In re the Marriage of Knutson

• Court: Court of Appeals of Iowa
• Decided: October 21, 2020
• Docket: 19-1836
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 19-1836 Filed October 21, 2020

IN RE THE MARRIAGE OF NATALIE KNUTSON AND DAVID KNUTSON

Upon the Petition of NATALIE KNUTSON, Petitioner-Appellant,

And Concerning DAVID KNUTSON, Respondent-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Winneshiek County, Richard D.

Stochl, Judge.

Natalie Knutson appeals the economic provisions of the decree dissolving

her marriage to David Knutson. AFFIRMED AS MODIFIED.

Andrew P. Nelson of Meyer, Lorentzen & Nelson, Decorah, for appellant.

Dana DeSimone of Miller, Pearson, Gloe, Burns, Beatty & Folta, P.L.C.,

Decorah, for appellee.

Considered by Bower, C.J., and Doyle and Schumacher, JJ. 2

DOYLE, Judge.

Natalie Knutson appeals the economic provisions of the decree dissolving

her eighteen-year marriage to David Knutson. She challenges a credit the court

gave David for assets he brought into the marriage and the court’s award of an

income-generating business to David. We review her claims de novo. See Iowa

R. App. P. 6.907.

The goal of property distribution is to divide the parties’ property equitably

based on the facts of each case rather than making an equal or percentage

distribution. See In re Marriage of Hansen, 886 N.W.2d 868, 871 (Iowa Ct. App.

2016). In determining what is equitable, the court considers the factors set forth in

Iowa Code section 598.21(5) (2018). But first, the court must identify and value

the assets subject to division. See In re Marriage of McDermott, 827 N.W.2d 671,

678 (Iowa 2013). All property, even property brought into the marriage, is subject

to division. See id. The exception is property that is gifted to or inherited by one

party; that property is divisible only if the court finds failing to do so would be

inequitable to the other party. See id. (citing Iowa Code § 598.21(6)). The court

“should not automatically award [premarital property] to the spouse who owned the

property prior to the marriage.” Id. Premarital property “is merely a factor to

consider by the court, together with all other factors, in exercising its role as an

architect of an equitable distribution of property at the end of the marriage.” Id.

(citation omitted).

The district court determined the value of the parties’ property and divided

it such that David received property valued at $476,571 and Natalie received

property valued at $25,506. Before ordering an equalization payment to balance 3

the equities, the court found David was entitled to a credit of $122,010 for assets

he brought into the marriage based on the net worth David reported in a loan

application he filled out shortly before the parties married. In making this

determination, the court noted that David did not seek interest in any of the assets

Natalie inherited during the marriage. It also noted that David “made significant

contribution to the accumulation of the assets while also financially supporting the

care of Natalie’s children.”

Natalie argues David should not receive any credit for premarital assets.

We agree. “Unless the marriage is short in duration, our law does not credit a party

for the value of property owned prior to the marriage.” In re Marriage of Hingtgen,

No. 00-1103, 2001 WL 912683, at *2 (Iowa Ct. App. Aug. 15, 2001) (citing In re

Marriage of Hass, 538 N.W.2d 889, 892–93 (Iowa Ct. App. 1995); In re Marriage

of Brainard, 523 N.W.2d 611, 616 (Iowa Ct. App. 1994)). “To the contrary, the

property brought to the marriage by each party is only a factor to consider together

with the other relevant factors in determining an equitable property division.”

Brainard, 523 N.W.2d at 616 (citing what is now Iowa Code § 598.21(5)(b)). “If

there were wide disparities between the assets of the parties at the time of the

marriage, . . . 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, 831 (Iowa Ct. App. 1981).

Given the length of the marriage and the contribution of each party, no credit is

warranted. We modify the decree to eliminate the $122,010 credit. As a result, 4

we increase the amount David must pay to Natalie by $61,005, bringing the total

of the equalization payment to $130,314.1

Natalie also asks us to award her an income-generating business to provide

her a source of supplemental income because she is not receiving spousal

support. The district court determined Natalie had not demonstrated a need for

spousal support based in part on $300,000 that remained of an inheritance she

received in 2017. See In re Marriage of Meerdink, 530 N.W.2d 458, 460 (Iowa Ct.

App. 1995) (“Inherited property can be considered on the issue of alimony.” (citing

In re Marriage of Moffatt, 279 N.W.2d 15, 20 (Iowa 1979))). Coupled with the

modified equalization payment of $130,314, we find no compelling reason to award

the business to Natalie. As the district court found, the record shows that David is

best suited to continue operating the business. We affirm the provision of the

decree awarding the business to David.

Natalie asks that we order David to pay the costs of the appeal, and David

requests an award of his appellate attorney fees. We have discretion in awarding

appellate attorney fees based on the parties’ financial positions and whether the

party seeking an award was obligated to defend the trial court’s decision on appeal.

See In re Marriage of Benson, 545 N.W.2d 252, 258 (Iowa 1996). Because the

1 David was asked, If the court is going to enter an order allowing Natalie to enjoy a hundred percent of the inherited funds that she’s receiving, do you believe that it’s fair and equitable that the court likewise allow you a credit of $122,000.00 to restore at least some of the position that you were in prior to entering into this marriage? He answered, “Yes.” But even without this credit, the net value of the assets David is receiving minus the equalization payment still exceeds his net assets at the time of the marriage. 5

parties are in similar financial situations, we decline to award attorney fees. See

id. Costs of the appeal are taxed equally to each party.

AFFIRMED AS MODIFIED.