Court Opinion

ID: 4203099
Source: CourtListenerOpinion
Date Created: 2017-09-13 16:10:54.742485+00
Date Added: 2024-06-11T14:40:57.248510
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 16-1947
                           Filed September 13, 2017

IN RE THE MARRIAGE OF NATALIE RAE HAMMER
AND CHRISTOPHER MICHAEL HOLLAND

Upon the Petition of
NATALIE RAE HAMMER,
      Petitioner-Appellee/Cross-Appellant,

And Concerning
CHRISTOPHER MICHAEL HOLLAND,
     Respondent-Appellant/Cross-Appellee.
________________________________________________________________

      Appeal from the Iowa District Court for Winnebago County, DeDra L.

Schroeder, Judge.

      A father appeals the denial of his petition to modify child support and a

mother appeals the court’s denial of her request for trial attorney fees.

AFFIRMED ON BOTH APPEALS.

      Sarah A. Reindl of Reindl Law Firm, Mason City, for appellant/cross-

appellee.

      Becky S. Knutson of Davis, Brown, Koehn, Shors & Roberts, P.C., Des

Moines, for appellee/cross-appellant.

      Considered by Vogel, P.J., and Potterfield and Mullins, JJ.
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VOGEL, Presiding Judge.

      Christopher Holland (Chris) appeals the modification court’s decision to

deny modification of the dissolution of marriage decree between him and Natalie

Hammer. Chris asserts because the initial stipulated decree failed to state how

child support was calculated it cannot serve as the basis in future modifications.

He further asserts the modification court should have found child support anew.

On cross-appeal, Natalie requests we reverse the modification court’s denial of

attorney fees and further seeks appellate attorney fees.            Because the

modification court appropriately considered the child support amount as set forth

in the decree, and Chris failed to show a substantial change of circumstances,

we affirm. We also affirm the modification court’s denial of attorney fees for

Natalie, but we award her $5000 fees on appeal.

   I. Backgrounds Facts and Proceedings

      Chris and Natalie’s marriage in 1999 produced four children, all of whom

are still minors. A stipulation and decree of dissolution of marriage were filed on

April 27, 2015, granting the parties joint legal and physical custody of the

children, with Natalie having somewhat more parenting time than Chris. Chris

was responsible for paying Natalie $2200 each month in child support.          The

stipulation provided uncovered medical expenses “shall be paid by the parents in

proportion to their respective net incomes.” Accordingly, Chris was responsible

for the children’s health insurance and eighty-five percent of uncovered medical

expenses, while Natalie was responsible for fifteen percent.

      Not directly related to child support, but clearly contemplated by the

parties, was the substantial division of assets. The parties agreed Chris would
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pay Natalie $350,000 for her share of his business, $2500 per month for 120

months in additional property settlement, and $75,000 per year payable as

“salary” for twelve years as a former employee of C.R. Holland. No spousal

support was ordered.

      At the time of the dissolution, Natalie was not employed; however, her

imputed income as reflected on her October 28, 2014 affidavit of financial status

was $24,000 annually. Since the decree was filed, she has taught one year at

Waldorf College as an adjunct faculty earning $29,000, as well as worked at the

YMCA, two hours per week at $8.25 per hour. Her financial affidavit filed prior to

the modification hearing listed her annual gross income at $29,124. Chris owned

and worked for numerous businesses including C.R. Holland, Holland Moving

and Rigging Services, Atlas Enterprises, and Grok, L.L.C. Chris submitted a

financial affidavit on October 14, 2014, showing his gross annual income at

$68,775.   His affidavit filed prior to the modification hearing listed his gross

monthly income as $12,526.76 or approximately $150,321.12 per year.

      In spite of this apparent increase in his income, Chris filed an application

to modify child support on April 8, 2016, less than a year after the entry of the

decree, asserting he had an involuntary reduction of his income.          Natalie

resisted. The matter came on for trial in September 2016. While reviewing the

original child support stipulated amount, the court found “many factors went into

the parties’ agreement” as to how the child support figure was determined.

Additionally, as the record was developed, the modification court noted Natalie’s

expert opined Chris’s 2014 to 2015 income changed from a loss of $566,801 to a

gain of $294,000, an increase of $861,000.       Finding no support for Chris’s
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assertion his income had significantly decreased, and hence no evidence to

support his claim of a substantial change of circumstances not contemplated by

the decree, the modification court denied Chris’s petition to modify.

       Chris appeals, and Natalie cross-appeals.

   II. Standard of Review

       We review the modification of a dissolution decree de novo.              In re

Marriage of Wessels, 542 N.W.2d 486, 490 (Iowa 1995). However, we will not

disturb the trial court’s conclusion unless there has been a failure to do equity. Id.

   III. Child Support

       Chris asserts the modification court should not have used the child

support from the stipulated decree to determine whether modification was

appropriate, as the decree failed to make the requisite findings as to how the

agreed-upon child support deviated from the guidelines. Instead, Chris asserts

the modification court should have applied the child support guidelines as if it

were looking at the dissolution anew.         “A stipulation and settlement in a

dissolution proceeding is a contract between the parties; however, it becomes

final only when accepted and approved by the court.”              In re Marriage of

Handeland, 564 N.W.2d 445, 446 (Iowa Ct. App. 1997). When a stipulation

merges into a decree, it is then to be interpreted and enforced as a final

judgment of the court, not as a separate contract between the parties.             Id.

Additionally, if the court varies from the guidelines, it must determine whether the

variance is justified and appropriate, and include reasons for the variance. Id.

       Here, the modification court stated the parties’ stipulated decree appeared

to vary from the child support guidelines for a variety of possible reasons.
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However, even without detailed findings in the original decree, the stipulation

stated, “[t]hese calculations were based on the Child Support Guideline

Worksheets.” Thus, the modification court merged the stipulated amount of child

support into the dissolution decree, which became the judgment of the court.

Therefore, the modification court was correct in using the amount of child support

set in the stipulated decree as the starting point for determining child support in

future modifications.

        A child support amount may be modified if there is a substantial change in

circumstances, as in “changes in the employment, earning capacity, income, or

resources of a party.” Iowa Code § 598.21C(1)(a) (2016). If the court order for

child support varies by ten percent or more from the amount which would be due

pursuant to the most current child support guidelines, a substantial change of

circumstances exists. Id. § 598.21C(2)(a). The court shall not vary from the

amount of child support resulting from application of the guidelines unless a

substantial injustice would result to the payor, payee, or child or to do justice

between the parties under the special circumstances of the case. Iowa Ct. R.

9.11.

        Our supreme court has held:

        (1) not every change in circumstances is sufficient; (2) it must
        appear that the continued enforcement of the decree would, as a
        result of the changed circumstances, result in positive wrong or
        injustice; (3) the change in circumstances must be permanent or
        continuous rather than temporary; and (4) the change in
        circumstances must not have been within the contemplation of the
        district court when the original decree was entered.

In re Marriage of Maher, 596 N.W.2d 561, 565 (Iowa 1999) (noting further that

“the district court has reasonable discretion in determining whether modification
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is warranted, and we will not disturb that discretion unless there is a failure to do

equity.”).

       From evidence presented at the modification hearing, the modification

court found Chris’s income actually increased.          While Chris’s accountant

disagreed Chris’s “personal income” increased, he agreed Chris’s businesses

have increased profitability, but testified it would be irresponsible for a sole

shareholder to allocate too much income to personal income. We agree with the

modification court there is no evidence that Chris experienced an involuntary

reduction in income.

       On the other side of the ledger, Chris asserts Natalie’s income is

underreported as the property settlement of $75,000 per year he pays to Natalie

should be considered by the court as her income, in addition to the salary she

earns from teaching. Thus, he claims her real income is $104,858.

       The modification court determined the parties’ property settlement—

including the $75,000 annual payment—was not contemplated to be considered

as a wage or income for purposes of calculating child support, but rather, it was

clearly set out as part of the structured property settlement. The modification

court found structuring the property settlement payment as the parties did in their

stipulation actually provided Chris with a tax benefit. Thus, the parties created

the property settlement structure after contemplating the larger financial picture

with attendant tax consequences.          The record establishes the property

settlement was not contemplated as traditional income for Natalie for purposes of

calculating child support.
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       Given the credible evidence that Chris’s income did not decrease, and

Natalie’s   income   did   not   significantly increase,    the   modification     court

appropriately decided a substantial change in circumstances did not occur, and

appropriately dismissed Chris’s petition.

   IV. Attorney Fees

       On cross-appeal, Natalie asserts the modification court should have

awarded her trial attorney fees. The court’s decision on whether or not to award

attorney fees is reviewed for an abuse of discretion. In re Marriage of Sullins,

715 N.W.2d 242, 255 (Iowa 2005). The district court considers the needs of the

party making the request and the ability of the other party to pay. Id. Finding no

abuse of discretion, we affirm the denial of Natalie’s trial attorney fees.

       Natalie also requests an award of appellate attorney fees. In re Marriage

of Applegate, 567 N.W.2d 671, 675 (Iowa Ct. App. 1997). An award of appellate

attorney fees is not a matter of right but rests within our discretion.          Id.   In

determining whether to award appellate attorney fees, we 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 decision of the trial

court on appeal. Id. Natalie was not only required to defend the original decree

filed in April 2015, but also required to defend the modification court’s decision on

appeal. After considering these factors, we award Natalie $5000 in appellate

attorney fees.

   V. Conclusion

       Because we conclude Chris failed to show a substantial change in

circumstances since the original decree, we affirm the modification court’s denial
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of the petition to modify child support. We similarly affirm the district court’s

denial of Natalie’s request for trial attorney fees, but award her $5000 in

appellate attorney fees.

      AFFIRMED ON BOTH APPEALS.