Opinion
No. 1-977 / 01-0853.
Filed July 3, 2002.
Appeal from the Iowa District Court for Henry County, DAVID B. HENDRICKSON, Judge.
Petitioner appeals from the trial court ruling denying his request to modify the alimony provisions of the decree dissolving his marriage to respondent. AFFIRMED.
Michael R. Mullins of Morrison, Lloyd, McConnell, Mullins, Davis Gorham, Washington, for appellant.
David A. Hirsch of Beckman Hirsch, Burlington, for appellee.
Considered by VOGEL, P.J., and MILLER and EISENHAUER, JJ.
Laverne H. Hueholt appeals from the trial court ruling denying his request to modify the alimony provisions of the decree dissolving his marriage to Sondra K. Hueholt. Laverne argues the trial court erred in (1) finding there was not a substantial change in his financial condition, (2) including social security as an "other income source," and (3) failing to find that alimony amounting to more than fifty percent of his income was an injustice or positive wrong. We affirm.
I. BACKGROUND FACTS AND PROCEEDINGS
The thirty-nine year marriage of Laverne and Sondra Hueholt was dissolved by stipulated decree on May 28, 1996. At the time of the dissolution Laverne was retired from his prior occupation as a school superintendent and had begun receiving IPERS benefits as of July 1995. In 1980 Laverne started a corporation known as Herkay Enterprises (Herkay). Laverne is Herkay's sole shareholder. On October 1, 1995, Herkay was awarded a one-year contract by the State of Iowa for Laverne to provide vocational program consulting services through North Iowa Community College. The initial contract provided for an annual income of $49,000, to be renewed on an annual basis. The contract was in fact renewed annually until June 30, 2000 when funding for the services ended. At that time the consulting contract was providing Laverne $72,400 gross income annually.
The 1996 dissolution decree required Laverne to pay $1500 per month to Sondra until either she dies or remarries, Laverne dies, or the amount is modified by agreement or court order. The alimony awarded to Sondra was to be paid one half from the gross amount of Laverne's IPERS ($928.57) with the remainder ($571.43) to come from Laverne's "other income sources."
In June of 2000 Laverne learned his consulting contract with the college was not going to be renewed again. This prompted him to file a petition for modification on August 28, 2000 requesting a reduction in his alimony. He alleged in his petition that there had been a substantial change in circumstances justifying modification of his alimony amount. Hearing was held on the petition to modify on March 7, 2001. At the time of the modification hearing Laverne was sixty-four years old, had remarried, and was retired receiving IPERS and social security benefits. Sondra was sixty-one years of age at the time of the modification and was employed as a medical records assistant at a nursing home, where she had worked since 1991, earning a gross monthly income of $1196.
In a written ruling filed March 23, 2001 the trial court denied Laverne's request for modification. The court concluded that looking solely at the change in Laverne's "other income sources," as the term was used in the stipulated decree, Laverne had suffered an approximately seventy-three percent reduction in such other income since the decree. However, the trial court concluded that in comparing Laverne's monthly income at the time of the dissolution with such income at the time of the modification, as well as taking into account his financial situation as a whole, Laverne had "failed in his burden to show there has been a substantial change in his financial condition which, if the original decree was enforced, would result in a positive wrong or injustice."
This consisted of a loss of a $49,000 consulting contract, together with a $13,392 combined increase in IPERS and commencement of social security retirement benefits.
Laverne asserts the trial court erred in finding a $72,400 reduction in annual income was not a substantial change in his financial condition, in including social security as an "other income source," and in not finding that alimony amounting to more than fifty percent of his income was an injustice or positive wrong.
Error was preserved through Laverne's motion to enlarge or amend the trial court's ruling pursuant to Iowa Rule of Civil Procedure 1.904(2) and the court's ruling on the motion.
II. SCOPE AND STANDARDS OF REVIEW
In this equity case our review is de novo. Iowa R. App. P. 6.4. We examine the entire record and adjudicate rights anew on the issues properly presented. In re Marriage of Smith, 573 N.W.2d 924, 926 (Iowa 1998). No hard and fast rules govern the economic provisions of a dissolution decree, each decision turns on its own uniquely relevant facts. Id. Thus, we accord the trial court considerable latitude in resolving disputed claims and will disturb a ruling only when there had been a failure to do equity. Id.
III. MERITS
Modification of a dissolution decree is governed by Iowa Code section 589.21(8) (1999). "Modification of the alimony provisions of a decree is justified only if there has been some material and substantial change in circumstances of the parties, financially or otherwise, making it equitable that other terms be imposed." In re Marriage of Van Doren, 474 N.W.2d 583, 586 (Iowa Ct.App. 1991). The party seeking the modification must prove the change in circumstances by a preponderance of the evidence. In re Marriage of Rietz, 585 N.W.2d 226, 229 (Iowa 1998); Van Doren, 474 N.W.2d at 586. In determining whether there is a substantial change in circumstances one of the things the court considers is changes in the employment, earning capacity, income or resources of a party. Iowa Code § 589.21(8). "Circumstances that have changed, to justify modification of alimony, must be those that were not within contemplation of the trial court when the original decree was entered." Van Doren, 474 N.W.2d at 586 (citing In re Marriage of Full, 255 N.W.2d 153, 159 (Iowa 1977)). Such changes also must be more or less permanent or continuous, not temporary. Id.
We first consider Laverne's assertion that the trial court erred in including his social security retirement benefits as an other income source. Laverne argues that correspondence between the parties' lawyers at the time of the original dissolution proceeding shows both parties were referring to his consulting contract income when they referred to $571.43 per month of the alimony to be paid from his "other income sources."
Laverne essentially argues that by the term "other income sources" the parties were referring exclusively to his consulting contract income. While that may be true, it is true only because under the facts as they existed at the time his consulting contract income was apparently his only significant income other than IPERS benefits. The record does not suggest that the parties agreed or intended that the term "other income sources" would for all time exclude any and all other non-IPERS income no matter what the future should bring.
Further, and perhaps more importantly, when interpreting dissolution decrees it is not the intent of the parties that is controlling. Rather, when interpreting a dissolution decree the determining factor is the intent of the trial court as gathered from the decree and other proper evidence. In re Marriage of Ruter, 564 N.W.2d 849, 851 (Iowa Ct.App. 1997). No substantial evidence suggests that in entering the dissolution decree the trial court intended that for all time the only non-IPERS income source of Laverne's that could be looked to for alimony was his consulting contract income. In fact, the use of the plural term "other income sources" in referring to non-IPERS income appears to contemplate the opposite, the possibility of more than one non-IPERS income source from which alimony might be paid.
For the two foregoing reasons we find it was appropriate for the trial court to include Laverne's social security retirement benefits in determining whether there had been a substantial change in circumstances to require modification to decrease his alimony obligation, and affirm on this issue.
As set forth above, the change in circumstances relied upon by Laverne in support of his modification petition is the loss of income payable to Herkay pursuant to the consulting contract which, at the of its termination, was providing him with $72,400 in gross income per year. The evidence in the record shows that at the time of the dissolution Laverne's gross monthly income was approximately $3,235.88 ($1,856.13 gross from IPERS and $1,378.75 of after-expense income from the consulting contract), while at the time of the modification action his gross monthly income was approximately $3,090.16 ($1,974.16 from IPERS and $1,116.00 from social security.) Therefore, since the dissolution there has in fact been a slight decrease in his monthly income.
In determining whether there has been a substantial change in circumstances we compare Laverne's income at the date of the modification with his income at the time of the decree, not with his income at some post-decree date. See In re Marriage of Maher, 596 N.W.2d 561, 564-65 (Iowa 1999) (stating the party seeking modification must prove a substantial change in circumstances since the decree or any subsequent modification that considered the situation of the parties upon application for the same relief).
However, between the time of the dissolution and modification actions Herkay has accumulated substantial additional assets in excess of liabilities such that its retained earnings have increased from $10,480 in 1996 to $117,702 in 2000. Furthermore, Herkay continues to pay some $400-$500 of Laverne's monthly expenses, as it apparently did at the time of the decree. In addition, since the dissolution Laverne has inherited, or will inherit, approximately $90,000. Therefore, although his present monthly income from IPERS and social security is somewhat less than his income from IPERS and the consulting contract was at the time of the decree, he now has some $165,000 to $207,000 more in assets than he did at the time of the decree. These additional assets, at any reasonable rate of return, can generate at least as much income as Laverne has otherwise lost. Taking into account the totality of Laverne's financial situation, we find he has not proved that he is now substantially less able to pay the amount of alimony agreed to in the stipulated decree than he was at the time of the dissolution.
In an October 5, 1995 financial affidavit Laverne estimated Herkay Enterprises' value to be $6939, and in a March 8, 2001 financial affidavit he estimated its value to be $81,242.
In conclusion, we agree with the trial court that Laverne has failed to meet his burden to prove there has been a substantial change in circumstances in his financial situation since the original dissolution decree was entered such that if the original decree were enforced it would result in a positive wrong or injustice. The denial of Laverne's application to modify the alimony provisions of the parties' dissolution decree is affirmed.
AFFIRMED.