Court Opinion

ID: 4249594
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:19:45.200593+00
Date Added: 2024-06-11T13:56:38.769805
License: Public Domain

IN THE SUPREME COURT OF IOWA
                                 No. 11–0325

                           Filed April 27, 2012

IN RE THE MARRIAGE OF ARLEEN
MARIE VAUGHAN AND PHILIP
JAMES VAUGHAN,

Upon the Petition of
ARLEEN MARIE WHITE-VAUGHAN,

      Appellee,

And Concerning,
PHILIP JAMES VAUGHAN,

      Appellant.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Dubuque County,

Michael J. Shubatt, Judge.

      On further review, appellant asserts the district court and court of

appeals erred in awarding the statutory maximum postsecondary
education subsidy under Iowa Code section 598.21F (2011). DECISION

OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT

AFFIRMED AS MODIFIED.

      Jeffrey E. Clements, West Union, for appellant.

      Jennifer A. Clemens-Conlon of Clemens, Walters, Conlon & Meyer,

L.L.P., Dubuque, for appellee.
                                      2

APPEL, Justice.

        In this family law case, we are asked to determine whether good

cause exists for ordering a parent to pay a postsecondary education

subsidy pursuant to Iowa Code section 598.21F (2011) and, if so, in what

amount.     The district court ordered both parents to pay the statutory

maximum of one-third of the remaining cost of the child’s college

education at Iowa State University. The father appealed. The court of

appeals, over a dissent, affirmed the district court. We granted further

review. We affirm the determination that good cause exists for payment

of a modest postsecondary education subsidy, but reduce the amount

awarded by the district court.

        I. Factual and Procedural Background.

        Philip Vaughan and Arleen Wentworth (formerly Arleen White-

Vaughan) were married in 1990 but separated the following year.          In

early 1992, Arleen gave birth to the couple’s only child, Allison.      The

parties divorced. The divorce decree awarded custody of Allison to Arleen

and required Philip to pay child support of $282 per month. The decree

ordered Philip to continue paying child support until Allison turned

twenty-two if Allison “continues a course of higher education under

Section 598.1(2), Code of Iowa 1991.” The decree was later modified to

raise Philip’s child support obligation to $480 per month.

        Arleen subsequently remarried. Arleen’s second husband was the

general manager of Dubuque Greyhound Park until his retirement in

2008.     Philip also remarried.   Philip and his second wife had three

children but were subsequently divorced as well.

        Philip initiated the present proceeding, asserting that because of a

change in law, his child support obligation terminated when Allison

reached eighteen. Arleen answered and filed a cross-petition, asking that
                                    3

Philip be required to pay the statutory maximum of postsecondary

education subsidy under Iowa Code section 598.21F.

      At trial, the parties stipulated that under current law, Philip was

no longer required to pay child support. Further, Arleen stipulated that

she would provide the maximum postsecondary education subsidy to

Allison. As a result, the litigation focused on whether the court should

order Philip to also pay a postsecondary education subsidy and, if so, in

what amount.

      Most of the testimony offered at trial related to the question of

whether Allison had repudiated her father which, if true, would relieve

Philip of any postsecondary education obligation.         See Iowa Code

§ 598.21F(4).

      Evidence related to the financial status of Arleen and Philip was

presented mostly in the form of stipulated exhibits.         When Philip

attempted at trial to inquire further into the financial status of Arleen,

Arleen objected on the ground that because she agreed to pay the

maximum allowable subsidy, further exploration of her financial status

was irrelevant. The objection was sustained, and the evidentiary issue

has not been challenged on this appeal.

      Nonetheless, the evidence established that Arleen, along with her

husband, lives debt free in a $200,000 home. Arleen and her husband

have a joint investment account, the balance of which exceeds $100,000.

In addition, Arleen and her husband have approximately $200,000 in

various bank accounts.     Arleen has no car loan or credit card debt.

Arleen earns $28,000 annually.     The record did not establish Arleen’s

husband’s retirement income.

      With respect to Philip, the record established that he is required to

pay his second wife $750 per month for child support. In addition to
                                    4

child support payments, Philip pays $702 per month for his primary

mortgage.   Philip spends an additional $664 each month on a second

mortgage, which financed, among other things, his two vehicles, a 1987

Harley Davidson motorcycle worth $9000 and a 2005 Chevrolet pickup

valued at $14,000.    Philip has $17,000 in credit card debt, which

requires him to spend $380 each month. About $7000 of this debt was

related to home improvements.    One hundred dollars is also deducted

from Philip’s paychecks each month for health insurance.        Further,

Philip reports that he spends $500 each month on utilities and phone

services, $25 each month for clothing, $300 each month for food and

meals, and $260 each month for transportation and car expenses.

Philip’s documented monthly expenses total $3681.

      Philip works at Kregel Farms in Garnavillo, Iowa. In 2009, Philip’s

gross income was approximately $56,600.      About $11,400 is deducted

from Philip’s income each year for taxes, leaving an after tax income of

$45,200. Thus, Philip is left with $3767 each month to pay his monthly

expenses. Based on Philip’s financial disclosures, his cash flow is thus

$86 per month.

      Philip has some equity in his home, which is worth about

$120,000, but his home equity is offset by his credit card debt. Philip’s

net worth is approximately $8500.

      The record further established that at age eighteen, Allison

enrolled at Iowa State University. The evidence established that the cost

of educating Allison at ISU was $22,822 per year, which includes

summer classes. Although she applied for financial assistance, Allison

did not receive any scholarship money to pay for her college education

although the testimony indicated that Allison received a form indicating

that she could borrow money in an unspecified amount. Allison works
                                     5

part-time at JC Penney in Dubuque about once a month and during

breaks. Allison earned a 3.42 GPA during her first semester at ISU.

      Applying Iowa Code section 598.21F, the district court held good

cause existed to order postsecondary education subsidies. The district

court reasoned Allison’s age and proven ability to succeed in college

supported ordering a postsecondary education subsidy.          The district

court also noted that Allison was unable to support herself, despite her

industriousness, and that both Philip and Arleen were capable of

contributing toward Allison’s postsecondary education.

      Having determined that good cause existed for a postsecondary

education subsidy, the district court then turned to the amount of

subsidy to be paid by each parent. The district court determined that

Allison could contribute $5000 each year to her education. Thus, the

total education costs minus Allison’s contribution equaled $17,822. The

district court ordered Philip and Arleen to pay the statutorily prescribed

maximum amount of one-third of the total cost of education, which came

to $7607.33 annually or $633.94 monthly. The district court asserted

that, although Arleen’s financial condition was better than Philip’s, Philip

did own a motorcycle that required monthly payments. The district court

concluded that “Philip’s legal obligation under Iowa Code Section

598.21F [was] superior to [Philip’s] desire to have a motorcycle in

addition to his regular transportation.”    The district court denied any

award of attorney fees. Philip appealed.

      The court of appeals affirmed. The court of appeals agreed with

the district court’s analysis relating to the showing of good cause. The

court also affirmed the district court’s holding requiring Philip to pay

$633.94 per month. The court of appeals explained that Philip has “a

good income” and should therefore bear his proportional expenses of
                                    6

assisting Allison with her college education.      The court of appeals

assessed costs one-half to each party.    Philip filed an application for

further review, which we granted.

      II. Standard of Review.

      We review this equitable action de novo. In re Marriage of Neff, 675
N.W.2d 573, 577 (Iowa 2004).

      III. Discussion.

      A.   Evolution of Postsecondary Education Subsidies in Iowa.

The question of whether parents were obligated to pay for the cost of

postsecondary education as part of their child support obligations arising

from divorce produced a division of authority among state courts. Some

held that the child support obligation did not include postsecondary

education.   See, e.g., Morris v. Morris, 171 N.E. 386, 387 (Ind. App.

1930); Middlebury Coll. v. Chandler, 16 Vt. 683 (1844). Others, noting

the importance of a college education, extended the child support

obligation to include support for postsecondary education.      See, e.g.,

Esteb v. Esteb, 244 P. 264, 267–68 (Wash. 1926).

      In Gerk v. Gerk, 259 Iowa 293, 144 N.W.2d 104 (1966), this court

held that a divorced parent may be required to pay for his or her child’s

postsecondary education as part of his or her support obligation in

certain cases. We stated:

             What education, if any, should be classed as necessary
      for the parent’s child must generally be determined in a
      proper case from all the facts and circumstances,
      consideration being given not only to the station of the minor
      in society but also to the progress of society and the
      attendant requirements on the citizen of today. Although
      earlier authorities have been considered to support a
      contrary view, the trend of recent authority is to the effect
      that under modern conditions and in proper cases,
      education beyond that provided in the common schools may
      be a necessary which a parent is obliged to provide for his
      child, and that a parent able to do so may be required to
                                     7
      bear the expense of a college education for a child evincing
      an aptitude therefor.

Gerk, 259 Iowa at 300, 144 N.W.2d at 109 (citation and internal
quotation marks omitted). We observed that the facts of each case are

important and factors to be considered include: “the financial condition

of the parent, the ability of the minor for college work, the age of the

minor, whether the child is self sustaining or not, [and] the father’s

willingness to provide an education.” Id.; see also Scott A. Hall, Note, In

the Best Interests of the Child and the State: A Call for Expansion of

Iowa’s Postsecondary Education Subsidy Law, 57 Drake L. Rev. 235,

243–44 (2008) (discussing Gerk).

      Cases following Gerk applied the multi-factored approach and

considered the financial condition of the parent in determining the

amount of education subsidy to be awarded. In Sandler v. Sandler, 165
N.W.2d 799, 802 (Iowa 1969), we explained, “It is the duty and

responsibility of both parents to furnish financial assistance for higher

education in such an amount as their financial condition will permit.”

See also Beasley v. Beasley, 159 N.W.2d 449, 452 (Iowa 1968) (financial

condition of parent relevant to determine amount of education subsidy).

      When the age of majority lowered to eighteen, however, the

question   arose   whether   the   obligation   to   provide   postsecondary

education support survived the change in law.         See Kathleen Conrey

Horan, Postminority Support for College Education—A Legally Enforceable

Obligation in Divorce Proceedings?, 20 Fam. L.Q. 589, 590–91 (1987).

The general assembly responded by amending the definition of “support”

in Iowa Code section 598.1 (1973).       1972 Iowa Acts ch. 1027, § 48

(codified at Iowa Code § 598.1(2) (1973)). As defined in the 1973 Code,

“support” included obligations for a child who was “in good faith, a full-
                                          8

time student in a college, university, or area school; or has been accepted

for admission to a college, university, or area school and the next regular

term has not yet begun.”           Iowa Code § 598.1(2) (1973).            The 1972

amendment reflected Gerk and its progeny in that divorced parents were

required to pay for their children’s postsecondary education in the form

of child support. In In re Marriage of Vrban, 293 N.W.2d 198, 202 (Iowa

1980), this court upheld the constitutionality of the 1972 amendment,

noting that “even well-intentioned parents, when deprived of the custody

of their children, sometimes react by refusing to support them as they

would if the family unit had been preserved.”

      In 1997, the general assembly took a new approach which

restricted and limited the postsecondary education obligation of parents.

The general assembly excluded postsecondary education support from

the definition of “support” in the Iowa Code and promulgated a new

section dealing with what it termed a “postsecondary education subsidy.”

1997 Iowa Acts ch. 175, §§ 185, 190 (codified at Iowa Code §§ 598.1(8),

.21(5A) (Supp. 1997)).         The 1997 legislation provides the current

statutory basis for requiring divorced parents to provide funds for a

child’s postsecondary education.

      B.    Framework Established by Iowa Code Section 598.21F.

Under the legislature’s new framework, a child must first qualify for a

postsecondary education subsidy. In order to qualify, the child must be

between the ages of eighteen and twenty-two and must have a

demonstrated capacity to succeed in postsecondary education. See Iowa

Code §§ 598.1(8), .21F (2011).

      If   the   child   is   eligible,   the   district   court   “may”    order    a

postsecondary education subsidy if “good cause” is shown.                           Id.
                                     9

§ 598.21F(1).   Iowa Code section 598.21F(2) provides the criteria for

making a good cause determination. The section states:

      In determining whether good cause exists for ordering a
      postsecondary education subsidy, the court shall consider
      the age of the child, the ability of the child relative to
      postsecondary education, the child’s financial resources,
      whether the child is self-sustaining, and the financial
      condition of each parent.

Id. § 598.21F(2).

      Upon a showing of good cause, the Code provides a process for

determining the amount of subsidy. First, the court determines the cost

of postsecondary education based upon “the cost of attending an in-state

public institution for a course of instruction leading to an undergraduate

degree.” Id. § 598.21F(2)(a). Next, the court is to determine the amount,

if any, the child may reasonably be expected to contribute, considering

the child’s financial resources, the availability of financial aid such as

scholarships, grants, or student loans, and the ability of the child to earn

income while attending school. Id. § 598.21F(2)(b). Third, the court is to

deduct the child’s expected contribution from the cost of postsecondary

education to arrive at a figure for the “remaining cost” of the

postsecondary education. Id. § 598.21F(c).

      Once the remaining cost has been determined, the statute directs

the court to apportion the responsibility of the remaining cost to each

parent. Id. The statute, however, explicitly caps the amount apportioned

to each parent to no more than thirty-three and one-third percent of the

total cost of the child’s postsecondary education at a state institution.

Id.

      C. Caselaw Under Iowa Code Chapter 598.21F. We have been

called upon to interpret Iowa Code chapter 598.21F on several occasions.

Two cases are particularly germane to the issues raised in this appeal.
                                    10

      In In re Marriage of Longman, 619 N.W.2d 369, 369 (Iowa 2000), we

considered whether a parent’s financial condition was sufficient to

support a twenty-percent allocation of the remaining costs of education

of two children.   The father noted that the mother in this case had

monthly after tax income of $1400 plus a child support payment of $374

per month.   Longman, 619 N.W.2d at 370.        The father also noted the

mother’s monthly expenses totaled $1416, thereby resulting in a positive

cash flow of $358 per month. Id. Accepting this cash flow figure, we

noted that the mother was required to pay for expenses including

clothing, home maintenance, auto maintenance and repair, and medical

bill copayments.   Id. at 370–71.     We concluded that such financial

resources were insufficient to justify imposition upon her of any college

expenses incurred by the children. Id. at 371. Among other things, we

emphasized that a parent is not required to make the same amount of

parental sacrifice toward assisting in the college education of a child as

in providing subsistence support for minor children. Id.

      We also considered whether a person of limited means should be

ordered to provide a postsecondary education subsidy in Neff.           The

father, Robert, who had remarried and shared living expenses with an

employed wife, had disposable income of $12,497 with his only assets

being a 1989 Chevrolet truck with 174,000 miles, a bank account of

$130, and furniture worth $50. Neff, 675 N.W.2d at 579. We concluded

under the facts that there was good cause to impose a “modest”

postsecondary education subsidy on each parent. Id. We stated:

      We cannot construe the statute to require these particular
      parents to pay more than a modest share, even if it means
      the children will not have sufficient funds to complete college
      in the traditional four years or without working or borrowing.
                                     11

Id. Based on the evidence in the record, we concluded Robert should pay

a postsecondary education subsidy in the amount of $300 per year. Id.

at 580.

      In Neff, it is not entirely clear whether “good cause” or the

subsequent    “apportion[ment]   .   .    .   for   the   remaining   cost”    is

circumscribed by a parent’s financial ability. The “good cause” provision

allows consideration of a parent’s financial condition as one of the

criteria in making the determination, but the statute does not expressly

provide for a finding of good cause for only a modest subsidy. See Iowa

Code § 598.21F(2).     Once good cause has been found, the statute

provides that the court “shall apportion” the educational costs remaining

after subtracting the expected contribution of the student.                   Id.

§ 598.21F(2)(b). While there is a cap of one-third of the total educational

costs, there is no language expressly indicating that the allocation may

be limited by financial hardship that would result. We conclude that the

best reading of Neff is that the “good cause” requirement of Iowa Code

section 598.21F(2) is subject to an implied limitation preventing its

extension to situations in which the postsecondary education subsidy

would cause undue financial hardship on the parent.

      D.   Application of Iowa Code Section 598.21F.                  With this

backdrop in mind, we proceed to the questions presented in this case.

There is no question that Allison is eligible for the postsecondary

education subsidy. She is nineteen years old and doing well in college.

Philip argues that his financial condition precludes a finding of good

cause to justify a postsecondary education subsidy and that, even if good
                                          12

cause is evident, the district court’s determination of the amount of

subsidy is excessive given his financial condition. 1

       We first turn to the question of good cause. The statutory criteria

for making the determination include the relative abilities of the parents

and the child to finance the postsecondary education. In Neff, we held

that even when parents have relatively few resources, there might be

good cause for a “modest” educational subsidy. Neff, 675 N.W.2d at 579.

       We believe that under Neff, there is good cause for a modest

education subsidy to be paid by Philip.              See id.    Allison has limited

financial resources as she received no financial aid to pay for tuition or

other college expenses. Although the statute directs that the availability

of student loans is a factor to be considered in a child’s contribution, the

availability of student loans has not been raised by Philip and, as a

result, the availability of such loans is not a factor in the determination

of the contribution that may be made by Allison in this proceeding. In re

Marriage of Vannausdle, 668 N.W.2d 885, 890 (Iowa 2003).                      Further,

although Allison works part-time at JC Penney, we agree with the district

court’s conclusion that Allison is not self-sustaining. We do not quarrel

with the district court’s assessment that she can earn $5000 per year to

contribute to her undergraduate education.

       We must also consider the financial condition of Philip. He has a

very modest net worth which is tied up primarily in home equity. His

cash flow is very tight. There is nothing in the record that suggests he

lives an extravagant lifestyle. He does own a motorcycle, apparently for

recreational purposes, but even the liquidation of this asset would not

       1Philipdoes not challenge on appeal the district court’s finding that Allison did
not repudiate her father so as to disqualify her from receiving a postsecondary
education benefit under Iowa Code section 598.21F(4).
                                    13

dramatically alter his financial outlook.     Nonetheless, while Philip is

entitled to the benefit of Neff, he must also bear its burden. We conclude

that there is good cause to require Philip to provide a modest

postsecondary education subsidy in this case.

      In determining the amount of subsidy, we recognize that under

Longman, we do not require the same amount of parental sacrifice for

postsecondary education subsidies as we would for payment of child

support.    Longman, 619 N.W.2d at 371.             Further, under Neff, a

postsecondary education subsidy must not cause undue financial

hardship on a parent.     Neff, 675 N.W.2d at 579.       Applying this legal

framework to the facts and circumstances of this case, we conclude that

Philip should pay a $150 per month postsecondary education subsidy to

Allison to help defray the cost of her education.
      IV. Attorney Fees.
      Philip and Arleen request appellate attorney fees.          Assuming
without deciding that attorney fees may be awarded in an action to

determine postsecondary education subsidy obligations under Iowa Code

section 598.36, see In re Marriage of Rosenfeld, 668 N.W.2d 840, 848–49

(Iowa 2003); but see In re Marriage of Mullen-Funderburk, 696 N.W.2d
607, 611 (Iowa 2005), in the exercise of our discretion we decline to

award attorney fees.
      V. Conclusion.
      For the above reasons, we order Philip to pay a postsecondary

education subsidy in the amount of $150 per month to Allison pursuant

to Iowa Code section 598.21F. We also hold that neither party is entitled

to appellate attorneys’ fees. We therefore vacate the decision of the court

of appeals, affirm the judgment of the district court to the extent it finds

good cause for Philip to pay a postsecondary education subsidy, but
                                   14

reduce the amount from $633.94 per month to $150 per month. Costs

are assessed to Arleen. The parties shall pay their own attorney fees.

      DECISION OF COURT OF APPEALS VACATED; DISTRICT

COURT JUDGMENT AFFIRMED AS MODIFIED.