits or an independent decision of the court." Id. at 605. Consequently, the remand proceeding was the first judicial determination of the marital assets subject to distribution and their value. Curiously, Pat acquiesced in the 1979 values of all assets but the Davis Marketing stock. He makes no objection to the inclusion of a sailboat and trailer as marital assets, despite the fact he bought them after the divorce decree.
If, following the 1976 dissolution, there had been an actual distribution of common stock in a public corporation, either party would have been free to sell or retain such property. The resulting loss or gain of one party due to fluctuating stock values would not affect the interest of the other. Here, however, there was no distribution. If we were to adopt Pat's argument, he would benefit by three years' appreciation in Davis Marketing stock while Necia would merely receive the legal rate of interest on her share.
We hold that here equity and logic dictate we approve the trial court's decision to value the marital assets as of November 1979.
The parties' net worth is central to this appeal. They disagree on the value of their principal marital asset, 8,285 shares of Davis Marketing. These shares, standing in Pat's name, constitute more than eighty percent of Davis Marketing's outstanding stock. Pat's expert put their worth on December 31, 1978, at between $260,729 and $298,674. Necia's two experts valued this stock at $2,183,428.90. On cross-examination, rather effective attacks were made on the experts by counsel for both parties. The variety and complexity of the appraisal...
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