In re the Marriage of Naylor ( 2018 )

IN THE COURT OF APPEALS OF IOWA
No. 17-0770
Filed November 7, 2018
IN RE THE MARRIAGE OF RICHARD WAYNE NAYLOR
AND ASHLEY MARIE NAYLOR
Upon the Petition of
RICHARD WAYNE NAYLOR,
Petitioner-Appellee,
And Concerning
ASHLEY MARIE NAYLOR,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Black Hawk County, Kellyann M.
Lekar, Judge.
Appeal challenging the economic provisions of a decree of dissolution of
marriage. AFFIRMED.
Barry S. Kaplan and C. Aron Vaughn of Kaplan & Frese, LLP, Marshalltown,
for appellant.
Kevin D. Engels of Correll, Sheerer, Benson, Engels, Galles & Demro, PLC,
Cedar Falls, for appellee.
Heard by Vogel, P.J., and Vaitheswaran and McDonald, JJ.
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McDONALD, Judge.
Ashley Naylor pursues this appeal from the decree dissolving her marriage
to Richard Naylor. On appeal, Ashley challenges the property distribution and
spousal support award as inequitable.
The record reflects the following. The parties commenced their relationship
in 2005 or early 2006. At the time the parties started dating, Richard was
approximately forty-three years old and Ashley was approximately twenty-two
years old. He was employed as an orthopedic surgeon at a local hospital, earning
approximately $2 million per year. She was employed as a radiologic technologist
at the same hospital, earning approximately $40,000 per year. He was married
with two children, and she was single. Although Richard was married with children,
Richard and Ashley began cohabiting in May 2006. They continued to reside
together while Richard’s divorce from his spouse was pending. Richard’s divorce
was final in November 2010. Ashley and Richard married in April 2011.
The parties entered the marriage with a disparity in assets. Richard brought
significant assets into the marriage. He owned timeshare properties in Hawaii, Las
Vegas, and Mexico. He owned two condo units in Panama City, Florida. One unit
was rented out, while the other was used as a vacation home. He owned a home
in Suffolk, Virginia. He owned four vehicles. He had a wine collection ranging
between 100-150 bottles, a collection of artwork, substantial amounts of jewelry,
several hundred-thousand dollars in precious metals, a retirement plan through his
work, and his personal property. Ashley owned one vehicle at the time the parties
began dating, but Richard paid the loan on the vehicle, gifted the vehicle to his
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niece, and purchased Ashley a new vehicle. Ashley also owned her personal
possessions.
The parties commingled their finances before and during the marriage.
After the parties began dating, they opened joint bank accounts. They paid bills
from the joint bank accounts. They had joint credit cards. They established
retirement and investment accounts. They purchased life insurance policies. The
aforementioned precious metals were purchased while the parties were dating but
prior to their marriage. They owned real property together. As previously stated,
the parties began living together in the spring of 2006. At that time, Richard had
moved from the marital home into a duplex he purchased. Ashley moved into the
duplex with Richard. After several years, Richard sold the duplex and purchased
a home for himself and Ashley. They were not married at the time Richard
purchased this home, and Richard held title to the home. Subsequently, the
parties purchased land and built Ashley her “dream home.” Richard estimated the
parties spent approximately $1.6 million to build the home. Given the local real
estate market and the customization of the home to the parties’ taste (for example,
the home contains a wine cellar capable of storing 1700 bottles of wine), the fair
market value of the home is substantially less than the cost of the home and the
mortgages on the home.
During the course of the marriage, the parties lived, in their own words, an
“opulent” lifestyle. This lifestyle was financed by Richard’s significant income.
Richard’s income declined over the course of the marriage from approximately $2
million per year to approximately $1.5 million per year. He testified he worked less
to spend more time with Ashley. He also testified he spent more time doing
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administrative work and less time performing surgery. This was because Richard
was transitioning into an administrative position in the hospital. After the parties
married, Ashley ceased full-time employment with the hospital, but she continued
to work as a PRN nurse (from the Latin "pro re nata,” for an occasion that has
arisen, as circumstances require, as needed). The parties agreed Ashley was
largely responsible for managing the household while Richard worked fairly long
hours.
Richard filed this petition for dissolution of marriage in May 2016. The
contested issues at trial were property distribution and spousal support. In light of
the disparity of income between the parties, the disparity in the value of premarital
assets, and the short duration of the marriage, the district court concluded an
equitable distribution of the parties’ property did not require an equal division of the
parties’ property. The district court awarded Ashley some jewelry and other
property but awarded the lion’s share of the parties’ property to Richard. The
district court rejected Ashley’s request for traditional or reimbursement support but
did award Ashley rehabilitative support. The district court summarized its division
of property and spousal support award as follows:
The court determines that [Richard] should be restored to the extent
possible to the majority of the property he brought into the marriage.
Further, the court finds that the assets acquired by the parties during
the course of the marriage should be subject to equitable, but not
equal distribution. [Ashley] should receive those assets were which
directly invested into her name. [Richard] should receive those
assets which were directly invested in his name or which were
acquired through his employment benefits for the purposes of
retirement savings.
[Ashley] should be afforded a fair amount of supposal [sic]
support that will allow her to regain full-time employment or seek
further education. She wishes to pursue that education on a part-
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time basis and estimates it will take her four to four and a half years
at an approximate cost of $5,000 per semester. The court believes
that a period of four years should be sufficient to allow [Ashley] to
advance her education and an additional year to regain a reasonable
lifestyle that reflects her individual earning capacity and ability.
[Ashley’s] request . . . for spousal support that exceeds the actual
length of the marriage is not reasonable. [Ashley] is entitled to
reasonable spousal support and, as [Richard] has agreed to provide
it, reasonable educational support.
Our review in a marriage action is de novo. See In re Marriage of
McDermott, 827 N.W.2d 671, 676 (Iowa 2013). “Although our review is de novo,
we afford deference to the district court for institutional and pragmatic reasons.”
Hensch v. Mysak, 902 N.W.2d 822, 824 (Iowa Ct. App. 2017); accord In re
Marriage of Gust, 858 N.W.2d 402, 406 (Iowa 2015) (noting we give great latitude
to the district court in fixing spousal support); In re Marriage of Benson, 545 N.W.2d
252, 257 (Iowa 1996) (“This deference to the trial court’s determination is decidedly
in the public interest. When appellate courts unduly refine these important, but
often conjectural, judgment calls, they thereby foster appeals in hosts of cases, at
staggering expense to the parties wholly disproportionate to any benefit they might
hope to realize.”). As such, we will not modify a decree unless the district court
failed to do equity. See In re Marriage of Mauer, 874 N.W.2d 103, 106 (Iowa 2016).
We first address the property distribution. “Iowa is an equitable distribution
state.” In re Marriage of Keener, 728 N.W.2d 188, 193 (Iowa 2007) (citing In re
Marriage of Sullins, 715 N.W.2d 242, 247 (Iowa 2006)). Equitable distribution
requires the division of “all of the property owned by the parties at the time of
divorce except inherited property and gifts received by one spouse.” Id. (citing
Sullins, 715 N.W.2d at 247). An equitable distribution does “not require an equal
division or percentage distribution.” In re Marriage of Campbell, 623 N.W.2d 585,
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586 (Iowa Ct. App. 2001) (citing In re Marriage of Russel, 473 N.W.2d 244, 246
(Iowa Ct. App. 1991)). The relevant considerations are set forth in the Code:
a. The length of the marriage.
b. The property brought to the marriage by each party.
c. The contribution of each party to the marriage, giving
appropriate economic value to each party’s contribution in
homemaking and child care services.
d. The age and physical and emotional health of the
parties.
e. The contribution by one party to the education, training,
or increased earning power of the other.
f. The earning capacity of each party, including
educational background, training, employment skills, work
experience, length of absence from the job market, . . . , and the time
and expense necessary to acquire sufficient education or training to
enable the party to become self-supporting at a standard of living
reasonably comparable to that enjoyed during the marriage.
....
h. The amount and duration of an order granting support
payments to either party pursuant to section 598.21A and whether
the property division should be in lieu of such payments.
i. Other economic circumstances of each party, including
pension benefits, vested or unvested. Future interests may be
considered . . . .
j. The tax consequences to each party.
....
....
m. Other factors the court may determine to be relevant in
an individual case.
Iowa Code § 598.21(5) (2016).
On de novo review, we conclude the district court’s division of the property
was equitable under the circumstances presented. In the interest of brevity, rather
than discussing each of the statutory factors and performing a line-item disposition
of each contested asset, we choose to discuss several items of particular import.
First, this marriage lasted only six years. In marriages of short duration, an
equitable distribution of property does not require an equal distribution of property.
See In re Marriage of Peiffer, No. 12-1746, 2013 WL 5498153, at *2 (Iowa Ct. App.
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Oct. 2, 2013) (citing Campbell, 623 N.W.2d at 586). Instead, in marriages of short
duration, our courts are inclined to restore the parties to the status quo ante or are
inclined to at least trend toward the status quo ante. See In re Marriage of Fluent,
No. 16-1321, 2017 WL 2461601, at *4 (Iowa Ct. App. June 7, 2017) (“We find the
higher award to Grant is equitable in recognition that he did bring additional sums
to the marriage, a union that was of relatively short duration.”); In re Marriage of
Sinclair, No. 13-1419, 2014 WL 4230215, at *4 (Iowa Ct. App. Aug 17, 2014) (“In
this case, the distribution of assets is driven by the short duration of the marriage.”);
In re Marriage of Hass, 538 N.W.2d 889, 892 (Iowa Ct. App. 1995) (“If a marriage
lasts only a short time, the claim of either party to the property owned by the other
prior to the marriage or acquired by gift or inheritance during the brief duration of
the marriage is minimal at best.”). We reject Ashely’s contention that the period of
cohabitation prior to the marriage should be considered as part of the marriage for
the purposes of dividing property. Notably, the statute does not identify premarital
cohabitation as a relevant consideration. See Iowa Code § 598.21(5)(a)-(m).
Second, and interrelated, there was a significant disparity of assets brought
into the marriage.
If there were wide disparities between the assets of the parties at the
time of the marriage, or if one of the parties were the recipient of a
substantial gift or inheritance, the length of the marriage is a major
factor in determining what the respective rights of the parties with
respect to such property are at the time of its dissolution.
In re Marriage of Wallace, 315 N.W.2d 827, 830-31 (Iowa Ct. App. 1981). A more
equal division of martial property is generally done where “the accumulated
property is the product of the joint efforts of both spouses over a considerable
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period.” In re Marriage of Arnold, 133 N.W.2d 53, 60 (Iowa 1965). This is not the
case here.
Third, the distribution of property is equitable when we consider the
“contribution of each party to the marriage, giving appropriate economic value to
each party’s contribution in homemaking and child care services.” Iowa Code
§ 598.21(5)(c). A just and equitable distribution of property must give regard to the
efforts of the respective partners. See Campbell, 623 N.W.2d at 586. Here,
Richard’s income from his medical practice supported the parties’ lifestyle. His
income accounts for almost all of the parties’ accumulation of assets. The record
reflects his income ranged between $1.5-2.0 million per year during the marriage.
Ashley ceased fulltime employment but continued to work as needed. Her income
decreased to under $10,000 on an annual basis. It was undisputed that Ashley
did not provide care for Richard’s children. It was also undisputed that Ashley
managed the household while Richard worked. We believe her non-economic
contributions to the marriage are fairly reflected in the property distribution. See
In re Marriage of Lattig, 318 N.W.2d 811, 815 (Iowa Ct. App. 1982) (stating the
property distribution “should be a function of the tangible contributions of each
party and not the mere existence of the marital relationship”).
In sum, on de novo review, we cannot conclude the district court failed to
do equity in distributing the parties’ property. This was a marriage of short duration
where the parties entered into the marriage with a significant disparity of assets.
In dividing the property, the district court took those facts into consideration while
giving Ashley significant credit for her non-economic contributions to the marriage.
We affirm the judgment of the district court on this issue.
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We next address the issue of spousal support. Here, the district court
ordered Richard to pay $5000 monthly for a period of five years, plus additional
payments for tuition for eight semesters, as rehabilitative spousal support. On
appeal, Richard does not contest the spousal support award. Ashley contends the
amount and duration of the award should be increased.
Spousal support is not an absolute right; an award depends upon the
specific circumstances of each case. Gust, 858 N.W.2d at 408. Our cases
recognize three primary forms of spousal support: traditional, rehabilitative, and
reimbursement. See id.; In re Marriage of Nelson, No. 15-0492, 2016 WL
3269573, at *3 (Iowa Ct. App. June 15, 2016). Our cases also recognize a limited
fourth category of spousal support—transitional support. See, e.g., In re Marriage
of Hansen, No. 17-0889, 2018 WL 4922992, at *16 (Iowa Ct. App. Oct. 10, 2018)
(McDonald, J., concurring specially) (recognizing transitional support as a form of
spousal support); In re Marriage of Lange, No. 16-1484, 2017 WL 6033733, at *3
(Iowa Ct. App. Dec. 6, 2017) (“Jessica does not need traditional rehabilitative
support so much as transitional support while finding suitable employment.”). In
determining the form, amount, and duration of spousal support, this court is guided
by the following statutory factors:
a. The length of the marriage.
b. The age and physical and emotional health of the
parties.
c. The distribution of property made pursuant to section
598.21.
d. The educational level of each party at the time of
marriage and at the time the action is commenced.
e. The earning capacity of the party seeking
maintenance, including educational background, training,
employment skills, work experience, length of absence from the job
market, . . . and the time and expense necessary to acquire sufficient
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education or training to enable the party to find appropriate
employment.
f. The feasibility of the party seeking maintenance
becoming self-supporting at a standard of living reasonably
comparable to that enjoyed during the marriage, and the length of
time necessary to achieve this goal.
g. The tax consequences to each party.
h. Any mutual agreement by the parties concerning
financial or service contributions by one party with the expectation of
future reciprocation or compensation by the other party.
....
j. Other factors the court may determine to be relevant in
an individual case.
Iowa Code § 598.21A(1).
Ashley contends traditional support is appropriate here because the parties’
relationship, when including the premarital period, lasted almost twelve years. We
disagree. Traditional support is typically warranted in long-term marriages where
the earning potential of the parties may be reliably predicted. See Gust, 858
N.W.2d at 410. “[T]he shorter the marriage, the less likely a court is to award
traditional spousal support.” Id. Twenty years is the generally accepted durational
threshold for the award of traditional spousal support. See id. at 410-11. The
period of cohabitation prior to the marriage should not be considered for the
purposes of awarding traditional spousal support. See In re Marriage of Spiegel,
553 N.W.2d 309, 320 (Iowa 1996) (rejecting argument that premarital relationship
should be considered in awarding spousal support and stating, “[n]otably, section
598.21(3) does not include in its list of factors the premarital relationship of the
parties”), superseded by statute. However, even if it were permissible to consider
the premarital relationship, the length of the entire relationship falls far short of the
durational threshold justifying an award of traditional support. See In re Marriage
of Stephens, No. 13-0861, 2014 WL 69728, at *7 (Iowa Ct. App. Jan. 9, 2014)
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(denying spousal support when “the marriage was of short duration”); In re
Marriage of Gonzalez, 561 N.W.2d 94, 99 (Iowa Ct. App. 1997) (finding a five year
marriage insufficient to necessitate traditional support). Traditional spousal
support is not equitable in this case.
In support of her claim for additional spousal support, Ashley contends
reimbursement support would be appropriate here. Again, we disagree.
“Reimbursement spousal support allows the spouse receiving the support to share
in the other spouse’s future earnings in exchange for the receiving spouse’s
contributions to the source of that income.” In re Marriage of Becker, 756 N.W.2d
822, 826 (Iowa 2008). As a factual matter, there is no evidence Ashely contributed
to the source of Richard’s income. To the contrary, Richard was long established
in his medical practice at the time the parties met. In addition, the record reflects
his income actually decreased over the course of the marriage. As a legal matter,
reimbursement support is inapplicable here. It applies only in “situations where
the marriage is devoted almost entirely to the educational advancement of one
spouse” and “there has not been enough time for the parties to receive the benefit
from the educational advancement through tangible assets accumulated during
the marriage.” In re Marriage of Erpelding, No. 16-1419, 2017 WL 2670806, at *6
(Iowa Ct. App. June 21, 2017), vacated on other grounds, 917 N.W.2d 235, 247-
48 (Iowa 2018). Reimbursement support is unavailable outside this narrow
context. See id.; see also In re Marriage of Probasco, 676 N.W.2d 179, 185-86
(Iowa 2004) (holding reimbursement support inapplicable where wife provided
support to build restaurant franchise business). We see no reason to deviate from
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Erpelding and Probasco. An award of reimbursement support would not be
equitable in this case.
We do agree with the district court that rehabilitation support is appropriate
under the circumstances. “Rehabilitative spousal support is ‘a way of supporting
an economically dependent spouse through a limited period of re-education or
retraining following divorce, thereby creating incentive and opportunity for that
spouse to become self-supporting.’” Becker, 756 N.W.2d at 826 (quoting In re
Marriage of Francis, 442 N.W.2d 59, 63 (Iowa 1989)). “Self-sufficiency is the
primary goal of rehabilitate [spousal support].” In re Marriage of Smith, 573 N.W.2d
924, 926 (Iowa 1998). “Because self-sufficiency is the goal of rehabilitative
[spousal support], the duration of such an award may be limited or extended
depending on the realistic needs of the economically dependent spouse, tempered
by the goal of facilitating the economic independence of the ex-spouses.” Francis,
442 N.W.2d at 64. Here, Ashley testified regarding her desire to continue her
education and improve her earning capacity. The district court’s support award
allows Ashley to pursue these educational goals with a significant amount of
financial support, including additional tuition support, over an extended period of
time. This award was appropriate under the circumstances presented, including
the significant distribution of property to Ashley. See, e.g., In re Marriage of Dillon,
No. 16-0415, 2016 WL 7393904, at *2 (Iowa Ct. App. Dec. 21, 2016) (finding an
award of rehabilitative spousal support appropriate where the recipient “was just
forty-one years old at the time of trial, was in good health, possessed a nursing
degree from a four-year institution, and earned wages as a nurse for all but five
years of the marriage.”).
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We affirm the district court’s award of spousal support.
For the foregoing reasons, we affirm the judgment of the district court.
AFFIRMED.