Opinion
No. 4-462 / 03-1300.
July 28, 2004.
Appeal from the Iowa District Court for Polk County, John D. Lloyd, Judge.
Eugene Elliott appeals from the alimony provisions of the dissolution decree entered by the district court dissolving his marriage to Jeanette Elliott. AFFIRMED AS MODIFIED.
Considered by Mahan, P.J., and Miller and Vaitheswaran, JJ.
Diane Dornburg of Carney, Appleby, Nielsen Skinner, P.L.C., Des Moines, for appellant.
Harvey Harrison of Harrison Dietz-Kilen, for appellee.
Eugene Elliott appeals from the alimony provisions of the district court decree dissolving his marriage to Jeanette Elliott. He contends the court erred in its award of permanent alimony to Jeanette. We affirm as modified.
I. BACKGROUND FACTS AND PROCEEDINGS.
Eugene and Jeanette were married on December 30, 1989. The marriage was Eugene's first and Jeanette's second. Jeanette had a son, Nicholas, born May 18, 1985, from her first marriage. The parties had two children together during their marriage, Eugene II, born February 1, 1991, and Samuel, born June 9, 1994. Prior to the parties' marriage Eugene played golf professionally from 1984 until 1989. In 1990 he began working in a business owned by his parents, Elliott Equipment Company, where he remains employed. In 1992 he acquired, by gift from his parents, a forty-nine percent interest in the business.
At age seventeen Jeanette began working as a receptionist in the x-ray department at Mercy Hospital in Davenport, Iowa. While working as a receptionist she attended Scott Community College to become an x-ray technician. Upon graduating from that two-year program she became employed as a "graduate tech" in Mercy Hospital's x-ray department in 1980. After passing board examinations a few months later she became a staff technologist, a position she held until 1987.
Following graduation from Scott Community College and while employed at Mercy Hospital, Jeanette attended Marycrest College. She received a Bachelor's degree in December 1983. She also later received training to become a CT (computerized tomography) technologist, and worked in that specialized field from 1987 to 1990. However, she worked only part-time from when Nicholas was born in 1985 until she ended her outside-the-home employment in 1990. At that time she and Eugene agreed she would quit her job to become a full-time wife and mother. At about the time she left her employment Jeanette was earning approximately $18,000 per year working part-time.
It is undisputed that Jeanette was the primary caretaker of the children during the marriage while Eugene was the wage earner for the family. Jeanette's son from her previous marriage also lived with the parties throughout their marriage and was supported by Eugene. Her son was about to graduate from high school at the time of trial in this case.
For several years Eugene has drawn a yearly salary of $160,000, plus benefits, from the family business. He also has dividend and interest income of about $6,500 per year. Both parties agree that a significant portion of the income they have enjoyed over the last several years has come from withdrawal and use of retained earnings from Elliott Equipment Company. The amounts withdrawn from the retained earnings have allowed the parties to live at the standard of living they have enjoyed for several recent years, a standard of living which both the parties and the district court seem to agree they could not and cannot sustain, as the retained earnings are now exhausted except for $7,000. From 1994 through 2001 inclusive the parties' gross annual income averaged $352,036, and their after tax annual income averaged $225,817. As of 2002 not only had Elliott Equipment Company's retained earning been exhausted, but it earned little if any profit.
Eugene filed a petition for dissolution of marriage on July 3, 2002. Trial was held on the petition on May 7 and 8, 2003, and the trial court filed detailed and comprehensive written findings of fact and a decree on June 11, 2003. At the time of the dissolution trial Eugene was forty-one years of age and Jeanette was forty-two. The court found that both parties were in good health. Their two children were twelve and almost nine years of age at the time of trial. The parties agreed to joint legal custody of their children and that Jeanette should have their physical care. The court determined Eugene's monthly income to be $8,915.88 and based on that income and our child support guidelines ordered him to pay $2,541.03 per month in child support for the two children. In determining Eugene's net income for child support purposes the court did not deduct any of the spousal support Eugene was ordered to pay Jeanette. The court also exercised its discretion to apply the support guidelines percentage of 28.5% (applicable to a recipient having no income and a payor having income of $5,001 to $6,000 per month) to Eugene's entire net income, resulting in the amount of child support Eugene is required to pay for two children exceeding by $801.03 per month the minimum amount required by the guidelines. Eugene does not challenge any of the custody or child support provisions of the decree.
See In re Marriage of Lalone, 469 N.W.2d 695, 596-97 (Iowa 1991) (recognizing trial court's discretion to deduct alimony paid in determining net income for child support purposes, and affirming the court's decision to do so where trial court ordered alimony of $1,500 per month).
After setting aside to each party certain gifted property and some of the property that each had brought into the marriage, the court equitably divided the parties' remaining assets and debts. Eugene received a net award of $635,705 of the divided property, and Jeanette received $646,458. Eugene does not challenge the court's property division.
The trial court ordered Eugene to pay Jeanette a combination of rehabilitative and permanent alimony. Alimony was set at $3,000 for the first twelve months, "to provide income to [Jeanette] at close to her estimated expense level, when combined with the child support, for 12 months" and "to allow her time to adjust to minimize the impact on the children in the near term." After the first twelve months the court ordered the alimony payments to decrease to $2,500 for the next thirty-six months under the assumption Jeanette would "be able to obtain all of her necessary education and re-training within the next four years and make the transition from full-time homemaker to a working, single mother." Thereafter, the court awarded Jeanette permanent alimony of $2,000 per month "until the death of either party." The court found permanent alimony should be awarded to permit [Jeanette] to maintain a comfortable lifestyle, albeit not at the level to which she is presently accustomed. While permanent alimony is often not considered in a relatively short marriage, the significant disparity in income and earning potential and the standard of living that [Jeanette] has enjoyed during the marriage are factors that strongly support a permanent alimony award in this case.
The court estimated Jeanette's expenses to be nearly $6,600 per month. However, some of the expenses upon which the estimate was based were for not only Jeanette and the parties' two children, but for Jeanette's son and Eugene as well. The expenses also included numerous discretionary items and amounts.
Eugene appeals from the alimony provisions of the dissolution decree contending the court erred in awarding Jeanette permanent alimony. He argues that based on Jeanette's age, good health, education, past employment experience, and the property she was awarded in the decree permanent alimony is unwarranted and is inequitable. He argues the permanent alimony should either be eliminated or, in the alternative, reduced in amount and duration.
II. SCOPE AND STANDARD OF REVIEW.
In this equity case our review is de novo. Iowa R. App. P. 6.4. We examine the entire record and adjudicate rights anew on the issues properly presented. In re Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998).
III. MERITS.
"Alimony is an allowance to the spouse in lieu of the legal obligation for support." In re Marriage of Sjulin, 431 N.W.2d 773, 775 (Iowa 1988). Any form of spousal support is discretionary with the court. In re Marriage of Ask, 551 N.W.2d 643, 645 (Iowa 1996). Spousal support is not an absolute right; an award depends on the circumstances of each particular case. In re Marriage of Dieger, 584 N.W.2d 567, 570 (Iowa Ct.App. 1998). The discretionary award of spousal support is made after considering the factors listed in Iowa Code section 598.21(3) (2003). Id. We consider the length of the marriage, the age and health of the parties, the parties' earning capacities, the levels of education, and the likelihood the party seeking alimony will be self-supporting at a standard of living comparable to the one enjoyed during the marriage. In re Marriage of Clinton, 579 N.W.2d 835, 839 (Iowa Ct.App. 1998). Property division and alimony should be considered together in evaluating their individual sufficiency. In re Marriage of Trickey, 589 N.W.2d 753, 756 (Iowa Ct.App. 1998).
An alimony award will differ in amount and duration according to the purpose it is designed to serve. In re Marriage of Hettinga, 574 N.W.2d 920, 922 (Iowa Ct.App. 1997). Rehabilitative alimony was conceived as a way of supporting an economically dependent spouse through a limited period of education or retraining following divorce, thereby creating incentive and opportunity for that spouse to become self-supporting. In re Marriage of Francis, 442 N.W.2d 59, 63 (Iowa 1989); see also In re Marriage of O'Rourke, 547 N.W.2d 864, 866 (Iowa Ct.App. 1996). Because self-sufficiency is the goal of rehabilitative alimony, the duration of such an award may be limited or extended depending on the realistic needs of the economically dependent spouse, tempered by the goal of facilitating the economic independence of the ex-spouses. Francis, 442 N.W.2d at 64.
Traditional or permanent alimony is usually payable for life or for so long as the dependent spouse is capable of self-support. Hettinga, 574 N.W.2d at 922. "[T]he spouse with the lesser earning capacity is entitled to be supported, for a reasonable time, in a manner as closely resembling the standards existing during the marriage as possible, to the extent that that is possible without destroying the right of the party providing the income to enjoy at least a comparable standard of living as well." In re Marriage of Hayne, 334 N.W.2d 347, 351 (Iowa Ct.App. 1983). "But once the dependant spouse's standard of living is assured, there is no reason, in equity, for the supporting spouse to provide still more." Id. The economic provisions of a dissolution decree are "not a computation of dollars and cents, but a balancing of equities." Clinton, 579 N.W.2d at 839.
We agree with the trial court's award of rehabilitative alimony to Jeanette, at $3,000 per month for the first twelve months and $2,500 for the next thirty-six months. This should allow Jeanette more than sufficient time and income to acquire such retraining or further education as she might wish in order to make the transition from full-time homemaker to a single, working mother and become self-sufficient. We, however, respectfully disagree with the trial court's conclusion that an award of permanent alimony is warranted after the four-year period of rehabilitative alimony under the facts and circumstances of this case.
Jeanette contends she should be able to stay home with the parties' children, as she and Eugene had agreed and hoped would happen when she allowed her certification as an x-ray technician to go into "retired status" some thirteen years ago. Although the parties agreed on Jeanette quitting her job when they married, and quite apparently hoped and planned she would be able to remain a stay-at-home wife and mother, their plan was based upon their marital relationship continuing. The situation has now clearly changed, and thus the plan they had in that regard is no longer feasible because of the dissolution of their marriage and the recent large change in their financial circumstances.
Jeanette also argues that even with retraining she will be unable to earn sufficient income to enjoy the standard of living she enjoyed during the parties' marriage. One of the goals in awarding alimony is to allow the spouse with the lesser earning capacity to live in a manner as closely resembling the standard he or she enjoyed during the marriage. Hayne, 334 N.W.2d at 351. However, when an award necessary to do so would prevent the other party from enjoying at least a comparable standard of living as well, see id., or when as here the parties were only able to enjoy their standard of living by living well beyond their means and thus both spouses will have to significantly reduce their lifestyles after the dissolution, an award which would allow the spouse with the lesser earning capacity to continue living at the standard to which he or she was accustomed is simply not possible.
Jeanette was only forty-two years of age at the time of the dissolution and was in good health. She has a Bachelor's degree from Marycrest, two years of x-ray technician training at Scott Community College, and she received additional training and became a CT technologist. She worked in the field of radiographics, as an x-ray technician and a CT technologist, for approximately ten years prior to her marriage to Eugene. She entered the marriage with property consisting of a four-year-old car, a zero coupon bond of undisclosed value (intended for her son Nicholas's college education), approximately $2,000 in a savings account, and a debt of about $3,000 for a school loan. The school loan debt was paid off during the parties' marriage. The parties' marriage, although not of just brief duration, is also not a long-term marriage. After a marriage of about thirteen years Jeanette leaves with a net property award of $646,458, approximately $640,000 more than she brought to the marriage.
Based on all of the facts and circumstances of this case we do not believe Jeanette will be incapable of self-support in the long term, and certainly not for the balance of the parties' joint lives. We conclude an award of permanent alimony is not warranted in this case.
IV. CONCLUSION.
Jeanette is forty-two years of age, is in good health, has extensive education, has lengthy work experience, and would appear to have excellent earning capacity after a limited period of retraining or further education. Under such circumstances the combination of the large property award she received after a less than long-term marriage, the generous child support award, and four years of large amounts of rehabilitative alimony appear to be fully adequate to allow her to become self-sufficient at a standard of living reasonably comparable to the standard the parties would have enjoyed had they not artificially enhanced their standard of living by depleting and using all of Elliott Equipment Company's retained earnings over the last several years. Based on our de novo review of the record we conclude an award of permanent alimony is not warranted under the facts and circumstances of this case. We therefore modify the dissolution decree to remove the requirement that Eugene pay permanent alimony of $2,000 per month. In all other respects we affirm the trial court's ruling. Costs on appeal are taxed to Jeanette.
AFFIRMED AS MODIFIED.