In Re the Marriage of Gary E. Erlandson and Susan Kay Erlandson Upon the Petition of Gary E. Erlandson, and Concerning Susan Kay Erlandson

• Court: Court of Appeals of Iowa
• Decided: August 2, 2017
• Docket: 16-0989
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 16-0989 Filed August 2, 2017

IN RE THE MARRIAGE OF GARY E. ERLANDSON AND SUSAN KAY ERLANDSON

Upon the Petition of GARY E. ERLANDSON, Petitioner-Appellant,

And Concerning SUSAN KAY ERLANDSON, Respondent-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Black Hawk County, George L.

Stigler, Judge.

Gary Erlandson appeals from the economic provisions of the decree

dissolving his marriage to Susan Erlandson. AFFIRMED.

Erin Patrick Lyons of Dutton, Braun, Staack & Hellman, P.L.C., Waterloo,

for appellant.

Heather A. Prendergast of Roberts, Stevens & Prendergast, P.L.L.C.,

Waterloo, for appellee.

Heard by Vaitheswaran, P.J., and Tabor and Mullins, JJ. 2

VAITHESWARAN, Presiding Judge.

We must decide whether a separation decree controls the disposition of

property and spousal support in a subsequent dissolution proceeding.

I. Background Facts and Proceedings

Gary and Susan Erlandson married in 2001. They separated after nine

years and formalized their status in a “stipulation for separation” prepared by

Susan’s attorney.1 The stipulation stated “[e]ach party shall receive those items

of real and personal property, household goods, and furnishings currently in their

possession.” It granted Susan the parties’ home, required her to shoulder the

mortgage, and held Gary responsible for a home equity loan of $23,000. The

stipulation stated, “If the parties should continue on and file a dissolution of

marriage action, Gary agrees that he will remain responsible for this loan and

have said loan transferred to his name only.”

The stipulation divided the parties’ pensions as follows:

Susan is awarded all rights and interests in any pension plan, 401k plans and/or any other retirement plan, with no rights or interest in Gary. Susan shall be awarded one-half interest in any pension plan, 401K plans and/or any other retirement plan.

Finally, the stipulation contained two provisions explaining the import of

the document:

1 The stipulation stated: REPRESENTATION OF PETITIONER. Gary has been advised that he should retain counsel if he has any questions regarding this matter and that [the attorney] represents only Susan and that Susan’s interests may be different than Gary’s interests in this matter. Postnuptial agreements are not governed by the same standards as prenuptial agreements. Cf. In re Marriage of Shanks, 758 N.W.2d 506, 511 (Iowa 2008) (stating premarital agreements are not enforceable under certain specified circumstances (citing Iowa Code § 596.8 (2007))). 3

5. COMPLETE SETTLEMENT. This Stipulation for Separation shall be a complete settlement of the rights and obligations of the parties to each other. .... 18. DISSOLUTION OF MARRIAGE. The parties agree that if this matter should continue and proceed to a dissolution of marriage, that the above agreement and Stipulation for Separation shall remain in effect.

After the stipulation was executed and presented to the district court, the

court filed a “decree for separation” ordering the parties “legally separated.” The

court further “ordered and decreed” that “each and all of the terms, provisions,

and agreements . . . contained in the Stipulation for Separation . . . is hereby

ratified, confirmed, and approved and made a part of this Decree . . . as though

fully set out herein and judgment is entered accordingly.”

The Erlandsons reconciled for several years but maintained separate

finances. In time, Gary petitioned for a dissolution of the marriage.2 Following

trial, the district court filed a dissolution decree finding paragraph 18 of the

stipulation—providing for the stipulation’s continued effect in the event of a

dissolution—“equitable.” The court disposed of the home in accordance with the

stipulation. As for the pensions, the court granted Susan “one-half” of Gary’s

military pension “per the Benson formula, when and if [Gary] becomes eligible to

draw retirement pay.”3 The court subsequently filed an “order to divide military

retired pay.”

The court next turned to spousal support. After acknowledging the

stipulation did “not directly address alimony” and “reflect[ed] that each expects

2 Gary was ordered to pay temporary spousal support of $600 per month after the dissolution petition was filed. 3 See In re Marriage of Benson, 545 N.W.2d 252, 255 (Iowa 1996). 4

the other will take care of his or her own future needs,” the court awarded Susan

temporary spousal support of $400 per month until December 31, 2018.4

Gary appealed.

II. Property Distribution

Gary contends the district court “did not divide the marital property in this

case equitably.” He notes that Susan was granted “exclusive right to her own

retirement funds,” as well as “a substantial portion of [his] retirement funds, and

the home,” while he was held responsible for the home equity loan. He proposes

Susan assume responsibility for the home equity loan and the parties retain their

own retirement funds.

Susan counters that the stipulation resolved any property distribution

questions and Gary cannot now attempt to collaterally attack that judgment or

seek a modification of the property distribution scheme encompassed within it. In

her view, the court could not even add language requiring division of Gary’s

pension pursuant to the Benson formula because the stipulation “specified that

the pension rights were to be divided equally between the parties.”

Gary responds that Susan did not file a cross-appeal from the portion of

the district court’s dissolution decree adding the Benson formula and,

accordingly, she cannot now challenge the court’s method of dividing the

pension.

4 The court also imposed a child support obligation based on current financial data, added health insurance language that was not in the stipulation, and alternated the dependency exemption between the parties even though the stipulation granted Susan this exemption. 5

We must first determine what the stipulation is. “Under Iowa law, married

spouses can legally separate by filing a petition for separate maintenance as

provided in Iowa Code section 598.28 [(2015)] without dissolving their marriage.”

In re Estate of Whalen, 827 N.W.2d 184, 185 (Iowa 2013) (citing 2 Marlin M.

Volz, Jr., Iowa Practice Series, Methods of Practice § 31:31, at 869 (2012)); see

Iowa Code § 598.21(1) (prefacing provision on disposition of property with, “Upon

every judgment of annulment, dissolution, or separate maintenance, the court

shall divide the property of the parties . . .”). The order approving the stipulation

was styled a “decree for separation” rather than a “separate maintenance”

decree. But it served the same purpose as a statutory separate maintenance

decree, “which permits the court . . . to decide the identical property issues that

are adjudicated in dissolution actions.” In re Estate of Carlisle, 653 N.W.2d 368,

372-73 (Iowa 2002) (Ternus, J., dissenting). We conclude the “decree of

separation” was, in effect, a statutory “separate maintenance” decree. See In re

Marriage of Kurtz, 199 N.W.2d 312, 314 (Iowa 1972) (distinguishing common law

separate maintenance decree from statutory separate maintenance decree).

We turn to Susan’s argument that the dissolution court exceeded the

parameters of the separation decree by making reference to the Benson formula

and Gary’s argument that Susan needed to file a cross-appeal to raise this issue.

The dissolution court specified a method for dividing the pension because the

stipulation was silent on this issue. Although the stipulation stated, “Susan shall

be awarded one-half interest in any pension plan,” it did not specify when the 6

one-half interest would be determined or how.5 The dissolution court simply filled

in the blank by stating the military pension would be divided pursuant to the

Benson formula. The formula would have accounted for the share of the pension

allocated to Susan, in this case fifty percent.6 See Benson, 545 N.W.2d at 255.

We conclude the dissolution court did not impermissibly modify the stipulated

property disposition by adding a method of division, as Susan contends. We

further conclude Susan’s failure to file a cross-appeal from the dissolution court’s

addition of a reference to the Benson formula does not prevent her from arguing

the language of the stipulation is controlling—an argument that is responsive to

Gary’s appeal of the property distribution.7

We are left with the language of the stipulation. By its terms, the

stipulation controls the disposition of property in a subsequent dissolution action:

5 At the dissolution trial, Gary’s attorney stated, “[The separation agreement] says she will get 50 percent—half of his pension, but half of what would have been its value at that time or is it half of what he would receive if he remained in the military for another nine-and-a-half years at this point in time. Because when they separated, he had less than four years of—when the separation agreement was written, he had less than four years of active duty time.” Gary argued for a fifty-percent division as of the date of the stipulation, as follows: Q. [GARY’S ATTORNEY] And the—what you’re asking the court to do is . . . divide things as of their value on January 10 of—January 2010 when the separation agreement is and that way she would only receive approximately 10 percent of any pension; is that correct? A. [GARY] Right. 6 The military order implementing the pension provision of the dissolution decree did not contain the formula set forth in Benson. It included the following language: [Susan] is entitled to 50% of [Gary’s] Disposable Retired Pay or Retainer Pay. . . . It is further stated that the date of the marriage is January 20, 2001 and that they are divorced herein on [March 30, 2016]. The parties have been married for more than ten (10) years during Member’s creditable military service.” This provision was in line with what Susan requested at trial: Q. [SUSAN’S ATTORNEY]: Are you asking [the district court] enter an order stating you be awarded 50 percent of Mr. Erlandson’s disposable retired pay? A. [SUSAN] Yes. 7 Her failure to file a cross-appeal would preclude her from attempting to gain a greater than fifty-percent share of Gary’s pension, but this is not what she is requesting. 7

“The parties agree that if this matter should continue and proceed to a dissolution

of marriage, that the above agreement and Stipulation for Separation shall

remain in effect.” See also Iowa Code § 598.21(7) (stating a property division

under chapter 598 is “not subject to modification”).

The stipulation unambiguously provides that the home will go to Susan,

subject to her assumption of the mortgage, and Gary is responsible for the home

equity loan. The district court adhered to this disposition in its dissolution decree.

Gary is foreclosed from now arguing the disposition of the home is inequitable.

We affirm the dissolution decree’s provisions on the home.

The stipulation’s pension provision is less clear. As noted, it states:

“Susan is awarded all rights and interests in any pension plan, 401k plans and/or

any other retirement plan, with no rights or interest in Gary. Susan shall be

awarded one-half interest in any pension plan, 401K plans and/or any other

retirement plan.”

At first blush, the first and second sentences of this provision seem

contradictory, with the first affording Susan “all” rights in “any” pension and the

second awarding her “one-half interest in any pension.” But the first sentence

ends with the clause, “with no rights or interest in Gary.” We believe this clause

limits the first part of the sentence to Susan’s pension accounts. The second

sentence applies to all other pension accounts, namely those in Gary’s name.

This reading is consistent with the provision affording “[e]ach party . . . those

items of real and personal property, household goods, and furnishings currently

in their possession.” We conclude the stipulation grants Susan her entire

pension and a one-half interest in Gary’s pension. 8

The district court followed this disposition. Although the court did not

expressly award Susan her own pension, the court stated each party would

receive “those items of real and personal property, household goods, and

furnishings currently in his or her possession.” The court also stated Susan

would receive “one-half of” Gary’s military pension. The separation decree

previously approved the agreed method of distributing the pensions. Gary

cannot now challenge the disposition of the pension as inequitable. We affirm

the dissolution court’s division of the pensions.

III. Spousal Support

The district court ordered Gary to pay Susan temporary spousal support of

$400 per month until December 2018. Gary argues, “[I]f Susan did not need

alimony at the time of the . . . 2010 separation, and if [she] has continued to keep

her finances entirely separate from [his] since that time, . . . then there should be

no need for an award of alimony . . . now.” He also argues the award was

inequitable based on Susan’s circumstances at the time of the dissolution trial.

As noted, the stipulation did not expressly address spousal support, but it

could have, because our statutory provision on spousal support in a divorce

proceeding, allows support payments “[u]pon every judgment of . . . separate

maintenance.” See id. § 598.21A. The question here is whether the dissolution

court could order spousal support where the stipulation was silent on spousal

support but stated, “This Stipulation for Separation shall be a complete

settlement of the rights and obligations of the parties to each other.”

This language would appear to foreclose a later award of spousal support.

But the language must be read in light of our State’s public policy. If we were 9

dealing with a prenuptial agreement rather than a postnuptial agreement, the

agreement could not adversely affect spousal support. See id. § 596.5 (“The

right of a spouse or child to support shall not be adversely affected by a

premarital agreement.”). And if we were dealing with a postnuptial agreement

purporting to affect a spouse’s elective share on the other spouse’s death, the

agreement would not be enforceable. Cf. Hussemann ex rel. Ritter v.

Hussemann, 847 N.W.2d 219, 224, 226 (Iowa 2014) (“[O]ver a century ago, we

held that ‘a contract between husband and wife, with reference to her interest in

his estate, is of no validity whatever’” and “we have presumed here that Iowa

does not enforce postnuptial agreements that waive a spouse’s elective share.”).

Because section 598.21A permits spousal support awards in separate

maintenance decrees and our State’s public policy in other contexts looks

askance at agreements waiving these types of support, we conclude the

“complete agreement” language contained in the parties stipulation did not

foreclose a subsequent award of spousal support in a dissolution decree.

We turn to Gary’s argument that the spousal support award was

inequitable, given Susan’s financial circumstances at the time of the dissolution

decree. The district court provided the following rationale for the support order:

[Susan] has enrolled in Kaplan University and expects to graduate in 2017. The Kaplan University exhibit reflects that given the cost and Pell grants, [Susan] will be able to meet the expenses of her education except for approximately $3500 each year. After she graduates Kaplan University in 2017, [Susan] should be able to better provide for herself without a permanent need for alimony. The court will award temporary alimony of $400 per month until December 31, 2018. 10

Our standard of review requires us to give the district court “considerable latitude

in determining spousal support.” In re Marriage of Anliker, 694 N.W.2d 535, 540

(Iowa 2005). Although our review is de novo, we “will disturb that determination

only when there has been a failure to do equity.” Id.

Susan received a generous share of the property, militating against a

spousal support award. See Iowa Code § 598.21A(1)(c). But the award was

temporary and was geared towards enhancing her long-term earnings, which

were significantly lower than Gary’s after considering his non-taxable military

allowances. Under these circumstances, we conclude the limited award did not

work an inequity on Gary. We affirm the amount and duration of the district

court’s spousal support award.

IV. Appellate Attorney Fees

Susan seeks an award of appellate attorney fees. An award is

discretionary. In re Marriage of Berning, 745 N.W.2d 90, 94 (Iowa Ct. App.

2007). Given the significant amount of property Susan received, we decline to

require any payment by Gary toward her appellate attorney fee obligation.

AFFIRMED.