In Re the Marriage of John R. Lockard and Laura L. Lockard Upon the Petition of John R. Lockard, and Concerning Laura L. Lockard ( 2016 )

IN THE COURT OF APPEALS OF IOWA
No. 15-0051
Filed January 13, 2016
IN RE THE MARRIAGE OF JOHN R. LOCKARD
AND LAURA L. LOCKARD
Upon the Petition of
JOHN R. LOCKARD,
Petitioner-Appellant,
And Concerning
LAURA L. LOCKARD,
Respondent-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Dallas County, Donna K. Paulsen,
Judge.
John Lockard appeals the economic provisions of the district court’s
decree dissolving his marriage. AFFIRMED AS MODIFIED AND REMANDED.
Ryan A. Genest of Culp, Doran & Genest, P.L.C., Des Moines, for
appellant.
Nathan A. Russell and Todd A. Elverson of Elverson Vasey, L.L.P., Des
Moines, for appellee.
Considered by Doyle, P.J., and Mullins and Bower, JJ.
2
MULLINS, Judge.
John Lockard appeals the economic provisions of the district court’s
decree dissolving his marriage to Laura Lockard. John contends the district court
erred in (1) failing to deduct spousal support paid for purposes of calculating his
child support obligation; (2) ordering John to pay $3000 per month to Laura in
permanent spousal support; (3) requiring John to maintain life insurance to
secure his spousal support obligation; (4) awarding John the marital home
instead of ordering it to be sold and the proceeds divided; and (5) awarding
Laura $5000 in trial attorney fees. Upon our de novo review of the record, we
affirm as modified and remand for entry of an order consistent with our
recalculation of child support.
I. Background Facts and Proceedings
John and Laura were married in July 1983. They are the parents of four
children: N.L., born in 1992, M.L., born in 1996, K.L., born in 2000, and J.L., born
in 2003.
John is fifty-one years old and in good health. He earned both a
bachelor’s degree and a master’s degree in computer engineering during the
marriage. John worked as a teacher’s assistant during graduate school. The
parties lived together in a house owned by John’s mother while John was in
school. After John completed his master’s degree, the parties moved to Chicago
for John’s job. The parties had their first child in 1992 and returned to Des
Moines shortly thereafter. John later left his employment to start his own
company, Silicon Plains Technologies. Thereafter, John negotiated a buy-out
3
with his business partner. As part of the buy-out, John received $10,000 per
month for twenty-four months and signed a twenty-four-month non-compete
agreement. Instead of gaining employment in another field, John began day-
trading for the next eighteen months. John did not succeed in this capacity and
the parties withdrew funds from a 401(k) account to pay for expenses after John
was not fully paid under the buy-out agreement. The parties also faced litigation
stemming from debt incurred by John’s ex-business partner and filed bankruptcy
as a result. John is currently employed as a computer consultant by a company
in Colorado and works from home with minimal travel.
Laura is fifty years old. She has an accounting degree and a CPA
certificate, both earned during the marriage. Laura worked full time while John
was in graduate school and while working toward her CPA. Laura continued to
work full time until the birth of their first child. Thereafter, she assumed the role
of caretaker for the parties’ children. Over the next twenty-two years Laura
worked a few part-time jobs, as an accountant for Silicon Plains, an office
manager for a dance and gymnastic studio in order to receive a discount on the
children’s tuition, and helping with the books at the horse stable where the
children’s horses were kept to decrease boarding charges. In May 2001, Laura
suffered a severe stroke. As a result of the stroke, Laura has a permanent
“significant disability” and does not have the use of her right arm and wears a
brace on her right leg. Because of her disability, she has poor keyboard and ten-
key skills. In 2012–2013, Laura took classes to reinstate her CPA certificate but
4
has been unable to find full-time employment. She currently works as a part-time
accountant preparing tax returns.
On November 7, 2013, John filed a petition for dissolution of marriage.
The petition came to trial on September 10–12, 2014. Following trial, the district
court entered a decree dissolving their marriage. The court awarded the parties
joint legal and physical custody of their three minor children.1 The court found
John earns an average gross annual income of $114,564.252 and Laura a gross
annual income of $12,589.71. It ordered John to pay $513.47 each month to
Laura for support of their three minor children, $433.87 per month in support for
two children,3 and $284.43 per month in support for one child.4 The court also
ordered John to pay Laura permanent spousal support in the amount of $3000
per month until either party’s death or Laura’s remarriage. The court awarded
John the marital home valued at $183,000 and ordered John to pay Laura $7948
for her share of the home’s $15,896 in equity. The court further ordered John to
maintain $200,000 in life insurance, naming Laura as the beneficiary, to secure
his child and spousal support obligations. Additionally, the court ordered John to
pay $5000 toward Laura’s attorney fees.
1
The court found the parties’ oldest child, age twenty-two, to be self-sufficient.
2
The court determined John’s average annual income based upon his 2009–2013 tax
returns and paycheck stubs for 2014. Laura conceded that although his actual annual
income might be higher because John receives additional pre-tax health benefits under
his employer’s cafeteria plan, $114,564.25 was a fair average of his gross annual
income.
3
John’s child support obligation for three children was to end when M.L. reached age
nineteen.
4
The court ordered John may claim as dependents all three minor children on his
income taxes for 2014. Starting in 2015, John may claim M.L. and J.L., and Laura may
claim K.L. When only one child is eligible to be claimed as a dependent, the parties will
alternate claiming the child as a tax dependent.
5
Following the court’s written order, John filed a motion to enlarge or
amend the court’s findings and conclusions pursuant to Iowa Rule of Civil
Procedure Rule 1.904(2). John requested (1) that his spousal support payments
be deducted from his income prior to calculating his child support obligation;
(2) that the decree provide his spousal support obligation end upon the death of
either party, the remarriage of Laura, or when John reaches age sixty-two and
becomes eligible for social security benefits; (3) that John’s obligation to maintain
life insurance terminate upon the conclusion of his child support obligation; and
(4) the court order the parties’ marital home be sold and the proceeds divided
between the parties. The district court denied John’s motion. This appeal
followed.5
II. Standard of Review
We review cases tried in equity, such as dissolution cases, de novo. Iowa
R. App. P. 6.907; In re Marriage of Gust, 858 N.W.2d 402, 406 (Iowa 2015). We
give weight to the factual findings of the district court, especially when
considering the credibility of witnesses, but are not bound by them. Iowa R. App.
P. 6.904(3)(g). Prior cases, though helpful, have little precedential value
because we must base our decision primarily on the particular circumstances of
the parties presently before us. In re Marriage of Weidner, 338 N.W.2d 351, 356
(Iowa 1983). We accord the trial court considerable latitude in making factual
determinations and will disturb the ruling only when there has been a failure to do
equity. Gust, 858 N.W.2d at 406.
5
On January 7, 2015, John filed a notice of appeal. Laura filed a motion to dismiss
John’s appeal, which our supreme court denied.
6
III. Analysis
John contends the district court erred in (1) ordering John to pay $3000
per month to Laura in permanent spousal support; (2) failing to deduct spousal
support paid to Laura for purposes of calculating child support; (3) requiring John
to maintain $200,000 in life insurance to secure his spousal and child support
obligations; (4) awarding John the marital home instead of ordering that it be sold
and the proceeds divided; and (5) awarding Laura $5000 in trial attorney fees.
Laura requests an award of appellate attorney fees.
A. Spousal Support
John argues the district court erred in ordering him to pay Laura $3000 per
month in permanent spousal support until either party’s death or Laura’s
remarriage. He contends the court should have awarded Laura rehabilitative
spousal support in the amount of $1500 for four years and $1000 for an
additional two years thereafter. Alternatively, John requests his permanent
spousal support obligation terminate upon his reaching age sixty-two, age sixty-
five, or when he retires.
Spousal support is not an absolute right, but depends upon the particular
facts and circumstances of each case. In re Marriage of Hansen, 733 N.W.2d
683, 704 (Iowa 2007). The discretionary award of spousal support is made after
considering the factors listed in Iowa Code section 598.21A(1) (2013).6
6
The factors to be considered are:
a. The length of the marriage.
b. The age and physical and emotional health of the parties.
c. The distribution of property made pursuant to section 598.21.
7
Traditional or permanent spousal support is “payable for life or so long as a
spouse is incapable of self-support,” In re Marriage of Olson, 705 N.W.2d 312,
316 (Iowa 2005), with the goal of “provid[ing] the receiving spouse with support
comparable to what he or she would receive if the marriage continued,” Gust,
858 N.W.2d at 408 (quoting In re Marriage of Hettinga, 574 N.W.2d 920, 922
(Iowa Ct. App. 1997)). Rehabilitative spousal support is a “way of supporting an
economically dependent spouse through a limited period of re-education or
retraining following divorce, thereby creating incentive and opportunity for that
spouse to become self-supporting.” In re Marriage of Francis, 442 N.W.2d 59, 63
(Iowa 1989).
The district court found permanent spousal support was appropriate in this
case. In making this award, the district court noted the parties had a thirty-one-
year marriage, there was a great disparity in their earnings, Laura had helped
support John while he earned his master’s degree, she had not worked outside
the home for twenty-two years and had not developed skills or expertise that
d. The educational level of each party at the time of marriage and at the
time the action is commenced.
e. The earning capacity of the party seeking maintenance, including
educational background, training, employment skills, work experience,
length of absence from the job market, responsibilities for children under
either an award of custody or physical care, and the time and expense
necessary to acquire sufficient education or training to enable the party to
find appropriate employment.
f. The feasibility of the party seeking maintenance becoming self-
supporting at a standard of living reasonably comparable to that enjoyed
during the marriage, and the length of time necessary to achieve this
goal.
g. The tax consequences to each party.
....
j. Other factors the court may determine to be relevant in an individual
case.
Iowa Code § 598.21A(1).
8
would be valuable to employers, she was “significantly disabled” as a result of
her stroke, and she was suffering from depression that impacted her ability to
maintain a full-time job. In essence, the district court found that given her age
and the above circumstances, “it is really not feasible that [Laura] would become
self-supporting at a standard of living reasonably comparable to that enjoyed
during the marriage.”
Upon our de novo review, we find the district court properly weighed the
statutory factors and the spousal support award in this case does not fail to do
equity. See In re Marriage of Anliker, 694 N.W.2d 535, 540 (Iowa 2005).
Further, we note Laura has a bachelor’s degree and a CPA certificate. Thus, no
re-education or retraining will help her become self-supporting. Additionally, our
supreme court recently held that a spousal support payor’s future retirement is
too “speculative . . . to be considered in the initial spousal support award.” Gust,
858 N.W.2d at 416. Similar to Gust, we are missing important facts in this case
concerning John’s retirement plans and the parties’ future economic positions.
See id. John claims he may retire within the next ten years, but we do not know
when he will actually retire. See id. at 416–17. “We do not know what the
relative financial position of the parties will be at the time of [John]’s eventual
retirement,” or whether he will “maintain consulting relationships or other
arrangements that enhance his retirement income.” See id. at 417. We do not
know whether John’s health will decline or if Laura’s health will worsen. See id.
And we do not know whether John will be motivated to retire to avoid or reduce
his spousal support obligations. See id. Therefore, we conclude any request by
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John to have his spousal support obligation terminate upon his retirement is best
left to a possible modification action “when retirement is imminent or has actually
occurred.” Id. at 418. Accordingly, we affirm the district court’s permanent
spousal support award of $3000 per month.
John also claims the district court erred in failing to deduct spousal
support paid to Laura in calculating his income for child support purposes.7
There is a rebuttable presumption that the amount of child support
determined in accordance with Iowa’s child support guidelines is the correct
amount of child support to be awarded. Iowa Ct. R. 9.4. The guidelines
enumerate the items that can be deducted from gross income in arriving at the
“net monthly income” which is to be used for calculating child support. Iowa Ct.
R. 9.5. Under Iowa Court Rule 9.5(8), only prior support obligations are
deductible from net monthly income, not support ordered in the present decree.
Iowa Ct. R. 9.5; In re Marriage of Lalone, 469 N.W.2d 695, 697 (Iowa 1991).
However, the district court has discretion to include the current alimony amount
in the child support calculations if failure to do so would result in substantial
injustice to either party or the child. Lalone, 469 N.W.2d at 697.
The district court here did not deduct the spousal support to be paid by
John when determining his income but did include the amount of spousal support
7
In his brief, John argues the court failed to both include spousal support Laura received
in calculating her income and deduct spousal support John paid when determining his
income for child support purposes. We note the district court considered the spousal
support ordered here as income to Laura for purposes of calculating child support.
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ordered in determining Laura’s income.8 Because of the substantial monthly
amount and lengthy duration of the spousal support obligation, we conclude it
would be inequitable not to allow the deduction to John. See In re Marriage of
Milton, No. 00-0617, 2002 WL 1840858, at *5 (Iowa Ct. App. Aug. 14, 2002)
(modifying trial court decree to allow deduction of spousal support where child
support payor was ordered to pay $1500 per month in spousal support for seven
years); In re Marriage of Russell, 511 N.W.2d 890, 891–92 (Iowa Ct. App. 1993)
(modifying trial court decree to allow deduction of spousal support where child
support payor was ordered to pay $1000 per month in spousal support for five
years); In re Marriage of Allen, 493 N.W.2d 273, 275 (Iowa Ct. App. 1992)
(modifying trial court decree to allow deduction of spousal support where child
support payor was ordered to pay $750 per month in spousal support for six
years). We conclude that not allowing the deduction would result in substantial
injustice to John. See Lalone, 469 N.W.2d at 697. We therefore modify this
provision, reducing John’s net monthly income for child support purposes to
$5124.85, and modify his child support obligation to $228.19 for three children,
$185.63 for two children, and $105.86 for one child until his child support
obligation ends.9
8
The current child support guidelines provide that support is calculated based on the
total net monthly income of the parties, then allocated based on the percentage of that
income attributed to each. Under the district court’s order, the total income of the parties
is inflated by $36,000, as the spousal support was added to Laura’s income, but not
subtracted from John’s income. Thus, the child support calculation is incorrect.
9
We reached this calculation by using a gross annual income for John of $114,564.25
minus $36,000 ($78,564.25), allowing him a deduction for two children and filing as head
of household, to reach a net monthly income of $5124.85; a gross annual income of
$12,589.71 combined with $36,000 in spousal support for Laura ($48,589.71), allowing
11
B. Life Insurance
John also argues the district court erred in requiring him to maintain a
$200,000 life insurance policy naming Laura as the beneficiary to secure his
support obligations. He argues that any obligation for life insurance should end
when his child support obligations end. The statement of requested relief John
submitted to the district court had requested the court order him to designate
Laura as the beneficiary of $100,000 of that life insurance policy. That requested
relief makes no reference to whether he intended the life insurance as a property
issue or security for support. At the commencement of the trial, John’s counsel
stated: “We are willing to stipulate that Mr. Lockard would maintain a policy of life
insurance. The primary dispute here is how much.”
A requirement to maintain life insurance to secure spousal support is
permissible. See Olson, 705 N.W.2d at 318. The court may order the security of
a life insurance policy where the party requesting the security has demonstrated
a need and the cost of such a policy would not be unduly burdensome. See id.;
see also In re Marriage of Muow, 561 N.W.2d 100, 102 (Iowa Ct. App. 1997).
We find Laura has demonstrated a clear need for continued support based upon
her limited employment experience, significant disability, and inability to support
herself at a standard of living reasonably comparable to that enjoyed during the
marriage. Although John’s employment seems stable at the present time, on our
her a deduction for one child and filing as head of household, to reach a net monthly
income of $3538.87; and including a $204 monthly credit to John for the cost of the
children’s health insurance premium. As noted above, John’s pre-tax health benefits
cafeteria plan was not included in the support calculations. This issue was conceded at
trial, so we will not address it further.
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de novo review we recognize the history of the family’s financial difficulties
justifies the district court’s determination that some amount of life insurance to
secure future support obligations is equitable.
After the trial of this case, the district court judge stated in open court: “In
order to partially secure child and spousal support, I’m ordering that the father
keep $200,000 of [life] insurance . . . naming the mother the beneficiary—so long
as he is obligated on child support or spousal support.” The written decree
provides language to the same effect. At the time of trial, John was paying $186
per month for a $1.1 million term life insurance policy. Although the record does
not provide us with the cost of $100,000 worth of life insurance, or the cost of a
$200,000 policy, or what the premiums will be as John reaches insurance-age
milestones, we cannot say the district court failed to do equity in its life insurance
order.
Therefore, we affirm the provision requiring John to maintain a $200,000
policy naming Laura as the beneficiary to secure his spousal and child support
obligations.
C. Marital Home
John argues the district court erred in not ordering the marital home be
sold and the proceeds after costs divided between the parties. He claims that
because the court awarded joint physical care of the children instead of awarding
him sole physical care, his retention of the family home is not necessary for the
children’s stability. He further complains that based upon the financial
obligations imposed on him by the court’s decree, he cannot maintain the home
13
and its associated payments. Additionally, John disputes the court’s determined
value of the home and the value of the home’s equity.
“Although our review is de novo, we ordinarily defer to the trial court when
valuations are accompanied by supporting credibility findings or corroborating
evidence.” Hansen, 733 N.W.2d at 703. At trial, Laura submitted a formal and
credible appraisal establishing the home’s value at $183,000. John contends the
home is worth only $178,000 due to hail damage10 and other needed repairs.
We agree with the district court’s conclusion that the appraisal was reasonable,
having considered the hail damage and necessary repairs, and value the home
at $183,000. The home has an undisputed outstanding mortgage indebtedness
of $167,104. The district court calculated the home’s equity to be $15,896 at the
time of trial, and ordered that amount be split one-half to each party—requiring
John to make a payment to Laura for her share of the home’s equity in the
amount of $7948. Because the district court awarded the marital home to John,
he may decide to sell it, but we decline to alter the district court’s decree in this
respect. Therefore, we affirm the district court’s valuation of the marital home, its
award of the home to John, and John’s ordered payment of $7948 to Laura.
D. Trial Attorney Fees
John appeals the trial court’s award of $5000 in attorney fees to Laura.
“Ordinarily an award of attorney’s fees rests in the sound discretion of the trial
court and will not be disturbed on appeal in the absence of an abuse of
discretion.” In re Marriage of Wessels, 542 N.W.2d 486, 491 (Iowa 1995). “[A]n
10
The district court awarded John the proceeds of any hail damage claim on the home.
14
award of attorney’s fees depends upon the ability of the respective parties to pay,
depending upon the financial circumstances and earnings of each.” Id. We find
no abuse of discretion here and affirm the district court’s award of $5000 in
attorney fees to Laura.
E. Appellate Attorney Fees
Laura requests attorney fees for this appeal. Appellate attorney fees are
not a matter of right, but rather rest in this court’s sole discretion. In re Marriage
of Okland, 699 N.W.2d 260, 270 (Iowa 2005). In determining whether to award
attorney fees, we consider the needs of the party seeking the award, the ability of
the other party to pay, and the relative merits of the appeal. Id. Given the
substantial disparity in earnings between the parties, we award Laura appellate
attorney fees of $2000.
IV. Conclusion
Upon our de novo review, we affirm the district court’s decree (1) ordering
John to pay permanent spousal support to Laura in the amount of $3000 per
month; (2) requiring John to maintain $200,000 in life insurance naming Laura as
the beneficiary to secure his spousal support and child support obligations;
(3) awarding John the marital home valued at $183,000 and payment to Laura for
her share of the home’s equity in the amount of $7948; and (4) awarding Laura
$5000 in trial attorney fees. We modify the district court’s decree to deduct from
John’s income the spousal support paid to Laura for purposes of calculating his
child support obligation, and remand for entry of an order consistent with our
15
recalculation of child support. We award Laura appellate attorney fees in the
amount of $2000. Costs of the appeal are assessed to John.
AFFIRMED AS MODIFIED AND REMANDED.