IN THE COURT OF APPEALS OF IOWA
No. 18-2067 Filed September 25, 2019
IN RE THE MARRIAGE OF JULIE DALBY AND DOUGLAS DALBY
Upon the Petition of JULIE DALBY, Petitioner-Appellee,
And Concerning DOUGLAS DALBY, Respondent-Appellant. ________________________________________________________________
Appeal from the Iowa District Court for Linn County, Ian K. Thornhill,
Judge.
The husband appeals from the district court’s division of assets in the
parties’ dissolution decree. AFFIRMED AS MODIFIED.
Mark D. Fisher of Nidey Erdahl Fisher Pilkington & Meier, PLC, Cedar
Rapids, for appellant.
Dana A. Judas of Nazette, Marner, Nathanson & Shea LLP, Cedar
Rapids, for appellee.
Considered by Potterfield, P.J., and May and Greer, JJ. 2
POTTERFIELD, Presiding Judge.
Douglas Dalby appeals from the decree dissolving his marriage to Julie
Dalby. Douglas maintains the division of marital assets was inequitable and asks
us to modify the equalization payment due to him from the amount of $31,331.55
to $112,770.24. He also asks for an award of appellate attorney fees. In
response, Julie maintains the district court’s division was equitable and asks that
we award her appellate attorney fees.
I. Background Facts and Proceedings.
Douglas and Julie were married in August 2006. Julie has a child from a
previous relationship who lived with Douglas and Julie until the child reached
majority—approximately the first six years of their marriage. No children were
born of the marriage.
Julie filed a petition for dissolution in January 2018. Douglas did not
accept service until April 27, 2018.
Nearly a month later, on May 24, 2018, Julie filed notice of her intent to file
for default judgment. Douglas still took no action, and, on June 5, Julie moved
for entry of default. The clerk entered default against Douglas the next day.
On July 30, counsel for Douglas filed an appearance, an answer to Julie’s
petition for dissolution, and a motion to set aside the default. Julie resisted the
motion to set aside, asserting she had text messages from Douglas that showed
his failure to respond in a timely manner was not due to mistake or neglect as he
indicated he had no intention of contesting the dissolution.
Following a hearing on in the issue, the district court denied Douglas’s
motion to set the default aside, ruling: 3
Douglas clearly decided he was not going to defend this action and was going to allow Julie to obtain a default. Thus, after accepting service, he did nothing to defend and acknowledged to Julie that he understood he would be defaulted. He did nothing to contact Julie’s counsel or the court to preserve any rights he might have or inquire as to what he should do if he wanted to defend the action because he had no intention of defending. .... . . . On June 18, 2018, a default hearing was set for today’s date. Douglas did nothing. Finally, in late July Douglas changed his mind and decided he wanted to defend this case. He then filed the present motion to set aside default judgment .... . . . Douglas’ change of mind since entry of the default does not justify setting aside the default entered on June 5, 2018.
(Footnote omitted). In the same order, the court recognized that “[a]lthough a
default has been entered, the court must still equitably and fully distribute the
marital assets and debts when it enters a decree.” The court set an additional
one-hour hearing for the limited issue of the equitable distribution of the marital
assets and debts.
That hearing took place in November. The parties submitted a joint
stipulation listing all of their marital assets and liabilities and the corresponding
agreed-upon values. Additionally, the parties agreed they had generally kept
their various financial accounts in their individual names and each would keep
their respective accounts. The issue was the amount of the equalization
payment from one party to another that would be necessary to achieve equity.
The marital assets totaled almost $589,0001 while the debts amounted to
1 We note that at the hearing, Julie testified that $25,000 of this was what she received in child support from her child’s father; she seemed to argue this money should be considered nonmarital and set aside for her daughter. However, on the parties’ joint stipulation, Julie included the $25,000 in the assets, and the district court considered it as marital in its division of assets. Julie does not challenge the district court’s determination it was a marital asset to be divided, so we do not disturb this conclusion. 4
approximately $172,200, resulting in approximately $416,800 in net marital
property. The marital home was valued at $200,000, and the parties had a
mortgage of $140,000. Otherwise, a large portion of the marital assets was
located in accounts in just Julie’s name: a combined total of $243,997.23 in a
money market, checking account, and 401k. In contrast, the accounts in
Douglas’s name amounted to $72,073.69.
At the hearing, Julie testified she believed she should be able to retain the
money in her accounts because the parties had always made a point to keep
separate accounts; neither party has access to the other’s accounts or tracked
the other’s finances. According to Julie, throughout their marriage, she and
Douglas shared household bills by Douglas paying the mortgage on the marital
home while she “paid everything else.” She estimated Douglas paid
approximately $200 more each month on the mortgage than she did on the other
family bills. According to Douglas, he also paid for the family’s insurance, cell-
phone plan, and “the majority of entertainment expenses whenever” the family
would go out. Julie agreed the parties should split the equity in the marital
residence but also indicated the basement required repairs, for which she
believed Douglas should be responsible. According to an estimate she had
prepared, the basement repair would cost $23,675. When asked, Julie reported
she was unable to say what the value of the home would be after the basement
repair was completed.2 Based on this request, Julie believed she should be
ordered to make an “equalization payment” to Douglas in the amount of
2 The $200,000 value the parties agreed upon for the value of the marital home was the “as is” value. 5
$5121.05, which would result in Julie receiving a net value of $316,016.56 of the
approximately $416,800 of marital property.
During his testimony, Douglas seemed to take responsibility for certain
issues with the basement that needed fixed.3 However, he claimed that much of
the needed repair was due to water getting into the basement, which Douglas
maintained had been a longtime issue in the home that Julie was aware of before
he moved out. Douglas asked that the court divide the marital estate equally
between the two parties, which would require ordering Julie to make an
equalization payment of $112,770.24 to Douglas.
In making the division of marital property, the district court relied upon the
stipulated values from the parties.4 Additionally, as the parties agreed, Julie kept
the marital home and took responsibility for the mortgage. Each party kept one
vehicle and took responsibility for the corresponding vehicle loan. The only item
with a disputed value at the time of the hearing, Julie’s defined benefit pension,
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IN THE COURT OF APPEALS OF IOWA
No. 18-2067 Filed September 25, 2019
IN RE THE MARRIAGE OF JULIE DALBY AND DOUGLAS DALBY
Upon the Petition of JULIE DALBY, Petitioner-Appellee,
And Concerning DOUGLAS DALBY, Respondent-Appellant. ________________________________________________________________
Appeal from the Iowa District Court for Linn County, Ian K. Thornhill,
Judge.
The husband appeals from the district court’s division of assets in the
parties’ dissolution decree. AFFIRMED AS MODIFIED.
Mark D. Fisher of Nidey Erdahl Fisher Pilkington & Meier, PLC, Cedar
Rapids, for appellant.
Dana A. Judas of Nazette, Marner, Nathanson & Shea LLP, Cedar
Rapids, for appellee.
Considered by Potterfield, P.J., and May and Greer, JJ. 2
POTTERFIELD, Presiding Judge.
Douglas Dalby appeals from the decree dissolving his marriage to Julie
Dalby. Douglas maintains the division of marital assets was inequitable and asks
us to modify the equalization payment due to him from the amount of $31,331.55
to $112,770.24. He also asks for an award of appellate attorney fees. In
response, Julie maintains the district court’s division was equitable and asks that
we award her appellate attorney fees.
I. Background Facts and Proceedings.
Douglas and Julie were married in August 2006. Julie has a child from a
previous relationship who lived with Douglas and Julie until the child reached
majority—approximately the first six years of their marriage. No children were
born of the marriage.
Julie filed a petition for dissolution in January 2018. Douglas did not
accept service until April 27, 2018.
Nearly a month later, on May 24, 2018, Julie filed notice of her intent to file
for default judgment. Douglas still took no action, and, on June 5, Julie moved
for entry of default. The clerk entered default against Douglas the next day.
On July 30, counsel for Douglas filed an appearance, an answer to Julie’s
petition for dissolution, and a motion to set aside the default. Julie resisted the
motion to set aside, asserting she had text messages from Douglas that showed
his failure to respond in a timely manner was not due to mistake or neglect as he
indicated he had no intention of contesting the dissolution.
Following a hearing on in the issue, the district court denied Douglas’s
motion to set the default aside, ruling: 3
Douglas clearly decided he was not going to defend this action and was going to allow Julie to obtain a default. Thus, after accepting service, he did nothing to defend and acknowledged to Julie that he understood he would be defaulted. He did nothing to contact Julie’s counsel or the court to preserve any rights he might have or inquire as to what he should do if he wanted to defend the action because he had no intention of defending. .... . . . On June 18, 2018, a default hearing was set for today’s date. Douglas did nothing. Finally, in late July Douglas changed his mind and decided he wanted to defend this case. He then filed the present motion to set aside default judgment .... . . . Douglas’ change of mind since entry of the default does not justify setting aside the default entered on June 5, 2018.
(Footnote omitted). In the same order, the court recognized that “[a]lthough a
default has been entered, the court must still equitably and fully distribute the
marital assets and debts when it enters a decree.” The court set an additional
one-hour hearing for the limited issue of the equitable distribution of the marital
assets and debts.
That hearing took place in November. The parties submitted a joint
stipulation listing all of their marital assets and liabilities and the corresponding
agreed-upon values. Additionally, the parties agreed they had generally kept
their various financial accounts in their individual names and each would keep
their respective accounts. The issue was the amount of the equalization
payment from one party to another that would be necessary to achieve equity.
The marital assets totaled almost $589,0001 while the debts amounted to
1 We note that at the hearing, Julie testified that $25,000 of this was what she received in child support from her child’s father; she seemed to argue this money should be considered nonmarital and set aside for her daughter. However, on the parties’ joint stipulation, Julie included the $25,000 in the assets, and the district court considered it as marital in its division of assets. Julie does not challenge the district court’s determination it was a marital asset to be divided, so we do not disturb this conclusion. 4
approximately $172,200, resulting in approximately $416,800 in net marital
property. The marital home was valued at $200,000, and the parties had a
mortgage of $140,000. Otherwise, a large portion of the marital assets was
located in accounts in just Julie’s name: a combined total of $243,997.23 in a
money market, checking account, and 401k. In contrast, the accounts in
Douglas’s name amounted to $72,073.69.
At the hearing, Julie testified she believed she should be able to retain the
money in her accounts because the parties had always made a point to keep
separate accounts; neither party has access to the other’s accounts or tracked
the other’s finances. According to Julie, throughout their marriage, she and
Douglas shared household bills by Douglas paying the mortgage on the marital
home while she “paid everything else.” She estimated Douglas paid
approximately $200 more each month on the mortgage than she did on the other
family bills. According to Douglas, he also paid for the family’s insurance, cell-
phone plan, and “the majority of entertainment expenses whenever” the family
would go out. Julie agreed the parties should split the equity in the marital
residence but also indicated the basement required repairs, for which she
believed Douglas should be responsible. According to an estimate she had
prepared, the basement repair would cost $23,675. When asked, Julie reported
she was unable to say what the value of the home would be after the basement
repair was completed.2 Based on this request, Julie believed she should be
ordered to make an “equalization payment” to Douglas in the amount of
2 The $200,000 value the parties agreed upon for the value of the marital home was the “as is” value. 5
$5121.05, which would result in Julie receiving a net value of $316,016.56 of the
approximately $416,800 of marital property.
During his testimony, Douglas seemed to take responsibility for certain
issues with the basement that needed fixed.3 However, he claimed that much of
the needed repair was due to water getting into the basement, which Douglas
maintained had been a longtime issue in the home that Julie was aware of before
he moved out. Douglas asked that the court divide the marital estate equally
between the two parties, which would require ordering Julie to make an
equalization payment of $112,770.24 to Douglas.
In making the division of marital property, the district court relied upon the
stipulated values from the parties.4 Additionally, as the parties agreed, Julie kept
the marital home and took responsibility for the mortgage. Each party kept one
vehicle and took responsibility for the corresponding vehicle loan. The only item
with a disputed value at the time of the hearing, Julie’s defined benefit pension,
was ordered to be divided using the Benson formula.5 Otherwise, the court
refused to divide any of the monies in the parties’ individual accounts. The court
ordered Julie to make an equalization payment to Douglas of $31,331.55, but it
arrived at this figure by giving Douglas half the equity in the marital home 6 plus a
3 There was evidence some fixtures in the basement bathroom needed to be replaced due to lack of cleaning and issues involving mold. 4 The court stated it was adopting the itemization and valuations in the parties’ joint stipulation—$200,000 value for the home with a mortgage of $140,000. But in doing the actual calculation, it seems the court used a mortgage value of $142,461.90, which is close to the amount Julie testified the mortgage was at the time Douglas left the home and stopped making the mortgage payment. We rely on the stipulated values. 5 See In re Marriage of Benson, 545 N.W.2d 252, 256 (Iowa 1996). 6 The court determined half the equity in the home was equal to $28,769.05 rather than $30,000. 6
“repayment” for “disparity in shared expense agreement” of $14,400 7 and
subtracting half the cost of the estimated basement repair ($11,837.50). This
division of assets left Julie with a net award of $289,806.06 and Douglas with a
net award of $126,928.68 of marital assets.
Douglas appeals.
II. Standard of Review.
“In this equity action involving the dissolution of a marriage, our review is
de novo.” In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013).
“Accordingly, we examine the entire record and adjudicate anew the issue of the
property distribution.” Id.
III. Discussion.
Douglas does not challenge the district court’s decision not to set aside
the default. He focuses his argument on the claim the division of marital assets
was inequitable. “[A] defaulting party to a dissolution proceeding may seek
appellate review on the merits. But, our de novo review will generally be limited
to (1) scope of relief granted, and (2) equities of the decree as determined by an
examination of the entire record made at trial.” In re Marriage of Huston, 263
N.W.2d 697, 700 (Iowa 1978).
As Julie emphasizes, “Iowa is an equitable distribution state.” McDermott,
827 N.W.2d at 678. “An equitable distribution of marital property, based upon the
factors in [Iowa Code section] 598.21(5) [(2018)], does not require an equal
division of assets.” Id. at 682 (citation omitted). “Equality is, however, most often
7 We assume the court reached this figure by “refunding” Douglas half of the extra $200 he spent each month on family bills multiplied by roughly the number of months the parties were living together and splitting the expenses. 7
equitable; therefore, we have repeatedly insisted upon the equal or nearly equal
division of marital assets.” Id.
It seems the district court’s division of assets was predicated on the fact
that Julie saved a large amount of money—much more than Douglas—while
generally earning substantially less than he did each year.8 It seems unlikely
Julie would have been able to save such a large amount without Douglas’s
contributions to the family. Especially when we consider that Julie earned less
than $3000 one year during the parties’ marriage while she went back to school.
Moreover, “[i]t is important to remember marriage does not come with a ledger.”
In re Marriage of Fennelly, 737 N.W.2d 97, 104 (Iowa 2007). “Each person’s
total contributions to the marriage cannot be reduced to a dollar amount.” Id.
“Financial matters make up but a portion of a marriage, and must not be
emphasized over the other contributions made to a marriage in determining an
equitable distribution.” In re Marriage of Miller, 552 N.W.2d 460, 465 (Iowa Ct.
App. 1996). And while even Douglas agreed the parties had a “loose agreement”
to be responsible for their individual finances throughout the marriage, there is no
evidence the agreement contemplated or applied to what would occur in the
event of a dissolution.
8 According to the tax returns admitting at the hearing, the parties’ incomes from the several years before filing for dissolution were as follows: Tax Year Julie Doug 2010 $58,608 $111,805 2011 $2540 $115,592 2012 $53,179 $116,636 2013 $93,911 $123,454 2014 $70,998 $98,314 2015 $103,305 $112,151 2016 $118,342 $118,972 8
In considering the enumerated factors of section 589.21(5), a more-equal
split of the marital property is necessary to achieve equity. At the time of
dissolution, both Douglas and Julie were in their mid-forties. Douglas was
unemployed, as he had recently completed treatment for alcohol abuse and had
quit his job; he admitted he had not yet started looking for new employment. Still,
Douglas and Julie seem to have approximately the same earning capacity: in
2016, Douglas earned $118,972 and Julie earned $118,342. Other than
Douglas’s issues with alcoholism, it seems both were in good health and would
be able to work for a number of years.
We modify the district court’s property division to award Douglas half the
marital property. However, we agree with the district court that Douglas should
be required to pay for half the cost of the basement repair, as Douglas admitted
at least some fault in the issues with the basement. We recognize that the value
of the home will likely increase after the repairs are completed, but we agree with
the district court that the amount of the increase is too uncertain for us to
consider it in our division of assets. Therefore, we modify the equalization
payment Julie owes to Douglas to the amount of $100,932.74.9
Both Douglas and Julie request appellate attorney fees.
Appellate attorney fees are not a matter of right, but rather rest in this court's discretion. Factors to be considered in determining whether to award attorney fees include: “the needs of the party seeking the award, the ability of the other party to pay, and the relative merits of the appeal.”
9 We calculated this number by taking the amount of net assets Julie was awarded ($321,137.61) and subtracting the amount of net assets Douglas was awarded ($95,597.13) and dividing the difference in half to get $112,770.24. We then subtracted half the estimated cost of the renovation ($11,837.50) to get the total owed. 9
In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006) (citation omitted).
We deny Julie’s request because Douglas has been largely successful on
appeal. And we deny Douglas’s request because we believe our adjustment of
the division of property—considered together with the parties’ nearly-equal
earning capacity—allows Douglas to pay his own appellate attorney fees. See,
e.g., In re Marriage of Larson, No. 14-1333, 2015 WL 5965116, at *10 (Iowa Ct.
App. Oct. 14, 2015) (noting that while one party was successful on appeal, the
modification in favor of the successful party “sufficiently equip[ped]” the party to
pay their own fees).
We affirm as modified the dissolution decree.
AFFIRMED AS MODIFIED.
May, J., concurs; Greer, J., concurs specially. 10
GREER, Judge (concurring specially).
I agree with modifying the decree to increase the equalization payment to
Douglas, but I write separately to address the cost of the basement repair. As
the majority recognizes, Douglas admitted at least some fault for damage to the
basement. To that end, Julie testified Douglas withdrew $20,000 to $30,000 from
one of his accounts to pay for repairs that have yet to happen. Douglas did not
explain or otherwise account for these missing funds. Therefore, I would reduce
the equalization payment to Douglas by an additional $11,837.50, representing
the full amount of the basement repair. I otherwise concur with the majority’s
well-reasoned opinion.