Opinion
No. 2-925 / 02-0551
Filed January 29, 2003
Appeal from the Iowa District Court for Crawford County, Richard J. Vipond, Judge.
Appellant, Terence Edward Crawford, appeals, and appellee, Patricia Joan Crawford, cross appeals challenging the economic provisions of the decree dissolving their nineteen-year marriage. AFFIRMED.
Allen Nepper of Nepper Law Firm, Denison, for appellant.
J. C. Salvo, Richard Schenck, and Bryan Swain of Salvo, Deren, Schenck Lauterbach, P.C., Harlan, for appellee.
Heard by Sackett, C.J., and Zimmer and Vaitheswaran, JJ.
Appellant, Terence Edward Crawford, appeals, and appellee, Patricia Joan Crawford, cross appeals challenging the economic provisions of the decree dissolving their nineteen-year marriage. We affirm.
Our review of the economic provisions of a divorce decree is de novo. Iowa R.App.P. 6.4. We examine the entire record and adjudicate anew the issues properly presented on appeal. In re Marriage of Steenhoek, 305 N.W.2d 448, 452 (Iowa 1982). We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses, but are not bound by them. Iowa R.App.P. 6.14(6)( g); In re Marriage of Grady-Woods, 577 N.W.2d 851, 852 (Iowa Ct.App. 1998). We approach this issue from a gender-neutral position avoiding sexual stereotypes. In re Marriage of Pratt, 489 N.W.2d 56, 58 (Iowa Ct.App. 1992); see also In re Marriage of Bethke, 484 N.W.2d 604, 608 (Iowa Ct.App. 1992).
Before making an equitable distribution of assets in a dissolution, the court must determine all assets held in the name of either or both parties as well as the debts owed by either or both. See In re Marriage of Driscoll, 563 N.W.2d 640, 641-42 (Iowa Ct.App. 1997); In re Marriage of Brainard, 523 N.W.2d 611, 616 (Iowa Ct.App. 1994). The assets should then be given their value as of the date of trial. Locke v. Locke, 246 N.W.2d 246, 252 (Iowa 1976); In re Marriage of McLaughlin, 526 N.W.2d 342, 344 (Iowa Ct.App. 1994). The assets and liabilities should then be equitably, not necessarily equally, divided after considering the criteria delineated in Iowa Code section 598.21(1) (2001). In general, the division of property is based upon each marriage partner's right to a just and equitable share of the property accumulated as a result of their joint efforts. In re Marriage of Dean, 642 N.W.2d 321, 323 (Iowa Ct.App. 2002). With these principles in mind we address the parties' challenges.
Terence and Patricia were married in November of 1983. At the time of the marriage Terence, born in 1952, was a graduate civil engineer and was employed in that capacity. Patricia, born in 1962, was a high school graduate and was employed as the assistant manager of a fast food restaurant. They had four sons. The parties agreed that they should have joint custody of the children, that Patricia should be the primary physical custodian, and that Terence should have specified visitation. They also agreed that Terence would pay child support of $1147 a month for four children, $1008 a month for three children, $848 a month for two children, and $562 a month for one child. These matters are not disputed on appeal.
The district court valued the property and then divided it. It found Patricia brought $6575 into the marriage and Terence brought approximately $22,000 into the marriage. The court gave each credit for that amount.
The court then divided the remaining property and debts so as to leave Patricia and Terence each with approximately $193,195 in value after the payment of debts. The court ordered Terence to pay rehabilitative alimony of $900 a month for eight years.
We first address Terence's claim he was not given sufficient credit in the division of assets for property he brought into the marriage and that Patricia was given too much credit. Terence brought personal property and a home into the marriage. The house was purchased for $28,500 in 1978, about five years before the marriage. It was sold ten years after the marriage for $16,500. The district court valued it at $16,500. Terence's argument is that there was no evidence to support the district court's determination the home was worth less than the original purchase price. We find the value set by the court to be within the permissible range of evidence and affirm.
Terence's second argument is the court gave Patricia credit for the balance of a savings account she brought into the marriage but she still has $515 in the account and was given that account. Consequently her award should be modified. Patricia contends she was not awarded a $515 savings account. "Property which a party brings into a marriage is a factor to consider in making an equitable division." In re Marriage of Wendell, 581 N.W.2d 197, 199 (Iowa Ct.App. 1998). This factor "may justify a full credit, but it is not required." In re Marriage of Miller, 552 N.W.2d 460, 465 (Iowa Ct.App. 1996). We find the division equitable.
We next address Terence's claim that the district court overvalued the shares of stock in Sundquist Engineering, P.C., and in SEA Corp. The shares were all given to him in the property division.
The general rule is that stock should be valued at market value if it can reasonably be ascertained. In re Marriage of Steele, 502 N.W.2d 18, 21 (Iowa Ct.App. 1993); In re Marriage of Dennis, 467 N.W.2d 806, 808 (Iowa Ct.App. 1991). However, the valuation of a closely held corporation is difficult, and the market value of stock in a closely held corporation rarely can be ascertained. Id. Because of the difficulty of the task of valuation of closely held corporations, the law provides much leeway to the trial court. Id. If values are within a permissible range of the evidence, we will not disturb them on appeal. See In re Marriage of Alexander, 478 N.W.2d 420, 422 (Iowa Ct.App. 1991).
Sundquist Engineering P.C. is a professional corporation with Terence and Steve Sundquist being the only shareholders. The corporation has 255 shares of stock outstanding. At the end off 2001 the corporation valued the stock at $1,395 a share. Terence owns forty-five shares of stock in the corporation, which the district court valued at forty-five times $1,395, or $62,755. Terence contends the shares should only have been valued at $28,000, which is the sum the corporation would have had to pay for the stock if on the date of the dissolution he voluntarily or involuntarily withdrew from the corporation. The valuation fixed by the corporation would be payable to him only if he voluntarily or involuntarily withdrew after December 31, 2002, some nine months after the filing of the dissolution decree.
Terence correctly argues that assets are valued as of the date of the dissolution. The date of the dissolution is the only reasonable time when an assessment of the parties' net worth should be undertaken. Locke, 246 N.W.2d at 252; Schantz v. Schantz, 163 N.W.2d 398, 405 (Iowa 1968). We value property for division purposes at its value at the time of the dissolution. In re Marriage of Fall, 593 N.W.2d 164, 168 (Iowa Ct.App. 1999). However, in determining the value here we look also to the fact that there is no evidence Terence would not stay with the professional corporation through the end of 2002 and that the stockholder would not sell all the stock for the value established. See In re Marriage of Dieger, 584 N.W.2d 567, 569 (Iowa Ct.App. 1998) (where the court considered other equitable factors in valuing stock). We affirm the court's determination of the value of the stock in Sundquist Engineering.
SEA Corp. is a closely held S Corporation. The shares of stock are owned by fourteen persons who are employees of Sundquist Engineering P.C. SEA Corp. owns and rents the real estate of Sundquist P.C. Terence owns 21,000 of the 73,298 outstanding shares of SEA Corp. On December 12, 2001 the board of directors of the corporation, of which Terence is a member, set the redemption price of the stock at $1.50 a share. The district court valued Terence's 21,000 shares at $1.50 a share, or $31,500. Terence contends that the shares should have been valued at the book price of $1.17 a share, or $24,570.
The real estate owned by the corporation includes an office building and a house. The office building was purchased for $65,000 and had improvements of $240,000 to $250,000 made to it. Terence contends the building is worth between $150,000 and $160,000. It is subject to a mortgage of $75,316. The house was purchased for $55,000 and has a mortgage of $54,267. Terence contends this means that the corporation has a net worth of $85,417 making the 73,298 shares of stock worth $1.17 a share. We find the value used by the court to be within the permissible range of the evidence and affirm.
Terence next contends the alimony award of $900 per month for eight years is too large. He argues the district court should not have awarded traditional alimony. Rather, he claims, it should have awarded rehabilitative alimony of $250 a month for five years. On cross appeal Patricia contends she should have alimony of $900 a month to be paid until she reaches the age of sixty-five.
We consider alimony and property division together in assessing their individual sufficiency. They are neither made nor subject to evaluation in isolation from one another. McLaughlin, 526 N.W.2d at 345; In re Marriage of Griffin, 356 N.W.2d 606, 608 (Iowa Ct.App. 1984). There is considerable authority to award the disadvantaged spouse alimony under such circumstances as we find here. See In re Marriage of Friedman, 466 N.W.2d 689, 693 (Iowa 1991); In re Marriage of Hitchcock, 309 N.W.2d 432, 437-38 (Iowa 1981); In re Marriage of Misol, 445 N.W.2d 411, 413-14 (Iowa Ct.App. 1989); In re Marriage of Hayne, 334 N.W.2d 347, 350-51 (Iowa Ct.App. 1983).
In awarding alimony we look to the particular circumstances of the case. The mandate is to achieve an equitable and just result under the circumstances. See In re Marriage of Webb, 426 N.W.2d 402, 405 (Iowa 1988); Bethke, 484 N.W.2d at 609. We look to Terence's earning capacity and the standard of living the parties have maintained, as well as his relative ability to pay. See id.; In re Marriage of Imhoff, 461 N.W.2d 343, 345 (Iowa Ct.App. 1990). We also look to the factors of section 598.21(3).
The district court addressed Terence's post decree motion which urged that it should have awarded rehabilitative alimony, and Patricia's post decree motion claiming she should have alimony for twenty-five years, and denied both. In doing so it noted that the life expectancy of a man Terence's age is twenty-six years. The court noted the income differences between the two parties are generally the result of the fact Terence was college educated at the time of marriage and had a substantial earnings capacity while Patricia had a high school education with no plans for further education and a modest income. It further noted Patricia has not reached an age where she was prevented from assuming a life as a self-supporting person. Apparently recognizing the fact that during most of the marriage she was the caretaker of the children and home, the court reasoned that Patricia was receiving substantial property and that together with eight years of alimony would provide her an opportunity to recover the earning capacity she lost as a result of the marriage.
At the time of the dissolution Terence was earning about $84,000 a year. While he does not deny that this is shown as taxable income, he points out that a portion of this figure is income retained by the S Corporation, which is not distributed to him. Patricia had recently become employed as a teacher's aid and works no more than twenty-five hours a week for nine months. Her annual income from this employment has been $6,000. Considering the circumstances before us, we find the alimony award equitable.
In 2000 the K-1 showed he had distributed income from Sundquist Engineering P.C. of $9460 and from SEA Corp. of $3033.