In Re the Marriage of Julie Ann Jervik and Kirk Bradley Jervik Upon the Petition of Julie Ann Jervik, petitioner-appellant/cross-appellee, and Concerning Kirk Bradley Jervik, respondent-appellee/cross-appellant.
15-0766
| Iowa Ct. App. | Oct 12, 2016Background
- Married 1979; two children (one minor at dissolution). Kirk operated a sole-owner electrical business; Julie was a long-term homemaker and homeschooler.
- Kirk was severely injured in a 2013 arc-flash workplace accident; business operations were suspended and he received disability income.
- Julie filed for dissolution in 2011; the court entered temporary child support and alimony based on prior high draws from the business.
- At trial the business value post-injury was contested: Kirk’s expert valued it at ~$194,000 (pre-accident higher), Julie’s expert had earlier valued it at $280,000 (and Kirk’s pre-accident valuation was ~$388,000).
- Julie had kept an inheritance (~$95,000) in her name; Kirk claimed a one-fifth interest in family farmland whose character (gift vs marital) was disputed.
- Trial court awarded the business to Kirk, treated Julie’s inheritance as nonmarital, valued marital assets and ordered an equalization payment; court also awarded modest ongoing alimony to Julie and reduced child support based on Kirk’s post-accident income.
Issues
| Issue | Julie's Argument | Kirk's Argument | Held |
|---|---|---|---|
| Vehicle trade-in valuation/dissipation | Court should not attribute $5,500 trade-in value to Julie because she leased the replacement and asset was not marital at dissolution | Trade-in credit should be treated as marital asset allocated to Julie | Court: lease means no ownership; trade-in equity was a legitimate household expense (no dissipation); remove $5,500 from Julie's marital assets |
| Business valuation | Court should use higher pre-accident valuation (or include $~190k cash/AR) because Kirk wasted or hid funds | Post-injury business decline was legitimate; expert valuation at trial supports lower value and sale-of-assets value was even lower | Court: trial valuation ($194,450) is within permissible evidence and not disturbed |
| Income for child support/alimony (imputation) | Kirk’s historical draws and expectation of returning to work justify imputing higher income | Current income is disability + farm income; return to work was uncertain and speculative | Court: used actual current income ($24,177); decline to impute greater income; modification available if income later changes |
| Treatment of inheritance/family farm (nonmarital/gift) | Julie’s inherited funds appreciated but should remain nonmarital; Kirk argued appreciation or gift portion should be marital | Kirk argued appreciation and claimed part of farm interest was a gift to him and nonmarital | Court: inheritance kept separate and not a family decision — nonmarital; no evidence farm interest was a gift to Kirk alone — court’s allocation stands |
Key Cases Cited
- In re Marriage of Sullins, 715 N.W.2d 242 (Iowa 2006) (de novo review but weight given to trial court fact findings)
- In re Marriage of Hansen, 733 N.W.2d 683 (Iowa 2007) (trial court valuation will not be disturbed if within permissible evidence)
- In re Marriage of Kimbro, 826 N.W.2d 696 (Iowa 2013) (dissipation doctrine exception for legitimate household/business expenses)
- In re Marriage of McDermott, 827 N.W.2d 671 (Iowa 2013) (valuation of business is imprecise and trial court has leeway)
- In re Marriage of Conley, 284 N.W.2d 220 (Iowa 1979) (equality in property division need not be mathematically exact)
- In re Marriage of Dennis, 467 N.W.2d 806 (Iowa Ct. App. 1991) (trial court has wide latitude in valuing closely held business)
- In re Marriage of Wiedemann, 402 N.W.2d 744 (Iowa 1987) (trial court findings on valuation upheld when within range of evidence)
- In re Marriage of Schriner, 695 N.W.2d 493 (Iowa 2005) (post-divorce recoveries are separate property; anticipated recoveries can be considered in division)
- In re Marriage of Gust, 858 N.W.2d 402 (Iowa 2015) (traditional alimony appropriate in long marriages where one spouse was out of workforce)
- In re Marriage of Nelson, 570 N.W.2d 103 (Iowa 1997) (include all non-anomalous, non-speculative income when setting support)
- In re Marriage of White, 537 N.W.2d 744 (Iowa 1995) (treatment of inherited property and when appreciation is marital)