Opinion
No. 0-541 / 00-0059
Filed October 25, 2000
Appeal from the Iowa District Court for Calhoun County, David R. Danilson, Judge.
Petitioner appeals the economic provisions of the parties' dissolution decree.
AFFIRMED IN PART AND REMANDED.Joseline L. Greenley of Greenley Law Office, Webster City, for appellant.
Jeane W. Pearson of Price Pearson, Fort Dodge, for appellee.
Considered by Vogel, P.J., and Miller and Hecht, JJ.
Richard Eugene Jensen appeals the economic provisions of the parties' dissolution decree. We find 1) the trial court properly used earning capacity when setting child support, 2) the spousal support was appropriate and 3) the division of the retirement assets was equitable. However, since the trial of the issues, the child support guidelines have been revised. We, therefore, remand to the trial court to recompute Richard's child support obligation after allowing him the full health care premium deduction from gross income.
Background facts. Richard and Susan Jensen were married for thirty years. There were four children born to the marriage; only one remained a minor at the time of trial. The parties stipulated to most of the issues, reserving the division of retirement funds, the award of spousal support and setting of child support for the court to resolve.
Richard is fifty-one years of age and is currently unemployed. He is trained in making fiberglass products or molds and is seeking new employment. He recently received a house valued at $61,000 and $35,392 in cash as an inheritance from his mother's estate. His most recent employment yielded him an annual salary of nearly $42,000. Susan is fifty years of age and is currently employed on an hourly basis, earning $6.15 per hour as a special needs aide for a disabled child in the Rockwell City School System. She is restricted in her employment options by several health problems and her limited education. She is unemployed without any income during the summer months and school holidays. In 1998, her total gross income was $5,539. Daniel, their minor son, is sixteen years old and resides with Susan, per the parties' agreement.
The parties have three retirement accounts, including Susan's IPERS account with a balance of $735, Richard's 401(k) account with a balance of $3,000, and Richard's IRA account with a balance of $31,990. The parties stipulated to an equal split of these assets prior to trial. The trial court, after reviewing all of the evidence in this case, awarded Susan both the IPERS and 401(k) accounts and half of the IRA balance. The court's division of the pension accounts amounted to $1,868 more shifted to Susan than the parties had stipulated. Richard appeals, alleging this is neither a fair division nor what the parties had previously agreed to.
Further, the trial court awarded child support and spousal support amounts based on Richard's proven annual earning capacity of $40,000 rather than his current weekly income of $283 of unemployment compensation. Richard sought to deduct his health care premiums from his gross income and, thus, reduce his child support. The trial court allowed a deduction of one-third of the total premium, allocating that amount to coverage of the parties' minor son. Richard appeals both the child and spousal support awards.
Scope of review. Because this is an equity action, our review is de novo. Iowa R. App. P. 4. In our review, we examine the entire record and adjudicate anew the rights on the issues properly presented. In re Marriage of Maher, 596 N.W.2d 561, 564 (Iowa 1999). Although we give weight to the district court's factual findings, we are not bound by them. Iowa R. App. P. 14(f)(7).
Child support calculated on earning capacity. Richard contends the trial court should have used his actual earnings rather than his earning capacity to determine his child support obligation of $450 per month. At the time of trial, Richard was unemployed and his actual earnings consisted of his $283 weekly unemployment compensation. He asserts that because his unemployment was not due to his own misconduct or an attempt to avoid support payments, the trial court should not have based his support obligation on his earning capacity.
This court has previously found it is appropriate to consider earning capacity rather than actual earnings in applying the Uniform Child Support Guidelines. In re Marriage of Flattery, 537 N.W.2d 801, 803 (Iowa App. 1995). However, this approach requires a finding that the use of actual earnings would create a substantial injustice or adjustments are necessary to provide for the needs of the children and to do justice between the parties. Id.
The trial court calculated the support award based on Richard's earning capacity, finding his unemployment was a temporary situation, he possessed a marketable skill, he had no known health problems, and he had been earning in excess of $40,000 per year since 1997. Further, Susan has several known health problems, a limited education and employment skills which restrict her job opportunities and earning capacity. Therefore, the trial court found, "It would create a substantial injustice to permit Richard to escape his support obligations based upon this temporary circumstance." We agree with the trial court's use of earning capacity to determine Richard's support obligations.
Effect of revised child support guidelines: Deduction of health insurance premiums. Richard next asserts the trial court should have deducted the full cost of his COBRA family medical insurance premiums from his gross income prior to making the child support calculations. The trial court, not having the exact figures attributed to each person covered under the policy, allowed Richard to deduct one-third of the cost as it estimated this portion could be allocated to the parties' minor son's health coverage. At the time of the hearing, this computation substantially complied with the Child Support Guidelines, effective July 1, 1995, which allowed for a deduction of the "[d]ependent health insurance coverage either deducted from wages or paid for dependent medical insurance pursuant to court order." The Child Support Guidelines have been revised, with the changes becoming effective August 1, 2000. The new guidelines allow a deduction of "[h]ealth insurance premium either deducted from wages or paid by a parent for health insurance so long as the child is covered by the policy." The newly enacted guidelines, therefore, allow for the total premium amount to be deducted from Richard's gross income in determining net income, which is then used to calculate the applicable child support obligation.
The guidelines state that the revisions "shall apply to cases pending on August 1, 2000." In the past, this court has interpreted this language to include cases pending on appeal. In re Marriage of Roberts, 545 N.W.2d 340, 343 n. 2 (Iowa App. 1996). When calculating the child support to be ordered after the revision effective date, the new guidelines must be used. In re Marriage of Gaer, 476 N.W.2d 324, 326 (Iowa 1991). Therefore, Richard's child support obligation after August 1, 2000, must be recalculated under the revised Child Support Guidelines, allowing the full health insurance premium amount to be deducted from his gross monthly income prior to determining the applicable child support obligation. We affirm the child support set by the trial court prior to August 1, 2000. We remand this case for the limited purpose of allowing the trial court to receive evidence in order to recalculate Richard's net monthly income and establish his child support obligation after August 1, 2000, consistent with the revised guidelines.
Spousal support. Richard next claims the trial court imposed child and alimony support obligations that exceed his current ability to pay. He alleges his current monthly income of $1,220 is insufficient to pay his spousal support obligations, as set by the trial court at $375 per month, increasing to $450 per month when his child support obligation ends. We have already affirmed the trial court's setting of child support based on Richard's earning capacity as opposed to his temporary unemployment income. We then look to the appropriateness of the spousal support award. When determining the appropriateness of alimony, the court must consider "(1) the earning capacity of each party, and (2) present standards of living and ability to pay balanced against the relative needs of the other." In re Marriage of Miller, 524 N.W.2d 442, 445 (Iowa App. 1994); In re Marriage of Estlund, 334 N.W.2d 276, 281 (Iowa App. 1983). Alimony may be used to remedy the inequities in a marriage and to compensate a spouse who leaves the marriage at a financial disadvantage. In re Marriage of Geil, 509 N.W.2d 738, 742 (Iowa 1993).
In determining the appropriate support obligations, the trial court considered several factors. It found Richard's unemployed status was a temporary circumstance. It also found Richard will no longer need to provide health insurance for his wife and, upon new employment, Richard will probably enjoy a reduced health insurance premium for himself and his son than his current COBRA premium. In addition, the trial court found Richard had recently benefited from an inheritance upon the death of his mother, including a home with no outstanding debt against it and $36,000 in cash. Although the court does not include inherited property in the division of assets, it may consider such property as a factor of the parties' circumstances in making an equitable property division and determining spousal support. In re Marriage of Hardy, 539 N.W.2d 729, 732 (Iowa App. 1995); Iowa Code § 598.21(1) (2). Clearly Richard is on better economic footing than Susan, given the benefit of his inheritance. We agree with the trial court, both as to the need for Susan to receive spousal support from Richard and the amount set.
Division of pension. Finally, Richard alleges the trial court's division of the parties' retirement accounts was neither fair nor what the parties had stipulated to prior to trial, that is a 50/50 split of those assets. Iowa courts, however, do not require an equal division or percentage distribution. In re Marriage of Russell, 473 N.W.2d 244, 246 (Iowa App. 1991). The determining factor is what is fair and equitable in each circumstance. Id.
The trial court, in awarding a slightly higher percentage to Susan ( 55.2%), considered the specific circumstances of these parties. In doing so, the court stated:
The parties have stipulated that Susan's IPERS and Richard's 401K account both be awarded to Susan. Additionally, the parties stipulated that Susan be awarded a percentage of Richard's IRA account, the "Mercantile Investment," so that the division of property would be 50-50. Under the circumstances, Susan should also be awarded one-half of Richard's IRA account, the Mercantile Investment. This division will permit Susan some offset for her lack of equity in a motor vehicle, Richard's failure to provide support for approximately three months, and provide Susan some security at the time of retirement.
Richard left the marriage in February 1999 and was ordered to pay temporary child support in the amount of $565 per month, starting in April 1999. However, no child support was actually paid until the mandatory income withholding process began in May 1999. Clearly, the trial court considered the circumstances and economic condition of the parties before slightly reapportioning the IRA account.
In addition, Richard contends the court's property division was not in accordance with the pretrial stipulation agreed to by the parties. "The trial court is not bound by the parties' agreement." In re Marriage of Lovetinsky, 418 N.W.2d 88, 90 (Iowa App. 1987) (citing Messer v. Messer, 238 Iowa 783, 28 N.W.2d 329 (1947)). The trial court was, therefore, well within its bounds to render a fair property division, regardless of the stipulations previously entered into by the parties. Accordingly, we affirm the division of the retirement plans.
Susan requests Richard pay $1,500 toward her appellate attorney fees. An award of appellate attorney fees is not a matter of right, but rests within the court's discretion and the parties' financial positions. In re Marriage of Hansen, 514 N.W.2d 109, 112 (Iowa App. 1994). We are to consider the needs of the party making the request, the ability of the other party to pay, and whether the party making the request was obligated to defend the trial court's decision on appeal. In re Marriage of Castle, 312 N.W.2d 147, 150 (Iowa App. 1981) (citations omitted). We determine Richard shall pay Susan $1,000 for appellate attorney fees. Court costs are assessed to Richard.
Having considered all arguments on appeal before us, we remand for further proceedings consistent with this opinion. We do not retain jurisdiction.