Opinion
No. 3-248 / 02-1453
Filed July 10, 2003
Appeal from the Iowa District Court for Clay County, Patrick M. Carr, Judge.
The petitioner appeals various economic provisions of the parties' dissolution decree. AFFIRMED.
Daniel Connell of Dan Connell, P.C., Storm Lake, and Eric Hansen and Laura Pattermann, of Gallner Patterman, P.C., Council Bluffs, for appellant.
Michael Bovee of Montgomery, Barry Bovee, Spencer, for appellee.
Heard by Mahan, P.J., and Miller and Vaitheswaran, JJ.
A spouse appeals the property and alimony portions of a dissolution decree. We affirm.
I. Background Facts and Proceedings
Gary and Audrey Johnson married in 1969. Both are high school graduates. At the time of trial, Gary was fifty-one years old and Audrey was forty-nine. Gary farmed throughout the marriage. Until the parties' separation in 2001, Audrey assisted with the farming operation and raised the parties' three daughters. Following the separation, she obtained a job with a farm consulting service. Her most recent earnings were approximately $45,000 per year.
Audrey sought and obtained a divorce. The district court initially awarded her a property settlement of $83,837. Realizing that the value of an acreage had been omitted from this calculation, the court subsequently amended its decree pursuant to Iowa Rule of Civil Procedure 1.904(2) and increased Audrey's property award to $113,837. The court declined to award Audrey requested alimony of $400 per month for eight years.
On appeal, Audrey challenges the district court's property determinations with respect to land, farm machinery, and growing crops. She also takes issue with the court's decision not to award alimony. Our review of these issues is de novo. Iowa R.App.P. 6.4
II. Property A. 242 Acre Farm. The parties owned two farms covering 242 acres. Gary's appraiser valued the land at $446,730.40. Audrey's appraiser settled on $530,830. The district court adopted a value of $500,000. Audrey contends this figure is not supported by the evidence. We disagree.
The district court examined both Gary's and Audrey's appraisals and, although finding the one proffered by Audrey to be more "scientific," elected not to adopt the final figure contained in that report. We find nothing untoward in the court's selection of a lower value than that espoused by Audrey's appraiser. This appraiser compared the property to five other comparable properties and arrived at a range of values, from a low of $461,528 to a high of $533,408. The court's figure fell within this range. We accept it, because, "[a]lthough our review is de novo, we will defer to the trial court when valuations are accompanied with supporting credibility findings or corroborating evidence." In re Marriage of Vieth, 591 N.W.2d 639, 640 (Iowa Ct.App. 1999).
B. 6.8 Acre Homestead. Audrey next challenges the district court's valuation of the homestead portion of the parties' property. Again, the court was faced with two appraisals, one on behalf of Gary in the amount of $119,873.20 and one on behalf of Audrey for $165,000. The court again found the report of Audrey's appraiser more convincing than that of Gary's but concluded that this report did not account for economic obsolescence. See Bankers Life Co. v. Zirbel, 239 Iowa 275, 284-85, 31 N.W.2d 368, 373(1948) (stating economic obsolescence is a factor that reduces actual value); J.R. Simplot Co. v. Dep't of Revenue, 897 P.2d 320-21 (Or. 1995) (defining economic obsolescence as "loss in value due to forces from outside the property, such as neighborhood decline, market or industry changes and general economic conditions"). After considering this factor, the court valued the property at $140,000.
Although we agree with Audrey that Gary did not specifically ask to have the acreage discounted based on economic obsolescence, his appraiser did take into account "location, and demand." Both are factors that result in economic obsolescence. See J.R. Simplot, 897 P.2d at 320-21. In light of this evidence, we believe the district court acted equitably in adopting a lower value for the acreage than Audrey's appraiser recommended.
Although valuing the property at $140,000, the district court elected to subject to division only $60,000 of that amount. Audrey claims the entire value should have been included among the assets to be divided. We disagree. As the court explained, Gary's father deeded the acreage to Gary alone and paid for many of the improvements on the property, but the parties used this portion of the farm to run the farm operation and raise their children. The court concluded that "equity to all concerned" required inclusion of a portion of the value in the marital pot. Under these circumstances, we believe the court's decision was equitable.
C. 356.5 Acre Parcel . Also at issue is the district court's decision to set aside to Gary a remainder interest in a 356.5 acre parcel of land deeded to him by his parents in 1998. In doing so, the district court noted that the land was gifted fairly recently and "was clearly deeded to Gary alone, not to Gary and Audrey." The court further noted that Gary had "no present possessory interest in the farm." We are persuaded by this reasoning.
Gifted property is generally not subject to division unless a failure to do so would prove inequitable. See In re Marriage of Thomas, 319 N.W.2d 209, 211 (Iowa 1982). Audrey claims the court's decision to set aside this property is inequitable because she assisted with planting and harvesting duties on this farm and Gary told her he would share the land with her on his parents' death. While her claims are supported by the record, we believe the deed, executed just three years before the parties' separation, is controlling. Accordingly, we affirm this aspect of the court's ruling.
D. Farm Machinery. Audrey next contends the district court should have valued the farm machinery at $555,500 rather than the $316,949 figure suggested by Gary's expert witness. She points to the fact that a banker lending money to Gary ascribed the higher value to this machinery and she posits that this estimate would logically have taken into account depreciation.
The problem with her contention is that Audrey did not call the banker to testify about the reasons for his higher valuation. Gary's expert, in contrast, testified about his report. He stated that, based on his experience as a farm implement dealer and his knowledge of "Gary's line of machinery," he believed the assigned values were "quite fair" and he "wouldn't be embarrassed" with the prices assigned to any of the pieces. He also stated the machinery would be worth "quite a fair amount less" if it were presently sold at auction. We cannot fault the district court for finding his testimony more persuasive than the unexplained bank figure. Accordingly, we affirm the district court's valuation of the farm machinery and equipment.
E. Growing Crops. At the time of trial, the parties had 545 acres of planted corn and 489 acres of beans. The district court adopted Audrey's proposed aggregate crop value of $219,451 but offset against this value certain expenses to be incurred by Gary in harvesting the crops. The court came up with a final value of $84,215. Audrey contends her aggregate value of $219,451.50 was the more equitable measure. We disagree.
Our court has expressly authorized consideration of "the reasonable cost of harvest" in determining the value of growing crops. In re Marriage of Martin, 436 N.W.2d 374, 376 (Iowa Ct.App. 1988). Gary projected his crop expenses would be $206,105.68. The district court determined this projection was too high and, after examining each item of expense, reduced his expenses to $108,636. The court also subtracted from Audrey's aggregate crop value $26,600 in pre-paid crop inputs that had already been listed as an asset and awarded to Gary. We find nothing inequitable about this method of valuation and, accordingly, affirm it.
III. Alimony
Audrey finally contends the district court acted inequitably in declining to award her alimony. Given the substantial debt load Gary assumed, Audrey's five-year history of off-the-farm earnings, and the equalizing property payment Gary was ordered to pay, we agree with the district court's decision, notwithstanding the length of the marriage. See In re Marriage of Hardy, 539 N.W.2d 731, 732 (Iowa Ct.App. 1995) (decreasing alimony award where award could not be made without significant borrowing).