In Re the Marriage of Jennifer Marie Hartwig and Shannon Richard Hartwig Upon the Petition of Jennifer Marie Hartwig, and Concerning Shannon Richard Hartwig
IN THE COURT OF APPEALS OF IOWA
No. 15-1798
Filed September 28, 2016
IN RE THE MARRIAGE OF JENNIFER MARIE HARTWIG
AND SHANNON RICHARD HARTWIG
Upon the Petition of
JENNIFER MARIE HARTWIG,
Petitioner-Appellee,
And Concerning
SHANNON RICHARD HARTWIG,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Shelby County, J.C. Irvin, Judge.
A former husband appeals from the district court’s order dissolving the
parties’ marriage, disputing the physical care of the parties’ children, the
calculation of child support, and the property distribution. AFFIRMED.
Gina C. Badding of Neu, Minnich, Comito, Halbur, Neu & Badding, P.C.,
Carroll, for appellant.
J.C. Salvo and Bryan D. Swain of Salvo, Deren, Schenck, Swain
& Argotsinger, P.C., Harlan, for appellee.
Considered by Danilson, C.J., and Vogel and Potterfield, JJ.
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VOGEL, Judge.
Shannon Hartwig appeals from the district court’s order dissolving his
marriage to Jennifer Hartwig. He asserts on appeal: (1) it is in the children’s best
interests to be placed in the parties’ joint physical care, (2) the court improperly
determined his income for the purposes of calculating his monthly child support
obligation, and (3) the court’s property and debt division was inequitable. Both
parties also request an award of appellate attorney fees.
Upon our de novo review of the trial record and the district court’s order
following our limited remand, we conclude the custody and care arrangement set
forth by the district court is in the children’s best interests. We conclude the
court’s assessment of Shannon’s income for calculating child support was
accurate based on the limited evidence provided. In addition, we affirm the
property division and cash equalization payment as the values and debts
assigned to the parties’ property was within the permissible range of evidence.
For these reasons, we affirm the district court’s decision.
I. Factual and Procedural Background.
The parties were married in September 2007, and they have two minor
children together, S.H, born in 2006, and K.H., born in 2010. The parties
separated on June 1, 2014, and a temporary order establishing joint physical
care was entered requiring the parties to alternate physical care on a weekly
basis. No temporary child support was ordered.
Shannon owns his own business with his brother, S & S Construction,
L.L.C., which he started during the parties’ relationship. In addition to its
construction work, the company also owns rental properties. One rental property
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building was owned during the marriage, and two more were acquired by the
company during the pendency of the dissolution proceedings. The three
buildings contained an estimated total of thirty-two rental units, and each unit had
a rental price from $450 to $525 per month.
During the marriage, Jennifer collected the rent and did the bookkeeping
for the one apartment building owned at the time. She testified the rental
payments were usually made in cash and one-half of the money would be
deposited into the company’s rental savings account and one-half of the money
would be put into the company’s safe in the shop. Jennifer asserted the gross
annual income for the one building owned during the marriage, assuming all
apartments were rented, would be $66,000. From this business, Jennifer
estimated Shannon’s income for child support purposes to be approximately
$34,600, though Shannon claimed at trial he only took home $1600 per month
from the business and Shannon’s Schedule K-1 tax return form from the
business’s tax return showed he reported earning $14,220 in 2014. Very little
evidence was admitted at trial that established the value of the assets and
liabilities or the income and expenses of the company.
At the time of trial, Jennifer was employed as a freight broker and earned
$34,600 with benefits. She remained living in the marital home. Jennifer testified
she was the primary caretaker of the children throughout the marriage. Shannon
disputed this characterization, testifying they shared parenting duties. To support
her claims she should be granted physical care, Jennifer testified that the
temporary weekly alternating parenting schedule was problematic for the children
as behavioral issues were being exhibited at school. She believed it was in the
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best interests of the children to be placed in her physical care with liberal
visitation to Shannon, consisting of six overnights every two weeks, with
exchanges taking place during the week. This schedule placed the children with
Shannon from Wednesday until Friday on one week and from Thursday until
Sunday on the other week. During the summer, the parties would again alternate
care on a weekly basis with exchanges occurring on Sundays.
Shannon testified he preferred joint physical care with the schedule
remaining the same as the temporary order: alternating weekly with exchanges
occurring on Sunday. Shannon testified the parties tried a schedule similar to
what Jennifer proposed during the pendency of the dissolution proceedings but
the schedule, with midweek exchanges, was confusing to the children. As of the
time of trial, Shannon was living in one of the rental units owned by S & S
Construction; however, the majority of the time he stayed at his girlfriend’s home
with her child. At the time of trial, Shannon’s girlfriend was also pregnant with
Shannon’s child, which Shannon testified would be born in February 2016.
Shannon stated about three-fourths of the time he is with the children at issue in
this case is spent at his girlfriend’s home.
After hearing testimony and receiving exhibits at trial on July 17, 2015, the
court issued its dissolution decree on September 8, 2015. The order placed
physical care of the children with Jennifer, with visitation to take place pursuant
to her suggested schedule, as well as set Shannon’s child support obligation at
$635 each month based on the income figures Jennifer submitted. The court
ordered Shannon to pay Jennifer $9068.09 for child care expenses Jennifer paid
while the parties were separated, which Shannon had agreed to do during trial.
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Shannon was also ordered to pay one-half of Jennifer’s credit card debt that
totaled $9252.28 at the time of trial. Jennifer retained the marital home and the
responsibility for its mortgage. Jennifer was awarded her 401K and IRA
accounts, the joint savings account, and the certificate of deposit, and each party
was awarded the bank accounts currently in their name. Shannon was awarded
all of the assets of the construction company along with the associated debts, but
he was ordered to pay Jennifer a cash equalization of $40,000.
Shannon filed a motion to amend or enlarge on September 22, 2015,
requesting the district court expand its findings with regard to the reasons joint
physical care was rejected, how it calculated the child support award, and its
basis for ordering that the uncovered medical expenses be shared equally. The
motion further stated the court’s order did not make specific findings about the
value of the assets awarded to each party and the subsequent basis for the
$40,000 cash equalization payment Shannon was to make to Jennifer. Jennifer
resisted the motion, and it came on for hearing on October 7, 2015. The court
filed an order generally overruling Shannon’s motion, though it modified the
decree provisions regarding the payment of uncovered medical care expenses.
It further found the physical care and visitation schedule was in the children’s
best interests, and the evidence supported the remaining portion of the court’s
order. Shannon appealed.
Upon our review of the record and the district court’s decision, we
determined a limited remand was in order so the district court could provide us
with a supplemental order providing an item-by-item assessment of the value of
the marital assets and debts. We also directed the court to make specific
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findings as to the income of the parties and other factors considered in setting
the monthly child support obligation. After the district court filed its supplemental
order, we permitted the parties to submit supplemental briefing on the claims
raised. Now that all supplemental submissions have been received, we address
the issues raised by Shannon on appeal.
II. Standard of Review.
We review dissolution and child custody proceedings de novo. In re
Marriage of Hansen, 733 N.W.2d 683, 690 (Iowa 2007).
III. Physical Care Arrangement.
Shannon first asserts joint physical care is in the children’s best interests,
as opposed to Jennifer having physical care. He also takes issue with the
visitation schedule as set forth by the district court, arguing it is in the best
interests of the children to adhere to the schedule set forth in the temporary
custody order.
Physical care arrangements should be made with the best interests of the
children in mind. Id. at 696. When considering what arrangement would be the
most suitable, the court is to consider stability, continuity of caregiving, the
degree of hostility between the parents and whether they can co-parent
peacefully, as well as the parents’ agreement on daily parenting matters. Id. at
697–98 (noting, with regard to the consideration of who was the primary
caretaker, “the successful caregiving by one spouse in the past is a strong
predictor that future care of the children will be of the same quality,” but that joint
physical care is preferred if both spouses contributed equally to the caretaking).
When determining which spouse should receive physical care, “the factors of
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continuity, stability, and approximation are entitled to considerable weight.” Id. at
700.
In its order on the motion to amend or enlarge, the district court placed the
children in Jennifer’s physical care, stating Jennifer:
has been and continues to remain the primary caretaker of the
children’s needs, whereas [Shannon] relies mainly on [Jennifer] to
care for the children while spending the majority of his time at work,
or with his now pregnant girlfriend, and to a far lesser time with his
children. [Jennifer] is the parent who attends to the children’s
medical, educational, and physical needs, shouldering the financial
obligations of the children. Given these facts, coupled with the
opportunity to listen to the parties and observe their demeanor, the
Court finds the primary care with [Jennifer] is in their best interests.
We agree that the record supports the conclusion Jennifer was the
primary caretaker of the children in their day-to-day care as well as the one who,
postseparation, was responsible for paying the bills incurred on behalf of the
children. These factors weigh in favor of Jennifer receiving physical care. See
id. at 697. While we agree with Shannon the record demonstrates the parties are
able to co-parent more or less agreeably, we nonetheless conclude the factors
present in this case establish it is in the children’s best interests that physical
care be with Jennifer.
We also agree with the district court the visitation schedule set forth in its
order is in the best interests of the children. As testified to by Jennifer, the
children began to develop problems while the weekly alternating temporary
custody order was in place. In addition, Shannon has ample time with the
children in the visitation schedule, six out of every fourteen overnights, which is
also a best-interests consideration. See id. Consequently, we affirm that portion
of the court’s order.
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IV. Child Support.
Shannon next argues the district court improperly ordered that he pay
Jennifer $635 each month in child support. He asserts there was not enough
evidence showing he earned $34,600 each year and therefore the child support
was not calculated correctly. In the district court’s remand order, the court
stated:
In 2015 S&S Construction purchased two apartment houses, one
for $260,000 and another for $350,000. [Shannon] concealed from
[Jennifer] these acquisitions and the income derived therefrom.
The apartment houses have a relatively limited equity; however,
they do generate substantial income, much of which [Shannon]
denied at trial. [Shannon] testified that rent proceeds, most of
which were cash, were deposited in an S&S account and placed in
a safe. The three apartment houses owned by S&S Construction
contained thirty-two apartments renting at an average of $500 per
month. No accounting was made by [Shannon] as to the profits
retained or otherwise generated by the apartment houses. In fact,
[Shannon] at trial declined to state his present income. He stated
that his sister-in-law was the bookkeeper and she did not get the
profit and loss statements to him in time for trial. [Jennifer’s]
request for such information went unanswered. This failure to
produce information necessary for establishing [Shannon’s] income
at the time of trial when such information was available requires the
Court to attempt to determine such income from all three apartment
houses based upon rents.
[Shannon’s] evasive testimony at trial reveals a conscious
failure to produce evidence reflecting his actual income. This is not
a case of imputed income but is rather a search for evidence of
actual income. The failure of [Shannon] to cooperate with
discovery attempts, which would most certainly aid the Court in
making an accurate determination as to [Shannon’s] income,
results in the Court’s decision to find that for child support purposes
[Shannon’s] income of $34,600 as proposed by [Jennifer] is fair and
equitable.
Shannon contends he did provide the court with evidence to support what
he claims should be his income for the child support calculation, including his
prior tax returns that reflect his share of the company’s profits for 2014 was
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approximately $14,220, amounting to roughly $1600 per month take home pay.
While the prior tax returns were provided, these tax returns reflected only the
profit generated from one apartment building and did not reflect the income and
profits generated, if any, from the two apartment buildings acquired after the
parties separated but before the dissolution trial.
Shannon agreed that with thirty-two apartments available in the three
buildings, the company could expect $170,000 to $192,000 in gross rental
income during 2016. There was no other evidence provided as to the monthly
debt obligation or other expenses associated with each of the apartment
buildings or what income, if any, was generated from the construction side of the
business. Thus, it was impossible for the court to determine a current monthly
income figure for Shannon based on the evidence Shannon submitted. See In re
Marriage of Ales, 592 N.W.2d 698, 703 (Iowa Ct. App. 1999) (“[A] person in
possession of facts necessary to prove an issue . . . should have the burden of
proving those facts.”); 29 Am. Jur. 2d Evidence § 178 (2008) (“Where information
necessary to prove an issue is peculiarly or exclusively within the possession of
one party, courts sometimes reason that convenience and fairness justify placing
the burdens of pleading and proving those facts upon that party.”). We conclude
it was reasonable for the court to accept Jennifer’s estimation of Shannon’s
income at $34,600 per year, in the absence of other evidence to the contrary.
See In re Marriage of Powell, 474 N.W.2d 531, 534 (Iowa 1991) (“The court must
determine the parent’s current monthly income from the most reliable evidence
presented.”). We affirm the court’s calculation of Shannon’s child support
obligation.
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V. Property Distribution.
Next, Shannon claims there was not enough specificity in the district
court’s decree with regard to the property distribution and how the equalization
payment was calculated. We agreed and remanded the matter to the district
court for a detailed explanation of the property distribution. The remand order
entered by the district court specified the value assigned to the various property
items owned by the parties and the debt associated with the items. When
combined with the initial decision and the evidence submitted by the parties, we
have now been able to determine the value of the martial estate and the district
court’s distribution.
In his supplemental brief following the court’s remand order, Shannon
takes issue with the court’s statement that the value assigned to the marital
home assumes a payment of $7500 from Shannon to Jennifer for repairs to the
home and the assignment to Jennifer of the obligation for repayment of a $6809
grant that must be repaid if Jennifer moves from the residence “during the next
two years.” Jennifer notes in her supplemental brief that despite the language
the district court used in the remand order regarding the $7500 for repairs of the
home, there was no separate order from the court for Shannon to pay this
amount to Jennifer, so we must assume this $7500 is part of the $40,000
equalization payment. We agree with Jennifer’s interpretation of the remand
order. In addition, district court noted the unlikelihood of the $6809 grant would
ever need to be repaid, and the court never listed this amount as an obligation
against the home awarded to Jennifer; thus, we do not consider the $6809 grant
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to be an obligation assigned to Jennifer as part of the district court’s property
division.
Shannon also faults the district court for accepting the value Jennifer
assigned to certain personal property items, such as a pool table, hot tub, stove,
and grill, which were awarded to Shannon. Instead, Shannon asserts the court
should have used the lower values Jennifer initially placed on the items in her
pretrial affidavit. Because the pretrial affidavit was not admitted into evidence at
trial and because Shannon offered no evidence as to the value of these items at
trial, we find no error in the district court’s assessment of their value. Relatedly,
Shannon claims it was unclear whether the court’s separate itemization
“household goods and furnishings” included the pool table, hot tub, stove, and
grill. We agree with Jennifer that by itemizing and valuing certain items like the
pool table, hot tub, stove, and grill, and then separately valuing “household goods
and furnishings,” the court was not double counting the assets awarded to
Shannon.
Shannon next asserts the values and debts assigned to his company were
incorrect and misleading. We note some of the properties and assets of the
company were valued in the district court’s remand order in light of Shannon’s
one-half interest while other items were listed at the asset’s full value. However,
despite this confusion, this court, in consultation with the trial record, has been
able to determine the value the district court assigned to each item and the item’s
debt obligation and calculate Shannon’s interest in the item in light of his fifty
percent ownership in the company. We agree with Shannon’s assertion that the
district court incorrectly listed the debt obligation associated with one of the
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apartment properties owned by Shannon’s company. With the trial record and
Jennifer’s concession in the supplemental brief, we conclude the district court
made a scrivener’s error for this particular item, and we have considered the
correct debt obligation associated with this business asset in our evaluation of
whether the property division was equitable.1
When a district court’s valuation of the assets of a martial estate is within
the range of permissible evidence, we refuse to disturb the district court’s
decision. In re Marriage of McDermott, 827 N.W.2d 671, 679 (Iowa 2013). Upon
our view of the record available to the district court and making appropriate
adjustments to the value of the items detailed above, we conclude the $40,000
equalization payment is equitable in this case, and we affirm the district court’s
property distribution.
VI. Attorney Fees.
Finally, both Shannon and Jennifer request the award of appellate
attorney fees.
Appellate attorney fees are not a matter of right, but rather rest in
this court’s discretion. Factors to be considered in determining
whether to award attorney fees include: “the needs of the party
seeking the award, the ability of the other party to pay, and the
relative merits of the appeal.”
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The district court listed the debt associated with one of the newly acquired apartment
buildings at $40,000, but the record shows, and Jennifer concedes, Shannon’s half of
the debt was approximately $125,000 to $130,000. The fact the district court ordered a
$40,000 equalization payment leads us to conclude the $40,000 figure for the debt was
a scrivener’s error because if the property in question only had $40,000 in debt a much
higher equalization payment would have been in order.
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In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006) (citations omitted).
With these considerations in mind, we decline to award either party appellate
attorney fees.
AFFIRMED.