IN THE COURT OF APPEALS OF IOWA
No. 13-0877 Filed May 29, 2014
IN RE THE MARRIAGE OF KIMBERLY SIGWALT AND DEAN SIGWALT
Upon the Petition of KIMBERLY SIGWALT, Petitioner-Appellee,
And Concerning DEAN SIGWALT, Respondent-Appellant. ________________________________________________________________
Appeal from the Iowa District Court for Carroll County, William C. Ostlund,
Judge.
A husband appeals the provisions of the decree dissolving his marriage.
AFFIRMED.
Cami Eslick of Eslick Law, Indianola, for appellant.
Gina C. Badding of Neu, Minnich, Comito & Neu, P.C., Carroll, for
appellee.
Considered by Vogel, P.J., and Mullins, J., and Eisenhauer, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2013). 2
VOGEL, P.J.
Dean Sigwalt appeals the spousal support, child support, and property
distribution provisions of the decree dissolving his marriage to Kimberly Sigwalt.
Dean claims (1) the court should not have awarded spousal support to Kim,
(2) his 401(k) should be divided based on the percentage method and not the
present-value method, (3) the court incorrectly determined Kim’s income for child
support purposes, (4) he should not have to sell all of his vehicles acquired
during the marriage and split the proceeds with Kim, (5) the court assigned an
incorrect value to the marital home, (6) the court should have awarded him a toy
box, and (7) the court abused its discretion in ordering him to pay $750 of Kim’s
trial attorney fees.
We affirm the child support order in this case finding the district court
correctly imputed an income amount to Kim and affirm the spousal support order
finding it equitable in light of the parties’ incomes. We do not disturb the court’s
determination that Dean’s 401(k) should be divided using the present-value
method. The value the court assigned to the marital home was within the
permissible range of evidence, and after awarding each party a vehicle, it was
equitable to order the sale of the other vehicles Dean acquired during the
marriage. It was appropriate to award Kim the toy box in question, and we find
no abuse of discretion in its award of trial attorney fees to Kim. Finally, we award
Kim $1500 in appellate attorney fees. We therefore affirm the district court’s
decree. 3
I. Background Facts and Proceedings.
Dean and Kim were married in 2005. The parties stipulated to joint legal
custody and joint physical care of the three minor children; however, they
disagreed on Kim’s income, leaving child support as an issue for the district court
to determine.
Kim was thirty-three years old at the time of trial and maintained an in-
home daycare along with a direct sales business. She asserted at trial her
annual income amounted to approximately $8000 between her two endeavors.
Her 2012 income tax return listed $8751 as her net business income. Dean
contended Kim’s income was more in the range of $50,000 per year. The trial
court imputed to Kim a minimum wage income for the purposes of calculating
child support.
Dean was forty-one years old at the time of trial and has been working at
Bridgestone Firestone since before the parties were married. The parties agreed
he makes approximately $64,000 per year. He also testified he serviced
automobiles for a hobby but claimed he has never made a profit, charging just
enough to cover his expenses. Neither party kept clear and detailed records of
their self-employment incomes and expenses.
Based on its assessment of the parties’ respective incomes, the court set
the child support at $749.88 per month pursuant to the child support guidelines.
The parties disputed the value of the marital home. Kim asserted the home was
worth $69,000 based on an appraisal that was done in 2010 when a home equity
line of credit was opened. Dean submitted an appraisal he had done just before
trial that set the value of the home at $50,000. The court set the current value of 4
the home at $60,000 for purposes of the dissolution. It gave Dean credit for the
premarital equity in the home but assessed against him the advances he took on
the home equity line of credit during the dissolution proceedings to pay his
attorney fees. Ultimately, the court found an increase in the equity in the home
during the marriage in the amount of $6155 and awarded the home to Dean in
the property distribution.
Dean purchased, both before and during the marriage, a number of
vehicles that he drove or serviced. Kim obtained a list of vehicles titled in Dean’s
name from the county treasurer’s office. Dean asserted during trial a number of
those vehicles were either no longer in existence or had little value. The court
assigned the two vehicles the parties routinely drove to its respective owner. It
ordered any vehicles owned by Dean prior to the marriage to become the sole
property of Dean and any other vehicles currently in existence to be sold and the
proceeds divided equally between the parties.
The court awarded all of Dean’s tools to him, accepting his testimony that
“ninety-five percent” of the tools were purchased before the marriage. The court
ordered Dean to be responsible for the credit card debt, as this debt greatly
increased during the pendency of the dissolution proceeding with Dean paying
his attorney fees with two new credit cards. The court directed the debt owed to
a furniture company to be paid by Kim, and the court directed the appliances that
were purchased with this line of credit also be given to Kim.1 The court stated
1 In a posttrial order, the court concluded that if the washer and dryer were in fact specifically modified to fit in the marital residence, and if Kim possessed her own washer and dryer already, the washer and dryer in question should remain in the marital residence with Dean. 5
that while the current division of property could result in an equalization payment
from Kim to Dean in the amount of $7000, no such payment would be ordered in
this case “in view of the economic circumstances of both parties.”
The court awarded to Kim most of the personal property she requested,
including a toy box Kim asserted was made by her ex-husband. The court
directed the parties to divide the 401(k) plan “pursuant to formula as accumulated
only during the course of the marriage.” The court awarded Kim spousal support
in the amount of $400 per month for sixty months, and the court noted it took into
consideration the child support and the substantial debt awarded to Dean when
determining the amount. Finally, it awarded Kim $750 in trial attorney fees to be
paid by Dean due to the discrepancy in the parties’ income.
Dean filed a posttrial motion to reconsider and to clarify. In addition to
other requests, he was specifically seeking clarification on the court’s division of
his 401(k). Dean filed a notice of appeal before the court ruled on the posttrial
motion, and Dean did not seek a limited remand from the supreme court to allow
the district court to address the posttrial motion. The district court issued an
order responding to the motion and specifically held, “[i]t was intended that the
Benson formula would be used to divide the existing 401(k). If the court has
misled the parties as to its intention, it is intended that the Petitioner shall receive
50% of the martial appreciation.”
II. Scope and Standard of Review.
As dissolution cases are heard in equity, our review is de novo. In re
Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013). We examine the
entire record and adjudicate anew the issues raised on appeal. Id. However, we 6
give weight to the factual findings of the district court, especially its
determinations of credibility. Iowa R. App. P. 6.904(3)(g). We will modify the
district court’s ruling only where there has been a failure to do equity.
McDermott, 827 N.W.2d at 676.
III. Spousal Support and Child Support.
Dean challenges the district court award of spousal support to Kim and its
award of child support. Because both claims are based on Dean’s disagreement
with the court’s determination of Kim’s annual income, we will address these
claims together. Dean asserts there is a large discrepancy between the amount
Kim claims as income and the deposits she makes in her bank account. He also
finds her deductions suspect. He claims given the discrepancy and poor record-
keeping, the court should not have relied on Kim’s testimony, nor should it have
imputed income to her, but should have calculated her income using her gross
deposits into her account minus her deductions from her handwritten records.
Kim admitted at trial that she comingles many of her purchases for her
daycare with her personal-use items; thus, she does not take the full value of her
purchases as deductions. She also testified that her bank account deposits are
not all attributable to income she receives from her daycare or direct sales
business but also include transfers she makes from her savings account and gifts
from her parents. During her testimony, the court asked Kim whether she
thought she could likely earn more money if she took another job working 8 a.m.
to 5 p.m. Kim acknowledged she probably could, particularly in a year when her
youngest child goes to school, but she loved running her own daycare. Prior to
Kim operating her daycare, she worked a number of different jobs including 7
working as a feeding assistant at a health center. Kim graduated from high
school and maintains the required certifications for her state-licensed daycare but
has no postsecondary education.
The court was correct in this case to use Kim’s earning capacity, minimum
wage, in its calculation of the child support rather than the income she reported
receiving from her daycare business. See In re Marriage of Nelson, 570 N.W.2d
103, 106 (Iowa 1997) (“Before using earning capacity rather than actual earnings
a court must however make a determination that, if actual earnings were used,
substantial injustice would occur or adjustments would be necessary to provide
for the needs of the child and to do justice between the parties.”). While Dean
asserts Kim’s income should be determined from her gross deposits in her bank
account, Kim clearly testified the deposits do not represent what she earns in her
businesses alone but includes transfers from savings and gifts from her parents.
It would do injustice to Kim and the children to use her bank deposits as the
basis to calculate her income when those deposits do not accurately represent
her income. The district court made a fair and equitable imputation of income to
Kim, and we affirm the resulting child support order.
As to Dean’s claim regarding spousal support, our review is also de novo,
but we give the court considerable latitude in making a spousal support award
based on the factors in Iowa Code section 598.21A (2011). In re Marriage of
Anliker, 694 N.W.2d 535, 540 (Iowa 2005). We will disturb the district court’s
order only when there has been a failure to do equity.
Dean was clearly the breadwinner in this marriage, earning as much as
eight times Kim’s annual income generated from her daycare and direct sales 8
businesses. The court acknowledged Kim was capable of securing employment
that could generate a higher level of income. It therefore limited the duration of
the spousal support to give her time to secure this employment and become
financially better established.
Dean asserts that given the modest duration of the marriage, Kim’s ability
to work, and the amount of debt he was ordered to assume, an award of spousal
support is inequitable. Alternatively, Dean claims that if spousal support is
affirmed, it should increase Kim’s income and reduce his for child support
calculations. The court noted that in determining the amount, it considered the
child support calculated under the guidelines and the amount of debt assigned to
Dean as part of the property division.
Under the child support guidelines, only prior obligations of spousal
support actually paid pursuant to a court or administrative order are deducted
from a party’s gross monthly income. See Iowa Ct. R. 9.5(8). We can vary from
the amount of child support calculated under the guidelines if we determine the
amount calculated pursuant to the guidelines would be unjust or inappropriate.
See Iowa Ct. R. 9.11; see also In re Marriage of Lalone, 469 N.W.2d 695, 697
(Iowa 1991) (“Consideration of the amount of alimony paid under the present
decree, while not provided by our guidelines as a deduction from income, may
nevertheless be considered by the court in an attempt to ‘do justice between the
parties.’”). However, we find no such justification to deviate from the guidelines
in this case, and we therefore reject Dean’s assertion that the spousal support
should be adjusted. The award of spousal support is affirmed. 9
IV. Retirement Account.
Next, Dean claims between the district court’s decree and district court’s
posttrial order he is still unclear how to divide his 401(k) plan. The district court
in the dissolution decree stated: “The parties are further directed to divide equally
any existing pension plans or 401(k) plans pursuant to formula as accumulated
only during the course of the marriage.” The court in the posttrial order stated: “It
was intended that the Benson formula would be used to divide the existing
401(k). If the Court has misled the parties as to its intention, it is intended that
the Petitioner shall receive 50% of the marital appreciation.”
Dean asks that we modify the decree to clarify his 401(k) plan should be
divided pursuant to the percentage method found in In re Marriage of Benson,
545 N.W.2d 252, 255 (Iowa 1996): the number of years during the marriage
benefits under the plan accrued, divided by the total number of years benefits
accrued, multiplied by the spouse’s share of the martial assets, and finally
multiplied by the total accrued monthly benefit upon maturity. Kim, alternatively,
claims the district court in the decree was clear that the increase in the 401(k)
during the marriage is to be divided equally between the parties. The parties
stipulated the value of the plan at the time of the marriage was $81,235.68, and
its value at the time of trial was $262,583.48, leaving a marital appreciation of
$181,347.80. Kim claims she is entitled to half of this amount. See Benson, 545
N.W.2d at 255 (describing the present-value method).
We begin by noting Dean filed the notice of appeal while his posttrial
motion seeking clarification of the court’s order regarding the 401(k) was pending
in the district court. “When a posttrial motion . . . is pending before an appeal is 10
taken, the judgment or decision to which the motion is addressed is interlocutory
until the district court rules on the motion.” IBP, Inc. v. Al-Gharib, 604 N.W.2d
621, 628 (Iowa 2000). When the party who filed the posttrial motion is the same
party who filed the premature notice of appeal, as in this case, there is no
jurisdictional problem, but we deem the appellant to have waived and abandoned
the posttrial motion. Id. In addition, the district court loses jurisdiction to rule on
the motion and any ruling has no legal effect. Id. Because the district court was
deprived of its jurisdiction by the filing of the notice of appeal, we will not consider
the language used by the district court in its posttrial order on this issue. We will
address Dean’s claim in light of the decree language alone.
In Benson, the court detailed the difference between “defined benefit
plans” and “defined contribution plans.” 545 N.W.2d at 254.
“Under a defined benefit plan, the future benefit to be received is specified in advance and ‘defined’ by a benefit formula or benefit schedule. The plan contributions are then made as required to fund the specified benefit. Conversely, under a defined contribution plan, the contributions to the fund are specified and ‘defined,’ but there is no predetermined scale of retirement benefits. Instead, the benefit amount received by the retiring employee is determined by the accumulated contributions allocated to that employee at retirement.”
Id. (quoting Steven R. Brown, An Interdisciplinary Analysis of the Division of
Pension Benefits in Divorce and Post-judgment Partition Actions: Cures for the
Inequities in Berry v. Berry, 39 Baylor L. Rev. 1131, 1137–38 (1987)). Dean’s
401(k) plan with his employer is a “defined contribution plan” as the amount of
the benefit he receives upon retirement is determined by the accumulated
contributions at retirement. “‘Because defined contribution plans are essentially
savings plans, their value at any time, including at [dissolution], is determined 11
easily.’” Id. at 256 n.1 (quoting Phoebe Carter & John Myers, Division and
Distribution of the Community Interest in Defined Benefit Pensions: Schweitzer
Reconsidered, 18 N.M. L. Rev. 95, 98 (1988)). “Thus, it may be more
appropriate to divide and distribute defined contribution plans under the present-
value method.” Id.; see also In re Marriage of Sullins, 715 N.W.2d 242, 248
(Iowa 2006) (noting it is normally desirable to divide defined benefit plans using
the percentage method).
Dean asserts the application of the present-value method allows Kim to
receive a larger share of the plan based on his premarital efforts. He explains his
retirement plan experienced substantial growth during the marriage but grew
much less in the eleven years prior to the marriage. Given the short duration of
the marriage compared to the number of years he has been contributing to his
retirement plan, Dean claims it is not equitable to allow Kim to capitalize on his
efforts prior to the marriage.
While either division method can be applied to any plan, see Sullins, 715
N.W.2d at 248, we seen nothing inequitable in this case in using the present-
value method to divide Dean’s 401(k) plan. The amount of appreciation the plan
experienced during the marriage is easily ascertainable in this case as the
parties stipulated to its value both before the marriage and at the time of trial.
See Benson, 545 N.W.2d at 255 (noting the valuation of a defined benefit
pension plan is complicated and requires the services of an actuary). The
language the district court used in the decree clearly showed its desire to award
half of the marital appreciation to Kim, which is consistent with the application of 12
the present-value method. We affirm the district court’s decree for the
application of the present-value method to divide Dean’s 401(k).
V. Property Distribution.
Next, Dean challenges a number of aspects concerning the court’s
property distribution, including that the court assigned an incorrect value to the
marital home. He also asserts it is inequitable to force him to sell the vehicles
acquired during the marriage and split the proceeds with Kim because he needs
the vehicles to drive to work and earn a living. Finally, he asks that we award
him, rather than Kim, a toy box.
A. Marital Home. Kim testified the house was worth $69,000 based on
an appraisal done of the house in 2010 when the parties applied for a home
equity line of credit. This 2010 appraisal set the value of home at $66,000. With
the loan money, the parties completed some work on the house including adding
a deck, new flooring, a new laundry room, and made a pantry, thereby increasing
the value. They also converted the garage to a usable room for Kim’s daycare
business. Initially, in his answers to interrogatories, Dean also asserted the
value of the house was $69,000. He testified he arrived at this number after
looking at the asking prices of houses that were similar to the marital home.
However, prior to trial Dean had an appraisal done of the home and submitted
that appraisal into evidence, which set the market value of the home at $50,000
based on a sales-comparison approach. No explanation was offered for the
$16,000 difference between the two appraisals done approximately three years
apart. The appraiser in the 2013 appraisal did note, “Fairly low populated area,
very few recent comparable sales to select from.” 13
The district court selected $60,000 as the value of the marital home. It
noted the value of the home at the time of the marriage in 2005 was
approximately $52,000 based on its assessed value. Dean offers no justification
for his assertion the value of the marital home decreased over the seven years of
the marriage. Because the value the district court assigned to the home was
within the permissible range of evidence, we will not disturb it on appeal. See In
re Marriage of Driscoll, 563 N.W.2d 640, 643 (Iowa Ct. App. 1997).
B. Vehicles Acquired During the Marriage. Dean claims that he uses
and maintains the vehicles in his possession due to his lengthy commute to work
every day in Des Moines. He claims the vehicles have little value and are
necessary for him to be able to earn a living. Thus, forcing him to sell the
vehicles and divide the profit with Kim would be inequitable.
It was clear at trial that Dean acquired a number of vehicles both before
and during the marriage. What is unclear in the record is what vehicles Dean
actually still possesses, what vehicles were acquired during the marriage, and
what value these vehicles hold. Kim sought a list of the vehicles titled in Dean’s
name from the county treasurer’s office, which included motorcycles,
snowmobiles, cars, trucks, and trailers; but Dean claimed at trial he no longer
owned many vehicles on the list.
The court awarded Dean any vehicle he owned prior to the marriage; thus,
the only vehicles at issue here are those acquired during the marriage. Kim
attempted to have an appraiser value the vehicles, but the appraiser was unable
to locate many of the vehicles in question. Iowa is an equitable distribution state,
and to make that equitable distribution, the court must determine what assets are 14
available and place values on those assets. Id. at 641–42. The court was
hampered in this endeavor with respect to the vehicles by Dean’s failure to
clearly and concisely identify and value the vehicles in his possession. His
argument that he uses the vehicles to travel to and from work rings hollow when
some of the vehicles involved are trailers, snowmobiles, and ATV’s, which are
incapable of travel on the roadway. In addition, during the pendency of the
dissolution proceeding, Dean sold two of the vehicles, keeping the profit and
showing not every vehicle in his possession is critical to his transportation needs.
Both Dean and Kim were awarded vehicles in the allocation of assets. We find
the court’s order that he sell the other vehicles acquired during the marriage, and
split the profit with Kim, equitable.
C. Toy Box. Finally, Dean asserts the court should have awarded a toy
box to him. He claims given the overwhelming number of personal property
items Kim received, he should get the toy box as it is one of the few items he
requested, and it would make the division more equitable.
No value was placed on this toy box, so it is unclear how awarding it to
Dean would make the distribution more equitable. Kim asserted the toy box was
built by her ex-husband, while Dean maintains it was purchased from a friend in
Arcadia who built it. No other evidence regarding the toy box was received
during the trial. We find nothing inequitable in awarding this toy box to Kim.
VI. Attorney Fees.
A. Trial Attorney Fees. Dean claims the court abused its discretion in
ordering him to pay $750 of Kim’s trial attorney fees. We review a district court’s
decision on trial attorney fees for an abuse of discretion. In re Marriage of 15
Michael, 839 N.W.2d 630, 635 (Iowa 2013). Considering the parties’ income, we
find no abuse of the trial court’s discretion in awarding trial attorney fees in this
case.
B. Appellate Attorney Fees. Kim seeks an award of $3500 in appellate
attorney fees. “Appellate attorney fees are not a matter of right, but rather rest in
this court’s discretion. In determining whether to award appellate attorney fees,
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.” McDermott, 827 N.W.2d at
687 (internal quotation marks and citations omitted). We also consider “whether
the party making the request was obligated to defend the trial court’s decision on
appeal.” In re Marriage of Gaer, 476 N.W.2d 324, 330 (Iowa 1991). After
considering these factors, we award Kim $1500 in appellate attorney fees.
Costs on appeal are assessed to Dean.