In Re the Marriage of Lori A. Leo and Michael A. Leo Upon the Petition of Lori A. Leo, and Concerning Michael A. Leo
16-0557
Iowa Ct. App.May 3, 2017Background
- Lori and Michael Leo married in 1982, had two children, and were married 33 years before Lori filed for dissolution in 2015.
- Michael operated several businesses (pizza restaurant, Leo Foods, Leo’s Italian Restaurant); Lori worked as a teacher and contributed income, benefits, and occasional work at the restaurant.
- Michael received gifts and inheritances from an aunt and uncle (disputed amounts and character), some of which were used in family businesses and the marital home; Lori also received modest inheritances/annuity.
- The district court valued assets (adopted Lori’s valuation for the restaurant, Michael’s for the home), found substantial commingling/use of gifts in marital assets, and included a portion of Michael’s gifts/inheritances in property division.
- The decree awarded Lori $347,073 in assets (plus a $200,000 equalization payment) and Michael $890,219 in assets; Michael appealed contesting the treatment of gifts/inheritances, overall distribution, certain valuations, and sought appellate fees.
Issues
| Issue | Plaintiff's Argument (Lori) | Defendant's Argument (Michael) | Held |
|---|---|---|---|
| Whether gifts/inheritances to Michael should be excluded from division under Iowa Code §598.21(6) | Gifts were commingled, used for marital assets/businesses, and Lori’s long-term contributions make dividing them equitable | Gifts/inheritances are Michael’s separate property and should be set aside to him; division is inequitable | Court affirmed district court: significant gifts/inheritances were properly considered in division given commingling, length of marriage, and Lori’s contributions |
| Whether overall property distribution (including $200,000 equalization payment) was inequitable | Distribution (with equalization payment) is fair given relative asset values and debts | Award is inequitable; Michael argues assets awarded to him were overvalued and he cannot pay equalization | Court found distribution equitable and affirmed decree |
| Valuation of Leo’s Italian Restaurant | Lori’s expert valuation is within permissible range and reflects payments on secured debt | Michael attacks valuation methodology and specific assumptions but offers no alternative valuation | Court adopted Lori’s expert valuation and declined to disturb it |
| Award of appellate attorney fees to Michael | N/A (Lori opposed) | Requests fees based on need and merits | Court denied Michael’s request for appellate fees; fees discretionary and factors did not support award |
Key Cases Cited
- In re Marriage of Gust, 858 N.W.2d 402 (Iowa 2015) (trial court findings in dissolution cases entitled to weight but reviewed de novo)
- In re Marriage of Weidner, 338 N.W.2d 351 (Iowa 1983) (property division decisions depend on unique facts of each marriage)
- In re Marriage of Thomas, 319 N.W.2d 209 (Iowa 1982) (factors for treating gifts/inheritances in division)
- In re Marriage of McDermott, 827 N.W.2d 671 (Iowa 2013) (valuation evidence must fall within permissible range)
- In re Marriage of Okland, 699 N.W.2d 260 (Iowa 2005) (standard for awarding appellate attorney fees in dissolution cases)
- In re Marriage of O’Rourke, 547 N.W.2d 864 (Iowa Ct. App. 1996) (property division must be just and equitable)
- In re Marriage of Campbell, 623 N.W.2d 585 (Iowa Ct. App. 2001) (division need not be equal but must be fair)
- In re Marriage of Hardy, 539 N.W.2d 729 (Iowa Ct. App. 1995) (length of marriage is important in considering division of gifted/inherited property)
- In re Marriage of Fall, 593 N.W.2d 164 (Iowa Ct. App. 1999) (commingling of gifts may justify including them in marital estate)