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Docket Number

No. 89-1702.

Attorney(S)

Arthur L. Buzzell, Davenport, for appellant. Carol A.H. Freeman of Lane Waterman, Davenport, for appellee.

Judges

ANDREASEN, Justice.

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Smart Summary

Case Summary: In re The Marriage of Kaye Elizabeth Ackerman Dunn and Walter Charles Dunn (No. 89-1702, Iowa Sup. Ct., May 23, 1990)

Factual and Procedural Background

The district court dissolved the marriage of Kaye and Walter Dunn on April 19, 1988. Physical custody of the parties' two minor children was placed with Kaye; Walter was granted reasonable visitation and ordered to pay child support of $785 per month. The dissolution decree divided marital property "approximately equal" based on the parties' joint valuation of assets, which included real property, automobiles, bank accounts, and Walter's pension plan. An appraiser overvalued Walter's pension by approximately $10,000.

Upon discovering the pension valuation error, Walter filed a petition to modify the dissolution judgment and decree under Iowa Rule of Civil Procedure 252. After a hearing the district court found that a valuation mistake had occurred, that neither party was at fault, and that Kaye had effectively received the greater share of marital assets because of the error. The district court amended the decree ordering Kaye to place $5,000 into a joint trust account for the children's education and retained jurisdiction to resolve disputes over use of those funds.

Walter appealed, contending the district court should have required Kaye to pay $5,000 plus interest directly to him. Kaye did not file a cross-appeal and instructed her attorney to take no active role in the appeal.

Legal Issues Presented

Whether the district court (acting under Iowa Rule of Civil Procedure 252) had authority to amend a final property division to require placement of $5,000 into a trust for children's education rather than ordering return of that portion of the property settlement to Walter.
Whether Walter is entitled to legal (statutory) interest on the $5,000 and, if so, from what date the interest should run.
The opinion notes uncertainty whether a valuation mistake of this character is an appropriate ground for modification under rule 252, but explicitly states that issue is not before the court on appeal.

Arguments of the Parties

Appellant's (Walter) Arguments

Walter argued the district court erred by requiring Kaye to place $5,000 into a joint trust for the children's education instead of directing Kaye to return $5,000 (plus interest) directly to him.

Appellee's (Kaye) Position

Kaye filed no cross-appeal and instructed her attorney to take no active role in the appeal. The opinion does not set out any further detailed argument by Kaye.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mishler v. Stouwie, 301 N.W.2d 744, 747 (Iowa 1981)	Clarifies that review under rule 252 is on assignment of error and not de novo.	The court cited Mishler to state its standard of review: the appeal is reviewed on assignment of error rather than de novo.
In re Marriage of Knott, 331 N.W.2d 135, 137 (Iowa 1983)	Property divisions in dissolution decrees cannot be corrected, vacated, or modified after becoming final except on grounds applicable to ordinary judgments.	Used with other cases to support the proposition that property divisions are final absent recognized grounds permitting their alteration.
In re Marriage of Johnson, 299 N.W.2d 466, 467-68 (Iowa 1980)	Same principle: finality of property division absent ordinary-judgment grounds for modification.	Reinforced the court's statement about the limited circumstances permitting post-judgment alteration of property divisions.
In re Marriage of Full, 255 N.W.2d 153, 156 (Iowa 1977)	Same principle of finality and limited grounds for modifying property divisions.	Supported the court's general rule about modification limits for property divisions in dissolution decrees.
Knipfer v. Knipfer, 259 Iowa 347, 355, 144 N.W.2d 140, 144 (1966)	Same principle regarding the nonmodifiable nature of property division after final decree absent recognized grounds.	Included among authorities establishing the rule that property division cannot be altered post-finality except on ordinary-judgment grounds.
Arnold v. Arnold, 258 Iowa 850, 854-55, 140 N.W.2d 874, 877 (1966)	Fixed money awards for child support, alimony, and property settlement draw statutory interest even if the judgment is silent on interest.	Cited to show that statutory interest attaches to fixed monetary awards arising from dissolution decrees.
Muchmore Equip., Inc. v. Grover, 334 N.W.2d 605, 610 (Iowa 1983)	Approves the general rule that when a judgment is modified on appeal and the only action required is compliance with the mandate, interest runs from the date of the original judgment.	Cited (with approval of a C.J.S. statement) to support awarding interest from the date of the original decree where the appellate court modifies the judgment.
Cummings v. Cummings, 248 Iowa 831, 836, 82 N.W.2d 676, 679 (1957)	Example of a trial court modification order requiring payment of an oversight difference with interest from the date of the original decree.	Used as historical support for awarding interest from the date of the original decree when a modification corrects an oversight that changes monetary allocations.

Court's Reasoning and Analysis

The court began by clarifying its standard of review: modification under Iowa Rule of Civil Procedure 252 is reviewed on assignment of error rather than de novo (citing Mishler). The court then reiterated established Iowa law that property divisions in dissolution decrees are final and generally may not be corrected, vacated, or modified after finality except on the same grounds applicable to ordinary judgments (citing In re Marriage of Knott, In re Marriage of Johnson, In re Marriage of Full, and Knipfer v. Knipfer). The court also noted that the statutory provisions allowing modification for change in circumstances (Iowa Code section 598.21(8)) do not apply to this situation.

Applying those principles to the record, the court accepted the district court's factual findings that a valuation mistake occurred with respect to Walter's pension, that neither party was at fault, and that Kaye received the greater share of marital assets because of the error. However, the court concluded that although rule 252 authorized correction or modification of the property division provisions, the district court lacked authority to convert part of the property settlement into a directed payment meant to provide for future child support by ordering the $5,000 to be placed into a joint trust for the children's education. The appellate court determined this was an inappropriate substitution of a property settlement remedy with a child-support-oriented payment and therefore held the district court erred by failing to order return of $5,000 to Walter.

On the interest issue, the court relied on Iowa Code section 535.3 and established Iowa precedent (Arnold) that fixed awards of money for child support, alimony, and property settlement draw interest at the statutory rate even if the decree is silent. Because the decree was amended on appeal (under rule 252) and the only action required in the district court on remand would be compliance with the appellate mandate, the court applied the general rule (supported by Muchmore and Cummings and a cited C.J.S. authority) that interest runs from the date of the original judgment. Consequently, Walter was held entitled to interest on the $5,000 from the date of the original decree, April 19, 1988.

Holding and Implications

REVERSED AND REMANDED.

Holding (direct effect): The Supreme Court of Iowa reversed the district court's amended decree and directed the district court to correct and modify the decree by ordering Kaye to return $5,000 to Walter, with interest running from April 19, 1988. Costs on appeal were taxed to the appellee (Kaye).

Implications: The decision enforces the limits on the district court's authority to convert adjustments in property division into directed payments intended to address future child support; instead, the proper remedy here was restoration of the erroneous portion of the property settlement to the party disadvantaged by the valuation error. The opinion applied established authority that statutory interest accrues on fixed monetary awards and that, where an appellate modification merely requires compliance with the mandate, interest runs from the date of the original judgment. The opinion does not announce a new rule of law beyond applying these settled principles to the facts of this case.

Source: Supreme Court of Iowa opinion, May 23, 1990, In re The Marriage of Kaye Elizabeth Ackerman Dunn and Walter Charles Dunn (No. 89-1702).

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In re The MARRIAGE OF Kaye Elizabeth Ackerman DUNN and Walter Charles Dunn. Upon the Petition of Kaye Elizabeth Ackerman Dunn, Appellee, And Concerning Walter Charles Dunn, Appellant.

ANDREASEN, Justice.

On April 19, 1988, the district court dissolved the marriage of Kaye and Walter Dunn. The decree placed with Kaye physical custody of the parties' two minor children. Walter was given reasonable rights of visitation. Walter was to pay child support in the amount of $785 per month. The decree divided the parties' property in an "approximately equal" manner based upon the parties' joint valuation of their assets. The property included a home, automobiles, bank accounts, and other assets. One of the assets was Walter's pension plan which an appraiser overvalued by approximately $10,000.

Once Walter discovered that his pension plan had been overvalued, he filed a petition to modify the dissolution judgment and decree under Iowa Rule of Civil Procedure 252. After a hearing, the district court found:

It is not in dispute that a mistake occurred in evaluation of one marital asset, Respondent's pension, which mistake was relied upon by all involved in negotiating the Decree of Dissolution of Marriage. Neither of the parties was at fault in any way; nevertheless, a mistake occurred and an asset was erroneously valued.

. . . .

Petitioner retained a respected actuary to value the pension plan and had no reason to believe that the pension plan was incorrectly valued. Nevertheless, it appears that she received the greater share of the marital assets due to this mistake, a situation she did not desire or intend.

The district court then concluded that because Walter has the higher earning capacity, it was likely that he would bear the greater share of the cost of the higher education for the parties' minor children. The court amended the decree and ordered that Kaye place $5000 into a joint trust account for the children's education. The court provided it would retain jurisdiction to resolve any dispute over how those funds are ultimately spent.

Walter appeals the court's order and amended decree. He maintains the court should require Kaye to pay $5000, plus interest, directly to him. Kaye filed no cross-appeal and instructed her attorney to take no active role in the appeal.

I. Under rule 252 the court may correct, vacate or modify a final judgment or order, or grant a new trial upon certain enumerated grounds. It is not clear whether a mistake of the character alleged herein is an appropriate ground for modifying a judgment under rule 252. However, that issue is not before us on appeal. Our review under rule 252 is on assignment of error; it is not de novo. Mishler v. Stouwie, 301 N.W.2d 744, 747 (Iowa 1981).

We have long recognized a property division in a dissolution decree cannot be corrected, vacated or modified after it has become final in the absence of grounds on which ordinary judgments may be corrected, vacated or modified. See In re Marriage of Knott, 331 N.W.2d 135, 137 (Iowa 1983); In re Marriage of Johnson, 299 N.W.2d 466, 467-68 (Iowa 1980); In re Marriage of Full, 255 N.W.2d 153, 156 (Iowa 1977); Knipfer v. Knipfer, 259 Iowa 347, 355, 144 N.W.2d 140, 144 (1966). The provisions of Iowa Code section 598.21(8), which allow modification of a dissolution decree upon proof of a change in circumstances, do not apply.

Although the court had authority under rule 252 to correct or modify the property division provisions, it had no authority to order the payment of a portion of the property settlement to provide for future child support. The court erred in failing to order the return of $5000 to Walter.

II. Walter requests he be allowed legal interest on the $5000. The district court's amended decree did not require Kaye to pay interest on the amended property settlement.

Iowa Code section 535.3 provides in part that interest shall be allowed on all money due on judgments and decrees of courts at the rate of ten percent per year. In Iowa, fixed awards of money for child support, alimony, and property settlement draw interest at the statutory rate even though the judgment makes no reference to the matter of interest. Arnold v. Arnold, 258 Iowa 850, 854-55, 140 N.W.2d 874, 877 (1966).

Here, the dissolution decree was amended under the provisions of rule 252. Under these circumstances, we apply the general rule that when a judgment is modified on appeal and the only action required in the district court is compliance with the mandate of the appellate court, the interest runs from the date of the original judgment. See 47 C.J.S. Interest and Usury § 68, at p. 158 (1982) (cited with approval in Muchmore Equip., Inc. v. Grover, 334 N.W.2d 605, 610 (Iowa 1983)). See also Cummings v. Cummings, 248 Iowa 831, 836, 82 N.W.2d 676, 679 (1957) (approved trial court's modification order that defendant pay $4500 difference arising from the oversight, with interest, from the date of the original decree). Walter is entitled to interest from the date of the original decree.

We reverse and remand with direction to the district court to correct and modify the decree and to order Kaye to return $5000, with interest from April 19, 1988, to Walter. Costs are taxed to the appellee.

REVERSED AND REMANDED.

IN RE MARRIAGE OF DUNN