Opinion
No. 4-349 / 03-1882.
June 9, 2004.
Appeal from the Iowa District Court for Scott County, James E. Kelley, Judge.
Appellant Kathy Ann Casey, formerly known as Kathy Ann Jones, appeals an order modifying the child support obligation of Timothy Scott Jones. AFFIRMED.
Marc Gellerman, Bettendorf, for appellant.
Steven Jacobs and Jean Feeney of Betty, Neuman McMahon, L.L.P., Davenport, for appellee.
Considered by Sackett, C.J., and Huitink and Miller, JJ.
Appellant Kathy Ann Casey, formerly known as Kathy Ann Jones, appeals an order modifying the child support obligation of Timothy Scott Jones. Kathy, who has physical care of the parties' daughter, Nicole Jones, who was born on February 1, 1987, contends the district court arrived at an inequitable result. We affirm.
The case was tried in equity. Our review is therefore de novo. Iowa R. App. P. 6.4. We examine the entire record and adjudicate anew rights on the issues properly presented. In re Marriage of White, 537 N.W.2d 744, 746 (Iowa 1995). We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses, but are not bound by them. Iowa R. App. P. 6.14(6)( g); In re Marriage of Gaer, 476 N.W.2d 324, 326 (Iowa 1991). We recognize that the district court "has reasonable discretion in determining whether modification is warranted and that discretion will not be disturbed on appeal unless there is a failure to do equity." In re Marriage of Walters, 575 N.W.2d 739, 741 (Iowa 1998) (quoting In re Marriage of Vetternack, 334 N.W.2d 761, 762 (Iowa 1983)).
On March 13, 2003, Timothy filed the petition seeking modification of his child support obligation which led to this appeal. The matter came on for hearing on September 16, 2003, and on October 14, 2003, the district court filed a decision finding as of July 1, 2003, Timothy's child support was reduced to the amount of fifty dollars a month.
Timothy's child support obligation had been set at $125 a week. On March 26, 2001, while employed as a roofer earning about twenty-five dollars an hour, he injured his back in an alleged work-related injury. He had surgery in March of 2002 and was permanently restricted by his doctor to light work. He took a job paying seven dollars an hour. He filed for workers' compensation benefits, and his claim was contested. In January of 2003 the claim was settled as a compromised settlement. Timothy received the sum of $100,000, which left him with $70,000 after payment of attorney fees. The settlement application computed Timothy's weekly benefit based on Timothy's age and life expectancy at $36.38 a week. In February of 2003 Timothy again injured his back and has not been able to work. He had applied for social security disability benefits, but the matter had not been resolved at the time of the modification hearing. If Timothy does receive the benefits, Nicole, as a minor dependent child, would also receive benefits.
Kathy makes only a general argument that equity was not done. She does not challenge the district court's finding, with which we agree, that Timothy was disabled and unemployed or that the settlement was for a lifetime disability which resulted in a weekly benefit of $36.38. Kathy's argument seems to be that Timothy should have been required to pay her a lump sum of $12,500, which is 100 weeks of child support at $125 a week, representing support for the time until Nicole graduates from high school. Kathy contends the district court did not do equity in refusing this request. In support of her claim she relies solely on the case of In re Marriage of Swan, 526 N.W.2d 320 (Iowa 1995).
A court may modify an order of child support when a "substantial change in circumstances" has been shown to exist. Walters, 575 N.W.2d at 741. One of the factors which the court is to consider is, "Changes in the employment, earning capacity, income or resources of a party." Iowa Code § 598.21(8)(a) (2003). This was the factor relied on by Timothy in seeking a reduction in his child support obligation. As the party seeking the modification, he had to prove the change in circumstances by a preponderance of the evidence. Walters, 575 N.W.2d at 741; In re Marriage of Feustel, 467 N.W.2d 261, 263 (Iowa 1991). We agree with the district court that he met the burden of proving his income has substantially decreased, and he is no longer able to pay child support of $125 a week. Kathy has not challenged the district court's finding that Timothy's current income is $36.38 a week, or $1,891.76 a year. In applying the child support guidelines to that amount his child support should be $50 a month. Iowa Ct. R. 9.12.
The Iowa Child Support Guidelines are to be strictly followed unless applying the guidelines leads to an unjust or inappropriate result. State ex rel. Reaves v. Kappmeyer, 514 N.W.2d 101, 104 (Iowa 1994). Having determined the amount of support owed under the guidelines is $50 a month, we need next determine whether an adjustment to increase Timothy's child support to $125 a week is warranted. The guideline amount may be adjusted upward or downward if the court finds an adjustment necessary to provide for the needs of the child. In re Marriage of Beecher, 582 N.W.2d 510, 513 (Iowa 1998).
In arguing that Timothy should pay $125 a week, Kathy focuses on Timothy's lump sum payment and the fact he paid bills out of it. Workers' compensation benefits are directly related to the worker's former earnings and his or her ability to earn income in the future. See Deaver v. Armstrong Rubber Co., 170 N.W.2d 455, 466 (Iowa 1969). Ordinarily, compensation is awarded for incapacity to earn or industrial disability and not for the injury. Id. In Swan, 526 N.W.2d at 325, the court addressed the question of whether a parent's lump sum workers' compensation benefit should be considered income for purposes of applying the child support guidelines in the year it was paid, or whether it should be considered income in the weeks for which the benefits were paid. The court wisely refused to adopt one rule to be applied in all cases, holding the appropriate treatment of a lump-sum payment of workers' compensation benefits depends on the circumstances of each case. Swan, 526 N.W.2d at 325. However, in Swan they did consider the parent's lump sum award as income apportioned over the weeks for which it was paid. Id. at 325-26.
While Kathy relies exclusively on Swan, 526 N.W.2d at 326, she does not argue that the total lump sum payment should be considered income for child support purposes in the year it was received, and she has failed to provide us with any computation of what Timothy's child support would have been in the year 2003 if his income in that year had been $70,000. That said, we find no reason to depart from the district court's decision to apportion the lump sum award over Timothy's lifetime. In arriving at this decision, we have considered that it was apportioned for a permanent disability; Timothy's income has been substantially reduced; if he receives social security disability benefits, Nicole, as a minor, will also receive benefits; and Timothy paid $5,900 in back support from the settlement proceeds.
We recognize there are times when a court can impose a trust on the proceeds from a lump sum workers' compensation settlement to provide a fund for payment of future child support. See Iowa Code § 598.21(1) (providing that the court may set aside part of a parent's property in a separate fund to be used for the support of the children). Kathy does not specifically ask that a trust be established. She seems to contend the money should have been paid to her immediately. Yet she cites no authority to support such an order, nor do we find such an order justified. We are mindful that child support is payable as it accrues, and circumstances such as a change in custody or the death of a child can terminate an obligation at any time.
We do not believe a trust is justified under the circumstances here. Using the reduced support obligation, Timothy would owe less than $1,200 for future child support. Timothy was injured in 2001 and received the settlement about two years later, in January of 2003. At the time he was less than a year behind in his child support which would support a finding that Timothy generally paid it except for the period following his injury. His payments are reduced to a level consistent with his current financial situation. Further, if he receives disability income, Nicole should benefit from that. We affirm the district court. We award no appellate attorney fees. Costs on appeal are taxed to Kathy.