Opinion
No. 2-319 / 01-1202
Filed August 28, 2002
Appeal from the Iowa District Court for Davis County, Annette Scieszinski, Judge.
Respondent appeals from the physical care and property distribution provisions of the parties' dissolution decree.
AFFIRMED.
James McGrath of McGrath McGrath, P.C., Keosauqua, and Marci B.H. Tooman of Hopkins Huebner, P.C., Des Moines, for appellant.
Matthew Moore of Heslinga, Heslinga, Dixon Moore, Oskaloosa, for appellee.
Considered by Mahan, P.J., and Zimmer and Eisenhauer, JJ.
Tim Hale appeals from the custodial and economic provisions of the parties' dissolution decree. He contends (1) joint physical care is in the children's best interests, and (2) the division of property was inequitable because the district court's valuation of assets was inaccurate and it failed to give him credit for a premarital personal injury settlement. Shelly Hale requests appellate attorney fees. We affirm.
I. BACKGROUND FACTS.
Tim and Shelly Hale were married in 1989. They have three children, Chelsie, born in 1991, Andrea, born in 1992, and Zachary, born in 1994. Tim has been a self-employed farmer throughout the parties' marriage. He also sells seed. Shelly has very limited employment experience. She devoted her attention to homemaking during the parties' marriage.
Shelly filed a petition for a no-contact order in May 2000, after an episode in the home which the children witnessed. As a result of this incident, the court issued a protective order limiting contact between the parties. Shelly filed a petition for dissolution of the marriage on June 20, 2000. Pursuant to stipulation of the parties, the district court entered a temporary order awarding Tim and Shelly joint legal custody and physical care of the three children. The parties agreed on their schedule for exercising joint physical care.
Trial was held in May of 2001. The main focus of the trial was on whether Tim and Shelly should be awarded joint physical care of the children. Shelly requested she be awarded physical care. Tim requested joint physical care. Following trial, the district court awarded primary physical care of the children to Shelly and divided the marital assets. Tim appeals.
II. SCOPE OF REVIEW.
In this equity case our review is de novo. Iowa R. App. P. 6.4. We examine the entire record and adjudicate rights anew on the issues properly presented. In re Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998). We give weight to the fact-findings of the trial court, especially when considering the credibility of witnesses, but we are not bound by them. Iowa R. App. P. 6.14(6)( g). This is because the trial court has a firsthand opportunity to hear the evidence and view the witnesses. In re Marriage of Will, 489 N.W.2d 394, 397 (Iowa 1992).
III. PHYSICAL CARE.
Tim contends joint physical care is in the best interest of the parties' children because it would allow them to spend the maximum amount of time with each parent. He claims the parties demonstrated mutual cooperation when dealing with the children after the temporary custody order was entered. He points out that the parties live in a small town, and the children would be in the same school district when residing with either parent. At trial, he requested that physical care be alternated every two weeks.
Shelly has stated in her brief that she no longer lives in the same town as Tim, so the children would not be in the same school district when residing with either of them. However, this was not part of the record on appeal, and thus we do not consider it in analyzing the joint physical care issue.
In any custody determination, the primary consideration is the best interests of the children. Iowa R. App. P. 6.14(6)( o); In re Marriage of Murphy, 592 N.W.2d 681, 683 (Iowa 1999). The court's objective is to place the children in the environment most likely to bring them to healthy physical, mental, and social maturity. Murphy, 592 N.W.2d at 683. In considering what custody arrangement is in the best interest of the children, the court is required to consider statutory factors. Iowa Code § 598.41(3) (1999). All factors bear upon the "first and governing consideration" of what will be in the best long-term interests of the children. In re Marriage of Vrban, 359 N.W.2d 420, 424 (Iowa 1984). These statutory factors and the factors identified in In re Marriage of Winter, 223 N.W.2d 165, 166-67 (Iowa 1974), are appropriately considered in determining the award of physical care. In re Marriage of Will, 489 N.W.2d at 398.
The trial court refused to award the parties joint physical care of their children. Joint physical care is defined as an award of physical care of a minor child to both joint legal custodial parents under which both parents have rights and responsibilities toward the child including, but not limited to, shared parenting time with the child, maintaining homes for the child, providing routine care for the child and under which neither parent has physical care rights superior to those of the other parent.
Iowa Code § 598.1(4). Although joint physical care was once strongly disfavored by the courts, the Iowa legislature has proclaimed it a viable disposition of a custody dispute. In re Marriage of Swenka, 576 N.W.2d 615, 616 (Iowa Ct.App. 1998). A joint care arrangement can work if the parents can cooperate and respect each other's parenting and lifestyles. In re Marriage of Walton, 577 N.W.2d 869, 870 (Iowa Ct.App. 1998).
We conclude that joint physical care is not in the best interests of the children, and thus we affirm the trial court on this issue. The parties' history strongly suggests they would be unable to achieve the level of mutual respect and trust necessary to make a joint physical care arrangement work. These parents do not communicate well with one another as partners in child rearing. Moreover, they have different approaches to raising the children.
We conclude Shelly should be awarded physical care of the children. Tim has a history of controlling behavior toward Shelly. He has emotionally and physically abused Shelly, sometimes in the presence of the children. He threatened to kill her and cut her into pieces. Shelly has always been the primary caretaker of the children. The trial court described her as an exemplary and dependable parent. She fosters Tim's relationship with the children, whereas Tim impedes her relationship with them. Tim has made many derisive comments about Shelly in the presence of the children and in the community. The best interests of the children will be served by awarding Shelly physical care. We affirm the trial court's ruling on this issue.
IV. VALUATION OF ASSETS.
Tim contends the trial court erred in its valuation of assets. He claims the trial court erroneously used a financial statement prepared December 31, 1999 to value the parties' assets. He suggests the trials court's valuation of assets is inaccurate. Upon review of the record, we disagree.
The date of trial is generally the most appropriate date to value assets. In re Marriage of Campbell, 623 N.W.2d 585, 588 (Iowa Ct.App. 2001). However, we recognize the need for flexibility in making equitable distributions based on the unique circumstances of each case. Id.
On December 30, 1999, Tim gave a financial statement to his local bank indicating he and Shelly had a net worth of $249,045. On June 21, 2000, the same day he was served with notice that Shelly had filed a petition for dissolution; Tim showed a net worth of only $79,086 when he updated his financial statement for the bank. In a January 2001 report, he calculated a net worth of only $39,619. We agree with the trial court's conclusion that Tim's re-characterization of the farm's financial status reveals "an intent to diminish Shelly's recovery of a proportionate share of the marital estate."
Tim reported a $449,045 net worth, which included an annuity the trial court set aside to him, and which he valued in December 1999 at $200,000.
We conclude that the trial court did not improperly value the assets on the date of the financial statement predating this litigation, as Tim contends. Instead, the trial court determined that evidence of a material change in marital equity over the last eighteen months is not believable. It is fair to value the sum of the couple's farm and household assets at the December 30, 1999 values reported, in good faith, to a community lender.
The court concluded that any decrease in valuation since December 1999 was offset by equity gains, and the 2001 crop and livestock inputs were fairly balanced by the growing value of those items presently in production.
It is clear that the trial court determined the December 30, 1999 valuations Tim provided to his lender were credible. It is also clear the court believed other financial statements Tim prepared were manipulated. The record supports this conclusion. After the breakup of this marriage, Tim's valuation of farm assets plunged dramatically without any material changes in the format or success of the farming operation. There is no evidence that the December 1999 financial statement was manipulated. The bank regularly inspected the parties' collateral and the December 1999 figures were based on an appraisal dated three days prior to that financial statement. Upon review of this record, we cannot say the trial court's careful valuation of assets was inequitable. We affirm on this issue.
V. PERSONAL INJURY AWARD.
The trial court allowed Tim to retain $35,000 in premarriage equity he brought to the parties' business ventures. Tim argues that he should receive an additional credit for a personal injury settlement. Tim was injured in a motor vehicle accident prior to the parties' marriage. He settled his claim for $60,000 cash and an annuity of $300,000 payable in 2009. He received the cash proceeds early in the parties' marriage, and he applied them to the couple's farming operation. The trial court concluded the $60,000 was to be distributed between the parties, and that Tim should receive the $300,000 annuity.
Property which a party brings into the marriage is a factor to consider in making an equitable division. Iowa Code § 598.21(1)(b). In some instances, this factor may justify a full credit, but does not require it. . . . A premarital asset is not otherwise set aside like gifted and inherited property. Instead, it is a factor to consider, together with all the other circumstances, in making an overall division. Its impact on the ultimate distribution will vary with the particular circumstance of each case. Furthermore, in considering accumulations to premarital assets, we do not limit our focus to the parties' direct contributions to the increase. Instead, we broadly consider the contributions of each party to the overall marriage, as well as all other factors. Iowa Code § 598.21(1). Financial matters make up but a portion of a marriage, and must not be emphasized over the other contributions made to a marriage in determining an equitable distribution.
In re Marriage of Miller, 552 N.W.2d 460, 465 (Iowa Ct.App. 1996).
Generally, proceeds from a personal injury claim are marital assets. In re Marriage of McNerney, 417 N.W.2d 205, 206 (Iowa 1987) (dividing the husband's personal injury settlement between the parties in a case where the injury occurred during the marriage). They are divided according to the circumstances of each case. Id. Settlement proceeds do not automatically belong to either party. Id. at 208. A trial court has flexibility to divide the property equitably on a case-by-case basis. Id.
Tim's injury predated the marriage, and he received the cash settlement during the marriage. He applied the settlement to the parties' farming operation. Given the length of the marriage, the commingling of funds, and Tim's infusion of the settlement into the parties' farming operation, we conclude the trial court properly considered the cash proceeds from Tim's personal injury claim as equitably assimilated into the marital assets. We affirm the trial court on this issue.
VI. APPELLATE ATTORNEY FEES.
Shelly seeks an award of appellate attorney fees in the amount of $4000. We consider the needs of the party making the request, the ability of the other party to pay, and whether the party making the request was obligated to defend the trial court's decision on appeal. In re Marriage of Cooper, 524 N.W.2d 204, 207 (Iowa Ct.App. 1994). Considering these factors, we award Shelly $1000 for appellate attorney fees.
VII. CONCLUSION.
We conclude Shelly was correctly awarded primary physical care of the parties' children. We conclude the trial court's allocation of assets and debt's was equitable. Accordingly, we affirm the decision of the district court in its entirety. We award Shelly $1000 for appellate attorney fees.
AFFIRMED.