A Trial Court Has Much Discretion When Divorce Strikes the Farm

November 13, 2015 | Kristine A. Tidgren

The Iowa Court of Appeals recently affirmed a dissolution decree involving a self-employed farmer and his ex-wife who was employed off the farm.

The parties had been married for 16 years. The husband was 52 years old and the wife was 43 years old at the time of trial. The wife, who was a welder when the parties were married, had finished her associate’s degree during the marriage and was employed as a court clerk earning $35,970. The husband, who testified that he earned $170 in 2011, $30,795 in 2012, and $4,561 in 2013, was a farmer during the entire marriage. The trial court found that he had an earning capacity of $50,000 per year. The parties had two children.

The husband came into the marriage owning pasture and timber ground valued at $30,000. The parties made no improvements to the property during the marriage, but it was valued at $104,400 at the time of dissolution. The husband’s parents gave him a homestead and pasture ground valued at $35,000 in 2001, three years after the parties married. At the time of the trial, the property was valued at $134,250. During the marriage, both parties had worked hard to improve the homestead.

The trial court found that the husband had grain valued at $70,500 on hand in 2013. It also found the husband owned crops valued at $126,402 in 2014.

The trial court awarded the real property to the husband and ordering him to make a $75,000 equalization payment to the wife. The trial court also ordered the husband to pay spousal support in the amount of $400 per month to the wife until the wife reached the age of 65, died, or remarried.

The husband appealed the decree, arguing that the distribution of property and the award of alimony were inequitable.

On appeal, the Iowa Court of Appeals affirmed. The court first reviewed Iowa law: An equitable distribution of marital property does not require an equal division of assets, but equality is most often equitable. The court noted that “there are no hard and fast rules governing economic issues in dissolution actions.”

The court then examined the husband’s arguments. The husband argued that the wife was not entitled to the original value of the homestead, since it was gift. Instead, he alleged that she was entitled only to her share of the increase in value of the property. Because the pasture and timber ground with which the husband entered the marriage was not improved during the marriage, the husband argued that the wife was not entitled to a one-half share of the appreciated value of that premarital property.

And this is where the opinion becomes a little murky. The court stated that the husband apparently understood the trial court’s ruling to mean that the entire value of all real estate was ordered divided in the property distribution. The court went on to explain that the husband argued that only the post-marital appreciation value of the homestead property should have been divided and that none of the premarital pasture and timber ground should have been divided.

“Without interpreting the precise meaning of the district court’s ruling on this issue,” the court determined that it was “equitable and appropriate to equitably divide the post-marital appreciation value of all the real estate, setting aside to [the husband] the premarital values.” And that was the extent of the real property distribution opinion. The trial court’s order was affirmed, but it appears the court agreed with the husband as to the homestead division. They both seemed to agree that an equitable division would be accomplished by dividing only the post-marital appreciated value of the homestead. Yet, that is not what the husband believed the trial court had done. The court chose not to interpret the “precise meaning” of the trial court’s ruling, but instead merely found it equitable. The ruling demonstrates the power of a trial court’s discretion in dividing property.

The court also affirmed the trial court’s award of alimony to the wife. The husband argued that the award would make him responsible for an alimony payment until he was 74 and unable to perform his farming work. The court again deferred to the trial court’s determination of equity. The court stated that there were many unknowns surround the parties’ health, future employability, and income. As such, the court ruled that the question of the husband’s spousal support obligation upon retirement was best left for a subsequent modification action.

The case was In Re Marriage of Shepperd, No. 14-1766 (Iowa Ct. App. Nov. 13, 2015).