Opinion
No. 0-652 / 00-0274
Filed March 14, 2001
Appeal from the Iowa District Court for Pottawattamie County, Michael S. Walsh, Judge.
The respondent appeals a district court order denying her petition to modify the child support provisions of the parties' dissolution decree and her petition to vacate the decree. AFFIRMED AS MODIFIED.
Harvey L. Harrison and Catherine C. Dietz-Kline of Harrison Dietz-Klein, Des Moines, for appellant.
John M. French of Peters Law Firm, P.C., Council Bluffs, for appellee.
Heard by Sackett, C.J., and Huitink and Hecht, JJ.
The respondent-appellant, Lora Shanks, appeals a district court order denying her petition to vacate a dissolution decree and her alternative motion to modify the decree. She claims the district court erred in: (1) granting Randall Shanks' motion for summary judgment and dismissing her petition to vacate the decree without first permitting her to conduct discovery; (2) failing to require him to make a full financial disclosure; (3) failing to increase Randall's child support obligation; (4) failing to admit evidence produced by Firstar Bank pursuant to a subpoena; (5) modifying the college support provisions of the decree; and (6) ordering her to repay Randall for health insurance premiums he mistakenly paid. Lora requests an award of trial and appellate attorney fees. Randall requests an award of appellate attorney fees. We affirm as modified.
I. Factual Background and Proceedings. Randall and Lora Shanks are the parents of two minor children: Emily, born December 29, 1986, and Mallory, born April 26, 1988. Randall, an attorney, filed a petition for dissolution of marriage in March of 1996. Trial of the matter was scheduled for May 1, 1997. On April 30, 1997, the parties, their attorneys, and a district court judge conducted a settlement conference. After six hours of negotiations, the parties reached agreement as to all issues except the Christmas Day visitation schedule. The parties made a record of their agreement in the presence of the court and agreed to submit the remaining visitation issue to the judge for decision. On May 7, 1997, Lora advised Randall through counsel that she intended to withdraw from the agreement reached during the settlement conference. Randall filed a motion requesting enforcement of the settlement and entry of a decree of dissolution. In her resistance, Lora alleged the agreement had been obtained through fraud, misrepresentation, unconscionable behavior, or mistake. In particular, she alleged Randall had orally agreed prior to April 30, 1997, to settle a client's personal injury claim (the "Jensen case") for $1,000,000; but he had wrongfully failed to disclose this fact to her before or during the settlement conference. Lora requested leave to withdraw from the settlement and an opportunity to undertake discovery to establish when the tort claim had been settled.
On May 8, 1997, a hearing was held on Randall's motion to enforce the settlement of the dissolution action. On June 5, 1997, the district court entered an order granting the motion, and filed a decree of dissolution incorporating the terms of the agreement reached by the parties on April 30, 1997, and resolving the Christmas visitation issue. The court found, inter alia: (1) both parties were well-represented by counsel during discovery, all hearings and the settlement conference; (2) there were no pending motions or issues relative to discovery on April 30, 1997; (3) the parties were prepared for trial that would have occurred on May 1, 1997, if the case had not been settled as a result of the settlement conference; (4) Lora and her counsel had full knowledge of the Jensen case; (5) Randall made full disclosure to permit Lora and her counsel to undertake valuation of the law practice and the Jensen case; (6) Randall "has not engaged in concealment of material information, fraud, misrepresentation, wrongdoing, or unconscionable behavior;" and (7) "the settlement agreement . . . was fair to all parties and should be enforced." The decree ordered Randall to pay Lora $3000 per month for child support. It also provided for the child support to continue until the children reached age twenty-two if they were attending college. Consistent with the agreement reached by the parties during the settlement conference, the decree awarded no alimony to Lora and divided the property of the parties. Lora did not file an appeal from the order enforcing the settlement agreement or the decree of dissolution.
Lora notes in the present appeal this finding by the district court was clearly erroneous. However, she did not appeal from the resulting final judgment in 1997.
On June 1, 1998, Lora filed a petition to vacate the decree or, in the alternative, to modify the decree. Lora again asserted Randall wrongfully concealed his knowledge of the settlement of the Jensen case prior to and during the April 30, 1997, settlement conference. She requested an equitable division of the parties' property and claimed Randall's income had dramatically increased such that an increase of child support was justified. Randall resisted the motion to vacate the decree and sought modification of the decree to (1) provide for joint physical custody; (2) reduce child support; (3) require Lora to set aside a portion of the child support in a separate fund for the support, education, and welfare of the children; (4) eliminate the child support during the children's postsecondary education; (5) eliminate or reduce his obligation to carry life insurance securing his child support obligation; and (6) permit him two overnights of visitation during the week. Randall also asked the court to order Lora to reimburse him for one year's health insurance premiums he paid by mistake after entry of the decree.
Following a flurry of motions and requests for discovery, Randall filed a motion for summary judgment. The district court granted summary judgment and dismissed Lora's motion to vacate the decree. On January 10, 2000, the district court entered an order regarding all remaining matters. The court declined to award Lora additional child support, concluding it was within the contemplation of the court at the time the decree was entered that Randall would receive a substantial increase in income. The court ruled Lora failed to prove by a preponderance of the evidence an increase of child support was necessary to maintain the children's standard of living. The court declined to award Randall additional visitation, concluding further visitation would be disruptive to the children's routine. The court ordered Lora to reimburse Randall for $1044 in health insurance premiums Randall paid by mistake and for which the decree made her responsible. The court also modified the original decree by ordering both parties to contribute toward the children's college expenses as provided in Iowa Code section 598.21(5A) (1999). Lora appealed.
Lora contends the district court erred: (1) in granting Randall's motion for summary judgment and denying her petition to vacate the decree without first allowing her to conduct discovery; (2) in failing to require Randall to make a full financial disclosure; (3) in failing to admit documents she obtained from Firstar Bank regarding Randall's financial accounts; (4) in failing to increase Randall's child support obligation; (5) in modifying the decretal provision pertaining to child support during the children's enrollment in postsecondary education; and (6) in ordering her to reimburse Randall $1044 for insurance premiums he mistakenly paid. Lora requests an award of trial and appellate attorney fees. Randall requests an award of appellate attorney fees. We address the parties' claims seriatim.
II. Ruling on Motion to Vacate. Lora petitioned to vacate the decree under Iowa Rule of Civil Procedure 252(b) alleging irregularity or fraud practiced by Randall against her in obtaining the decree. Proceedings under rule 252 and 253 are ordinary actions triable at law. Hastings v. Espinosa, 340 N.W.2d 603, 607 (Iowa Ct. App. 1983). Our review is for errors of law, not de novo. Iowa R. App. P. 4; see Stoner v. Kilen, 528 N.W.2d 648, 650 (Iowa Ct. App. 1995). Lora argues the district court erred in granting Randall's motion for summary judgment and dismissing her petition to vacate without allowing her an opportunity to conduct discovery. Summary judgment is appropriate when the moving party has shown no genuine issues of material fact exist and the party is entitled to judgment as a matter of law. Iowa R. Civ. P. 237(c); Schumacher Elec., Inc. v. DeBruyn, 604 N.W.2d 39, 41 (Iowa 1999). When examining whether a genuine issue of fact exists, we view the evidence and record in the light most favorable to the non-moving party. Id.
In its ruling on Randall's motion to enforce the settlement agreement, the district court made the following specific findings:
[T]he court finds that each of the parties was well represented by their counsel including the settlement conference, all hearings, and discovery which was undertaken.
. . . .
The record before the court amply demonstrates that respondent and her counsel had full knowledge of the Jensen case . . . .
. . . .
The court finds and concludes [Randall] had made full disclosure to respondent through discovery during the course of these proceedings to allow respondent and her counsel to undertake their analysis and evaluation of petitioner's practice, including specifically the Jensen case at the time of the mediation and the settlement that was entered into on the record between the parties at the conclusion of the settlement conference on April 30, 1997.
The court finds and concludes that petitioner has not engaged in concealment of material information, fraud, misrepresentation, wrongdoing, or unconscionable behavior.
On the strength of these findings made on June 5, 1997, the district court ordered the enforcement of the settlement agreement and entered a decree consistent with the agreement.
Because Lora did not appeal from either the order enforcing the settlement agreement or the dissolution decree entered on June 5, 1997, the principle of res judicata precludes her from relitigating the same issues under the guise of a petition to vacate the decree. See Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2428, 69 L.Ed.2d 103, 108 (1981) (holding "[a] final judgment on the merits of an action precludes the parties . . . from relitigating issues that were or could have been raised in that action."). Even if, as Lora contends, the district court reached erroneous findings and conclusions in its ruling on Randall's motion to enforce the settlement agreement, Randall is not deprived "of [his] right to rely upon the plea of res judicata . . . ." Id. The district court's findings, order, and decree filed in June of 1997 was a final judgment on the merits and involved the same claims of fraud, misrepresentation, and unconscionable behavior Lora attempted to reassert against Randall in the motion to vacate the decree. Accordingly, the district court correctly concluded there was no genuine issue of material fact remaining for trial on Lora's petition to vacate, and summary judgment was therefore appropriately ordered by the district court on that claim.
Lora's attempt to vacate the decree fails for a second reason. One who seeks to vacate a decree on the basis of fraud must prove extrinsic fraud. Costello v. McFadden, 553 N.W.2d 607, 612 (Iowa 1996). Extrinsic fraud "is some act or conduct of the prevailing party which has prevented a fair submission of the controversy." Stearns v. Stearns, 187 N.W.2d 733, 735 (Iowa 1971). It "includes lulling a party into a false sense of security or preventing the party from making a defense." Costello, 553 N.W.2d at 612. "In contrast, intrinsic fraud inheres in the judgment itself; it includes, for example, false testimony and fraudulent exhibits." In re Adoption of B.J.H., 564 N.W.2d 387, 391 (Iowa 1997). The fraud Lora alleges would be classified as intrinsic fraud, which is insufficient to vacate a judgment. Id. at 392. We therefore affirm the district court's ruling granting Randall's motion for summary judgment and dismissing Lora's petition to vacate the decree.
III. Sufficiency of Randall's Financial Disclosures in Modification Action. Lora also claims the district court erred in failing to require Randall to make full financial disclosure under Iowa Code section 598.13 in the modification action. We review proceedings to modify dissolution decrees de novo. In re Marriage of Sojka, 611 N.W.2d 503, 504 (Iowa 2000). We note the dissolution decree specifically waived the filing of financial affidavits in that proceeding. We acknowledge Randall did not provide disclosure of his financial status to Lora's satisfaction in the modification action. However, one purpose of the statutory requirement for the parties to make financial disclosure is to provide the court with sufficient information from which the court can determine the proper child support obligation of the noncustodial parent. At the time of the entry of the dissolution decree, Randall's net monthly income exceeded $6001, placing determination of his child support obligation in the sound discretion of the district court. SeeIowa Child Support Guidelines; In re Marriage of Bolick, 539 N.W.2d 357, 359 (Iowa 1995). In the stipulated agreement accepted by the court in the dissolution action, the parties agreed to monthly child support of $3000, which would continue during the period for postsecondary support if the children qualified. The financial evidence in the record of the modification proceeding reveals Randall's net monthly income still exceeds $6001. In the modification proceeding, the court inquired into the needs of the children and their standard of living. We find Randall's financial disclosure in the modification proceedings met the requirements of Iowa Code section 598.13 and provided an adequate basis for the district court to determine whether or not modification of Randall's child support obligation was warranted. Accordingly, we affirm on this issue.
IV. District Court's Ruling on Admissibility of Subpoenaed Financial Records. Lora next claims the district court should have allowed her to introduce the financial documents she subpoenaed from Randall's bank. The documents included information about savings accounts Randall established for his daughters, his business trust account, his business checking account, and personal accounts. The bank did not produce the documents in response to the pretrial subpoena until after trial. However, the court held the record open until the documents were received. Lora argued the documents should be admitted to show Randall's ability to pay increased child support and to challenge his credibility. After examining the documents, the district court overruled Lora's application to admit the documents. The court determined Lora failed to comply with Iowa Rule of Civil Procedure 365(f) concerning prior notice of the subpoena. The court also found Lora had not shown how the documents would demonstrate a lack of credibility. Finally, the district court determined there was no showing the documents would be "any more than cumulative" to the other evidence Lora introduced about Randall's financial condition.
On appeal, Lora argues the documents should have been admitted because they were relevant. See Iowa R. Civ. P. 402. The district court has discretion in its evidentiary rulings. Our review is to determine if the court abused its discretion. McClure v. Walgreen Co., 613 N.W.2d 225, 234 (Iowa 2000). The district court did not refuse to admit the documents because they were irrelevant. Relevant evidence may be excluded if it constitutes "needless presentation of cumulative evidence." Iowa R. Evid. 403. Lora does not challenge the court's determination the documents would be cumulative of the other evidence she presented. We conclude the district court did not abuse its discretion in overruling Lora's application to admit the financial documents.
V. Child Support Issues. Next, Lora asserts the district court should have increased Randall's child support obligation. She argues his income, earning capacity, and net worth all have dramatically increased since June of 1997, justifying an increase of his child support obligation. The record reveals Randall's net monthly income was in excess of $6001, both at the time of the decree and at the time of the modification hearing. Under the Child Support Guidelines, Randall's income falls in the range in which the court has discretion in determining the proper amount of child support. In re Marriage of Maher, 596 N.W.2d 561, 565 (Iowa 1999). In the stipulated agreement accepted by the court in the dissolution decree, the parties agreed Randall would pay monthly child support of $3000. The record from the modification proceedings reveals the children's needs are met at this level of support. Lora has not demonstrated the children suffer from any lack in their standard of living compared to what they might enjoy if they lived with Randall or if the dissolution had not occurred. We agree with the district court's finding an increase in Randall's income was within the contemplation of the court when the decree of dissolution was entered. We affirm the district court's decision not to modify Randall's child support obligation.
Effective July 1, 1997, amendments to Iowa Code section 598.21 established more detailed provisions concerning postsecondary education support. Iowa Code § 598.21(5A). The new provisions limit a parent's obligation for postsecondary education support to one-third of the total cost of postsecondary education. Iowa Code § 598.21(5A)(a)(3). These costs are based on the cost of attending an in-state public institution. Iowa Code § 598.21(5A)(a)(1). The amendment to the statute is prospective in application. In re Marriage of Williams,595 N.W.2d 126, 130 (Iowa 1999). In the case before us, the district court modified the child support provisions of the parties' dissolution decree to conform to the new provisions of the Iowa Code and to eliminate the provision for continuing the $3000 per month child support between the children's ages of eighteen and twenty-two. Lora argues on appeal that the original decree, requiring only Randall to pay, adequately provides for the children's educational expenses and it is not in their best interest to reduce Randall's obligation so drastically. Randall responds Lora agreed to this modification in her post-trial brief, which amounts to a stipulation which the court should accept. The Sojka case controls our resolution of this issue. In that case, the supreme court clearly stated, "we now hold that section 598.21(5A) applies only to dissolution decrees postdating the statute's enactment." Sojka, 611 N.W.2d at 505. The decree in the case before us was entered on June 5, 1997. Iowa Code section 598.21(5A) became effective July 1, 1997. The district court should not have modified the decree to conform to the statutory amendment. We modify the decision of the district court by reinstating the postsecondary education support provisions of the original dissolution decree.
VI. Health Insurance Premium Reimbursement. The decree of dissolution gave Lora the right to COBRA health insurance benefits under the existing policy and obligated her to pay her representative share of the premium. Randall did not initially make a determination what portion of the total premium related to Lora's coverage. Lora's monthly portion of the total premium was $87. Randall did not send Lora monthly bills or statements during the year following the decree during which her coverage was in effect. The district court ordered Lora to repay Randall the $1044 ($87 x 12 months) he paid, which represents her portion of the total insurance premium, as ordered in the decree. Lora argues Randall made the mistake in paying her portion of the premium and not determining how much of it was her responsibility, therefore she should not be required to repay him. The district court found no basis for Lora's refusal to pay her share of the premium as set forth in the decree. We also find no basis for Lora's refusal and affirm the judgment of the district court in favor of Randall in the amount of $1044, and affirm on this issue.
VII. Attorney Fees. Lora requests an award of both trial and appellate attorney fees. Randall requests appellate attorney fees. The district court has considerable discretion in awarding attorney fees. In re Marriage of Wessels, 542 N.W.2d 486, 491 (Iowa 1995). It ordered the parties to pay their own attorney fees. We find no abuse of discretion and affirm the district court's judgment concerning attorney fees.
An award of appellate attorney fees is not a matter of right. In re Marriage of Benson, 545 N.W.2d 252, 258 (Iowa 1996). 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 district court's decision on appeal. In re Marriage of Ales, 592 N.W.2d 698, 704 (Iowa Ct. App. 1999). Randall is better able to pay appellate attorney fees; however, he is the party defending the district court's decision on appeal. We determine no award of appellate attorney fees for either party is appropriate. Costs of this appeal are divided equally between the parties.
AFFIRMED AS MODIFIED.