Opinion
No. 4-166 / 03-1258
April 14, 2004.
Appeal from the Iowa District Court for Story County, Michael J. Moon, Judge.
Petitioner-appellant John Gustafson appeals the judgment of the district court following his petition for modification of the child support provision in his divorce decree. AFFIRMED IN PART, MODIFIED IN PART, AND REVERSED IN PART.
Pamela Vandel, Des Moines, for appellant.
Nathan Levin and Jere Maddux of Newbrough, Johnston, Brewer, Maddux Howell, L.L.P., Ames, for appellee.
Considered by Sackett, C.J., and Vaitheswaran and Eisenhauer, JJ.
Petitioner-appellant John Gustafson appeals the judgment of the district court following his petition for modification of the child support provision in his divorce decree. On appeal John argues the district court erred in (1) using his former wife Denise's actual earnings rather than her earning capacity as a basis of calculating support; and (2) calculating his postsecondary education contribution. John also argues the court abused its discretion by (1) failing to make its modification of his child support obligation retroactive; and (2) awarding Denise, instead of him, attorney fees. We affirm in part, modify in part and reverse in part.
I. BACKGROUND FACTS AND PROCEEDINGS
The marriage of John and Denise was dissolved on November 5, 1993. The parties have two children: Janice, born November 24, 1983; and David, born May 5, 1986. The parties were awarded joint custody with Denise having primary physical care. In the 1993 decree John was ordered to pay $2250 per month in child support. The decree provided that child support should be redetermined under current guidelines when a child no longer qualified and that, "Each child shall qualify for support until such time as the child attains the age of 18 years or graduates from high school, whichever later occurs. . . ." The dissolution court provided that each party should contribute to education beyond high school for the children in accordance with the provisions of Iowa Code section 598.1 (1993), and that if they could not agree on the amount there should be a hearing to determine it. This child support obligation was modified in a June 27, 1994 order which decreased John's support to $1200 per month based on a decrease in John's income and an increase in Denise's. On May 31, 2000 a second order modifying support increased John's obligation and provided he was to pay $1400 per month as monthly child support for Janice and David.
In August of 2001 John's attorney sent a letter to Denise. The letter related John had said there was an agreement to reduce child support to $700 per month upon Janice's graduation from high school. In the letter John's attorney indicated financial affidavits were necessary and requested a financial affidavit from Denise. John's attorney received no response. Denise testified at the hearing she did not remember whether she responded to the letter.
Janice turned eighteen in November of 2001 and graduated from high school in June of 2002. On December 30, 2002, John filed an application to modify the decree to reduce his support, as Janice was nineteen and not eligible for support. He contended in the application he should only pay support for one child. Denise responded, contending if support were modified it should not happen until April 13, 2003, which was three months after she was served with the petition to modify. She further asked that college support be fixed for Janice, who was then a student at Iowa State University, and for David, who would attend college in the fall of 2004.
The matter came on for hearing on June 26, 2003, and at that time Janice was a sophomore at Iowa State University with a grade point average of 3.97. David, age seventeen, was enrolled at Ames High School. There was evidence David suffered emotional problems which Denise, who holds a Bachelor of Science degree in materials engineering, claimed prompted her to leave her job at Iowa State University, where she was earning an annual salary in the $45,000 range. She contended she would not return to work until David finished high school.
On July 10, 2003 the district court filed its order finding the parties both acknowledged that support should be modified and providing that John should pay support for David of $1,200 a month, continuing in a like sum on the first of each month until David no longer qualified for support. The court also provided that John should contribute to the cost of postsecondary education for both children, and his contribution should be determined in accordance with the provisions of section 598.21(5A) (2001). The court then said, "For Janice, John shall contribute one third of the cost of room, board, books, fees and tuition while she attends Iowa State University." No provision was made in the order for Denise's contribution.
II. SCOPE OF REVIEW
We review de novo. Iowa R. App. P. 6.4; In re Marriage of Robbins, 510 N.W.2d 844, 844 (Iowa 1994). We give weight to the district court's findings of fact, but we are not bound by them. Iowa R. App. P. 6.14(6)( g).
III. ANALYSIS
Earning capacity. The district court calculated child support according to Denise's actual income rather than her potential earning capacity. John argues her earning potential should have been used in setting an award of child support. It is appropriate to consider the earning capacity of the parents. In re Marriage of Bonnette, 492 N.W.2d 717, 722 (Iowa Ct.App. 1992).
However, before using earning capacity rather than actual earnings, a court must make a finding that, if actual earnings were used, substantial injustice would result or that adjustments would be necessary to provide for the needs of the child and to do justice between the parties.
Id.
In determining John's child support obligation, the district court considered Denise's earnings to be zero. Denise left a job that paid her in the neighborhood of $45,000 a year because she felt is was necessary to do so to provide moral support to her son, who she testified has emotional problems. Although there was evidence David was well-adjusted and participated in Scouting, advanced math and science classes, chorus and band, there was also testimony David had attempted suicide in the past and was currently in therapy. John argues his support, if the district court had considered Denise's earning capacity, should be only $972 per month.
Parents have a responsibility to provide their minor children with both financial and emotional support, yet neither requirement is exclusive of the other. Denise, as the custodial parent, has more responsibility for the emotional support of David than does John, but she also is able to experience more of the joys of child raising. We recognize that David has had some problems, and while we do not seek to minimize them, he has a job and is in a series of activities and is doing well in school. The record does not support a finding that Denise's total absence from the work place is necessary to deal with David's problems, nor do these problems absolve her of responsibility for her son's financial support. Her earning capacity is clearly shown to be in the $45,000 range, and we adjust the child support John is ordered to pay to $972 a month.
Postsecondary education subsidy. The initial dissolution decree provides that both parties are to contribute to their children's further education expenses in accordance with then Iowa Code section 598.1 (1993). John argues the court made this postsecondary education contribution determination without adequate or accurate evidence and without properly deducting $4400 in expenses which Janice could reasonably be expected to contribute to her own education.
Section 598.1(6) (1993) provides in relevant part,
The obligations may include support for a child who is between the ages of eighteen and twenty-two years who is regularly attending an accredited school in pursuance of a course of study leading to a high school diploma or its equivalent, or regularly attending a course of vocational-technical training either as a part of a regular school program or under special arrangements adapted to the individual person's needs; or is, in good faith, a full-time student in a college, university, or community college; or has been accepted for admission to a college, university, or community college and the next regular term has not yet begun. . . .
The dissolution court determined each parent should contribute to the cost but did not determine the amount the parents were to pay. Consequently, Iowa's current postsecondary education subsidy statute, section 598.21(5A) (2001), is applicable in determining contributions. See In re Marriage of Rosenfeld, 668 N.W.2d 840, 847 (Iowa 2003). According to the statute, the court shall consider the child's financial resources and the financial condition of the parents in determining whether good cause exists for ordering such a subsidy. See Iowa Code § 598.21(5A) (a). The court further shall determine the cost of postsecondary education based upon the cost of attending an in-state public institution. See Iowa Code § 598.21(5A) (a)(1). John complains that these specific costs were not shown. Denise testified that after factoring in Janice's $2,000 scholarship her costs were about $9,000 a year. We consider Denise's testimony sufficient evidence to determine that Janice's total cost is $11,000 a year. In making this determination we also consider that the court in Rosenfeld noted the typical undergraduate student expense for the 2003-2004 year was $14,237. Rosenfeld, 668 N.W.2d at 848, n. 8 (citing Iowa College Student Aid Commission, Typical Undergraduate Student Expenses at 1 (2003)).
In addressing expenses to be paid under section 598.21(5A), our supreme court has said the costs includes tuition, books, supplies, a room and board plan, undelineated additional miscellaneous expenses and normal and reasonable living expenses beyond a standard room and board fee. In re Marriage of Vannausdle, 668 N.W.2d 885, 889 (Iowa 2003).
We next address John's argument that in figuring costs the district court failed to calculate Janice's proper contribution to her own education. Basically he contends the court should have subtracted Janice's $2,400 annual earnings and $2000 scholarship from costs before determining each parent's responsibility. In addition to testimony of Janice's $2,000 scholarship, Denise testified Janice worked in the Iowa State University Bookstore and earned approximately $200 per month.
We recognize, as John argues, that we are to determine Janice's expected contribution and deduct it from the cost of postsecondary education before determining each parent's share. See Rosenfeld, 668 N.W.2d at 848. We agree this computation was not made by the district court, but on our de novo review we make it. We subtract $4,400 as Janice's contribution to her own education from the $11,000 we have determined to be the total cost. This leaves $6,600 to be apportioned between the two parents. The court shall apportion responsibility for the remaining cost of postsecondary education to each parent. See Iowa Code § 598.21(5A) (a)(3). The amount of subsidy cannot exceed thirty-three and one-third percent of the total cost of postsecondary education. Id. That is, neither parent can be responsible for more than $3,666.66, or one third of the total cost of $11,000. The sum of $3,666.66 is a little more than one half of the remaining cost, and because John's income exceeds Denise's earning capacity, it is fair to hold him responsible for a school year payment of $3,666.66.
The district court had ordered that for Janice, John was to contribute one third of the cost of room, board, books, fees and tuition while she attends Iowa State University. We modify that provision to provide that the amount paid shall not exceed $3,666.66 in a school year, and that it shall be payable commencing in the fall of 2003 and continuing until Janice receives her undergraduate decree or reaches the age of twenty-three years, whichever event occurs sooner.
John also argues the district court failed to require Denise to pay her share of Janice's postsecondary education expenses. It was stipulated that the district court determine postsecondary education expenses. The initial decree provided that Denise should share in the expenses. Denise has a college degree and substantial earning capacity. We agree with John that she should contribute to both Janice's and David's college educations, but because she currently has no earnings and will not go back to the work force until David graduates from high school, it is equitable that her contribution to her daughter's education will not commence until the fall of 2003, at which time Denise's and John's contributions to David's college will need to be determined.
Retroactive modification of child support. John argues the district court abused it discretion in refusing to make its modification of child support retroactive to April 13, 2003, three months after Denise was served with the petition to modify, rather than the later date of August 2003. We agree.
Under Iowa Code section 598.21(8),
Judgments for child support . . . which are subject to a modification proceeding may be retroactively modified only from three months after the date the notice of the pending petition for modification is served on the opposing party.
Denise was served with John's application to modify the decree on January 13, 2003. The usage of the word "may" in the statute gives the trial court discretion in deciding whether modified support payments should become effective from the date the action was filed or from the date of the modification order. In re Marriage of Ober, 538 N.W.2d 310, 313 (Iowa Ct.App. 1995); Bonnette, 492 N.W.2d at 722; In re Marriage of Keopke, 483 N.W.2d 612, 614 (Iowa Ct.App. 1992). We review this issue to see whether the trial court abused its discretion. See Ober, 538 N.W.2d at 313; See also Bonnette, 492 N.W.2d at 722; Keopke, 483 N.W.2d at 614. There must be sufficient evidence in the record to support a finding support payments should be made retroactive. Ober, 538 N.W.2d at 313; Keopke, 483 N.W.2d at 614.
John was only required by the dissolution decree to pay child support for Denise until the later of her eighteenth birthday or high school graduation, though the support awarded for the two children was entered as one amount. Denise was well aware the support would decrease. In fact, the dissolution decree specifically provided it would reduce to the current guideline amount. Unfortunately, the decree did not specify the amount of the reduction when Janice was no longer eligible for child support. Janice was eighteen on November 24, 2001 and graduated from high school in June of 2002. Under the terms of the decree, John had no child support obligation for her after that time, yet he is only asking that the modification take place in April of 2003. The record supports his request. We modify the district court's order accordingly.
It is unfortunate that the district court did not include an amount of reduction in support when Janice was no longer eligible for child support, for parents should not have to incur the expense of a modification action to fix support again when one child of a larger family reaches his or her majority.
Attorney fees. The district court awarded Denise attorney fees. John argues this is an abuse of discretion, as it is Denise's fault the two ended up in litigation again. There was evidence of ongoing negotiations between the parties in an effort to settle this matter, but these negotiations are not grounds for penalizing the Denise. We find no abuse of discretion. See In re Marriage of Giles, 338 N.W.2d 544, 546 (Iowa Ct.App. 1983).
Neither party has been fully successful on appeal. Each party shall pay his or her own appellate attorney fees. Costs on appeal shall be assessed one half to each party.