              IN THE SUPREME COURT OF IOWA
                              No. 11–1398

                        Filed February 8, 2013


IN RE THE MARRIAGE OF DIANA L. KIMBRO
and STEVEN C. KIMBRO

Upon the Petition of

DIANA L. KIMBRO,

      Appellee,

And Concerning

STEVEN C. KIMBRO,

      Appellant.


      On review from the Iowa Court of Appeals.



      Appeal from the Iowa District Court for Linn County, Robert E.

Sosalla, Judge.



      A spouse seeks further review of a court of appeals opinion

affirming, as modified, a decree of dissolution.   COURT OF APPEALS
DECISION VACATED IN PART AND AFFIRMED IN PART; DISTRICT

COURT JUDGMENT AFFIRMED.



      Karen A. Volz of Ackley, Kopecky & Kingery, Cedar Rapids, for

appellant.



      Matthew J. Brandes and Kerry A. Finley of Simmons, Perrine,

Moyer, Bergman, P.L.C., Cedar Rapids, for appellee.
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WIGGINS, Justice.

      On further review, a spouse asks us to determine the fairness of a

property distribution and the denial of attorney fees.      The court of

appeals affirmed the district court decision by upholding the award of an

equalization payment, but modified the decision by reducing the amount

of the equalization payment from $45,468 to $5000.       Additionally, the

court of appeals upheld the district court’s denial of attorney fees. The

court of appeals also denied appellate attorney fees. On the issue of the

property distribution, we vacate the court of appeals opinion and affirm

the district court decision, because we agree with the district court’s

calculation of the equalization payment at $45,468.     On the denial of

trial and appellate attorney fees, we affirm both the court of appeals

opinion and the district court decision.

      I. Prior Proceedings.

      This appeal involves the dissolution of marriage between Steven

and Diana Kimbro. The district court entered the decree dissolving the

Kimbro marriage. To equalize the property distribution, the district court

required Steven to make an equalization payment to Diana totaling

$50,060. The district court later amended the decree and reduced the

amount to $45,468 to reflect Diana’s tax obligation. Second, the district

court awarded Diana physical custody of the parties’ two minor

daughters and granted her child and spousal support.

      Steven appealed, arguing the property distribution with the

equalization payment was inequitable, because Diana dissipated her

share of a joint bank account, which Steven unilaterally divided upon the

parties’ separation. Diana cross-appealed, contending the district court

erred by denying attorney fees. We transferred the case to the court of

appeals.   The court of appeals affirmed as modified the district court
                                     3

decision on the property distribution by reducing the equalization

payment from $45,468 to $5000. Finally, the court of appeals affirmed

the district court by denying trial and appellate attorney fees.

        Diana then sought further review, which we granted.

        II. Issues.

        This appeal involves two issues. Diana claims the court erred by

decreasing the equalization payment and by refusing to award attorney

fees.

        III. Standard of Review.

        We review appeals regarding dissolution of marriage de novo,

because such actions are equitable proceedings.        Iowa Code § 598.3

(2009); Iowa R. App. P. 6.907; In re Marriage of Schenkelberg, 824 N.W.2d

481, 484 (Iowa 2012).      Under this standard, we defer to the factual

findings of the district court.      Schenkelberg, 824 N.W.2d at 484.

However, those findings are not binding upon us. Id.; see also Iowa R.
App. P. 6.904(3)(g). We will disturb the district court ruling “when there

has been a failure to do equity.” In re Marriage of Schriner, 695 N.W.2d

493, 496 (Iowa 2005) (citation and internal quotation marks omitted).

        We review the denial of attorney fees for an abuse of discretion.

Schenkelberg, 824 N.W.2d at 484. We reverse the district court’s ruling

only when it rests on grounds that are clearly unreasonable or

untenable. Id. A ruling is clearly unreasonable or untenable when it is

“not supported by substantial evidence or when it is based on an

erroneous application of the law.”    Id. (citation and internal quotation

marks omitted).

        IV. Facts.

        On our de novo review, we make the following findings of fact.

Steven and Diana Kimbro married in Des Moines on August 21, 1993.
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Over the course of their seventeen-year marriage, they raised three

children. These proceedings only affect two minor children, age fourteen

and sixteen.

      When the couple had their first daughter, they jointly decided

Diana, who had graduated with a bachelor’s degree in education from the

University of Northern Iowa, would stay home to care for the children.

Steven’s role would be to support the family financially. Steven received

his bachelor’s degree from Iowa State University and has worked as a

sales representative for various pharmaceutical companies throughout

the marriage.

      One position Steven held was for the pharmaceutical company,

Genentech.      His benefits package included corporate stock options.

Genentech bought out Steven’s stock options in March 2009, paying him

$351,682 after federal and state withholdings. The Kimbros placed the

proceeds into a jointly held account at Bankers Trust.
      By the end of March 2010, Steven accepted a position in sales with

his current employer, Response Genetics.        Steven earns a salary of

$115,000     per   year   plus   commissions.   He   received   guaranteed

commissions of $4000 per month for the first three months of his

employment. He now averages $4200 per month. Steven is also eligible

for bonuses with an estimated total of $36,000. At the time of trial, his

projected earnings were approximately $170,400 per year.

      During the marriage, Diana made little to no income. In fact, she

allowed her teaching certificate to lapse. However, after separating from

Steven, she successfully renewed her teaching certificate and began

substitute teaching during the 2010–2011 school year for $114 per day.

In 2010, she earned $3167. In 2011, she made $5400. Diana estimates
                                     5

that if she were able to substitute teach for the full, forty-week school

year, she would earn approximately $22,800 annually.

      On January 18, 2010, Diana informed Steven she had consulted

an attorney and was filing for divorce. By that time, the Genentech stock

options in the Bankers Trust account had appreciated from $351,682 to

$444,053.

      The day after Diana told him about the pending divorce, Steven

unilaterally removed $226,518 from the Bankers Trust account and

placed it in a Bank Iowa account under his name alone.           He left the

remaining balance of $217,535 in the Bankers Trust account for Diana.

At trial, Steven explained his intent for dividing the Bankers Trust

account:

      I didn’t want to fight about it any further, so I took half of it
      and put it in there; and I came back and told her I took half
      out today and your other half is still there and so I didn’t
      want her to be decimated and have nothing. I just said
      equally right down the middle. That’s yours, this is mine.

(Emphasis added.)

      On the same day he transferred the funds, Steven informed Diana

of what he had done.     Steven admitted he divided the Bankers Trust

account without consulting Diana. He also testified that the parties had

no agreement concerning how to spend the money.

      At the time of trial, Diana had $49,000 remaining from her share

of the Bankers Trust account. Steven had $179,000 left.

      V. Property Distribution.

      A. Agreement to Divide the Bankers Trust Account. The court

of appeals reduced the equalization payment by finding Steven and

Diana had a predissolution agreement to equally divide the funds in the

Bankers Trust account. Diana contends the court of appeals erred by
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decreasing the equalization payment on this basis, because no such

agreement existed. On our de novo review, we conclude the record does

not support the finding of an agreement.

      Steven testified he did not consult Diana before dividing the

Bankers Trust account. Instead, he admitted to acting on his own. He

further testified there was no agreement with Diana as to how she could

spend the money from that account.         Steven never alleged such an

agreement existed before the district court entered the dissolution

decree. The first time Steven claimed any agreement existed was in his

rule 1.904(2) motion. There, he stated the only agreement between the

parties regarded splitting the tax liability. However, on appeal, Steven

did not argue an agreement existed.

      Diana’s testimony confirmed there was no agreement.              She

indicated that “Steve made the decision” to divide the account, and she

“didn’t know that he did it until later.” Furthermore, when asked as to

whether there was any agreement regarding the use of the money once

Steven divided it, Diana responded the parties had no such agreement.

      Accordingly, we find no evidence of an oral or written agreement to

substantiate Steven’s claim that the parties agreed to divide the Bankers

Trust account.   See In re Marriage of Johnson, 350 N.W.2d 199, 202

(Iowa 1984) (finding the spouses had an oral agreement to divide the

property prior to dissolution). There being no agreement relevant to an

equitable property division, we find the court of appeals opinion rests on

a finding not supported by the evidence. See Iowa Code § 598.21(5)(k)

(allowing the court to consider “[a]ny written agreement made by the

parties concerning property distribution”); id. § 598.21(5)(m) (permitting

the court to consider other relevant factors, including an oral agreement).

The record demonstrates Steven unilaterally divided the account between
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himself and Diana.        Therefore, we cannot treat the Bankers Trust

account as being subject to an agreement made by the parties when

distributing the Kimbro marital estate.

      B. Dissipation of Marital Assets Doctrine. Second, the court of

appeals   reduced   the    equalization   payment   upon   deciding   Diana

dissipated marital assets by spending, during the separation period, the

majority of the money Steven gave her from the Bankers Trust account.

In doing so, the court of appeals adopted Steven’s argument that his

unilateral division of the Bankers Trust account transformed those funds

into the separate property of the respective spouses and resultantly,

barred Diana from double-dipping into Steven’s remaining funds at the

time of dissolution.      Diana contends the court of appeals erred by

embracing this rationale and subsequently finding the dissipation

doctrine applied. We agree with Diana.

      A court may generally consider a spouse’s dissipation or waste of

marital assets prior to dissolution when making a property distribution.

In re Marriage of Burgess, 568 N.W.2d 827, 828 (Iowa Ct. App. 1997).

The dissipation doctrine applies when a spouse’s conduct during the

period of separation “results in the loss or disposal of property otherwise

subject to division at the time of divorce.” Id. If improper loss occurs,

the asset is “included in the marital estate and awarded to the spouse

who wasted the asset.” In re Marriage of Fennelly & Breckenfelder, 737

N.W.2d 97, 106 n.6 (Iowa 2007). However, the doctrine does not apply if

the spending spouse used the monies for “legitimate household and

business expenses.” Id. at 106.

      There is a two-pronged test for courts to use in analyzing claims

arising under the dissipation doctrine. Id. at 104. Under the first prong,

a court must decide “ ‘whether the alleged purpose of the expenditure is
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supported by the evidence.’ ”      Id. (quoting Lee R. Russ, Annotation,

Spouse’s Dissipation of Marital Assets Prior to Divorce as Factor in Divorce

Court’s Determination of Property Division, 41 A.L.R. 4th 416, 421 (1985)

[hereinafter Spouse’s Dissipation of Marital Assets]).      When a spouse

claims the other party dissipated assets and can identify the assets

allegedly dissipated, the burden shifts to the spending spouse to “show

how the funds were spent or the property disposed of by testifying or

producing receipts or similar evidence.” Id. It is not enough for a spouse

to merely show the incurrence of expenditures during the period of

separation.    Id.   The spouse also must show a nexus between the

payment of the expenses and the use of the marital assets at issue. Id.

      If the record sufficiently establishes the evidentiary basis for the

expense, the court advances to the second prong, which asks “ ‘whether

that purpose amounts to dissipation under the circumstances.’ ” Id. at

104 (quoting Spouse’s Dissipation of Marital Assets, 41 A.L.R. 4th at

421). A court identifies dissipation by utilizing the following factors:

      “(1) the proximity of the expenditure to the parties’
      separation, (2) whether the expenditure was typical of
      expenditures made by the parties prior to the breakdown of
      the marriage, (3) whether the expenditure benefited the ‘joint’
      marital enterprise or was for the benefit of one spouse to the
      exclusion of the other, and (4) the need for, and the amount
      of, the expenditure.”

Id. at 104–05 (quoting Spouse’s Dissipation of Marital Assets, 41 A.L.R.

4th at 421).

      Turning to the first prong, we find Diana satisfies the evidentiary

standard. Id. at 104. Below are Diana’s documented expenses from the

date upon which the parties separated and Steven divided the Bankers

Trust account (January 19, 2010), to the date the district court entered

the dissolution decree (June 17, 2011):
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      Family vacations                                  $6700

      Daughter’s non-refundable airline ticket          $745

      Car purchases, taxes, licenses, and repairs       $10,694

      Son’s college tuition (two semesters)             $14,869

      Loan to son                                       $500

      Daughters’ high school and activity costs         $4235

      Gutter and patio cleaning (marital home)          $317

      House cleaning (marital home)                     $1041

      Real estate and income taxes                      $10,500

      Down payment (Diana’s home)                       $40,000

      Renovations (Diana’s home)                        $27,055

      Home furnishings (Diana’s home)                   $19,978

      Rent (Diana’s home)                               $16,200

      These expenses total approximately $152,834.              Diana also

supplied the district court with bank statements and financial affidavits

to prove her expenditures on groceries, restaurants, gasoline, medical

fees, utilities, insurance, clothing, hardware store charges, and other

living expenses. These bank statements and affidavits itemize expenses

exceeding $15,000.    Combining these documents and the itemization

above, Diana has sufficiently documented how she spent her portion of

the Bankers Trust funds during the period of separation. Hence, this is

far different from the situation confronting us in the case of In re

Marriage of Williams, 421 N.W.2d 160 (Iowa 1988), where there were no

records verifying the spouse’s expenditures.      Williams, 421 N.W.2d at

165 (identifying dissipation of assets where “[w]e find no accounting of

the money”).
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      Still under the first prong, Diana also satisfies the nexus element

by sufficiently demonstrating she made those expenditures using the

funds in the Bankers Trust account.       In re Marriage of Goodwin, 606

N.W.2d 315, 322 (Iowa 2000) (requiring a spouse to demonstrate

payment of the expenses using the funds in the disputed account). She

introduced exhibits documenting that she paid separation expenses,

including the costs of gas, groceries, lunch money for the children,

clothing, and family vacations, with the funds Steven left behind when he

split the couple’s liquid assets. Diana also testified that she used the

funds in the Bankers Trust account to make the down payment on the

new home for her and the minor children, as well as the renovations to

that property. Thus, we find the first prong, requiring sufficient evidence

of the spouse’s expenditures, is satisfied.
      We next turn to the second prong and consider the purpose for

Diana’s expenditures, as well as whether her use of the funds constituted

dissipation under the circumstances.      Using the factors articulated in

Fennelly, we find Diana’s expenditures were for legitimate living expenses

and did not constitute dissipation. 737 N.W.2d at 104–05.

      Under the first factor, Diana incurred these expenses over the

course of almost seventeen months. Id. We recognize this is a lengthy

period, such that expenditures will naturally accumulate to a substantial

sum. The second factor requires us to consider the typicality of Diana’s

expenditures. Id. A majority of Diana’s expenses stem from her role as

the primary custodial parent for the two minor daughters. She bore the

expense of the children’s school and extracurricular activity fees.    She

also took the children on family trips the couple had planned prior to

their separation.     Moreover, she provided supplementary financial

support to her son in college. As for the remainder of her expenditures,
                                     11

we find they are typical of her preseparation lifestyle, given the couple

had assets of almost one million dollars.

      Pursuant to the third factor, we consider the benefits to the joint

marital enterprise that arose from Diana’s expenditures. Id. Certainly,

the fees expended to care for the couple’s children in their schooling and

social activities benefitted both. There is a joint parental responsibility to

support children financially. In re Marriage of Hoak, 364 N.W.2d 185,

189 (Iowa 1985).    Moreover, Diana used the funds to pay the parties’

mutual obligations, including expenses Steven had promised to pay, but

later did not. She paid half of Steven’s income taxes, thereby ensuring

his financial stability. See In re Marriage of Sullins, 715 N.W.2d 242, 252

(Iowa 2006) (finding a wife is not liable for a husband’s tax debts and

penalties upon dissolution, because such tax problems are “self-

imposed”). She paid to have the marital home cleaned and prepared for

sale, in addition to paying half the real estate taxes on the property.

These expenditures increased the value of the jointly held, marital home.

Moreover, the funds Diana expended to purchase and renovate the new

house for her and the children was to the advantage of both marriage

partners, because it increased Diana’s own net worth, making her less

financially dependent on Steven for support.

      The final factor under the second prong requires us to consider

Diana’s need for the expenditures.        Fennelly, 737 N.W.2d at 104–05.

Diana, as primary custodial parent, had to pay the day-to-day living

expenses for herself and two children. She had to obtain new housing

because Steven refused to move out of the marital home. His refusal to

leave created a stressful environment for the children, so Diana acted in

the children’s interest by locating alternate living arrangements. Diana

also needed to purchase vehicles for her children because she was
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looking for full-time employment and could no longer transport them.

Furthermore, she incurred the high costs that naturally flow from having

a child in college, as well as two high-school-age children who attend

private school and participate in extracurricular activities. Moreover, the

necessity of Diana’s reliance on the Bankers Trust account is reasonable,

considering she was earning little to no salary during the separation. Id.

In addition, Steven instructed Diana to use her share of the Bankers

Trust account to cover household bills during the separation period.

      Although we recognize $168,535 is a significant sum to spend, we

find such expenditures over a year and a half do not amount to

dissipation under these circumstances, where the spending spouse has

essentially no salary, remains responsible for marital obligations,

purchases a new home and makes renovations to ensure the home is

comfortable for the children, supports three children financially—one in

college and the other two in private school with costly extracurriculars—

and finally, maintains the lifestyle of a marriage with dissolution assets

of almost one million dollars. Moreover, we note there is no evidence in

the record to support Steven’s allegations that Diana dissipated, hid,

depleted, or diverted cash.    See, e.g., In re Marriage of Cerven, 335

N.W.2d 143, 146 (Iowa 1983) (finding the husband’s transfer of $40,000

to his son was a sham gift in an attempt to avoid paying his wife spousal

support).   Therefore, we affirm the district court’s finding that Diana’s

expenditures were reasonable under the circumstances and consistent

with the lifestyle to which she was accustomed. Accordingly, we count

the remainder of Steven’s share of the Bankers Trust account as marital

assets, subject to division.

      C.    Equalization Payment.        Concluding the court of appeals

lacked a basis supported by substantial evidence to reduce the
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equalization payment, we find the          district court’s award of an

equalization payment totaling $45,468 is equitable. We find this matter

merits the award of an equalization payment to Diana for several

reasons.

      First, without the payment, Diana receives approximately $57,000

less in assets than Steven. Such an outcome conflicts with our equitable

principles in Iowa Code section 598.21(5), which guides courts in

framing property distributions.      An equitable distribution of marital

property, based upon the factors in 598.21(5), does not require an equal

division of assets.    Schriner, 695 N.W.2d at 499.         However, “ ‘it is

generally recognized that equality is often most equitable.’ ”      Fennelly,

737 N.W.2d at 102 (quoting In re Marriage of Rhinehart, 704 N.W.2d 677,

683 (Iowa 2005)).     This court has often approved the equal or nearly

equal division of marital assets. See, e.g., In re Marriage of Duggan, 659

N.W.2d 556, 562 (Iowa 2003) (requiring modification of a decree to

“accomplish an equal division” of the couple’s assets); In re Marriage of

Hitchcock,     309   N.W.2d   432,   438   (Iowa   1981)    (recognizing   our

jurisprudential tradition of affirming awards of “substantial, nearly equal

property distribution, especially where the disparity in earning capacity

was great”).    Accordingly, in applying the factors, we find the $57,000

disparity in the property distribution award is inequitable without the

equalization payment to Diana.

      To illustrate, we recognize the parties were married for seventeen

years, which establishes sufficient commitment to award an equal

division of property. Iowa Code § 598.21(5)(a); Fennelly, 737 N.W.2d at

104 (finding that because the parties were married for nearly fifteen

years, an equal division upon dissolution of the appreciation in value of

the parties’ premarital assets was equitable).             Next, taking into
                                     14

consideration the economic situation of the parties, there is a vast

disparity in incomes between Steven and Diana.        Id. at § 598.21(5)(f).

Steven currently earns a salary, not including commissions and other

bonuses, of $115,000 annually. The most Diana has earned during the

marriage is $5400.      Such disparity leads to inequity, unless the court

imposes some form of equalization.        See Schenkelberg, 824 N.W.2d at

488 (awarding additional spousal support to the wife after considering

the vast disparity in the husband’s $400,000 income and the wife’s

negligible earnings).

       For these reasons, we find the equalization payment ordered by the

district court was appropriate and necessary to achieve equity in making

the property distribution.

       VI. Attorney Fees.

       An award of attorney fees is discretionary. Sullins, 715 N.W.2d at

255.    “Whether attorney fees should be awarded depends on the

respective abilities of the parties to pay.”     Id. (citation and internal

quotation marks omitted). To determine the ability to pay, we review the

parties’ entire financial picture, “including their respective earnings,

living expenses, and liabilities.” In re Marriage of Willcoxson, 250 N.W.2d

425, 427 (Iowa 1977).

       We conclude both parties have the ability to pay their respective

trial and appellate attorney fees. Steven has a substantial income, but

also bears the cost of paying his own legal expenses, child support,

tuition for the children, spousal support, and the equalization payment.

Although Diana has minimal income, she can now afford to pay her own

fees upon receipt of the equalization payment.      She also obtained an

equal share of the marital assets, valued at almost one million dollars.

Accordingly, in exercising our discretion, we affirm the district court’s
                                     15

decision and the court of appeals opinion by denying Diana trial and

appellate attorney fees.

      VII. Disposition.

      We vacate the court of appeals opinion regarding the reduction of

the equalization payment.      We affirm the district court by ordering

Steven to pay Diana an equalization payment of $45,468. We affirm the

court of appeals opinion and the district court decision on the denial of

trial and appellate attorney fees.

      COURT OF APPEALS DECISION VACATED IN PART AND

AFFIRMED IN PART; DISTRICT COURT JUDGMENT AFFIRMED.
