IN RE THE MARRIAGE OF COLLEEN M. RUNDALL AND SCOTT RUNDALL Upon the Petition of COLLEEN M. RUNDALL, Petitioner-Appellant, And Concerning SCOTT RUNDALL, Respondent-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 9-753 / 09-0037
Filed December 30, 2009
IN RE THE MARRIAGE OF COLLEEN M. RUNDALL
AND SCOTT RUNDALL
Upon the Petition of
COLLEEN M. RUNDALL,
Petitioner-Appellant,
And Concerning
SCOTT RUNDALL,
Respondent-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Darrell Goodhue,
Judge.
Colleen Rundall appeals from the district court’s modification of the
parties’ 2003 New York dissolution decree.
AFFIRMED IN PART AND
REMANDED.
Thomas P. Lenihan, West Des Moines, for appellant.
Roger Hudson and Andrew Howie of Hudson, Mallaney & Shindler, P.C.,
West Des Moines, for appellee.
Considered by Sackett, C.J., and Vaitheswaran and Danilson, JJ.
2
DANILSON, J.
Colleen Rundall appeals from the district court’s modification of the
parties’ 2003 New York dissolution decree.
She asserts she is entitled to
continuing spousal support and challenges the district court’s modifications
concerning childcare expenses and income tax exemptions. We affirm in part
and remand for recalculation of child support.
I. Background Facts and Proceedings.
Colleen and Scott Rundall were married in September 1986. They had
three children: Connor, born in 1992; Lauren, born in 1994; and Julia, born in
1998. In 2003, the Rundalls’ marriage was dissolved by a New York decree.
The decree incorporated the parties’ extensive “Separation and Property
Settlement Agreement.” They agreed on the division of their assets and debts,
each receiving personal property and bank accounts. Colleen was to receive the
balance of the monies from the sale of their New York house ($66,763).
The agreement included several articles relating to education and support.
The “Education”1 article provided, in part:
The parties recognize that the Wife does not have sufficient
marketable education and skills to support herself and to contribute
to the support of the parties’ children.
Also, the parties
acknowledge that the husband has earned an M.B.A. degree during
the marriage, and that under New York Law, the Wife would be
entitled to an equitable distribution award equal to some portion of
the appraised value of this degree. The Wife has agreed to waive
such an appraisal and accept the provision for her education in lieu
of a cash special distribution award for her claim on the Husband’s
degree. Therefore, the Husband shall contribute to the Wife’s
acquiring a Master of Arts in Teaching degree (“MAT”) (or the
nearest equivalent), including any undergraduate prerequisites
1
Both the “Child Support” and “Education” articles of the agreement are numbered
Article XIII.
3
courses which the Wife must meet to be admitted to matriculate
into the MAT program. The Husband shall pay half the cost of
tuition for the Wife’s degree. The cost of tuition for the Wife’s
program will be $484 per credit hour. The Wife shall provide proof
of the costs, and the Husband shall pay to the Wife half of such
costs. The parties have estimated that the total tuition costs will be
approximately $22,000, and agree that the amount due from the
Husband shall not exceed $11,000. Further, the Husband’s
obligation shall not extend beyond 10 years after any divorce
between the parties, provided that he has paid all sums accrued up
to that date. These payments shall not constitute alimony,
maintenance or taxable income to the Wife.
Scott and Colleen agreed to “use their reasonable efforts to contribute
financially” to the post-secondary education expenses of the children. Further,
they agreed that if they are not able to agree on their respective contributions,
“either party may make application to a court of appropriate jurisdiction to
compel” contribution.
The “Child Support” article provides as follows:
The parties establish herein a plan for spousal maintenance
and child support which takes into account, during the time that
maintenance is paid, the respective anticipated tax liabilities of the
parties.
Beginning the first of the month following the execution of
this Agreement, the Father shall pay to the Mother as and for child
support for the three (3) minor children of the parties the sum of
$650 per month each month until December 31, 2008. The Father
shall pay to the Mother a pro rated amount of child support for any
portion of the month from the day after the execution of this
Agreement until the first of the following month.
Beginning January 1, 2009, provided the Father is employed
at pay commensurate with this present base rate of pay, that is,
$170,000 per year, the Father shall pay to the Mother as and for
child support for the three (3) minor children, the sum of Three
Thousand Nine Hundred Fifty Dollars ($3,950) per month until one
or more of the children are emancipated as defined in this
Agreement. The Husband acknowledges that the current $650
child support figure was set lower than his current child support
obligation would ordinarily be in order to give the Husband the
benefit of a greater alimony deduction from his income. When the
Husband’s maintenance (alimony) obligation ends if he is not
4
employed at the pay equal to or greater than $170,000 per year,
either the Husband or the Wife shall be entitled to bring an action in
a court of competent jurisdiction to establish the amount of child
support to be paid.
....
. . . . The parties further understand that, in the absence of
this Agreement between them, the provisions of the Child Support
Standards Act would govern the determination of the amount of
child support obligation to be paid by the non-primary residential
parent to the primary residential parent. They acknowledge that the
basic child support obligation calculated as provided for in the Child
Support Standards Act would presumptively be the correct amount
of the child support to be paid.
....
The amount of basic child support agreed to herein deviates
from the basic child support calculated pursuant to the Domestic
Relations Law §240(1-b) for the sole reason that the parties have
determined that the child support taken together with the spousal
maintenance provided in this Agreement will result in greater after
tax income to both of them and that given the factors upon which
maintenance is determined under New York law, the Wife is entitled
to the amount of spousal maintenance provided in this Agreement.
The Husband acknowledges that the current $650 child support
figure is set lower than his current child support obligation would
ordinarily be in order to give the Husband the benefit of a greater
alimony deduction from his income. Further, considering the
inevitable financial difficulties of a separation and divorce, the
parties believe that the child support and maintenance provided
herein will result in meeting the basic needs of the Wife and the
children without depriving the Husband of the amount of money that
the Court would likely reserve to him for his support under New
York Law as applied by the Courts of the jurisdiction in which a
divorce between the parties is currently pending.
Scott was to pay to Colleen $4110 per month “for her support,
maintenance and alimony” until December 31, 2008. In addition, the agreement
called for “additional spousal maintenance” of “28% of any and all bonuses to a
maximum of $14,280, 86.5% of which shall be deemed additional spousal
maintenance, and 13.5% of which shall be deemed additional child support.” If
Colleen earned more than $28,000 “from employment,” “the amount of
maintenance paid herein shall be reduced by Fifty Cents ($.50) for every One
5
Dollar ($1.00) in excess of Twenty-Eight Thousand Dollars after income and
wage taxes.” Scott was also to pay $7500 “additional maintenance” in twentyfour equal monthly installments “in consideration of the attorney’s fees incurred,”
which could not be prepaid.
In the article entitled “Dental and Special Payments,” the parties agreed
Scott would provide comprehensive medical insurance until the children were
“emancipated as defined in this Agreement.” In addition, Scott was to provide “a
pro rata proportion of the child care necessary for [Colleen] to work and/or
complete her Master of Arts in teaching degree including any student teaching
requirement,” set then at ninety-two percent.
The percentage was to be
readjusted annually.
On December 22, 2003, the New York court filed a “Judgment of Divorce.”
In a separate filing that same date, the court’s “Findings of Fact and Conclusions
of Law,” includes the following:
SEVENTH: C. Defendant [Scott] induced Plaintiff [Colleen] to
join with him in the purchase of a house in Rochester, New York,
which cost $406,900, even though such a house was a “stretch” on
their budget, when in reality the house was a reckless purchase,
given that Defendant had good reason to believe that he might be
imminently separated from his employment without immediate
prospects of new employment.
....
NINTH: That Plaintiff and Defendant entered into a
Separation Agreement . . . which has settled all matters between
them including distribution of property and maintenance. Said
Separation Agreement was fair and reasonable when made and is
not unconscionable.
....
ELEVENTH: That Defendant shall pay to Plaintiff the sum of
Four thousand One Hundred Ten Dollars ($4110.00) per month for
her support, maintenance and alimony until December 31, 2008,
unless earlier terminated by the Plaintiff’s remarriage, pursuant to
6
the terms of the parties’ Separation and Property Settlement
Agreement.
....
EIGHTEENTH: The award of child support in accordance
with the D.R.L. §240(1-b) is based upon the following findings:
....
B. The income of the Plaintiff, who is the sole
custodial parent is Zero Dollars ($0) per year;
C. The income of the Defendant, who is the noncustodial parent is Two Hundred Thirty Eight Thousand One
Hundred Seventy Six Dollars ($238,176) per year[2] . . . ;
D. The applicable child support percentage is twentynine percent (29%);
E. The presumptively correct basic support obligation
would be Three Thousand Nine Hundred Fifty Dollars ($3,950.00)
per month, plus expenses for health care not covered by insurance;
....
The parties have entered in a Separation and Property
Settlement Agreement dated October 17, 2003, wherein Defendant
agrees to pay $650.00 per month for child support through
December 31, 2008 and thereafter Defendant agrees to pay
$3,950.00 per month for child support until one or more of the
children are emancipated as defined in the Separation and Property
Settlement Agreement . . . .
The amount of child support agreed to therein deviates from
the basic child support obligation, and the parties’ reasons for
deviating from the presumptive amount are: (i) that the Defendant is
paying $4,110 per month maintenance; ([ii]) that the Defendant will
pay $3,9[5]0 child support after the termination of maintenance; and
(iii) that Defendant is paying certain sums toward the Plaintiff
obtaining further education.
(Emphasis added.)
The court approved the deviation from the presumptive
amount of child support “because the total of maintenance and child support will
provide for the needs of the children.” The court concluded “the Separation and
Property Settlement Agreement entered into by the Plaintiff on August 28, 2003
and by the Defendant on October 18, 2003 shall be incorporated, but not
merged, in the Judgment of Divorce.”
2
Scott’s income was apparently adjusted for “maintenance being paid.”
7
Scott was ordered to pay “92% of the child care necessary for [Colleen] to
work and/or complete her Master of Arts in teaching degree . . . pursuant to the
terms of the Separation and Property Settlement Agreement.”
In May 2007, Colleen filed a petition for modification of child support in
Iowa, asserting Scott’s income had substantially increased. Scott answered and
cross-petitioned for modification of the support and custody provisions of the
dissolution decree. He asserted that if the $650 in child support was modified,
other terms of the decree should also be modified, including when child support
should terminate, the custody and visitation arrangements, child care expenses,
who should receive the tax exemptions for dependents, and medical insurance
issues.
Colleen moved to dismiss Scott’s cross-petition for modification of
alimony, asserting the Iowa court lacked jurisdiction pursuant to Iowa Code
section 252K.205(6) (2007) (“A tribunal of this state may not modify a spousal
support order issued by a tribunal of another state having continuing, exclusive
jurisdiction over that order under the law of that state.”). Scott resisted, asserting
the alimony obligation was alimony in name only, that it was in essence child
support. Colleen then moved to amend her petition, seeking modification of the
alimony provisions of the decree. The district court allowed the amendment,
ruling that it had jurisdiction to modify the alimony provisions because the
language of the New York decree made alimony part of the child support. The
issues of child support and alimony were tried to the court on August 19, 2008.3
3
Scott voluntarily dismissed his cross-claims for custody and visitation, which
were then re-filed in Illinois.
8
In July 2003, Colleen and the children moved to Northfield, Illinois. They
rented a house at first, but in 2005 purchased it for $550,000 with financial
assistance from Colleen’s father.
Colleen had a college degree and worked
during the early years of her marriage to Scott, but ceased working outside the
home upon the birth of their second child. She testified, “It has been very difficult
to get back in the job market at age 40.” She testified she “chose not to go back
into teaching because I couldn’t afford to do that and not earn income.” Rather,
she started working part-time. By 2006 Colleen was working full-time as an
office manager/secretary earning $44,000 per year. She testified she had not
received any raises since 2006: “I ran into significant problems with childcare
and health issues and had to cut back my hours and am working at home on
Thursdays and Fridays, so they left my salary at [$]44,000.”
Colleen testified that she has incurred substantial debt since moving to
Illinois. Her current monthly living expenses are in excess of $7900. 4 The oldest
child is enrolled in a private high school, tuition for which is $11,500 per year.
The children are involved in many extracurricular activities, including dance,
soccer, and volleyball. She had been paying a private tutor for one child, but
could no longer afford to do that and owed money to the tutor. Colleen testified
she had assistance from part-time help providing care and transportation for the
children before and after school while she was at work. She stated that after she
got home from work, she drove the children to their various activities from 6 p.m.
to 8:30 or 9 p.m. Colleen testified that Scott was behind in paying childcare
4
In addition, Colleen’s father pays $500 per month toward her home equity loan
and provides her with a $250 per month gas stipend.
9
expenses and had taken it upon himself to prorate those expenses, asserting
that the oldest, now age sixteen and driving, did not need childcare.
She
testified, however, that she had to pay the same for childcare whether there were
two or three children needing assistance. She also testified that Scott had not
paid medical expenses as agreed.
Colleen further testified that since the divorce she has experienced
symptoms of an anxiety disorder, including insomnia and panic attacks, which
she relates to financial strain and the obligations of being the parent with sole
responsibility for childcare. She takes medication for the anxiety. In 2007, she
developed tremors, which were later diagnosed as “manifestations of an extra
pyramidal brain disease, most likely Parkinson’s.”
Colleen’s physician has
recommended that “she take a medical leave of absence until such time as her
life stressors have diminished.” She testified she could not afford to take the
advised medical leave.
Colleen testified that she and the children have not been able to maintain
the standard of living they enjoyed during the marriage.
There are no pool memberships. There are no country
clubs, which is fine. We don’t take family vacations. . . . I’m away
from them. I was a stay-at-home mom and loved it and was
involved. Our lives have dramatically, dramatically changed.
Colleen asked that the court order continuing spousal support in the
amount of $5500 per month, child support in the guideline amount of $4103.18,
and $900 per month for childcare expenses. She also requested an award of
attorney fees and expenses.
10
On cross-examination, Colleen acknowledged the terms of the parties’
settlement agreement.
She testified that Scott had paid the $4110 spousal
support and $650 child support per month promptly and had paid her a portion of
his bonuses as per the agreement. She also acknowledged that even though
she was earning in excess of $28,000 per year, Scott had not reduced the
amount of alimony he paid, as permitted under the parties’ agreement.5 Colleen
further testified she had not consulted Scott before enrolling their oldest child in
private school and acknowledged there was nothing in the divorce decree that
required that Scott pay for private schooling. She also testified that she and the
children had not always used Scott’s insurance carrier’s preferred providers.
Colleen’s father, Lawrence Keefe, testified that he lived in Northbrook,
Illinois, and that Colleen and the children had lived with him when they first
moved back to Illinois. He testified he had been paying her legal fees. He had
helped find the rental house in the adjoining suburb for Colleen and had provided
the down payment ($64,900) for Colleen to purchase the house. He testified that
he was making the payments on her $80,000 home equity loan. He provided
about $750 per month in support for Colleen and was of the opinion that without
his support she could not maintain the house.
Scott moved from California to Iowa in 2004. His current base salary is
$265,000 per year. In addition, he has received bonuses for the past five years
5
As noted above, the maintenance provision of the separation agreement
(Article XV), incorporated into the divorce decree, provides in part:
If, prior to January 1, 2009, Mother earns from employment more than
Twenty-Eight Thousand Dollars, after income and wage taxes the amount
of maintenance paid herein shall be reduced by Fifty Cents ($.50) for
every One Dollar ($1.00) in excess of Twenty-Eight Thousand Dollars
after income and wage taxes.”
11
ranging from $80,000 to $153,495. He testified that he was not consulted about
sending their child to private high school. He also testified Colleen’s requests for
childcare reimbursement were confusing and lacking in corroborating receipts.
II. Scope and Standard of Review.
This action for modification of a dissolution decree is an equity case. See
Iowa Code §§ 598.3 (2007) (“An action for dissolution of marriage shall be by
equitable proceedings. . . .”), 598.21C (providing for modification of orders for
disposition and support when there is a substantial change in circumstances).
Our review is thus de novo. Iowa R. App. P. 6.907. 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. 6.904(3)(g). We accord the district
court considerable latitude in making its determinations and will disturb its rulings
only where there has been a failure to do equity. In re Marriage of Rietz, 585
N.W.2d 226, 229 (Iowa 1998).
III. Analysis.
We begin our analysis with these relevant legal principles.
“[C]hild,
spousal, or medical support orders” of a dissolution decree may be modified
when there has been “a substantial change in circumstances.”
Iowa Code
§ 598.21C(1) (enumerating factors to be considered for modification); see In re
Marriage of Pals, 714 N.W.2d 644 ,646 (Iowa 2006). The legislature has at times
altered the required showing of a substantial change in circumstances by
describing specific circumstances that permit modification. Pals, 714 N.W.2d at
647; see, e.g., Iowa Code § 598.21C(2)(a) (“[A] substantial change of
circumstances exists when the court order for child support varies by ten percent
12
or more from the amount which would be due pursuant to the most current child
support guidelines established pursuant to section 598.21B or the obligor has
access to a health benefit plan, the current order for support does not contain
provisions for medical support, and the dependents are not covered by a health
benefit plan provided by the obligee . . . .”).
However, parties can contract
alimony is not modifiable. In re Marriage of Aronow, 480 N.W.2d 87, 89 (Iowa Ct.
App. 1991) (citing In re Marriage of Francis, 442 N.W.2d 59, 63 (Iowa 1989)).
A. Alimony. In seeking to extend spousal support, consideration must be
given to Article XV of the parties’ separation and property settlement agreement,
which provides in part:
That said parties, having been fully advised as to their rights
in regard to spousal support and maintenance, do hereby relieve
and forever discharge each other from any and all manner of
actions, suits . . . and any and all claims . . . against either party . . .
ever had, now have, or may in the future have . . . including but not
limited to any and all claims for spousal support, separate
maintenance, alimony payments, in the nature of spousal support
or maintenance other than as provided herein . . . and do hereby
waive, relieve and forego any and all right to seek spousal support,
alimony and/or separate maintenance . . . other than as provided
herein.
We first reject Colleen’s assertion that “the spousal support provisions of
the parties’ property and settlement agreement are clearly inequitable and should
not be enforced by a court of equity.” We note specifically that the dissolution
decree incorporated the parties’ stipulation; both parties were represented by
counsel; and no appeal was taken. There is no timely petition to vacate the
judgment on fraud, mistake, or irregularity.
See Iowa Rs. Civ. Proc. 1.1012,
1.1013. Colleen’s argument constitutes an impermissible attempt to collaterally
attack the original dissolution decree. “It is well-established that a decree or
13
judgment generally cannot be attacked collaterally. Heishman v. Heishman, 367
N.W.2d 308, 309 (Iowa Ct. App. 1985). The only exception is when a judgment
is void for lack of jurisdiction, id., which is not claimed here.
Colleen next contends Scott waived enforcement of the parties’ separation
and property settlement agreement prohibiting modification of alimony by crosspetitioning for modification of alimony. The district court addressed this assertion
in its amendment and enlargement of findings, conclusions, and order: “That
[Scott] may have initiated or consented to the jurisdiction of the Iowa Courts
doesn’t mean that the entire matter is to be relitigated premised on an estoppel
or waiver theory.” We agree.
Waiver requires a voluntary and intentional waiver of a known right.
Huisman v. Miedema, 644 N.W.2d 321, 324 (Iowa 2002).
It must be made
intentionally and with knowledge of the circumstances. Millsap v. Cedar Rapids
Civil Serv. Comm’n, 249 N.W.2d 679, 683 (Iowa 1977). The party asserting the
waiver bears the burden of proof. In re Estate of Warrington, 686 N.W.2d 198,
202 (Iowa 2004); see also Johnson v. Johnson, 301 N.W.2d 750, 753 (Iowa
1981) (noting that the burden is on the party who claims loss of rights by an
adverse party through acquiescence to show facts supporting the contention).
Here, Colleen initiated this proceeding seeking to modify the child support
provisions of the parties’ decree and to extend indefinitely Scott’s alimony
obligation.
Scott responded that the provisions of the dissolution decree
governing alimony and child support were intertwined and must be considered
together. We are unable to conclude that Scott intentionally waived enforcement
14
of the parties’ earlier settlement and dissolution decree by responding to
Colleen’s modification petition or cross-petitioning for modification of alimony.
Colleen’s fallback position is that “[i]t remains within the power and
authority of a court in equity to fashion an equitable remedy to implement justice
and fairness between the parties.” She characterizes the spousal maintenance
provided in the original decree as rehabilitative alimony, which may be modifiable
despite an agreement to the contrary. We acknowledge that “[u]nder our cases
there are rare situations where, notwithstanding an agreement and decree to the
contrary, later occurrences are so extreme in their nature as to render the initial
understanding grossly unfair and therefore subject to change.” In re Marriage of
Wessels, 542 N.W.2d 486, 489 (Iowa 1995).
In Wessels, the court concluded that rehabilitative alimony, set to
terminate at a given time, could, in “extreme situations,” be extended and made
permanent by reason of unforeseen changed circumstances. Id. at 487. In that
case, the dissolution decree adopted the parties’ stipulation, which provided
James Wessels would pay Yvonne Wessels rehabilitative alimony in the amount
of $3100 per month for a period of sixty months and for up to two years $700 per
month if she attended a full-time, post-graduate program. Id. Yvonne was to
make every reasonable effort to become self-sufficient.
Id.
Unfortunately,
despite good faith efforts to become self-sufficient, severe and debilitating mental
illness left Yvonne unable to ever work again. Id. at 488.
The district court concluded that “Yvonne’s worsening psychiatric
problems, the lack of health insurance benefits, her increased medical expenses,
her unemployability, the increased financial resources of James and the reduced
15
assets of Yvonne” constituted a significant change in circumstances warranting
modification of the decree. Id. at 489. The appellate court affirmed, holding that
the situation qualified “as the sort of rare and unique change that demanded the
extraordinary relief” the former wife sought. Id. at 490.
Here, the parties’ settlement agreement and the dissolution decree
provided Colleen with a substantial property settlement, $11,000 for tuition for
Colleen to acquire a Master of Arts in Teaching degree, 6 and support in excess
of $4700 per month for five years ($650 designated as child support and $4110
“for her support, maintenance and alimony”) plus twenty-eight percent of any and
all bonuses Scott received (capped at $14,280).
The spousal maintenance
obligation was to terminate on December 31, 2008, at which time child support
was to increase to $3950 per month.
Colleen presented evidence that she now suffers from an anxiety disorder
and is currently displaying medical symptoms consistent with the initial stages of
Parkinson’s disease.
She argues that her physical condition, her inability to
maintain the standard of living enjoyed during the marriage, and the inadequacy
of the initial alimony award qualify for modification of alimony.
We do not believe this is one of the rare cases demanding extraordinary
relief. Colleen’s physician opined that “prognosis for her anxiety problems are
good and are expected to improve significantly after the excessive life stressors
resolve.”7 He also testified that “she’s not disabled at all as far as I can tell from
the Parkinson’s. But if it worsens, then that will add to her underlying anxiety
6
Colleen did not pursue this degree.
He explained that these excessive life stressors were “ongoing litigation and
financial and childcare issues and work, slash, income issues.”
7
16
disorder.” Medications have “led to vast improvement in the tremors.” Colleen
remains employed as an office manager/secretary earning $44,000 per year.
She has health insurance coverage. In addition to her income, she will receive
child support in the amount of $4105 per month as long as support is due for
three children, $3620 per month when support is due for two children, and $1665
when support is due for one child. We do not find these circumstances akin to
those presented in Wessels. See also In re Marriage of McCurnin, 681 N.W.2d
322, 329-31 (Iowa 2004) (extending alimony where former spouse had never
been able to work full time and earning potential “by any measure is below
poverty level,” she was solely responsible for care of parties’ five children, and
youngest child had developed an asthmatic condition that required mother to
negotiate with part-time employers that she be able to leave work at a moment’s
notice, which had occurred on a weekly basis for several years). We do not
conclude there has been a failure to do equity. See In re Marriage of Rietz, 585
N.W.2d 226, 229 (Iowa 1998).
We affirm the trial court’s ruling that alimony terminate on December 31,
2008, as set forth in the terms of the dissolution decree.
B. Childcare Expenses and Income Tax Exemption. The trial court
concluded there had been a change of circumstances warranting modification of
child support “based on a change of income of the parties without consideration
of other factors.” The court concluded that child support would remain in effect
until December 31, 2008, per the agreement of the parties. Thereafter, pursuant
17
to the Iowa Child Support Guidelines,8 Scott was to pay twenty-one percent of his
present net income as child support ($4105 per month).9
The court ordered that Scott receive the dependency exemption for one
child, Colleen for another, and the exemption for the third child would alternate
between the parties. Scott was to continue to maintain the health insurance on
the children and pay eighty-six percent of unpaid medical expenses. The court
concluded that Scott’s obligation to pay childcare expenses would terminate on
December 31, 2008.
Colleen argues that the district court erred in ending Scott’s obligation to
pay childcare expenses and in altering the dependency exemption allocation as
those matters were included in the parties’ “Separation and Property Settlement
Agreement.”
Scott contends the child support guidelines are designed to take all
reasonable living expenses into account, including daycare expenses. He also
argues that courts have the authority to award tax exemptions to achieve an
equitable resolution of the economic issues presented. See In re Marriage of
Okland, 699 N.W.2d 260, 269-70 (Iowa 2005).
The child support guidelines take into account the reasonable costs of
living for dependent children, including educational expenses and expenses for
clothes, school supplies, and recreation activities.
8
In re Marriage of
The child support guidelines have since been amended, effective July 1, 2009.
Under the former guidelines, a noncustodial parent with a monthly income of
$10,000 is to pay 21.1 percent of income as child support for three children. “For net
monthly income above $10,000, the appropriate figure is deemed to be within the sound
discretion of the court . . . .” Here, the district court applied the 21.1 percentage rate to
Scott’s entire net monthly income, which percentage is adjusted as the children no
longer qualify for support.
9
18
Kupferschmidt, 705 N.W.2d 327, 334 (Iowa Ct. App. 2005). We have said that a
separate support order covering such expenses is improper absent a finding that
the guidelines amount would be unjust or inappropriate. Id.
Additionally, tax exemptions for children subject to child support may be
allocated by the district court.
See id. at 337.
“[A]llocations of these tax
exemptions, being directly related to child support, are subject to the general
rules for modification of child support.” Id.
The problem here, however, is that the trial court modified and reallocated the tax exemptions, but calculated child support as though Colleen
retained all three exemptions. Because we remand for recalculation of child
support, we do not resolve the remaining issues presented.
Because the
determination of child support can only be accomplished after considering the
allocation of tax exemptions and any appropriate deviation from the guidelines,
the trial court is free to consider these relevant issues under the new child
support guidelines, which became effective July 1, 2009.
IV. Conclusion.
We affirm the trial court’s ruling that alimony terminate on December 31,
2008, as set forth in the terms of the dissolution decree. We remand this matter
for recalculation of child support.
Costs of appeal are to be divided equally
between the parties.
AFFIRMED IN PART AND REMANDED.
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