Opinion
No. 2-856 / 01-1745.
Filed February 28, 2003.
Appeal from the Iowa District Court for Audubon County, Gordon Abel, Judge.
The respondent appeals various economic provisions of the parties' dissolution decree. Respondent also requests an award of appellate attorney fees. AFFIRMED AS MODIFIED.
Robert Kohorst of Kohorst, Early, Gross Louis, Harlan, for appellant.
J. C. Salvo, Harlan, and Vicki Copeland of Wilcox, Polking, Gerkin, Schwarzkopf Copeland, P.C., Jefferson, for appellee.
Considered by Sackett, C.J., and Miller and Eisenhauer, JJ.
Ronald Wetzel appeals various economic provisions of the parties' dissolution decree. Wetzel contends the district court erred in (1) enlarging the decree by ordering him to pay for petitioner's medical insurance, (2) awarding excessive attorney fees, (3) awarding excessive child support, and (4) penalizing him for loss of stock assets. We affirm as modified.
I. Background Facts and Proceedings. Ronald and Pamela Wetzel were married in 1979 and have four children, Brandy Lee, age twenty-one, Natalie, age seventeen, McKenzie, age fourteen, and Samantha, age twelve. Brandy is a junior at Iowa State University. Ron is a carpenter and earned an average income of $33,226.00 from average gross receipts of $132,806.00 in 1999-2000. Pamela worked a variety of jobs during the marriage, and currently earns $20,252.00 per year at the Audubon County Hospital Foundation.
The parties separated on April 8, 2000. Ronald was ordered to pay temporary spousal and child support of $1500 per month and was ordered to maintain health insurance for Pamela and the children. Ronald purchased the insurance with a $5000 deductible. Soon thereafter, Pamela incurred considerable expenses for the children's health problems, including $300 per month for Natalie's medications. Pamela's health was also questionable due to gynecological problems. Ronald was found in contempt for failing to meet his child and spousal support obligations. Ronald did not contribute toward the children's medical expenses.
Shortly after trial, but before a decree was entered, Ronald cancelled Pamela's insurance without informing her. Not knowing her insurance was cancelled, Pamela agreed to schedule surgery for July 2001. A day before surgery, Pamela was informed by the hospital that her insurance had been cancelled and she would have to pay a $10,000 cash deposit before surgery could be performed.
The parties' dissolution decree was filed July 2, 2001. The court ordered Ronald to pay monthly child support of $828. He was further ordered to pay monthly alimony of $500 per month until the youngest child reached age twenty-one, at which time his obligation would be reduced to $300 for life. Ronald was additionally ordered to pay for the children's health insurance with a $500 deductible. Pamela was ordered to pay $500 of any initial uncovered medical expenses, while Ronald was ordered to pay the remaining two-thirds and Pamela the remaining one-third of any uncovered expenses. Pamela was awarded a cash property settlement of $20,087. The court ordered Ronald to pay $6000 toward Pamela's attorney fees due to his recalcitrance in providing financial information.
After the decree was entered, Pamela filed a motion to enlarge, claiming Ronald's cancellation of her insurance prevented her from obtaining necessary medical care in derogation of his obligations under the temporary order. The court granted Pamela's motion and increased her cash settlement to $30,087. Ronald has appealed.
II. Scope of Review. Our scope of review is de novo. Iowa R.App.P. 6.4. We give weight to the factual findings of the district court, especially when considering the credibility of witnesses, but we are not bound by them. Iowa R.App.P. 6.14(6)(g).
III. Motion to Enlarge. Ronald contends the district court erred in granting Pamela's motion to enlarge. He contends he was only required to pay for Pamela's medical insurance "during the pendency of this action," and that once trial was over, his obligation ceased. Ronald notes the decree did not order him to pay for Pamela's insurance, there was no discussion at trial regarding him paying it, and that it was reasonable for him to cancel the insurance since only the decree needed to be filed.
Iowa Code section 598.14 (2001) provides that a temporary order remains in full force and effect "until the action is dismissed or a decree is entered dissolving the marriage." See also Bork v. Richardson, 289 N.W.2d 622, 624 (Iowa 1980); In re Marriage of Springer, 538 N.W.2d 897, 901 (Iowa Ct.App. 1995). Temporary orders are considered final judgments under section 598.11. Springer, 538 N.W.2d at 900.
The temporary order filed April 17, 2000 required Ronald to maintain Pamela's medical insurance during the pendency of this action. Ronald, however, cancelled the insurance in April 2001, several months before the entry of the final decree. "Pendency" is a derivative of the word "pendent". According to The American Heritage Dictionary 917 (2d ed. 1985), "pendent" is defined as something "awaiting settlement." At the time Ronald cancelled Pamela's insurance, the temporary order still governed the actions of the parties since the final decree was not filed until July 2, 2001. Based on the wording of section 598.14 and the plain meaning of the word "pendency," Ronald was required to pay for Pamela's medical insurance until the final decree was entered. However, this does not end our inquiry. Pamela did not have her surgery scheduled during the pendency of the case. When the decree was entered on July 2, 2001, Ronald's obligation to provide health insurance ended. He had no health insurance obligation on July 6, 2001, the date scheduled for Pamela's surgery. The court added $10,000 to the property settlement to assist Pamela with her health care costs. We conclude there is no basis for the additional award. Ronald shall pay the original cash award of $20,087.00.
IV. Attorney Fees. Ronald asserts the district court abused its discretion in awarding excessive attorney fees, arguing it was unnecessary for Pamela to hire two attorneys to represent her. The district court based its attorney fee award on findings that Ronald's obstructive behavior during discovery caused Pamela to incur added legal expenses.
The amount of attorney fees awarded in a decree rests within the district court's sound discretion. Beckman v. Kitchen, 599 N.W.2d 699, 702 (Iowa 1999). An award of attorney fees will not be disturbed on appeal in the absence of an abuse of discretion. In re Marriage of Romanelli, 570 N.W.2d 761, 765 (Iowa 1997). Factors for the court to consider in making an award include (1) time spent, (2) nature and extent of the service, (3) the amount involved, (4) the difficulty of handling, (5) importance of issues, (6) responsibility assumed, and (7) the results obtained. Beckman, 599 N.W.2d at 702. The fees must be reasonably and rationally related to the case as a whole. Sunrise Dev. Co. v. Iowa Dep't of Transp., 540 N.W.2d 465, 469 (Iowa Ct.App. 1995).
The district court noted Ronald was extremely secretive about his financial affairs and was reluctant to include Pamela in financial decisions, making it difficult for her to decipher the tangled web of Ronald's financial documents. The court reasoned that in order to untangle Ronald's financial web, Pamela was compelled to hire another attorney to assist trial counsel. The record reveals Pamela filed several contempt actions in order to compel Ronald to meet his support obligations under the decree. Trial was continued twice due to Ronald's failure to adequately comply with discovery requests. Ronald's failure to maintain Pamela's health insurance prompted additional legal proceedings and expenses. Ronald is in a more secure financial position to pay. Based on this record, we conclude the district court did not abuse its discretion in awarding Pamela attorney fees of $6000.
IV. Child Support. Ronald also asserts the district court's child support award of $828 per month is excessive. He contends the court's deviation from the child support guidelines is inequitable since the award in essence forces him to pay twice for the children's medical expenses. We disagree.
In determining Ronald's child support obligation, the court noted the children's extraordinary medical expenses, including Natalie's $300 monthly prescription cost. The court further noted these prescriptions costs alone totaled twenty percent of Pamela's $1537.51 net monthly income, justifying a deviation from the guidelines.
In determining child support, the trial court must first look to the child support guidelines. In re Marriage of Hilmo, 623 N.W.2d 809, 811 (Iowa 2001). The child support guidelines are strictly followed in determining a parent's support obligation. State ex rel. Miles v. Minar, 540 N.W.2d 462, 464 (Iowa Ct.App. 1995). In applying the guidelines, we are required to determine the parties' net monthly incomes. Hilmo, 623 N.W.2d at 811. The scheduled amount, however, is not unassailable, but may be increased or decreased if the court finds it necessary to provide for the children's needs or to effectuate justice between the parties under the special circumstances of the case. Miles, 540 N.W.2d at 464.
For purposes of the guidelines, the district court determined Ronald's income was $35,416 and Pamela's was $20,332. Although Ronald's income decreased in 2000, his earning potential is greater, considering his previous gross business receipts. While Pamela has worked throughout the marriage, her earning potential is limited since she has not obtained a high school degree. Ronald's income decreased partially due to his decision to delve into daytime stock trading rather than working at his business.
Ronald does not dispute the children's medical needs are considerable and would require a large percentage of Pamela's income. While the children's health insurance policy has a $500 deductible, Ronald is not required to provide coverage for optometry, orthodontics, or prescriptions, and one-third of these expenses will have to be paid from Pamela's already strained budget. Based on the record as a whole, we do not believe the district court erred in deviating from the child support guidelines and setting Ronald's monthly child support at $828.
We further note at trial Ronald proposed paying $725 per month in child support based on income of $35,416. His proposal does not vary significantly from the district court's calculations.
V. Stock Assets. Ronald last contends the district court erred in holding him responsible for a $28,835 loss in value of the parties stock. He maintains there is no evidence that his day trading caused their portfolio to decrease in value.
Iowa courts have recognized that some conduct of a spouse which results in the loss or disposal of property which would otherwise be subject to division at the time of the divorce may be considered in making an equitable division of property. In re Marriage of Bell, 576 N.W.2d 618, 624 (Iowa Ct.App. 1998) ( abrogated on other grounds by In re Marriage of Wendell, 581 N.W.2d 197 (Iowa Ct.App. 1998)). Dissipation or waste of marital assets by a spouse prior to the dissolution of marriage may be considered in making a property division. In re Marriage of Burgess, 568 N.W.2d 827, 828 (Iowa Ct.App. 1997).
The district court's April 17, 2000 temporary order prohibited Ronald from transferring, liquidating, or disposing of any marital asset or incurring any debt, without express permission from the court. At the time of the parties' separation, their Ameritrade stock portfolio was valued at $69,778. A few weeks later, the value of the stock was valued at $50,894. Despite the court's order, Ronald continued to buy and sell stock. Ronald took $15,000 from the Ameritrade account and placed it in Datek, which is now worth less than one-half the original value. Tom Zaccone, an investment counselor, testified that Ronald's stock transactions indicated day trading is a very high-risk activity. Ronald also invaded several other investment and bank accounts and purchased items for himself, including a new van. He further prepaid $3300 from a joint account toward his 2001 taxes, although he admitted that one-half those funds belonged to Pamela.
While Ronald's actions may not be the sole cause of the reduction in value of marital assets after their separation, the record is clear they contributed significantly toward the reduction. The district court therefore did not err in concluding Ronald should be charged with a $28,835 reduction in stock values when determining an equitable distribution of marital property.
VI. Appellate Attorney Fees. Pamela requests an award of appellate attorney fees. An award of appellate attorney fees is not a matter of right, but rests within the court's discretion. In re Marriage of Kurtt, 561 N.W.2d 385, 389 (Iowa Ct.App. 1997). 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 Maher, 596 N.W.2d 561, 568 (Iowa 1999). We conclude each party should be responsible for their own appellate attorney fees.