Opinion
No. 0-348 / 99-1542.
Filed August 30, 2000.
Appeal from the Iowa District Court for Linn County, Thomas M. Horan, Judge.
On appeal from the district court's modification of custody and support, the appellant claims the district court erred in declining to impose a constructive trust for the amount of child support he paid the appellee during the pendency of the modification action. On cross-appeal, appellee challenges the court's retroactive termination of appellant's child support obligation. AFFIRMED IN PART AND REVERSED IN PART.
Jean C. Lawrence of White, Stone, Aasgaard Lawrence, P.L.C., Marion, for appellant.
Ronald L. Ricklefs, Cedar Rapids, for appellee.
Considered by Sackett, C.J., and Streit and Vaitheswaran, JJ.
Thomas Jedlicka and Sue Sebers are the parents of Wesley. Under a divorce decree, Sebers received primary care of Wesley and Jedlicka incurred an obligation to pay her child support. When he was seventeen, Wesley decided to move in with his father. Sebers continued to receive child support pursuant to a mandatory income withholding order.
Jedlicka applied to modify the physical care arrangement and child support obligation and served Sebers with the application in December 1998. On April 30, 1999, the district court suspended the mandatory income withholding order until a hearing could be held on the modification application. Following a hearing, the court ordered a change in the physical care arrangement and retroactively terminated Jedlicka's child support obligation as of March 15, 1999. The court, however, declined to order Sebers to reimburse Jedlicka for child support she received after the modification application was filed but before the withholding order was suspended. The court did order her to make child support payments to Jedlicka retroactive to March 15, 1999 through May 27, 1999. Jedlicka appealed and Sebers cross-appealed.
This appeal raises the following questions: (1) did the district court have authority to retroactively terminate Jedlicka's child support obligation and (2) was Jedlicka entitled to a constructive trust over child support paid to Sebers while Wesley was in his care. On our de novo review of this modification proceeding, we answer no to both questions and, accordingly, affirm in part and reverse in part.
I. Retroactive Termination of Child Support
The district court ordered Jedlicka's child support obligation to terminate as of three months after the date Sebers was served with his modification application. On cross-appeal, Sebers contends the court lacked authority to retroactively terminate support. Because resolution of this issue controls our disposition of Jedlicka's request for a constructive trust, we will address her contention first.
Our highest court recently reaffirmed the established principle that "we may not reduce or eliminate periodic child support obligations that have accrued prior to the time that modification is ordered." In re Marriage of Barker, 600 N.W.2d 321, 324 (Iowa 1999). This principle is based on the equally established principle that these child support payments become final judgments and liens as they come due, unless otherwise provided in the divorce decree. In re Marriage of Shepherd, 429 N.W.2d 145, 146 (Iowa 1988).
In Barker, the court was faced with interpreting a 1990 amendment to Iowa Code section 598.21, which provided:
Judgments for child support or child support awards entered pursuant to this chapter, chapter 234, 252A, 252C, 675, or any other chapter of the Code which are subject to a modification proceeding may be retroactively modified only from the date the notice of the pending petition for modification is served on the opposing party.
The court concluded this amendment did not abrogate prior case precedent holding child support payments may not be retroactively decreased, but only purported to place a limit on retroactive modification of a decree when such modification is otherwise permitted. Barker, 600 N.W.2d at 324. This section has since been amended to provide the modification shall begin three months after the date of service of the modification application. See Iowa Code § 598.21(8) (1999). In our view, this modified language does not affect the holding or reasoning of Barker.
In light of the Barker decision, Jedlicka concedes the district court was not authorized to retroactively terminate accrued child support benefits. Accordingly, we reverse that portion of the district court's modification decree terminating Jedlicka's child support obligation retroactively to March 15, 1999. We decline to order Jedlicka to return to Sebers any child support payments he received from her for the period from March 15, 1999 through May 27, 1999, as requested by Sebers.
II. Constructive Trust
Jedlicka asked the district court to impose a constructive trust on $3042 in child support funds accrued and paid to Sebers from November 1998, when the modification application was filed, through April 1999, when the income withholding order was suspended. The district court denied this request. On appeal, Jedlicka contends Sebers was unjustly enriched by receipt of the $3042 in child support funds and, notwithstanding the legal principles outlined above, the equitable constructive trust doctrine should have been used to prevent this type of unjust enrichment. Sebers counters that no legal authority supports imposition of a constructive trust under these circumstances and, in any event, Sebers used some of the funds for, or on behalf of, Wesley.
We agree with Jedlicka that the constructive trust doctrine is an equitable remedy designed to prevent unjust enrichment. See Neimann v. Butterfield, 551 N.W.2d 652, 654 (Iowa App. 1996). However, we are not aware of any Iowa appellate court decision which has applied the doctrine as a mechanism to refund child support. Cf. In re Marriage of Harvey, 523 N.W.2d 755, 757 (Iowa 1994) (holding the equitable doctrine of promissory estoppel barred former wife's support claim for period when wife agreed to execute satisfaction of judgment because child was with payor); In re Marriage of Yanda, 528 N.W.2d 642, 644-45 (Iowa App. 1994) (applying promissory estoppel to bar former wife from collecting child support where husband supported child and ex-wife for eight years after divorce).
Additionally, even if such authority existed, we are not convinced the equities of this case would warrant use of the constructive trust remedy to override clearly established legal doctrine . Wesley moved in with his father in July 1998, just a few months before becoming an adult. Even after he moved in, Jedlicka testified "it took a while for Wes to decide first off that this is what he wanted to do." Indeed, Sebers did not receive formal notification that the move was permanent until October 1998, just one month before the modification application was filed. Further, unlike the former spouses in Harvey and Yanda, Sebers did not agree to forego child support funds, a key factor cited in those casesfor invoking the related promissory estoppel principle.
This is merely a case in which the district court suspended the mandatory income withholding order later than Jedlicka would have wished. Our supreme court has stated, "[i]f mere wishes or expectations of a party may provide the basis for an unjust enrichment claim, the potential for using constructive trusts is virtually unlimited." In re Estate of Peck, 497 N.W.2d 889, 890 (Iowa 1993) (declining to impose constructive trust on wife's assets held by husband after dissolution action was dismissed due to death of wife). Cf. In re Marriage of Jones, 451 N.W.2d 25, 27 (Iowa App. 1989) (declining to impose constructive trust in favor of former spouse who made improvements to a home in which the parties lived). We decline to invoke equity under these circumstances. We reject Jedlicka's constructive trust argument and affirm that portion of the modification decree which refused to impose a constructive trust over child support funds paid to Sebers.
III. Trial and Appellate Attorney Fees
Both the district court and our court have discretion to order a party to pay some or all of the other party's attorney fees. In re Marriage of Dieger, 584 N.W.2d 567, 570 (Iowa App. 1998). Jedlicka contends the district court abused its discretion in declining to award him $1,445.50 in trial attorney fees. Both parties request appellate attorney fees. We find no abuse of discretion in the district court's attorney fee ruling. We decline to award appellate attorney fees to either party. The costs of this appeal are divided equally between the parties.
AFFIRMED IN PART AND REVERSED IN PART.
Streit, J., concurs; Sackett, C. J., concurs in part and dissents in part.
This case presents the question of whether Thomas, during the period he had custodial care of Wesley, should have been obligated to pay child support. Sue, while agreeing to a change of custodial care for Wesley, refused to agree to a termination of Wesley's child support obligation.
Thomas filed an application for modification in November of 1998 but unfortunately the matter was not tried until the end of April of 1999 and a decree of modification was not filed until June 30, 1999. The decree was modified to change custodial care according to the parties' agreement. The district court also modified Thomas's child support order retroactively to eliminate Thomas's obligation to pay child support effective March 15, 1999 and provided that Karen should begin paying Thomas child support of $261.56 a month beginning on the same day. The majority has determined in applying In re Marriage of Barker, that the district court did not have the authority to terminate Thomas's child support payments as of March 15, 1999, in a June 30, 1999 order. I agree that the majority has correctly applied Barker in arriving at this decision.
I also agree to that portion of the majority opinion that refuses to order Thomas to return to Sue child support the district court determined she owed him commencing March 15, 1999. Sue's obligation was established by a retroactive order to pay support, not as in Barker, a retroactive order to modify an existing judgment. See id.
While I agree the majority has correctly applied Barker in ordering that Thomas pay child support to Sue for a period that Wesley was in his custodial care I have grave difficulty justifying the result. Sue gave up custodial care of Wesley but refused to give up the child support. Thomas immediately did the only thing that he could to rectify the injustice to both him and his child and filed for a modification.
It is impossible for me to find any fairness or equity in this application of the law to these facts. I also have concern about the impact of such a holding on the interests of Wesley and other similarly situated children. Where a transfer of primary physical care is in a child's interest a former non-custodial parent may not be in a financial position to take custody of his or her child, assume their expenses and continue to pay child support to the other parent. Consequently, changes that may be in the interest of the child may not be made. Furthermore, in situations such as we have here where Thomas took Wesley and supported him while continuing to pay Wesley's mother child support, it is reasonable to believe that the level of support Thomas was able to provide for Wesley was lessened because of Thomas's child support obligation. Unlike the majority, I believe the inequities that result from the application of Barker in this case support the equitable remedy that Thomas seeks, and I would apply it.