In re the Marriage of Rasmussen

• Court: Court of Appeals of Iowa
• Decided: August 7, 2024
• Docket: 23-0805
• Status: Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 23-0805 Filed August 7, 2024

IN RE THE MARRIAGE OF BENJAMIN MICHAEL RASMUSSEN AND ALEXIS MICHELLE RASMUSSEN

Upon the Petition of BENJAMIN MICHAEL RASMUSSEN, Petitioner-Appellant,

And Concerning ALEXIS MICHELLE RASMUSSEN, Respondent-Appellee. ________________________________________________________________

Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg,

Judge.

A petitioner appeals the property division of a decree dissolving the parties’

marriage. AFFIRMED AS MODIFIED.

Jaclyn M. Zimmerman of Miller, Zimmerman & Evans P.L.C., Des Moines,

for appellant.

Andrew B. Howie and James R. Hinchliff of Shindler, Anderson, Goplerud

& Weese, P.C., West Des Moines, for appellee.

Considered by Schumacher, P.J., and Ahlers and Langholz, JJ. 2

LANGHOLZ, Judge.

Ben Rasmussen appeals the property division in the decree dissolving his

three-year marriage with Alexis Rasmussen. He does not challenge that the

district court’s division left Alexis with a net worth of more than $400,000 and him

with a negative net worth of about $20,000 in debt. Rather, he argues only that it

is inequitable for the district court to also order him to pay another $20,000 to Alexis

for her “lost equity” in a Mercedes Benz that she transferred to him during the

marriage and the court awarded to him in the property division.

We agree. Alexis’s “lost equity” is not an asset or debt subject to division.

Nor could a $20,000 payment that makes the property division less equal be an

equalization payment. And so, on our de novo review, we modify the property

division to strike Ben’s $20,000 payment obligation to Alexis and otherwise affirm.

I. Background Facts and Proceedings

Ben and Alexis married in November 2019 after living together for some

period before that. They have no children together. But Alexis has a son from

another relationship who was also living with them.

The parties entered their marriage in vastly different financial

circumstances. Alexis was well off—owning, among other assets, multiple luxury

vehicles, a house, and a profitable business. Ben owned little and was in such

serious debt that he considered declaring bankruptcy.

Even before the parties were married, Alexis began letting Ben drive one of

her vehicles—a 2017 Mercedes-Benz sports utility vehicle. Alexis later transferred

the Mercedes-Benz—at that time, worth $39,000—to Ben. In return, Ben paid off 3

her loan of about $24,000 by taking out a new loan on the Mercedes-Benz for

$38,000, the excess of which was used to pay off some credit card debts.

When Alexis bought a new vehicle for herself, she traded in Ben’s pre-

marital vehicle—on which he owed $18,000 more than it was worth—and rolled

the negative equity into the new loan. During the marriage, Alexis also helped pay

off at least $3000 of Ben’s credit card debt. She explained she wanted to help Ben

get out of debt to improve their collective financial future.

Alexis owned the marital home—as she had before the marriage—and was

solely responsible for its mortgage. She also spent $71,000 for improvements to

the home, including an outdoor pool. Ben contributed no money and negligible

labor to the improvements. The home improvement and general market conditions

boosted the value of the house during the three years of their marriage.

Other than a joint bank account that they tried using for only a short time,

the parties kept their assets separate during the marriage. Alexis paid for most of

the family’s household expenses. But Ben contributed at least some financial

support to the household, though the precise amount is disputed.

Both parties are middle-aged and appear to be in fine health. Both are

reasonably educated and have significant earning capacities. But each has had

some recent employment challenges, with Ben losing one of his jobs and Alexis’s

design-and-photography business struggling since the pandemic.

The parties separated in March 2022. And the next month, Ben petitioned

to dissolve their marriage. After a one-day bench trial—at which the main dispute

was the division of the parties’ property—the district court issued the dissolution

decree in February 2023. The court divided the property mainly by awarding each 4

party the assets and debts they held in their own name. This included awarding

the parties’ largest asset and debt—the marital home, valued by the court at

$500,000, and its roughly $218,000 mortgage—to Alexis. In total, the court

awarded property and debts to Alexis giving her a net worth of more than $400,000.

And the award left Ben with a negative net worth of about $20,000.

The court rejected Ben’s request that the court order Alexis to pay him a

$50,700 equalization payment to give him a portion of the value of the marital

home, reasoning that his “contributions were not significant” and “[t]he vast

majority of contributions to the home equity and value were made by Alexis and

her family.” Instead, the court agreed with Alexis and ordered Ben to pay her

$20,000 “for the lost equity Alexis had in the 2017 Mercedes Benz due to the

transfer of that vehicle to Ben.” The court reasoned that “[a]lthough Ben took over

the loan payment on that vehicle, he provided no equity up front covering the actual

value of the vehicle at the time of the transfer.”

Ben moved to reconsider the $20,000 payment under Iowa Rule of Civil

Procedure 1.904(2). The court summarily denied it. And Ben now appeals.

II. Division of Property

We review the district court’s division of property in a dissolution decree de

novo. See In re Marriage of Kimbro, 826 N.W.2d 696, 698 (Iowa 2013). Though

we are not bound by the trial court’s fact findings, we accord them weight. See id.

And we will only modify the district court’s division on appeal “when there has been

a failure to do equity.” Id. (cleaned up).

In a dissolution decree, “[t]he court shall divide all property, except inherited

property or gifts received or expected by one party, equitably between the parties.” 5

Iowa Code § 598.21(5) (2022); see also In re Marriage of McDermott, 827 N.W.2d

671, 678 (Iowa 2013) (“Iowa is an equitable distribution state.”). Dividing property

equitably requires a consideration of the facts of each case and the factors in Iowa

Code section 598.21(5). See McDermott, 827 N.W.2d at 682. While an equal

division is often equitable, “the division need not be equal in most short-term

marriages. Rather, it is often equitable to simply award the property to the party

that brought it into the marriage.” In re Marriage of Hansen, 886 N.W.2d 868, 873

(Iowa Ct. App. 2016); see also Iowa Code § 598.21(5)(a), (b) (requiring

consideration of “[t]he length of the marriage” and “[t]he property brought to the

marriage by each party”).

Along with awarding property and debts to each party, as a part of the

division, a court may order an equalization payment from one party to the other to

achieve an equal division that would otherwise be impractical. See McDermott,

827 N.W.2d at 683 (“An equalization payment is preferable when the court cannot

divide an asset easily and there are not enough liquid assets in the marital estate

to achieve an equitable distribution.”) An equalization payment—as one would

expect from its name—“suggests each party should be awarded an equal amount

of assets and liabilities.” Hansen, 886 N.W.2d at 873. But equalization payments

will typically be inequitable in short-term marriages. See id. And we know of no

Iowa precedent authorizing an equalization payment that has the effect of making

the property division less equal.

Ben’s challenge to the property division on appeal is narrow. He argues

that the order to pay Alexis $20,000 for her lost equity in the Mercedes-Benz is 6

inequitable because “lost equity is not an asset or debt in existence at the time of

dissolution and therefore should not be subject to distribution.”

Alexis offers no responsive argument. Rather, she focuses nearly all her

brief defending the district court’s decision to not order her to pay an equalization

payment—a challenge Ben does not pursue on appeal. Her only defense of the

$20,000 payment is that “the district court correctly found that Benjamin owed

Alexis $20,000 in equity associated with the awarding of the [Mercedes-Benz] to

him” because the “court correctly found that the ‘payoff of Ben’s debts placed Ben

in a better financial position than before the parties’ marriage.’”

We agree with Ben that the $20,000 payment is inequitable. Of course, the

court could consider the fact that Alexis brought the Mercedes-Benz into the

marriage with significant equity and the relative contributions of the parties to the

marriage when deciding on the equitable division of their property—both the overall

split and the awards of particular assets and debts to each party. See Iowa Code

§ 598.21(5)(b), (c). But see In re Marriage of Fennelly, 737 N.W.2d 97, 103 (Iowa

2007) (“It is important to remember marriage does not come with a ledger.”). Yet

when dividing the marital property, the court can only award assets and debts that

then exist, and it must generally do so based on their value at the time of trial. See

In re Marriage of Driscoll, 563 N.W.2d 640, 642 (Iowa Ct. App. 1997).

So here, the court could properly decide to award the Mercedes-Benz—

valued at about $26,000—and the $26,000 loan secured by it to one of the parties.

And the court did so, awarding both to Ben. No party challenges that award. Nor

does either challenge the overall unequal split: Ben entered the marriage in debt

and leaves it in debt; Alexis entered the marriage wealthy and leaves it wealthy. 7

Still, the district court reasoned that Ben should also be assigned

responsibility for value that Alexis had in the Mercedes-Benz when she transferred

it to him during the marriage. But this “lost equity,” as the court termed it, was not

property in existence at the time of trial that could be awarded. And the payment

could not be considered an equalization payment because it does not equalize the

property division—it makes the division less equal. Thus, the court’s order for Ben

to pay Alexis $20,000 for her lost equity in the Mercedes-Benz is inequitable and

must be removed from the decree.

Ben makes no other challenge to the property division on appeal. And

Alexis did not cross-appeal. So we could not grant either any further relief. We

thus do not attempt a comprehensive review of the district court’s division of assets

and debts and otherwise affirm the decree.

III. Appellate Attorney Fees

Alexis requests that we order Ben to pay her appellate attorney fees. In

dissolution cases, appellate attorney fees are not awarded as “a matter of right,

but rather rest in [our] discretion.” In re Marriage of Sullins, 715 N.W.2d 242, 255

(Iowa 2006) (cleaned up). In exercising that discretion, 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.” Id. (cleaned up). We exercise our discretion to deny Alexis’s

request for appellate attorney fees. Considering the relative financial

circumstances of the parties and Ben’s success on the merits, it is appropriate for

each party to pay their own attorney fees as they did in the district court. Costs

shall be assessed to Alexis.

AFFIRMED AS MODIFIED.