In re Thatcher

864 N.W.2d 533

In re the MARRIAGE OF Susan Michelle THATCHER and Ronald Dean Thatcher.

Upon the Petition of Susan Michelle Thatcher, Petitioner Anna Carson as Executor for the Estate of Susan Michelle Thatcher, Appellee And Concerning Ronald Dean Thatcher, Appellant.

No. 13–2044.

Supreme Court of Iowa.

June 5, 2015.

Kerry A. Finley and Allison M. Heffern of Shuttleworth & Ingersoll, P.L.C., Cedar Rapids, for appellant.

Sherry L. Schulte of Bradley & Riley, P.C., Cedar Rapids, for appellee.

Opinion

WATERMAN, Justice.

This appeal presents a question of first impression in Iowa: whether the district court has discretion to end a marriage through a decree of dissolution without dividing the marital property until a later judgment. This two-step process is known as a “bifurcated divorce” and is expressly allowed by statute in other states. Iowa Code chapter 598 (2013) does not expressly permit such bifurcation. Our rules of civil procedure allow separate trials of issues, but can be superseded by statute. Iowa Rs. Civ. P. 1.101, 1.914. Iowa Code section 598.21(1) states, “Upon every judgment of ... dissolution, ... the court shall divide the property of the parties....” The parties disagree whether the marital dissolution and division of property must be contemporaneous.

In this case, a terminal cancer patient whose death was imminent filed a motion to bifurcate her dissolution proceeding. Her husband resisted. The day before her death, the district court entered an order granting the motion to bifurcate and dissolving the marriage, with the division of property to “be determined at a later date.” The husband appealed, and the decedent's estate, as the substituted appellee, moved to dismiss the appeal as premature. We transferred the case to the court of appeals, which held the bifurcation order and decree of dissolution was not an appealable final judgment and did not meet the conditions for interlocutory appeal. We granted further review.

We now determine that the decree of dissolution is an appealable final judgment. For the reasons explained below, we hold section 598.21(1) requires the decree of dissolution to divide the property at the same time, which prohibits bifurcated divorces. We therefore vacate the opinion of the court of appeals and reverse the order of bifurcation and decree of dissolution. This outcome means the parties were married at the time of the wife's death, and the dissolution proceedings abated. We remand the case for entry of an order of dismissal. The probate court will determine the division of the decedent's property.

I. Background Facts and Proceedings.

Susan and Ronald Thatcher were married on November 10, 1984. They had one daughter, Lillian, born in 1993. In January 2013, Susan was diagnosed with cervical cancer. Her doctors told her she had a one-year life expectancy. Eight months later, on September 13, Susan filed a petition for dissolution of marriage in Linn County. She wanted to end their twenty-nine-year marriage and die unmarried. She was fifty years old. Ronald, age sixty-seven, was employed part-time as a pastor. They were living apart. Lillian, age twenty-one, was a full-time college student. Susan's petition alleged the marriage relationship had broken down and there was no likelihood the marriage could be preserved. She asked Ronald to waive the conciliation provisions. Ronald filed his answer on September 27. Ronald denied the breakdown of the marriage and that reconciliation services would be ineffective and reserved his right to counseling.

In November, each party filed an affidavit of financial status. These disclosed Susan had several life insurance policies, an inherited farm valued at $100,819, and inherited securities. Ronald cosigned Lillian's student loan of $41,000. Ronald and Susan each listed retirement accounts and bank accounts, and each listed securities owned jointly worth $76,352. Susan listed medical bills of $75,150, with insurance claims pending for $37,575. The homestead was valued at $105,000. The record is silent whether Susan had a last will and testament.

On November 22, Susan filed a motion to bifurcate dissolution. She “request [ed] that the Court dissolve the marriage of the parties at this time and that the issue of the property and debts of the parties be litigated at a later date.” As grounds, she noted her terminal cancer and that her physicians told her “at this time” her experimental treatments were not working. She alleged “it is highly unlikely that she will survive her condition for a trial.” She noted efforts to schedule a settlement conference, but that Ronald said “he was not available on the dates given and the next available dates were February of 2014, which is not a realistic date for [her].” She stated “she would like to have their marriage dissolved prior to her passing.” Her motion cited no financial reasons or legal authority to bifurcate the marital dissolution from the property division.

The motion was set for hearing on November 26. The day before the unreported hearing, Susan supplemented her motion with correspondence from her treating physicians stating her life expectancy was “limited from days to possibly weeks.” Ronald resisted the motion, arguing there is no legal basis to bifurcate the marital dissolution from a contemporaneous property division. As an alternative to bifurcation, he offered to participate in an expedited settlement conference and trial within two weeks. He stipulated to the breakdown in the marriage and waived the ninety-day waiting period. He argued bifurcation would prejudice his rights and complicate resolution of the property issues. In particular, he argued he would be forced to litigate the property division in probate court without the opportunity to depose or cross-examine Susan, lose health insurance and his status as beneficiary on her life insurance, and lose the right to file a joint tax return for 2013.

On November 27, the district court filed a two-page “Order Granting Motion to Bifurcate and Decree of Dissolution of Marriage.” The court granted the motion to bifurcate “for the reasons stated in [Susan's] motion.” The court also “granted a dissolution of marriage” and decreed that Ronald and Susan “are returned to their status of single persons.” The order allowed the parties to transfer one bank account of approximately $10,000 to their daughter. The order otherwise provided that “all property and debts of the parties and a division thereof will be determined at a later date” and prohibited the parties from transferring assets except for ordinary living expenses and reasonable legal fees. Susan died the next day.

On December 20, Ronald filed a notice of appeal. We granted an unresisted motion to substitute Susan's estate as appellee. On February 5, 2014, Susan's estate filed a motion to dismiss the appeal as interlocutory. Ronald resisted, arguing the decree of dissolution is a final order appealable as a matter of right. Alternatively, he sought interlocutory review. We ordered the motion to dismiss to be submitted with the appeal and transferred the case to the court of appeals.

On October 21, the court of appeals dismissed the appeal, concluding the district court's order and decree was not final and appealable because it contemplated “some later act—namely, the distribution of the parties' property” to finally decide the case. The court of appeals declined to allow interlocutory review, concluding Ronald “cannot show the bifurcation order will materially affect the final decision” and noted that he may appeal from the future ruling that divides the property. We granted Ronald's application for further review.

II. Standard of Review.

“An action for dissolution of marriage is an equitable proceeding and, consequently, this court's review is de novo.” In re Marriage of Winegard, 257 N.W.2d 609, 613 (Iowa 1977) (reviewing appeal from bifurcated proceeding); see also In re Marriage of Schenkelberg, 824 N.W.2d 481, 483 (Iowa 2012) (noting de novo standard of review for “[a]ppeals regarding the dissolution of marriage”). Our review of the district court's interpretation of a statute in an equitable proceeding is for correction of errors of law. In re Estate of Myers, 825 N.W.2d 1, 3–4 (Iowa 2012). “Our review of district court rulings on motions to bifurcate is usually for abuse of discretion,” but we may apply de novo review based on the nature of the appeal. In re Det. of Blaise, 830 N.W.2d 310, 315 (Iowa 2013). An abuse of discretion may be shown when the district court's ruling “ ‘is based on an erroneous application of the law.’ ” In re A.M., 856 N.W.2d 365, 370 (Iowa 2014) (quoting Office of Citizens' Aide/Ombudsman v. Edwards, 825 N.W.2d 8, 14 (Iowa 2012) ).

III. Analysis.

We first must decide whether the district court's bifurcation order and decree of dissolution is reviewable at this time. Because we determine the dissolution decree is reviewable, we then address whether the district court erred by bifurcating the dissolution of the Thatchers' marriage from the division of property and the effect of Susan's intervening death.

A. Is the Bifurcated Decree of Dissolution a Reviewable Final Judgment? Susan's estate argues there is no reviewable final judgment until the district court divides the marital property. Ronald argues the decree of dissolution itself is a final judgment. The court of appeals held that the dissolution was not a final order because it contemplated division of property at a future time.

“As repeatedly articulated by this court, a final judgment or decision is one that finally adjudicates the rights of the parties. It must put it beyond the power of the court which made it to place the parties in their original position. A ruling or order is interlocutory if it is not finally decisive of the case.”

In re Marriage of Denly, 590 N.W.2d 48, 50 (Iowa 1999) (quoting Mid–Continent Refrigerator Co. v. Harris,

248 N.W.2d 145, 146 (Iowa 1976) ). The bifurcated decree in this case...