Court Opinion

ID: 4249820
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:21:21.911981+00
Date Added: 2024-06-11T14:44:09.126347
License: Public Domain

IN THE SUPREME COURT OF IOWA
                             No. 08–1326

                         Filed April 30, 2010

IN RE THE MARRIAGE OF PAMELA S. JOHNSON
AND DAVID L. JOHNSON

Upon the Petition of
PAMELA S. JOHNSON n/k/a PAMELA S. WOBBEKING,

     Appellee,

And Concerning
DAVID L. JOHNSON,

     Appellant.

     On review from the Iowa Court of Appeals.

     Appeal from the Iowa District Court for Polk County, John D. Lloyd

(summary judgment) and Karen A. Romano (trial), Judges.

     A spouse requests further review of a court of appeals decision

affirming a district court’s decision not to modify medical support
payable to his former spouse.   DECISION OF COURT OF APPEALS

VACATED, JUDGMENT OF DISTRICT COURT AFFIRMED IN PART

AND REVERSED IN PART, AND CASE REMANDED TO DISTRICT

COURT WITH DIRECTIONS.

     Robert A. Nading II of Nading Law Firm, Ankeny, for appellant.

     Susan L. Ekstrom, Des Moines, for appellee.
                                     2

WIGGINS, Justice.

      In this appeal, we must decide if medical support, in the form of

health insurance payments, constitutes modifiable spousal support or is

part of the unmodifiable property settlement. Because we find medical

support constitutes spousal support payments and is modifiable, we

vacate the court of appeals’ decision and reverse that part of the district

court’s judgment holding otherwise. Additionally, we affirm the district

court’s denial of attorney fees. Accordingly, we remand the case to the

district court to enter a judgment consistent with this decision.

      I. Standard of Review.

      Our review of a decision in a proceeding to modify the terms of a

marriage dissolution decree is de novo.     In re Marriage of Barker, 600

N.W.2d 321, 323 (Iowa 1999).

      II. Background Facts and Proceedings.

      On our de novo review, we find the facts as follows.          In 1989

Pamela and David Johnson were married in Las Vegas, Nevada.             On

January 30, 2004, the district court dissolved the parties’ marriage in a

document entitled “Joint Stipulation and Decree of Dissolution of

Marriage.” The dissolution decree provided:

      Health and dental insurance coverage. David is presently
      providing medical and dental coverage for Pamela, and David
      shall be required to pay to Pamela up to $300 per month for
      health insurance after entry of the Decree. If the cost to
      Pamela is less than $300, David shall only be required to pay
      the lessor cost of the insurance.

      Both parties complied with the dissolution decree, and David

consistently met his medical support obligations under the decree. After

the dissolution, Pamela remained on David’s employer-based COBRA

health insurance policy, for which he paid through a payroll deduction.
                                     3

Initially, the cost of keeping Pamela on David’s plan was approximately

$240 a month; however, this cost eventually increased to approximately

$298 a month.

        In December 2006 Pamela became engaged to Bill Wobbeking.

During the engagement, Pamela put her home up for sale and it

unexpectedly sold in one week. Thus, in June 2007 Pamela moved into

Bill’s house and began to cohabitate with him. At about the same time,

Pamela also reduced her work hours to approximately twenty hours a

week.

        Upon learning of Pamela’s cohabitation with Bill, David filed an

application to modify the dissolution decree on October 17, 2007,

alleging that there had been a substantial and material change in

circumstances, which warranted a modification of the medical support

provision of the decree.

        On January 8, 2008, Pamela married Bill. Prior to being married,

the couple entered into a prenuptial agreement.       After the marriage,

Pamela notified David that he could remove her from his health

insurance policy because, effective February 1, 2008, she would begin to

receive health and dental insurance through her current husband, Bill.

David removed Pamela from his health insurance policy, and from that

point on, David simply reimbursed Pamela for her medical expenses by

sending her a monthly check for approximately $300. At trial, Pamela

claimed she reimbursed her current husband for the medical coverage he

provided her by writing him monthly checks and/or depositing the $300

checks she received from David into a joint bank account.

        David filed a motion for summary judgment alleging, as a matter of

law, the court should terminate the payments due to Pamela’s
                                     4

remarriage, improved financial status, and lack of need for the payments.

The district court overruled David’s motion for summary judgment.

      The case proceeded to trial on the issue of whether the medical

support payments constituted an unmodifiable property division or

modifiable spousal support.      The district court found the decree’s

language was clear, and the medical support was separate and distinct

from spousal support. Thus, the court concluded the medical support

payments were “more akin to part of the property settlement” and treated

them in that fashion.    Accordingly, the court held the payments were

unmodifiable and ordered David to continue to pay Pamela $300 a

month for her medical expenses. The court filed its final ruling with the

clerk of court on August 1, 2008.

      David filed a notice of appeal from the district court’s rulings.

Pamela filed a notice of cross-appeal due to the district court’s failure to

award her attorney fees and costs. We transferred the case to the court

of appeals.   The court of appeals affirmed the decision of the district

court and held that “the health and dental insurance coverage provision

was in the nature of a property division, which is not subject to

modification.”   The court of appeals also affirmed the district court’s

failure to award Pamela her attorney fees.           David then filed an

application for further review, which we granted.

      III. Issues.

      In this appeal, we must decide whether the medical support

payments are modifiable and whether the court was correct in not

awarding Pamela attorney fees.

      IV. Analysis.

      A. Summary Judgment Claim. David argues the court erred in

failing to grant his motion for summary judgment.        We have said on
                                               5

numerous occasions that the district court’s denial of a motion for

summary judgment is not appealable if the case proceeded to a trial on

the merits. Lindsay v. Cottingham & Butler Ins. Servs., Inc., 763 N.W.2d

568, 572 (Iowa 2009); Kiesau v. Bantz, 686 N.W.2d 164, 174 (Iowa 2004);

Klooster v. N. Iowa State Bank, 404 N.W.2d 564, 567 (Iowa 1987). The

previous denial of a motion for summary judgment merges with the

subsequent trial on the merits when the trier of fact has fully reviewed

the exhibits and listened to the testimony of the witnesses. Kiesau, 686

N.W.2d at 174. Thus, on an appeal from a final judgment following a

trial, the trial court’s final judgment supersedes a prior order denying a

motion for summary judgment.                       Klooster, 404 N.W.2d at 567.

Consequently, we decline to consider David’s assignments of error

relating to the summary judgment stage of this litigation and instead

consider only the assignments of error that relate to the district court’s

final ruling on the application to modify.

        B.      Whether the Medical Support Payments Were a Property

Settlement or Spousal Support.                     The court entered its dissolution

decree in 2004; therefore, the 2003 Iowa Code controls the outcome of

this issue. 1 At the time of the decree, the legislature authorized property

settlements and spousal support awards in section 598.21 of the Code.

Iowa     Code       §   598.21(1),     (3)   (2003).       Property     settlements      are

unmodifiable. Id. § 598.21(11). Spousal support awards are modifiable

upon a showing of a substantial change of circumstances.                                 Id.

§ 598.21(8).         Thus, if the medical support payments are part of a

property settlement, the district court was correct in holding it did not

have the authority to modify those payments. On the other hand, if the

        1All   references to the Iowa Code in this section of our opinion will be to the 2003
Code.
                                    6

medical support payments are spousal support, the district court had

the authority to modify those payments.

      Iowa Code section 598.21(1) authorizes the court to divide the

parties’ property in a dissolution action. Id. § 598.21(1). The legislature

did not define the term “property” in chapter 598. When the legislature

fails to define a term and its meaning is not established in the law, we

give the term its ordinary and common meaning by considering the

context in which the term was used. City of Des Moines v. Employment

Appeal Bd., 722 N.W.2d 183, 196 (Iowa 2006). The dictionary defines

“property” as:

      2 a : something that is or may be owned or possessed . . .
      b : the exclusive right to possess, enjoy, and dispose of a
      thing : a valuable right or interest primarily a source or
      element of wealth . . . c : something to which a person has a
      legal title.

Webster’s Third New Int’l Dictionary 1818 (unabr. ed. 2002). The purpose

of a property settlement in a dissolution action is to award each party a
just and equitable share of the property accumulated during their

marriage. In re Marriage of Hitchcock, 309 N.W.2d 432, 437 (Iowa 1981).

      Iowa Code section 598.21(3) authorizes the court in a dissolution

action to award support payments to either party.              Iowa Code

§ 598.21(3). The legislature has defined “support” or “support payments”

in chapter 598. Id. § 598.1(9). The Code provides:

      “Support” or “support payments” means an amount which the
      court may require either of the parties to pay under a
      temporary order or a final judgment or decree, and may
      include alimony, child support, maintenance, and any other
      term used to describe these obligations. For orders entered
      on or after July 1, 1990, unless the court specifically orders
      otherwise, medical support is not included in the monetary
      amount of child support.

Id.
                                     7

      From this statutory scheme, it is clear the legislature intended an

award requiring a spouse to pay a monthly payment to the other spouse

for health insurance to be spousal support rather than part of a property

settlement. The purpose of the medical support payments David made to

Pamela was to preserve part of the health insurance David maintained

for Pamela during the marriage. Pamela was entitled to these payments

for future health care expenses, not as a payment for the division of an

asset she and David owned, possessed, or accumulated during their

marriage.

      The legislature’s definition of “support” or “support payment”

includes “maintenance, and any other term used to describe these

obligations.” Id. Moreover, in defining “support” or “support payment,”

the legislature makes specific reference to “medical support,” indicating it

is a form of support. Id. This reference indicates a legislative intent to

include medical support as a form of support.

      Finally, Pamela argues the district court awarded her medical

support because of a disparate property settlement.      Thus, she claims

the medical support is really part of a property settlement and is

unmodifiable. We disagree.

      Pamela’s argument fails to consider the statutory scheme the

legislature enacted concerning an award of spousal support. One factor

a court takes into consideration when awarding spousal support is the

property settlement made by the court under section 598.21(1).           Id.

§ 598.21(3)(c).   The court’s consideration of a disparate property

settlement when awarding additional support to a spouse does not

change the fact that the additional support awarded is a spousal support

award. If we were to hold otherwise, the property settlement no longer

would merely be a circumstance to be used by the court in determining
                                           8

whether to award spousal support and/or determine the amount of a

spousal support award.            Rather, the property settlement would be

determinative as to whether a spousal support award is in fact a property

settlement. Just because a court applies the law as envisioned under

section 598.21(3)(c) and makes a spousal support award based upon a

disparate property settlement, the court does not transform the spousal

support award into a property settlement.              Any other interpretation of

section 598.21(3)(c) is contrary to the statutory scheme and the intent of

the legislature.

       Therefore, we conclude as a matter of law that a provision in a

dissolution decree requiring one spouse to provide medical support in the

form of health insurance payments to the other spouse is modifiable

spousal support under Iowa Code section 598.21(3).

       C.     Whether the District Court Erred When It Failed to

Terminate the Medical Support on Pamela’s Remarriage. David filed

his modification action in 2007; therefore, the 2007 Iowa Code controls

the outcome of this issue. 2          At the time David filed his action, the

legislature authorized the modification of support awards when there has

been a substantial change in circumstances.                Id. § 598.21C(1) (2007).
When determining whether there has been a substantial change in

circumstances justifying a modification, a court must consider, among

other factors, changes in the resources of a party, changes in the

residence of a party, remarriage of a party, and the possible support of a

party by another person. Id. § 598.21C(1)(a), (f), (g), (h). The burden is

on the person seeking the modification to prove a substantial change in

        2All references to the Iowa Code in the remaining sections of our opinion will be

to the 2007 Code.
                                       9

circumstances by a preponderance of the evidence.              In re Marriage of

Wessels, 542 N.W.2d 486, 489–90 (Iowa 1995).

      David claims Pamela’s remarriage was a substantial change in

circumstances. In the area of alimony, we have held that a subsequent

remarriage does not automatically end an alimony obligation; instead, it

shifts the burden to the recipient spouse to show extraordinary

circumstances justifying the continuation of the alimony payments. In re

Marriage of Shima, 360 N.W.2d 827, 828 (Iowa 1985). The rationale for

this rule is that it is illogical and unreasonable for a person to receive

support by way of alimony from a former spouse and an equivalent

obligation   from   the    present   spouse   at   the   same     time,   unless

extraordinary circumstances exist. Id.

      The legislature requires a spouse to be liable for the “reasonable

and necessary expenses of the family.” Iowa Code § 597.14. We have

interpreted this section to mean that a spouse is responsible for the

payment of the other spouse’s medical and hospital expenses incurred

during the marriage. St. Luke’s Med. Ctr. v. Rosengartner, 231 N.W.2d

601, 602 (Iowa 1975). Thus, as with alimony, upon remarriage the prior

spouse and the current spouse are responsible for an equivalent medical

support obligation.       Just as with alimony, the requirement of two

persons being responsible for the same obligation is illogical and

unreasonable.       Accordingly,     the   same    rationale    supporting   the

termination of alimony upon the recipient spouse’s remarriage is equally

applicable to the termination of medical support.                  Therefore, a

subsequent remarriage does not automatically terminate a medical

support obligation; instead, it shifts the burden to the recipient spouse to

show extraordinary circumstances justifying its continuation.
                                      10

      Recognized     extraordinary     circumstances     include:   (1)    the

annulment or invalidity of the second marriage, (2) the inability of the

subsequent spouse to furnish support, (3) the death of the subsequent

spouse, or (4) the dissolution of the subsequent marriage. Shima, 360

N.W.2d at 829. These circumstances conform to the underlying rationale

that it is illogical and unreasonable for a person to receive equivalent

obligations of support from two persons at the same time. In re Marriage

of Wendell, 581 N.W.2d 197, 200 (Iowa Ct. App. 1998).

      Upon    her   remarriage,   Pamela     had   the   burden     to    show

extraordinary circumstances warranted her continued receipt of medical

support payments from David.         Pamela has failed to prove any of the

extraordinary circumstances recognized by our courts.               Pamela’s

marriage to Bill has not been annulled or found invalid. Bill has not died

and neither party has petitioned for a dissolution of marriage. Moreover,

Bill is clearly able, and in fact, is currently furnishing medical support to

Pamela.    At the modification trial, Bill admitted that his current net

worth is approximately $1.5 million. In addition, since February 2008

Pamela has received health and dental insurance through Bill’s health

insurance policy.      Thus, Pamela’s failure to show extraordinary

circumstances after her remarriage warrants the termination of David’s

obligation to provide medical support payments to Pamela.

      D.     Effective Termination Date of the Medical Support

Payments.    David argues the court should retroactively terminate the

medical support payments on one of the following dates: (1) the date

Pamela and Bill began to cohabitate, (2) the date Pamela remarried,

(3) the date Pamela began to receive health benefits at allegedly no cost

from Bill, or (4) at the very least, the date the trial court denied David’s

motion for summary judgment.
                                      11

      The Code allows a child support obligation to be retroactively

modified only from three months after the date the opposing party

received notice of the modification petition.    Iowa Code § 598.21C(4).

There is no corresponding provision in the Code dealing with the

retroactive modification of spousal support awards. Our courts have no

authority to retroactively decrease a spousal support award to the date of

the filing of the application for modification unless and until the

legislature gives the courts the authority to do so.     In re Marriage of

Shepherd, 429 N.W.2d 145, 146 (Iowa 1988); In re Marriage of Harvey,

393 N.W.2d 312, 314 (Iowa 1986); Delbridge v. Sears, 179 Iowa 526,

536–37, 160 N.W. 218, 222 (1916). This rule is based on the premise

that each installment payment of a spousal support award in the original

decree becomes a binding final judgment when it comes due and cannot

be decreased until a subsequent judgment is entered decreasing the

original award. See Shepherd, 429 N.W.2d at 146; Walters v. Walters,

231 Iowa 1267, 1270, 3 N.W.2d 595, 596 (1942). This rule is true even

though a change of circumstances may have occurred prior to the entry

of the modification decree. Shepherd, 429 N.W.2d at 146; Walters, 231

Iowa at 1270, 3 N.W.2d at 596.         Consequently, we have refused to

retroactively   terminate   spousal   support   awards   upon   a   party’s

remarriage; instead, we have consistently terminated spousal support

payments prospectively, from the date the trial court issued its

modification ruling. See, e.g., In re Marriage of Harvey, 466 N.W.2d 916,

918–19 (Iowa 1991) (holding alimony should terminate as of the date of

the modification decree); Harvey, 393 N.W.2d at 314 (recognizing a trial

court cannot terminate alimony payments which accrue prior to the date

the modification order was entered); In re Marriage of Bonnette, 431

N.W.2d 1, 5 (Iowa Ct. App. 1988) (holding the trial court acted properly
                                     12

when it terminated alimony payments prospectively from the date of the

filing of its opinion).   Therefore, we can only terminate the medical

support award from the date the district court entered its decree.

      A district court’s modification decree is effective when the court

files it with the clerk of court. Iowa R. Civ. P. 1.453. The district court

filed its final ruling with the clerk of court on August 1, 2008.        Our

decision reversing the district court “is also effective as of the date of the

trial court’s entry of the modification decree.” In re Marriage of Schradle,

462 N.W.2d 705, 708 (Iowa Ct. App. 1990).           Therefore, our decision

reversing the district court is effective as of August 1, 2008.

      If David has paid any medical support after August 1, 2008, we

order Pamela to repay said support to David.         Pamela shall also pay

interest as provided by law on any repayment because each installment

payment of a spousal support award becomes a binding final judgment

when it becomes due.      See Schwennen v. Abell, 471 N.W.2d 880, 884

(Iowa 1991) (stating, “ ‘If payment has been made to the judgment

creditor or to his agent, or to an officer who has paid the judgment

creditor, upon reversal of the judgment the payor is entitled to receive

from the creditor the amount thus paid with interest.’ ” (quoting

Restatement of Restitution § 74 cmt. d (1937))).

      E.   Attorney Fees.     Pamela cross-appealed claiming the district

court should have awarded her attorney fees. This opinion reverses the

district court’s judgment holding the medical support payments due

Pamela are unmodifiable. Therefore, Pamela is not a prevailing party in

this litigation. The Code only allows our courts to award attorney fees to

the prevailing party in a proceeding seeking modification of a decree.

Iowa Code § 598.36. Accordingly, we affirm the district court’s decision

not to award Pamela attorney fees.
                                   13

      V. Disposition.

      We vacate the court of appeals’ decision and reverse that part of

the district court’s judgment holding medical support was part of a

property settlement and unmodifiable.     We affirm the district court’s

ruling not to award Pamela attorney fees. Accordingly, we remand this

case to the district court to enter a judgment terminating David’s medical

support obligation effective August 1, 2008, and order Pamela to repay

any medical support paid by David after August 1, 2008, with interest as

provided by law.

      DECISION OF COURT OF APPEALS VACATED, JUDGMENT OF

DISTRICT COURT AFFIRMED IN PART AND REVERSED IN PART,

AND CASE REMANDED TO DISTRICT COURT WITH DIRECTIONS.