In re the Marriage of Ayala ( 2019 )

IN THE COURT OF APPEALS OF IOWA
No. 18-0369
Filed May 1, 2019
IN RE THE MARRIAGE OF BRYANT WILLIAM AYALA
AND LAURA WALKER AYALA
Upon the Petition of
BRYANT WILLIAM AYALA,
Petitioner-Appellant,
And Concerning
LAURA WALKER AYALA,
Respondent-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, William P. Kelly, Judge.
Bryant Ayala appeals the property division provisions in the dissolution of
marriage decree. AFFIRMED.
Andrew B. Howie and James R. Hinchliff of Shindler, Anderson, Goplerud
& Weese, PC, West Des Moines, for appellant.
Ryan D. Babich of Babich Goldman, PC, Des Moines, for appellee.
Considered by Potterfield, P.J., and Tabor and Bower, JJ.
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BOWER, Judge.
Bryant Ayala appeals the property division provisions in the district court’s
decree dissolving his marriage with Laura Ayala. He claims the court should have
set aside additional amounts to him as premarital assets and erred in its valuation
of some property. We affirm the court’s decree.
I. Background Facts & Proceedings
Bryant and Laura were married on July 9, 2001. They had three children
together in 2003, 2006, and 2007. The parties purchased their marital home in
Bondurant in 2000.
Laura is forty-seven years old. Laura had her college degree prior to the
marriage and earned a master’s degree in 2011. Laura was a teacher when the
parties married. In 2008, Laura resigned and began running an in-home daycare
business from the marital home. Laura returned to teaching in 2014, and in 2017
moved to Oskaloosa as a science teacher. She has a salary of approximately
$47,000 per year.
Bryant is forty-seven years old. Bryant has a high school education. Since
2004, Bryant has worked out of the marital home as the manager of an apartment
building rental business and a car rotisserie business. The parties added a shop
building to the marital property for Bryant’s businesses. The apartment business
is discussed below in further detail. The car rotisserie business involved Bryant
making and selling car rotisseries used in the restoration of old cars. The rotisserie
business had been decreasing in profitability since 2009. He estimated he should
earn around $25,000 per year at his rotisserie business, working approximately
twenty hours per week.
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The parties are joint owners of three S-corporations, each of which holds a
multi-unit rental property in the Des Moines area. Two of the properties are
mortgaged, with Laura’s father acting as mortgagor. Bryant performs maintenance
and upkeep for the properties and is the primary contact for the tenants, working
approximately twenty hours per week. Each corporation has a separate checking
account. Twice a year Bryant makes disbursements from the business accounts
into a joint account from which Bryant pays himself. The rental properties’ income
was taxed half to each Bryant and Laura during the marriage, but Bryant
considered the profits his. Bryant averages $36,000 to $38,000 per year in profit,
though the tax exhibits show net profits over $40,000 for multiple years.
On May 12, 2016, Bryant filed a petition for dissolution of marriage. In July,
the court issued an order to preserve assets. In October, the parties entered a
mediated temporary joint stipulation which required Bryant pay $900 per month for
child support. Between June and August of 2017, Bryant withdrew approximately
$18,000 from the joint checking account subject to the preservation order. In July
Laura moved to Oskaloosa, taking furniture from the marital home. A trial was held
on August 8, 2017.
The court entered its decree on October 19, 2017. Laura was granted sole
legal custody and physical care of the three children, with Bryant paying child
support. Bryant was awarded all three S-corp. rental properties and the marital
home. Both parties were found to have violated the preservation of assets order.
The court ordered Bryant pay an equalization payment to Laura of $343,606.63,
giving him until January 30, 2020, to refinance the marital home and business
properties and make the payment.
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On October 24, Bryant filed an Iowa Rule of Civil Procedure 1.904(2) motion
for the court to reconsider several provisions in the decree and stay the order
relating to three checking accounts. Laura also filed a rule 1.904(2) motion
requesting the court accelerate the timeline of refinancing and the equalization
payment, specifically regarding premarital assets. On February 5, 2018, the court
denied all of Bryant’s motion, and denied Laura’s motion except for a personal
property provision not applicable here. Bryant appeals.
II. Standard of Review
The standard of review for an action dissolving a marriage is de novo. In re
Marriage of Hansen, 733 N.W.2d 683, 690 (Iowa 2007). While our review is de
novo, the district court is given latitude to make determinations which we will
disturb only if equity has not been done. In re Marriage of Okland, 699 N.W.2d
260, 263 (Iowa 2005). We give weight to but are not bound by the district court’s
factual findings. In re Marriage of Mauer, 874 N.W.2d 103, 106 (Iowa 2016).
Because the district court is in a unique position to hear the evidence, we defer to
the district court’s determinations of credibility. In re Marriage of Brown, 487
N.W.2d 331, 332 (Iowa 1992).
III. Analysis
On appeal, Bryant requests the equalization payment he is to pay Laura be
reduced by over $53,000 to a total equalization payment of $289,902.28. He
calculates this change through setting aside additional premarital moneys to him
and altering the valuations used by the court in its division of assets.
A. Inclusions. First, Bryant identifies additional premarital assets he
believes the court should have set aside from the property division. Bryant claims
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proceeds from the sale of his premarital home should have been set aside and not
included in the equalization-payment calculations. The other inclusion Bryant
claims was erroneous was a 1968 Pontiac GTO which, even though purchased
during the marriage, he claims was purchased using the proceeds from a car sale
prior to the marriage whose funds had never been commingled. Bryant did not
identify a specific account or asset where he kept the house proceeds separate
from the marital assets.
The court expressly found in its decree “that based on the property
settlement, the court will not treat premarital assets separately from the marital
assets” except for specifically identified items on the distribution chart. Premarital
assets for both Bryant and Laura not treated separately included proceeds from
premarital homes owned by each party, the GTO, and premarital IPERS retirement
accruals by Laura. The court noted both parties contributed cash from the sales
of their premarital homes toward the down payment of the marital home and those
funds had been commingled.
Our case law is clear that “the property included in the divisible estate
includes not only property acquired during the marriage by one or both of the
parties, but property owned prior to the marriage by a party.” In re Marriage of
Fennelly, 737 N.W.2d 97, 102 (Iowa 2007) (citation omitted). “The trial court may
place different degrees of weight on the premarital status of property, but it may
not separate the asset from the divisible estate and automatically award it to the
spouse that owned the property prior to the marriage.” In re Marriage of Sullins,
715 N.W.2d 242, 247 (Iowa 2006). Indeed, the court’s statutory obligation is to
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“divide all property, except inherited property or gifts received or expected by one
party, equitably between the parties.” Iowa Code § 598.21 (2016).
We find the court acted properly by including the parties’ premarital property
in the division of assets. The inclusions and resulting division of property are
equitable under the circumstances of this case.
B. Valuations. Bryant challenges the district court’s valuations of
various business and personal accounts, property, inventory, motor vehicles, and
equipment used by the court in its property division.
“Ordinarily, a trial court’s valuation will not be disturbed when it is within the
range of permissible evidence.” Hansen, 733 N.W.2d at 703. “In ascertaining the
value of property, its owner is a competent witness to testify to its market value.”
Id. “Although our review is de novo, we ordinarily defer to the trial court when
valuations are accompanied by supporting credibility findings or corroborating
evidence.” Id.The district court accepted some of Bryant’s valuations and some of Laura’s
valuations. The court looked at exhibits submitted by the parties supporting their
valuations. When making its valuation determinations, the court also considered
the dissipation of assets by both parties in violation of the court’s order during their
separation. The court further clarified its decree and valuations in the ruling on the
parties’ rule 1.904 motions. The court specifically noted that it was winding up a
corporation between partners when one partner was receiving the businesses and
the associated physical assets and trying to ensure the partner being bought out
obtained her share of the profits from 2017 as well as appropriate equity for her
half-ownership in the corporations.
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Bryant has not established the court’s valuations were outside the range of
permissible evidence. We find the district court’s valuations were each well within
the range of permissible evidence, and we decline to disturb the court’s credibility
findings relating to the valuation of assets. See In re Marriage of McDermott, 827
N.W.2d 671, 679 (Iowa 2013).
We find the court’s valuations and distribution of assets to be equitable. We
affirm the district court’s division of property.
C. Appellate Attorney Fees. Laura requests an award of appellate
attorney fees. She has submitted an affidavit showing her attorney fees for this
appeal are $5869.00. An award of appellate attorney fees is not a matter of right,
but rests within the court’s discretion. Sullins, 715 N.W.2d at 255. We consider
“the needs of the party seeking the award, the ability of the other party to pay, and
the relative merits of the appeal.” Id. We determine Laura should be awarded
appellate attorney fees of $3000.
AFFIRMED.