No. 04-0412.Court of Appeals of Iowa.
March 16, 2005.
Appeal from the Iowa District Court for Lee (South) County, Mary Ann Brown, Judge.
The respondent appeals from the property division provisions of the decree dissolving the marriage of the parties. AFFIRMED.
Thomas Marion of Norman Marion, Keokuk, for appellant.
James Dennis, Keokuk, for appellee.
Considered by Vogel, P.J., and Miller and Eisenhauer, JJ.
MILLER, J.
Frank Pennington, Jr. appeals from the property division provisions of the decree that dissolved his marriage to Virginia Pennington. He asserts the district court’s division of the parties’ assets and debts was inequitable. We affirm the district court.
I. Background Facts and Proceedings.
Frank and Virginia married on December 14, 1997. At the time of the marriage each party owned their own business, Frank a karate studio and Virginia a construction and remodeling business. Frank also worked for an automotive company. In addition, Frank owned two residential properties of unspecified value, upon which he carried some amount of debt.[1] Although no children were born during the marriage, Virginia’s children from a prior marriage resided with the couple.
During the course of the marriage the couple actively engaged in a rental property venture. They made a practice of purchasing distressed properties for a modest price and rehabilitating them. Most of these properties were then leased out. However one distressed property, purchased in March 2001 for $36,000, became Frank and Virginia’s residence (the 7th Street property). Another was purchased with the intention that Frank’s mother would live there (the Franklin Street property). While Frank’s mother did move into the Franklin Street property and make significant improvements, the property remained jointly titled in Frank and Virginia’s name.
In January 2003 the couple separated, and Frank moved from the marital home. Virginia filed a petition for dissolution in March of that year. The matter came on for trial in December 2003. In its February 12, 2004, dissolution decree the court made a roughly equal net division of the assets accumulated and the debts incurred during the marriage. The court made several specific asset awards and debt assignments, and ordered the remainder of the parties’ real and personal property sold and the net proceeds divided.
Virginia was awarded the 7th Street property, valued at $36,000, and assigned the accompanying debt of $33,011. Frank was awarded the Franklin Street property, valued at $35,000, which was unencumbered. The parties were each awarded the various items of personal property they had requested. The personal property awarded to Virginia was valued at $9,172, while the personal property awarded to Frank was valued at zero.[2] Frank’s 401(k) plan, which was accumulated during the marriage, was divided equally between the parties. In lieu of awarding Virginia what would be a nominal share of Frank’s defined pension plan, Frank was required to bear the expenses of maintaining the rental properties until they were sold.[3]
At the time of trial the parties had indebtedness on fourteen credit cards, and an obligation to a heating and cooling business. The court determined that the indebtedness on eight of the credit cards was incurred by Virginia post separation, and that she should be responsible for those debts separate and apart from the property division. In contrast, the court determined the $2,841 debt on the Bank One credit card, which Virginia used for her business, was a “marital debt,” and assigned it to Virginia within the context of the property division. The court valued the parties’ debt on the five remaining credit cards at the time of the separation, and assigned that total indebtedness of $24,063 to Frank, along with the $1,591.76 obligation to the heating and cooling business.
Frank filed a motion for a new trial, asserting several errors by the court. The court corrected some typographical errors, but denied the remainder of the motion. Frank appeals.
II. Scope of Review.
We conduct a de novo review of dissolution of marriage proceedings. Iowa R. App. P. 6.4; In re Marriage of Wagner, 604 N.W.2d 605, 608 (Iowa 2000). Although not bound by the district court’s fact findings we give them weight, especially when assessing the credibility of witnesses. Iowa R. App. P. 6.14(6)(g).
III. Discussion.
The partners to a marriage are entitled to a just share of the property accumulated through their joint efforts. In re Marriage of Russell, 473 N.W.2d 244, 246 (Iowa Ct.App. 1991). Iowa courts do not require an equal or percentage division. Id. The determining factor is what is fair and equitable in each circumstance. Id.
Adjudicating property rights in a dissolution action inextricably involves a division between the parties of both their marital assets and liabilities. In re Marriage of Johnson, 299 N.W.2d 466, 467 (Iowa 1980). The allocation of marital debts between the parties is as integral a part of the property division as is the apportionment of marital assets Id. The allocation of marital debts therefore inheres in the property division. Id.; In re Marriage of Siglin, 555 N.W.2d 846, 849 (Iowa Ct.App. 1996). Accordingly, the term “property division” incorporates both division of assets and assignment of responsibility for debts.
Although Frank asserts the district court did not equitably divide the assets and debts of the parties, his claims are directed less at the overall property division than at the fairness of specific asset awards and debt assignments. However, absent some particular inequity in awarding a specific asset, or assigning a specific debt, the property division provisions of the decree will be upheld so long as the overall property division was equitable.
As previously noted, the district court made a roughly equal property division. Frank complains such a division is inequitable, given that the parties’ marriage was one of short duration. However, the parties’ principal assets were accumulated and their principal debts incurred during the course of their seven-year marriage; the assets due to their joint efforts, and the debts largely for their joint benefit. To the extent the parties demonstrated the existence of premarital assets, they were set off to them by the district court. Under the circumstances, we agree with the district court that a roughly equal division of the parties’ remaining property is fair and equitable. We therefore turn to Frank’s specific claims regarding the allocation of various assets and debts.
We first address Frank’s contentions that two parcels of real estate should have been excluded from the property division. He asserts the Franklin Street property was a gift to his mother. He further asserts that one of the rental properties ordered sold at auction, located at 923 Timea, was in fact sold during the pendency of the proceedings. In reviewing the record, we conclude that Frank did not establish either claim.
Although Frank presented witness testimony that the parties intended the Franklin Street property to be a gift to his mother, at the time of trial the property was still held by Frank and Virginia as joint tenants, and there was no evidence the parties had signed a deed conveying the property to Frank’s mother. Thus, Frank has not demonstrated that the Franklin Street property was a completed gift. See In re Estate of Crabtree, 550 N.W.2d 168, 170 (Iowa 1996); Gray v. Roth, 438 N.W.2d 25, 29 (Iowa Ct.App. 1989). Nor has Frank demonstrated that the 923 Timea property was sold prior to hearing. Although the alleged buyer testified that he paid Frank $6,700 in cash for the property, there was no written purchase agreement, no written receipt, and the alleged buyer never received a deed to the property.
Frank also complains that it was inequitable to award Virginia the 7th Street property, and asserts the property should have been ordered sold at auction, with the net proceeds to be equally divided. Part and parcel of this argument are Frank’s claims that the district court undervalued the 7th Street property by at least $10,000, and overvalued the Franklin Street property by $29,500. However, the values assigned by the court were consistent with the evidence presented by Virginia, as well as a joint pretrial stipulation that valued the 7th Street property at $36,000. Where the district court’s valuations are within the permissible range of the evidence, they will not be disturbed on appeal. In re Marriage of Driscoll, 563 N.W.2d 640, 643 (Iowa Ct. App. 1997).
Provided the overall property division was equitable, we see no inequity in awarding Virginia the marital home, and assigning her its encumbrance, particularly in light of the home’s minimal equity. We reach the same conclusion regarding Frank’s claim that a number of items of personal property awarded to Virginia should instead be sold at auction, and the net proceeds divided. Frank’s claim regarding the personal property is, quite simply, that it is not fair Virginia received numerous furnishings and tools when he did not. However, each party was directed to file a post-hearing request for those items listed on the pretrial stipulation that they wished exempted from the auction, and each was awarded the items from the stipulation that he or she requested. Contrary to Frank’s assertions, the reasons given by Virginia for requesting the various items of property were valid and reasonable. Under the circumstances, we see no inequity in awarding these items of personal property to Virginia.
Finally, Frank complains that the district court did not equitably assign the parties’ debts. He contends that the Bank One debt should be assigned to Virginia outside of the property division, as it was a post-separation debt, and that the $24,063 in credit card debt assigned to him should be equally divided between the parties. In reviewing the record, we see no inequity in the overall debt assignment.
As a general rule, the court should assess the parties’ net worth at the time of trial, and not at the time of separation In re Marriage of Decker, 666 N.W.2d 175, 181 (Iowa Ct.App. 2003). There may, however, be occasions when it is appropriate to consider expenditures made during the separation. See id. This is apparently what the district court did in assigning Virginia eight of the credit card balances as personal post-separation debts, given that Virginia testified she incurred a significant portion of these debts after the separation and on behalf of her business. However, the court treated Bank One credit card debt, which was used for Virginia’s remodeling business but which she did not specifically identify as a post-separation debt, as a joint debt of the parties. It then allocated all the joint debt so as to make a roughly equal property division. We cannot fault such a division, particularly in light of the record made by the parties which is rather unclear regarding some of the property items at issue on appeal.
While it is possible if not in fact likely that at least a portion of the Bank One debt was incurred by Virginia after the separation, the record does not clearly so indicate. Similarly, while the record indicates that at least a portion of the debt assigned to Virginia as personal post-separation debt was incurred, not solely for her business, but for living expenses or the improvement or acquisition of marital assets, there is no clear proof on these matters. Given that the record has limited the court’s ability to determine the details of the various expenditures, we conclude it was fair and equitable to assign the Bank One debt as a joint debt of the parties.
Moreover, we find no fault in the district court’s decision to assign Frank the majority of the parties’ joint debt. There is no evidence that this particular debt allocation would work a hardship on Frank and, as we have previously noted, the district court’s debt allocation, when combined with its asset awards, resulted in a roughly equal property division. Under the circumstances, such a division was fair and equitable.
IV. Conclusion.
We have considered all of Frank’s arguments, whether specifically addressed or not.[4] When we do so, we conclude the district court equitably divided the property of the parties. The court’s decree is affirmed.
AFFIRMED.