Opinion
23-0577
03-06-2024
IN RE THE MARRIAGE OF RACHAEL ANNE NELSON BIGG AND RYAN JEFFREY BIGG Upon the Petition of RACHAEL ANNE NELSON BIGG, Petitioner-Appellee, And Concerning RYAN JEFFREY BIGG, Respondent-Appellant.
Jane M. Brennan and Kimberly K. Baer of Baer Law Office, Des Moines, for appellant. Ashley M. Sparks of Sparks Law, PLLC (until withdrawal), Des Moines, for appellee. Rachael Bigg, Altoona, self-represented appellee.
Appeal from the Iowa District Court for Polk County, Robert B. Hanson, Judge.
A husband appeals the child support, spousal support, and attorney fees awarded to his wife in their dissolution decree. AFFIRMED AS MODIFIED AND REMANDED.
Jane M. Brennan and Kimberly K. Baer of Baer Law Office, Des Moines, for appellant.
Ashley M. Sparks of Sparks Law, PLLC (until withdrawal), Des Moines, for appellee.
Rachael Bigg, Altoona, self-represented appellee.
Considered by Tabor, P.J., and Badding and Langholz, JJ.
BADDING, JUDGE
Ryan Bigg's income as a salesperson for the last few years of his eleven-year marriage to Rachael Bigg was "[p]henomenal" according to the owner of his company. And unrepeatable according to Ryan. Even though Ryan had lost a large account, the district court did not believe his future income prospects were "as dim as Ryan would have this court believe." So the court averaged Ryan's gross annual income over a six-year period-excluding the highest and lowest-earning years-and ordered him to pay Rachael child support, spousal support, and attorney fees.
Ryan appeals these awards, claiming they were excessive because the court set his income too high by "using past commission sales that would not be earned in the future." He asks us to recalculate his income, lower his child support obligation, eliminate or reduce his spousal support obligation, and order Rachael to be responsible for her own trial and attorney fees. We affirm as modified on the spousal support issue and remand for recalculation of child support.
I. Background Facts and Proceedings
Rachael and Ryan Bigg were married in August 2010. They both had bachelor's degrees in business. Rachael worked as a paralegal during the marriage, while Ryan worked as a salesperson for a company that sold commercial heating, plumbing, and cooling equipment. The couple had "a fairly disposable income," according to Rachael, although they "didn't necessarily go totally crazy with [their] spending."
Rachael petitioned to dissolve the marriage in March 2021. Trial was held about a year later when both parties were thirty-six years old. After they separated, Rachael stayed in the marital residence with the couple's two sons, ages nine and three. Ryan bought a house about three blocks away. In a stipulated temporary order entered in April, the parties agreed to place the boys in Rachael's physical care with flexible visitation for Ryan. They also agreed that Ryan would pay Rachael $3120.83 per month in temporary child support, plus $879.17 per month "for household maintenance."
Ryan has worked for the same company since 2013. He earned a base salary of roughly $50,000 per year when he first started. Once he became more established as a salesperson, Ryan switched to working entirely off commission. His income jumped to $117,000 in 2016, topping out at $354,712.82 in 2020. Ryan attributed these high incomes to an account that he landed in 2017 for a Microsoft data center in Des Moines. Unfortunately, in June 2021, Ryan learned that he had not gotten the bid for the project's next phase. He continued to receive commissions in 2021 for the products he had already sold to Microsoft, with the last coming in September or October. The contractor in charge of the project emailed Ryan that there were "still a lot of projects on the horizon" for Microsoft and "would anticipate pricing 2 more in the next 6-8 months."
Ryan's income from 2013 to 2021 was: 2013-$50,130; 2014-$56,048; 2015-$58,143; 2016-$117,020; 2017-$136,671; 2018-$208,637; 2019-$285,584; 2020-$354,712; and 2021-$282,673.
By the time of trial in March 2022, Ryan argued his gross annual income should be set at $180,000, testifying that "being commission, it was an idea of where I thought I could get to." Rachael, on the other hand, argued for a three-year average income of $307,656 for Ryan. Her salary as a paralegal was fixed at $65,000, with no anticipated increases. Rachael testified that she needed spousal support from Ryan to help her adjust to "a single-income household" and get her "future finances in order." She speculated that without spousal support, she might be unable to keep living in the marital home.
While the parties were far apart on Ryan's income, they agreed the children should be placed in their joint legal custody and Rachael's physical care, with a parenting plan that would allow Ryan to see them six nights out of every fourteen. The parties divided their marital estate nearly equally, with Ryan receiving $424,894 in assets and Rachael receiving $419,159 in assets, including the marital home. Of the assets awarded to Rachael, $101,468 was cash in a savings account. She was also set to receive $65,000 from Ryan's 401(k) through a qualified domestic relations order. However, the parties could not reach an agreement on child support, spousal support, and attorney fees, mostly because of Ryan's disputed income.
Those issues were submitted to the district court for trial, at which the owners of Ryan's company testified that their salespeople earned, on average, $130,000 to $135,000 per year. Ryan's recent higher earnings, according to one of the owners, were an anomaly due to the data center project- a "diamond[] in the rough"-that had since ended. While Ryan testified that he was "still trying to make as much money as ever," there were "zero" other accounts like Microsoft.
Following trial, the court issued a decree dissolving the parties' marriage in August 2022. After adopting the parties' stipulation, the court found "that Ryan's current reasonably expected annual income is $228,392," based on his average income "for calendar years 2016 through 2021 but excluding the high (2020-$354,712.00) and low (2016-$117,020.49) values." With Ryan's income set, the court determined Rachael was entitled to spousal support because Ryan "has had and will continue to have greater earnings than Rachael," though she was not leaving the marriage "at a total disadvantage, by any stretch." Ryan was ordered to pay Rachael $3000 per month in spousal support for seven years, to terminate only upon her death "or her cohabitation with another adult, whichever occurs earlier"; $1606 per month in child support; and $7390 toward her attorney fees. After his post-trial motion was denied on these issues, Ryan appealed.
II. Standard of Review
We review dissolution proceedings de novo, giving weight to the factual findings of the district court, though they are not binding on us. In re Marriage of Schenkelberg, 824 N.W.2d 481, 484 (Iowa 2012).
III. Analysis
A. Income
Ryan's income is at the core of his appeal, affecting each of the claims he raises regarding child support, spousal support, and attorney fees. See In re Marriage of Sommerville, No. 21-1672, 2023 WL 4521540, at *2 (Iowa Ct. App. July 13, 2023) (stating resolution of child support and spousal support awards "requires a determination of the parties' earnings"); see also In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006) (considering "the parties' respective abilities to pay" as a factor in assessing an award of trial attorney fees). So we start with that issue.
Ryan argues the district court should have excluded the income he received during the Microsoft project years-2017 through 2021-because that project had "ended and the likelihood of any similar future contract is highly unlikely and speculative." Rather than averaging those years, Ryan contends that his income should have been set between $130,000 to $135,000, the average yearly amount the owners of his company testified their salespeople grossed, or "by averaging all nine years of his income for a salary of $172,180.06."
"We determine the parties' incomes from the most reliable evidence presented." Sommerville, 2023 WL 4521540, at *2 (citing In re Marriage of Powell, 474 N.W.2d 531, 534 (Iowa 1991)). Generally, that is completed income tax returns. See id.; accord In re Marriage of Hansen, 886 N.W.2d 868, 876 (Iowa Ct. App. 2016). "When income is subject to fluctuation, an average income over a reasonable period of time should be used." In re Marriage of Roberts, 545 N.W.2d 340, 343 (Iowa Ct. App. 1996). While Ryan is correct that anomalous income should be excluded, see Markey v. Carney, 705 N.W.2d 13, 19 (Iowa 2005), income need not be guaranteed to be included in the court's calculations, see Seymour v. Hunter, 603 N.W.2d 625, 626 (Iowa 1999). "History over recent years is the best test of whether such a payment is expected or speculative." Id.
Ryan asserts the court "essentially ignored the uncontroverted testimony" about his lower expected income by relying on his historical income record, which was skewed by the Microsoft project. But the court attempted to account for that by excluding Ryan's highest earning year while the project was ongoing. The court reasoned
that by excluding those values, the court is being fair to both parties by giving appropriate weight to a) the uncontroverted testimony that the average income for salespeople at [Ryan's work] is $130,000 to $135,000 and b) Ryan's testimony that his income in 2020 is not an accurate reflection of his reasonably expected annual income going forward.
The court also considered, but rejected, testimony from Ryan and one of the company's owners that it was unlikely Ryan could secure another large account like the Microsoft data center:
Ryan argues it is unlikely that he will be involved with another large contract like the Microsoft contract in the future and, therefore, his income figures during those years are not representative of his reasonably expected annual income in the future. However, it is undisputed that Ryan has demonstrated he is a good salesperson. Further, Ryan acknowledges that he is always on the lookout for other large lucrative contracts-like the Microsoft contract-in which he and his employer could potentially get involved. Finally, certain evidence offered by Ryan and received by the court . . . gives the court substantial reason to believe that other large contracts, including even some in Des Moines and involving Microsoft, are "on the horizon" and that prospects of Ryan's and his employer's involvement in same are not as dim as Ryan would have this court believe.
Indeed, as Rachael pointed out in cross-examining Ryan, his year-to-date gross income in March 2022 was only $5000 off-pace from the same time the year before when he was still receiving commissions from the Microsoft project. Cf. In re Marriage of Cloyd, No. 08-1806, 2009 WL 1677422, at *2 (Iowa Ct. App. June 17, 2009) (declining to average past years' income where a parent's net income as a realtor had steeply decreased by trial, "the real estate market had collapsed, and she did not expect receiving any more commissions before the end of the year").
Upon our de novo review of the record, "with appropriate deference to the trial court that heard the testimony first-hand," we find the determination of Ryan's gross annual income to be within the range of permissible evidence. In re Marriage of McKee, No. 20-1242, 2021 WL 4592258, at *4 (Iowa Ct. App. Oct. 6, 2021); accord In re Marriage of Kupferschmidt, 705 N.W.2d 327, 334 (Iowa Ct. App. 2005) (recognizing the "district court needs to be given some discretion in making computations"); In re Marriage of Rife, No. 19-0679, 2020 WL 1542314, at *3 (Iowa Ct. App. Apr. 1, 2020).
B. Spousal Support
Despite our de novo review of dissolution proceedings, we give the district court deference in determining spousal support awards. In re Marriage of Sokol, 985 N.W.2d 177, 182 (Iowa 2023). Our supreme court has instructed that we should not disturb the court's determination unless "there has been a failure to do equity." Id. (citation omitted). We find that is the case here, largely because of recent developments in our spousal support jurisprudence.
"Unlike child support, we do not operate under spousal-support guidelines. Instead, we do equity based on the statutory criteria." In re Marriage of Cichon-Barche, No. 22-0962, 2023 WL 3335423, at *6 (Iowa Ct. App. May 10, 2023); accord Iowa Code § 598.21A(1) (2021). Through the application of these criteria, "our precedents have recognized four forms of spousal support deemed equitable: traditional, reimbursement, rehabilitative, and transitional." Sokol, 985 N.W.2d at 185. Each category has a different goal, and the "amount and duration of a spousal support award should be tailored to achieve" that goal. Id. On appeal, Rachael suggests the district court's award, which was uncategorized, "is a type of rehabilitative spousal support" needed to help her "transition[] to single life." We read this argument as advocating for a hybrid of rehabilitative and transitional spousal support. See id. at 186 ("Courts may issue hybrid awards 'to accomplish more than one of the foregoing goals.'" (citation omitted)).
In Sokol-a case issued after the parties' dissolution decree was entered- the supreme court clarified the contours of the transitional spousal support category that it had formally recognized the year before. See In re Marriage of Pazhoor, 971 N.W.2d 530, 541-42 (Iowa 2022). In doing so, the court distinguished transitional support from rehabilitative:
Transitional spousal support and rehabilitative spousal support are separate and distinct and serve different purposes. Transitional spousal support addresses short-term liquidity needs associated with splitting one household into two; whereas rehabilitative spousal support addresses training, education, work-readiness, and human capital development.Sokol, 985 N.W.2d at 187 (internal citations omitted). "[A] transitional spousal support award generally should not exceed one year in duration." Id. And "rehabilitative spousal support is inappropriate" without "a showing that the recipient spouse seeks reeducation, retraining, or some discrete period of time to increase earning capacity to become self-supporting." Id. at 186.
Rachael acknowledges that she "is not in need of furthering her education to become self-sufficient." See Iowa Code § 598.21A(1)(d), (e). She has her bachelor's degree in business and has worked full-time as a paralegal since 2013. Cf. In re Marriage of Weltz, 23-0136, 2023 WL 4533297, at *4 (Iowa Ct. App. July 13, 2023) (affirming hybrid transitional and rehabilitative spousal support award of $1000 per month for three years where receiving spouse worked parttime so that the children did not have to go to daycare). Yet Rachael contends that because of the large income disparity between her and Ryan, she needs spousal support to "obtain a comparable standard of living to what was experienced in the marriage" and meet her monthly expenses. See Iowa Code § 598.21A(1)(f). Those considerations carry more weight in marriages of long duration where an award of traditional spousal support is made. See In re Marriage of Gust, 858 N.W.2d 402, 411 (Iowa 2015) ("[I]n marriages of relatively long duration, the imposition and length of an award of traditional alimony is primarily predicated on need and ability." (cleaned up)). The parties' eleven-year marriage does not meet that durational threshold. See id.
Rachael's financial affidavit set her monthly expenses at $6713.22, against a net monthly income of about $4200. She included the total cost of the children's daycare ($1248 per month during the school year and $1640 per month during the summer) in those expenses. Although Ryan was ordered to pay 57% of the children's daycare on top of his child support obligation, Rachael's income still comes up short to meet her other expenses.
In the end, Rachael contends that "[a]ffirming the spousal support award will allow her to get on her feet, put future finances in order, rebuild her savings, reacclimate to a single-income household, and pay down her mortgage and car." These types of considerations are the "short-term liquidity needs" characteristic in a transitional spousal support award. Sokol, 985 N.W.2d at 187. Yet the sevenyear duration of the support ordered by the district court is too long to fit within that category. See In re Marriage of Cummings, No. 22-1481, 2023 WL 7014330, at *4 (Iowa Ct. App. Oct. 25, 2023) ("[T]ransitional support lasting six years does not comply with post-decree caselaw limiting the award to a one-year period."). And, as Ryan argues, Rachael received a property settlement that included $101,468 in cash, the marital home with $153,588.55 in equity, and $65,000 from his 401(k). See Iowa Code § 598.21A(1)(c).
So where does this leave Rachael? On appeal, Ryan contends that it leaves her without an award of spousal support. But at trial, he seemed to agree that Rachael needed some financial assistance transitioning from married life to single life, testifying: "I do want to pay what is fair." To help Rachael "bridge the gap' from married [life] to single life," Pazhoor, 971 N.W.2d at 545, we find that transitional spousal support will do equity between the parties but not for as long as the district court ordered. See Sokol, 985 N.W.2d at 187. We accordingly modify the dissolution decree to reduce the duration of the spousal support awarded to Rachael to eighteen months, commencing on the date spousal support began in the dissolution decree. Because our modification will necessarily impact Ryan's child support obligation, we remand to the district court to recalculate child support. See Pazhoor, 971 N.W.2d at 546; accord In re Marriage of Engelman, No. 21-1165, 2022 WL 8037595, at *4 (Iowa Ct. App. Aug. 3, 2022).
In reaching this conclusion, we have considered the cases Rachael surveyed in her appellate brief to support the longer award. But as our supreme court has often recognized, "prior cases are of little value in determining the appropriate alimony award, and we must decide each case on its own peculiar circumstances." In re Marriage of Becker, 756 N.W.2d 822 825-26 (Iowa 2008); accord Pazhoor, 971 N.W.2d at 537-38. We know this is not much comfort to the bench, bar, and litigants, but it's the realm within which we must operate-unless and until our state adopts formal spousal support guidelines. See In re Marriage of Colby, No. 22-0697, 2023 WL 5091835, at *5 (Iowa Ct. App. Aug. 9, 2023) (Buller, J., specially concurring) (advocating for the adoption of "spousal-support guidelines, to eliminate uncertainty and provide a common starting point for analysis").
C. Attorney Fees
Finally, Ryan claims the district court abused its discretion in ordering him to pay $7390 toward Rachael's attorney fees, which totaled $13,195. We review this decision for an abuse of discretion. See Sullins, 715 N.W.2d at 255. Because Ryan was earning significantly more than Rachael at the time of trial, we find no abuse of discretion in the court's award. See id.
Rachael also requests $5120 in appellate attorney fees. "Appellate attorney fees are not a matter of right, but rather rest in this court's discretion." Id. (citation omitted). Factors to be considered include "the needs of the party seeking the award, the ability of the other party to pay, and the relative merits of the appeal." Id. (citation omitted). Upon considering these factors, we deny Rachael's request for appellate attorney fees.
IV. Conclusion
On our de novo review of the record, we affirm the district court's calculation of Ryan's income. But after considering the factors in Iowa Code section 598.21A(1) and the goals of our recognized categories of support, we modify the dissolution decree to award Rachael transitional spousal support for eighteen months. We affirm the award of trial attorney fees to Rachael and deny her request for appellate attorney fees. The case is remanded to the district court for recalculation of child support. Costs on appeal are assessed equally between the parties.
AFFIRMED AS MODIFIED AND REMANDED.