Dividing Property of Couples who Aren't Married

Lots of couples live together without getting married. Sometimes the couple plans to wed eventually, but breaks up before the big day. Sometimes one or both parties are adverse to marriage. Sometimes one or both parties were married before, and are not eager to have that sort of relationship again. But whatever the reasoning, these relationship often end. Then the parties are in a situation where their money, and sometimes property, are combined. Clearly, if the couple was married, the legal system would just use the Iowa Code chapter of divorces to divide the property. But that is not available to couples that did not marry.


The Iowa Supreme Court and Iowa Court of Appeals cases discussing this sort of situation usually, but not always, center upon real property, in the form of either a house or farm. Typically, the Court considers how to divide such property under theories of contract, unjust enrichment, constructive trust, and joint venture. In re Marriage of Martin, 681 N.W.2d 619 (Iowa 2004).


Contract: The most straight-forward, if it can be proven, recovery method is in contract. A contract is simply an agreement between two parties. For instance, when one partner in a non-marital relationship tells the other to sell her home and move in with him, and she will have a place to live into retirement, the Court found a contract. It was breached when the couple split, and the partner retaining the residence owed the other partner damages. Kerkove v. Thompson, 487 N.W.2d 643 (Iowa App. 1992).


Unjust Enrichment: Unjust enrichment arises where someone keeps some sort of benefit provided by another without paying, where compensation is reasonably expected. This maybe utilized where one person improved the house owned by the other member of the couple, but the owner did not in any manner compensate for the improvements, and kept the house. However, the enrichment must be unjust in order to obtain recovery. In a case where the woman agreed to cook and clean for the man, expended no capital, took no risks, and expended only minor labor on improvements, no unjust enrichment on the man's part was established. Slocum v. Hammond, 346 N.W.2d 485 (Iowa 1984).


Resulting Trust: A resulting trust is a trust imposed by courts, where the circumstances suggest the prior owner did not intend to convey an interest in the property. Intent is key here. So, if the person who accidentally gives his or her interest refused to be on the mortgage or deed to a house, it was clearly not an unintentional surrender of rights. Slocum v. Hammond, 346 N.W.2d 485 (Iowa 1984).


Constructive Trust: This trust is also imposed by the court, where one wrongfully obtained property through wrongdoing. Again, intent can be key, but focuses on the wrongdoing. For instance, if a man tells a woman to move in with him, and she performs cooking and cleaning activities, but provided little toward the actual expenses of the house, there is insufficient proof of him acting inequitably or unconscionably to provide for a constructive trust. She rendered her services gratuitously. Slocum v. Hammond, 346 N.W.2d 485 (Iowa 1984).


Joint Venture: This seems to be the most used recovery vehicle in such cases recently. A joint venture is a business undertaking by two or more people toward a single project. This method divides the property based upon the interest each party held, which when buying a house is usually one-half to each. Therefore, the Court will typically reimburse for contributions toward the house (such as carrying costs and improvements, including labor) and divide the remaining amount equally. Scheppele v. Schulz, 728 N.W.2d 60 (Iowa App. 2006). Under this approach, the Court limits its analysis to the project, like the purchase of the house. Therefore, net worth does not matter, nor does other property, such as joint bank accounts. Riley v. Schrage, no. 01-0681 (Iowa App. July 19, 2002).


Loans: Just because a couple lives together does not mean that money flowing between them does not have to be repaid. In Shold v. Goro, 449 N.W.2d 372 (Iowa 1989), money provided by one party to the other in check form, delineated as a loan in the memo line, had to be repaid after the couple separated. To allow otherwise would to unjustly enrich the borrower by allowing him to keep the money he agreed to repay. 

Paternity Fraud

On June 1, 2012, the Iowa Supreme Court handed down a decision in the case of Dier v. Peters, no. 11-1581. Briefly, the Court found that a mother who defrauded a man into thinking he was the father of a child in order to gain money from him can be sued. But the case is certainly more complicated than that.

Facts

The lawsuit alleged that Peters, the mother, told Dier that he was the father of the child, even though she knew this was not true. Based on this assertion, Dier voluntarily provided money to Peters for her use and for the child's use. Dier later asked the court to determine custody of the child and, faced with the possibility of losing custody, Peters only then asserted Dier was not the biological father of the child. Two DNA tests confirmed he was not the father. Dier sought recovery of the money voluntarily provided to Peters, as well as the costs and attorney fees associated with the custody case. 

What is now allowed:

• A cause of action for fraud against a mother for misrepresenting the paternity of the child, when:
• The mother made a misrepresentation that the man was the father
• The man was not the father
• This assertion is likely to make the father act differently
• The mother knew this statement was false or had reckless disregard for the truth 
• The mother made the statement with the intent to deceive 
• The man justifiably relied upon the statement 
• The assertion was the proximate cause of the injury to the man
• The assertion caused damages to the man
• Even though the man can only reasonably rely upon the mother's statement that he is the father, the Court did not find that he must demand paternity testing. An action for fraud can still stand if he relied upon the mother's statement that he is the father.
• Any child support payments previously ordered but not yet paid are no longer due and owing after paternity has been disestablished. This is not new law, but stems from the Iowa Code predating this case. Still, it helps clarify the parameters of paternity fraud.
• Any child support payments ordered but due in future months are stopped. Again, this is not new law, but helps understand the big picture. 

What is still not allowed:

• Repayment of court-ordered child support payments already made. The father had the chance to argue about paternity when the child support was originally established.
• Attorney fees in the fraud action for having to defend himself in the paternity action; however, it may be possible to collect attorney fees in the underlying paternity action.

What remains unanswered:

• Can the mother be ordered to pay emotional distress damages for telling the man that he is the father while knowing it is not true?
• Does the case change if the child is old enough to be aware of, and affected by, the fraud case?

Contempt: The Cases

The previous blog post discussed the statutes that allowed for contempt, or punishment for violation of a court order. Now for a few highlights from the cases interpreting and applying those statutes.

First, as noted in the statutes, a violation of a court order must be willful to be contempt. Thus, the court has found that the refusal of a 16 and 18 year old to engage in visitation with their father did not amount to a willful violation by the mother. In re Marriage of Ruden, 509 N.W.2d 494 (Iowa 1993). And a good faith effort to comply with a court order will also prevent a finding of contempt. Wilson v. Fenton, 312 N.W.2d 524 (Iowa 1981). However, if an order is clear and unambiguous, there is no defense available that the violator did not understand and did not mean to violate the order. Yocum v. Gaffney, 131 N.W.2d 826 (Iowa 1964).  One can also be found in contempt for aiding and abetting violation of a no contact order; this is usually the protected party agreeing to meet with the violator. Hutchison v. Lee County, 480 N.W.2d 260 (Iowa 1992). 

Because jail is a possible consequence of a contempt action, the violator is entitled to a court-appointed attorney as a criminal defendant would. McNabb v. Osmudson, 315 N.W.2d 9 (Iowa 1982). Also because of the criminal nature of the consequences of a contempt finding, the violation must be established beyond a reasonable doubt. Phillips v. Johnson County, 380 N.W.2d 706 (Iowa 1986). However, if the violator asserts any defenses to prevent a finding of contempt, the violator bears the burden of proving those defenses to the court. Skinner v. Ruigh, 351 N.W.2d 182 (Iowa 1984). 

Multiple violations can be tried in the same contempt proceeding, such as multiple months of nonpayment of child support. Johnson v. Mahaska County, 385 N.W.2d 562 (Iowa 1986). Because the goal of contempt actions is to gain compliance with a court order, the court does allow for purging of contempt, or correcting one's actions to avoid punishment. This includes prompt payment of delinquent child support, for instance. Nystrom v. Woodbury County, 58 N.W.2d 40 (Iowa 1953). 

These case spell out the most basic, widely applicable rules on contempt actions. Of course, other situations will arise, and judges will have to apply these cases and statutes to the particular scenario in front of it. 

Contempt: The Statutes

Contempt actions are the vehicles to enforcement of a court order. That is, when someone refuses to provide the children for a court-ordered visitation, or does't pay child support, or violates a no contact order, the other party can attempt to have them held in contempt. The underlying idea is that the person violating the order has disrespected the court's authority by violating its order, and should be punished accordingly.


As you might expect, this subject is long and involves not only fairly detailed statutes, but also many cases interpreting those statutes. Therefore, this post, like ones before it, will be broken into to segments: the statutes, and the cases. Today, the rules as set out by the legislature.


Iowa Code 598.23 states that willful violations of a temporary order or decree in a divorce case may cause the violating party to be held in contempt, which can include a jail sentence up to thirty days for each offense. In the alternative, the court can order other punishments or solutions, such as requiring child support to be taken directly out of the violator's paycheck (if being punished for nonpayment of support), modify visitation to compensate for lost time, transfer custody or order joint custody, order exchanges to occur through a neutral party, or other sanctions, requirements, or even mediation to enforce the custody arrangement. 


A finding of contempt for nonpayment of child support has its own set of rules. Under Iowa Code 598.23A, one can be found in contempt for nonpayment of support or cash medical. If found in contempt, there are a variety of punishments available. The violator can be required to post bond in the amount of the arrears plus 12 months of current support, which can be forfeited to the other party after nonpayment within three months. The court can require the violator to do community service, which can be released by the violator becomes employed and starts paying child support, pays at least six months of support, or a change in circumstances prevents the violator from performing community service.


Under this code section, the court can prevent a person not paying support from participating in any activities that require a license. However, if this causes "extreme hardship," the court may allow such participation under certain conditions. The license is released when the support is paid. 


A finding of contempt can expose the violator to payment of the court costs associated with the contempt proceeding. Iowa Code 598.24. One can be found in contempt for violation of an injunction, which includes restraining or no contact orders. Iowa Rule 1.511. One can also be required to pay a find of up to $1000. Iowa Code 665.4.


Logistically, contempt actions are a little complex to file. The process is unlike most other in the law, and certainly in family law. For instance, there must be an affidavit showing the nature of the transaction. Iowa Code 665.6. There must also be personal service upon the violator, including notice of when the hearing is scheduled. Iowa Code 665.7. While there are some actions under family law that can be handled easily by one's self, this is probably not one of them.


Tomorrow: the cases that flush out other contempt issues. 

A Brief Overview of Discovery

Once a family law case begins, each party needs to find out information about the other side's case, so each can be prepared for a trial. Because this is true in all kinds of cases, the methods for finding this information are uniform for most types of cases, and therefore might have limited value in the family law arena. This is a brief overview of the types of information gathering tools (called broadly "discovery"), how they work generally, and which are most valuable and used in family law.


1. Financial Statements: Under Iowa Code 598.13, these are mandatory in divorce cases in Iowa, but can be waived if both parties agree. This disclosure involves completion of a form about income, debts, assets, and monthly expenses. It gives a complete financial picture of the party, which can help in a variety of family law issues.


2. Interrogatories: These are written questions sent by one party of the action to the other. They must be answered fully, under oath, and signed. These must be completed within 30 days of getting them from the other party. The number of questions is capped at 30. Iowa Rule of Civil Procedure 1.509.


3. Requests for Production of Documents: This method is also in writing. In most cases, this involves sending a list of requested documents to the other party, which the party must produce within 30 days. However, it can also be used to test, inspect, or sample, and can include electronic data or real property. Usually family law requests involve financial documents. Iowa Rule of Civil Procedure 1.512.


4. Physical/Mental Exams: Iowa Rule of Civil Procedure 1.515 allows for a party to request the other to undergo a physical or mental examination by a doctor. However, good cause must be shown to require the exam, which is very difficult to prove, especially in family law cases. This is rarely used. 


5. Requests for Admissions. Iowa Rule of Civil Procedure 1.501 mentions this method. This involves sending the other party written statements, and asking that party to admit or deny that the statement is true. These also have a 30 day time limit, but worse than the other methods, if a response is not received within 30 days, all the statements are deemed admitted. Therefore, timing is very important.


6. Depositions: This method has an entire chapter in the Iowa Rules of Civil Procedure, starting at 1.701. This involves questioning of either a party or a witness under oath, in person, while the answers are being recorded by a court reporter. Both attorneys are usually present, as well as the parties, whether or not they are being questioned. These can be used later at trial if a witness changes his or her story, but can be expensive. Depositions are sometimes, but not certainly not always, used in family law cases.


Just because a question is asked in any of these methods does not mean it is proper or must be answered. An attorney will help make the decision about whether a question should be answered, and if so, to what extent. People can represent themselves in family law cases, but the discovery process is one in which some expertise will make the navigation less confusing. 

Post-Secondary Education Subsidy: The Cases

Yesterday, I outlined the statute that discusses the post-secondary education subsidy (PSES) under Iowa law, providing for college funding for children of divorced parents. However, that discussion really did not develop on what the terms meant or under what situations the requirements have or have not been met. This post will develop those discussions more.


First, it is important to note that this statute only applies to children of parents who are divorced. It does not provide funding for children of parents who are still married or never were married. In re Marriage of Vrban, 293 N.W.2d 198 (Iowa 1980); Johnson v. Louis, 654 N.W.2d 886 (Iowa 2002). Second, it only applies to parents who were divorced in Iowa under Iowa Code chapter 598. So if a couple divorced in another state, the parent or child cannot seek PSES in Iowa later. White v. White, Iowa App. 2011. 


Repudiation. As previously noted, if a child disowns the parent, the parent will not have an obligation to provide PSES. There have been several cases outlining what this means. When the child would not speak to the parent nor list the parent on the high school graduation program, the parent did not have to pay. In re Marriage of Pendergast, 565 N.W.2d 354 (Iowa 1997). This is even more true when the child never listed dad as a parent, and would not even acknowledge him in public. In re Marriage of Baker, 485 N.W.2d 680 (Iowa App. 1992). However, if the lack of communication between the parent and child is due to the parent's behavior (such as being so harassing to ex-wife as to prevent any communication), the child did not disown the parent. Tack v. Sandholdt, 519 N.W.2d 414 (Iowa App. 1994). 


Qualification. The statute outlined yesterday also showed that the child does not automatically qualify for the subsidy, but must meet criteria to receive the PSES. If the child receives poor grades during the first year of higher instruction, it may indicate the child is not able to perform at the higher level of education sufficiently to warrant PSES. Moore v. Moore, 702 N.W.2d 517 (Iowa App. 2005). The PSES is available only to persons between the ages of 18 and 22, but this means the student need only be under the age of 23. In re Marriage of Neff, 675 N.W.2d 573 (Iowa 2004). While the child must be a full-time student, the court does not use the same definition of full-time as the college will; for purposes of Iowa law, full-time means continuous attendance during the normal school year. In re Marriage of Huss, 438 N.W.2d 860 (Iowa App. 1989). And the court must be able to discuss the issues involved in determining whether the PSES is appropriate, so if the children are too young, the court will leave the determination to later. In re Marriage of Mayfield, 477 N.W.2d 859 (Iowa App. 1991).


Resources. In addition, the court will consider what resources are available to the child/student prior to determining what each parent's obligation is. For instance, if the child lives at home while attending school, the parent providing the home is generally credited with providing this benefit. In re Marriage of Wood, 567 N.W.2d 680 (Iowa App. 1997). The court also will take into consideration all funds available to the student, regardless of whether the student intends to use the funds for college (such as savings bonds). In re Marriage of Kupferschmidt, 705 N.W.2d 327 (Iowa 2005). 


As discussed above, the court will only determine the amount of PSES needed by reference to a public, in-state college. Therefore, if the student chooses an out-of-state school at a higher expense, but has received a financial aid package that, while not covering the student's cost of attendance, does exceed the cost of an in-state education, no PSES is warranted. In re Marriage of Sullins, 715 N.W.2d 242 (Iowa 2006). 


Expenses. Only certain college expenses are included in this calculation of the need of the student. The include tuition, room, board, and mandatory fees, such as labs, student health, and computer fees. The parties can agree to cover additional costs, but the court will not force those upon a parent. In re Marriage of Dolter, 644 N.W.2d 370 (Iowa App. 2002). Sorority or fraternity fees are not included in necessary expenses. In re Marriage of Goodman, no. 4-079/03-1133 (Iowa App. 2004). 


Miscellaneous. A couple other minor points bear mentioning. First, unlike in child support, the ability of the parents to pay is relevant. The parents are not expected to sacrifice to the same level as they would to support a minor child. In re Marriage of Longman, 619 N.W.2d 369 (Iowa 2000). Finally, because the payment is to be made to the child or college, one parent cannot pay and then request reimbursement from the other. Such payments are considered voluntary. Id. 

Post-Secondary Education Subsidy: the Statute

Under Iowa law, children of parents who are divorced have the possibility of receiving post-secondary education subsidies from their parents. In layman's terms, the parents may be required to pay for college for their children. Because of the length of the statute, and the number of interesting cases, this topic will be broken into two blogs. Today, the statute; tomorrow, the cases. 

The statute in question is Iowa Code 598.21F. It allows for a post-secondary education subsidy (which will be abbreviated PSES) when good cause is shown. In determining whether the PSES is necessary, the Court will consider the age of the child, the child's ability regarding higher education, the child's financial resources, whether the child is self-sustaining, and the finances of each parent.

To determine the amount of the PSES, the Court engages in a multi-step analysis. First, the PSES is based upon the cost of a public, in-state, undergraduate degree, and includes only reasonable costs for necessary expenses. Having determined what this cost is, the Court then figures the amount the child is reasonably expected to contribute. This contribution can include financial resources such as financial aid, scholarships, grants, loans, and the ability to earn income while enrolled. This amount is deducted from the costs previously determined, to reveal the amount of unmet costs. The remaining amount is then apportioned between the parents. However, in no event will either parent's contribution exceed one-third of the total cost.

Once the Court has divvied up the college expenses, they have to be paid to someone. Unlike child support, the custodial parent is not the recipient of these funds. They are either paid to the child or to the college. 

The child also has some things to do if he or she is going to get the PSES. First, if the child repudiates the parent by publicly disowning, refusing to acknowledge, or similar actions, he or she will not be entitled to the PSES. Second, if the child receives the PSES, the child must forward his or her grades to the paying parent within 10 days of receipt. Finally, if the child's grades are below the median grade point average for his or her college each semester, the PSES will ended after the first calendar year of instruction.

Of course, there are many interesting cases discussing the ins and outs of all of these rules. Those will be explored in our next installment!