Court Opinion

ID: 9403648
Source: CourtListenerOpinion
Date Created: 2023-06-21 15:07:53.841441+00
Date Added: 2024-06-11T17:20:08.462847
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                     No. 22-1701
                                 Filed June 21, 2023

IN RE THE MARRIAGE OF WILLIAM JOSEPH REINSBACH
AND KAREN LEE REINSBACH

Upon the Petition of
WILLIAM JOSEPH REINSBACH,
      Petitioner-Appellant,

And Concerning
KAREN LEE REINSBACH,
     Respondent-Appellee.
________________________________________________________________

       Appeal from the Iowa District Court for Dickinson County, Shayne Mayer,

Judge.

       An ex-husband appeals denial of a petition to modify spousal-support

payments. AFFIRMED AS MODIFIED.

       Brandon J. Krikke and Ashley A. DeBoer of Dekoter, Thole, Dawson,

Rockman, & Krikke P.L.C., Sibley, for appellant.

       Joseph L. Fitzgibbons and Scot L. Bauermeister of Fitzgibbons Law Firm,

L.L.C., Estherville, for appellee.

       Considered by Bower, C.J., and Badding and Buller, JJ.
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BULLER, Judge.

        William (Bill) Reinsbach appeals from an order denying his petition to modify

spousal-support payments to ex-wife Karen Reinsbach. Bill claims a substantial

change in his health and earnings capacity due to his disability. He also claims

the district court abused its discretion in denying his request for attorney fees, and

both parties request appellate attorney fees. We affirm the district court’s order as

modified, denying Bill’s request to terminate his lifetime spousal-support obligation

but reducing the monthly obligation from $1500 to $1125. We also find no abuse

of discretion in denying Bill’s request for attorney fees, and we deny both parties’

requests for appellate attorney fees.

        I.     Backgrounds Facts and Proceedings

        Bill and Karen married in September 1979 and divorced in September 2015.

By stipulation, Karen was awarded spousal support of $3000 per month for twenty-

four months and $2500 per month in spousal support after that, payable “until the

death of either party, Karen’s remarriage, or until she becomes self-supporting at

a lifestyle to which she was accustomed to during the marriage.”

        In March 2016, Bill petitioned for a modification based on “a substantial

change in [his] earning capacity” after a job change. In October 2016, the parties

stipulated to reduce the spousal-support payment to $1500 per month going

forward, terminating under the same conditions previously agreed upon.

        In July 2021, Bill filed another petition requesting a modification, at issue

here.    This time, he sought modification based on “material and substantial

changes in [his] health and earning capacity,” relying on his permanent disability
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(as found by the Social Security Administration) and the related reduced income

and earnings capacity.

       Bill was born in 1961.     Since the divorce, he has continued living in

Dickinson County with his current wife.       In 2006, he began working for a

manufacturer in sales management. He earned a base annual salary of more than

$70,000 plus commissions that could take his total annual compensation over

$200,000. In early 2015, his employer told him changes were coming to his

compensation.    Though he did not know specifics at the time, he knew the

company was not doing well financially. In March 2016, his employer notified him

his annual compensation would be $90,000 with no commission, which led to him

filing the first petition for modification. He soon left the manufacturer, collected

unemployment for a time, and began working in sales for an agricultural equipment

dealer in June 2016. His salary for the dealer was $3333 bi-weekly. From 2014

to 2018, Bill also served as the elected mayor of Milford, but this income was not

significant compared to his full-time work.

       Around June 2019, the dealer fired Bill because he did not reach sales goals

that Bill described as “not possible.” He again collected unemployment for a time,

and later he began work as manager of a grain co-op. Bill left employment there

in the summer of 2020. He again began collecting unemployment, and he testified

that he could not find suitable employment through July 2021.

       Bill’s Social Security statement showed he earned the following annual

wages beginning with 2007, the first full year he worked for the manufacturer:
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                            Year              Annual Earnings
                            2007                  $90,548
                            2008                  $83,418
                            2009                 $117,019
                            2010                 $156,571
                            2011                 $100,088
                            2012                 $121,316
                            2013                 $173,422
                            2014                 $211,887
                            2015                 $157,904
                            2016                 $96,298
                            2017                  $87,520
                            2018                  $92,452
                            2019                  $55,754
                            2020                  $64,369

       The start of Bill’s health problems was in 2005, after he was injured at a

different co-op. This injury led to a workers’ compensation claim, which was still

pending at the time of trial. As of trial, Bill had undergone seven back surgeries,

one ankle surgery, two knee surgeries, and three shoulder surgeries; the last two

back surgeries occurred in 2020 and 2021, and four or five of the back surgeries

occurred during the marriage. He testified to his current health during trial:

       I have trouble walking. I have trouble standing. I have balance
       issues. I hurt all the time. There’s not much I can do. I can sit for
       about a half hour. I can’t stand longer than a couple minutes. The
       back of my knees, I can’t drive for more than about a half hour without
       getting out and stopping. I’m—my health is just—it just deteriorates.

The district court observed that Bill had “visible mobility issues” during his time in

the courtroom.

       In March 2021, Bill applied for federal disability benefits and was found to

have been disabled as of September 2020. At the time of trial, Bill received $2811

per month in disability payments, or $33,732 annually, which he claims as his sole

source of income against nearly $4600 in monthly expenses. He testified that his
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current wife pays for the remainder of his share of the household expenses. He

does not believe he will be able to return to work in any capacity close to his prior

income, and he expects his mobility and health will not improve. In Bill’s words,

his “body is falling apart.”

       Karen was born in 1960. She was a cosmetologist during marriage, moving

with Bill every few years as he found a new job and establishing her cosmetology

business in a new community. She moved to South Dakota after the divorce. At

the time of trial, she worked thirty to thirty-five hours per week in a salon at a senior

living center. She is an independent contractor and reports significant business

expenses. Karen’s exact income is hard to decipher from her tax returns and trial

testimony, but on her financial affidavit she claimed $2306.70 in monthly net

income, including $1500 in monthly spousal support and an additional $400 per

month in rent from a family member who lives with her. Karen testified she donates

10% of her annual income to her church, and her tax records suggest she gives

more than this to church or other charities (as much as $10,000 per year). Karen

does not believe her current standard of living is anywhere close to her life during

the marriage, when she and Bill enjoyed international and cross-country vacations,

boating on the Iowa Great Lakes, and other luxuries.

       After hearing this evidence, the district court denied Bill’s petition for a

modification, finding no substantial change in circumstances, and ordered that

spousal-support payments continue unmodified.            The court also denied Bill’s

request for attorney fees. Bill appeals.
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       II.    Standard of Review

       We review spousal-support-modification decisions de novo. In re Marriage

of Sisson, 843 N.W.2d 866, 870 (Iowa 2014); Iowa R. App. P. 6.907. “We give

weight to the findings of the district court, particularly concerning the credibility of

witnesses; however, those findings are not binding upon us.” Sisson, 843 N.W.2d

at 870 (quoting In re Marriage of McDermott, 827 N.W.2d 671, 676 (Iowa 2013)).

“[W]e . . . will disturb the ruling only when there has been a failure to do equity.”

Id. (quoting In re Marriage of Schriner, 695 N.W.2d 493, 496 (Iowa 2005)).

       III.   Discussion

       The General Assembly has empowered the courts to modify spousal

support only “when there is a substantial change in circumstances.” Iowa Code

§ 598.21C(1) (2021).      “[T]he changed circumstances must be material and

substantial, essentially permanent, and not within the contemplation of the court at

the time of the decree.” Sisson, 843 N.W.2d at 870–71. When a party has

obtained a prior modification, the substantial-change analysis is limited to facts that

arise after the intervening modification.        See In re Marriage of Full, 255

N.W.2d 153, 158 (Iowa 1977). The relevant factors are in the Code, and the most

pertinent here concern “[c]hanges in the employment, earning capacity, income,

or resources of a party” and “[c]hanges in the physical, mental, or emotional health

of a party.” Iowa Code § 598.21C(1)(a), (e). Bill had the burden to prove one or

more of these factors by a preponderance of the evidence. In re Marriage of

Lee, 486 N.W.2d 302, 304 (Iowa 1992).

       On our de novo review, we disagree with the district court and find there

was a substantial change in circumstances. While we do not believe that Bill’s
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spousal support obligation should terminate outright, equity requires a reduction in

his monthly obligation, given Bill’s substantial decline in health and earning

capacity.

       In 2016, Bill was earning nearly $7000 per month in gross wages. His

present earnings have declined by more than half, to $2811 per month in disability.

Bill’s testimony that his income does not cover his share of reasonable expenses

in his new marriage was undisputed. We are also convinced that the transition of

Bill’s earnings potential from wages to disability payments is roughly akin to

mandatory retirement or other circumstances requiring an exit from the workforce,

which have long been recognized as a time ripe for modification. See In re

Marriage of Gust, 858 N.W.2d 402, 418 (Iowa 2015) (“[F]uture retirement is a

question that can be raised only in a modification action subsequent to the initial

spousal support order.”); Toney v. Toney, 239 N.W. 21, 21–22 (Iowa 1931)

(mandatory retirement, from $260 in wages to $95 in pension, was a substantial

change in circumstances).

       Given Bill’s dramatic change in health and income, we must consider

whether such a decline was contemplated at the time of either the divorce or the

previous modification.   See In re Marriage of Michael, 839 N.W.2d 630, 635

(Iowa 2013). In the argument section of her brief, Karen asserts repeatedly that

Bill’s disability was contemplated by the parties, but she fails to cite the record a

single time—in violation of our rules of appellate procedure.        Iowa Rs. App.

P. 6.903(2)(g)(3); 6.904(4). Assuming without deciding that Karen has not waived

her claim for failure to comply with the rules, we find Bill has the better argument.

While some age- and health-related decline was reasonably expected by these
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parties, Bill testified that he anticipated improvement or a plateau for his condition

based on what physicians told him, rather than the serious decline that left him

permanently disabled. Karen, for her part, dissembled when asked whether she

anticipated Bill’s back injury would eventually disable him, claiming: “I don’t know

how to answer that question.”

       We find a substantial change in circumstances because the parties did not

contemplate that Bill’s health would deteriorate so dramatically—and that his

annual earnings capacity would plummet from $200,000 or $87,000 in wages to

about $33,000 in disability payments—while he was otherwise still in his working

years. Bill’s dramatic change in health and related earnings capacity are not the

type of health problems that are “reasonable and ordinary changes that are likely

to occur”; they are more like the type of “unexpected calamity” that can serve as

the basis for modification. In re Marriage of Skiles, 419 N.W.2d 586, 589 (Iowa Ct.

App. 1987); see also In re Marriage of Reis, No. 01-1022, 2002 WL 1072085, at *2

(Iowa Ct. App. May 31, 2002) (holding that, while parties knew of wife’s

fibromyalgia diagnosis and reasonably expected some progression, they could not

have reasonably anticipated the wife would become disabled and unable to work).

       In weighing the equities and statutory factors, we have considered Bill’s

argument that his obligations should be reduced because Karen now donates a

significantly higher proportion of her income than they did during the marriage. Our

case law recognizes this is a permissible consideration in evaluating spousal

support. See In re Marriage of Stenzel, 908 N.W.2d 524, 536 (Iowa Ct. App. 2018).

That said, we are not sure this fact moves the needle much in this case.
                                          9

       We have also considered Karen’s argument (again made without citation to

the record) that Bill could seek work but chooses not to. At trial, Karen did not

materially undermine Bill’s evidence of disability, which was proven by the Social

Security Administration’s determination that he was disabled and entitled to

disability benefits. But Bill also failed to put on evidence that he could not seek

any work to supplement his disability payments, and we give some weight to the

district court’s observation that Bill’s ability to go boating—including getting on and

off the dock without assistance—is at least suggestive of some additional earnings

capacity.

       We also credit the district court’s observation that Bill “bristled” at the idea

of selling his pleasure boat to fulfill his spousal-support obligations to Karen, and

our reading of the transcript confirms the court’s observation that Bill was “evasive”

and “his claim of lack of memory [was] not credible.” By Bill’s admission, he sold

the boat to his current wife at some point, though the record does not make clear

whether the transaction was legitimate or part of asset-sheltering shenanigans.

Regardless of whether any ill intent prompted the sale, we rely on our common

sense to recognize that the continued operation and maintenance of the boat is a

substantial luxury expense enjoyed by Bill, and this undermines his claim to at

least some extent.

       Based on these competing considerations, we are left to decide what

amount of spousal support is appropriate given Bill’s current earning capacity and

health. Bill does not argue for a specific dollar amount in his brief, and Karen

argues that Bill should continue paying $1500 per month—the same as he was

paying with more than double the income in 2016. We start with the baseline that
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Bill now earns about half what he did in 2016, and we adjust upwards significantly

in light of Bill’s unwillingness to liquidate luxury assets (like the boat and other

expenses attendant to life in a resort community), as well as his potential to

supplement his disability payment with wages or by drawing down his retirement

accounts. We conclude Bill should pay Karen 75% of the $1500 per month

obligation: $1125 per month, and we modify the decree accordingly.

       IV.    Attorney Fees

       Bill urges that the district court erred in not requiring Karen to pay his

attorney fees at trial, and he also urges that Karen should pay his attorney fees on

appeal. Karen also asks for appellate attorney fees. Both the district court and

our court have considerable discretion in awarding attorney fees in dissolution

matters. Iowa Code § 598.36; see McDermott, 827 N.W.2d at 687; In re Marriage

of Berning, 745 N.W.2d 90, 94 (Iowa Ct. App. 2007).

       We affirm the district court’s decision to require the parties to pay their own

fees, as Bill identified nothing clearly untenable or unreasonable about the fee

decision. We similarly exercise our discretion to require the parties to pay their

own attorney fees on appeal. Neither party has tremendously disparate incomes

or financial resources at this stage of life, and while Bill did partially prevail on

appeal, Karen had a duty to defend the district court’s decision and could also

claim a partial victory.

       V.     Disposition

       We affirm the district court’s judgment as modified.        We reduce Bill’s

monthly spousal-support payment to Karen, from $1500 per month to $1125 per

month, to terminate upon the same conditions as previously agreed by the parties.
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This change in payment is effective as of the date Bill petitioned for modification.

See In re Marriage of Schradle, 462 N.W.2d 705, 708 (Iowa Ct. App. 1990). The

district court is directed to enter any orders necessary to carry out this opinion.

Each party will bear their own attorney fees on appeal. Costs on appeal are

assessed equally between the parties.

      AFFIRMED AS MODIFIED.