In re Marriage of Hagerla

• Decision Date: 28 April 2005
• Docket Number: No. 04-0976.,04-0976.
• Citation: 698 N.W.2d 329
• Parties: In re the MARRIAGE OF John E. HAGERLA AND Susan J. FRAZEE-HAGERLA. Upon the Petition of John E. Hagerla, Petitioner-Appellant, and Concerning Susan J. Frazee-Hagerla, Respondent-Appellee.
• Court: Iowa Court of Appeals

698 N.W.2d 329

In re the MARRIAGE OF John E. HAGERLA AND Susan J. FRAZEE-HAGERLA.

Upon the Petition of John E. Hagerla, Petitioner-Appellant, and

Concerning Susan J. Frazee-Hagerla, Respondent-Appellee.

No. 04-0976.

Court of Appeals of Iowa.

April 28, 2005.

Eric Borseth of Borseth, Siebrecht & Siebrecht, Altoona, for appellant.

Timothy McCarthy of McCarthy & Hamrock, P.C., West Des Moines, for appellee.

Heard by SACKETT, C.J., and HUITINK and VAITHESWARAN, JJ.

SACKETT, C.J.

Appellant John Hagerla appeals, challenging the economic provisions of the February 27, 2004, decree dissolving his nearly fifteen-year marriage to Susan Frazee-Hagerla. We affirm as modified.

Our review is de novo. Iowa R.App. P. 6.4. We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses. Iowa R.App. P. 6.14(6)(g). We are not bound by these determinations, however. Id. We base our decision primarily on the particular circumstances of the parties presently before us. In re Marriage of McKamey, 522 N.W.2d 95, 97 (Iowa Ct.App.1994); see In re Marriage of Weidner, 338 N.W.2d 351, 356 (Iowa 1983)

.

The parties were married in 1990. Susan was born in late 1961, John in early 1962. Both are high school graduates but neither has an advanced degree, although Susan apparently has a year of college. They have a son born in 1993 and a daughter born in 1994. The parties were named joint custodians of the children and Susan was given primary physical care. The issue of custody is not disputed.

The district court determined John's income to be $80,000 and Susan's income to be $20,000. John was ordered to pay $1,222.41 monthly as support for two children and $868.28 when only one child was subject to support. John was given the tax exemption for the younger child and Susan for the older child. John was also ordered to maintain health insurance on the children and to pay seventy-five percent of uncovered expenses after Susan had paid the first $250 on each child or a maximum of $500. He was also ordered to pay Susan what would appear to be rehabilitative alimony of $1,000 a month for a period of six months and $600 a month for the next eighteen months. The district court divided the parties' assets and made certain other orders, including ordering the parties' personal residence sold and dividing the proceeds subject to Susan paying the mortgage payment and receiving $1,000 a month credit for February and March of 2004 and the amount of principal paid until the home sells.

Child support. John first challenges the amount of child support he was ordered to pay. He contends the district court attributed too much income to him and too little to Susan in computing child support.

Before applying the guidelines there needs to be a determination of the net monthly income of the custodial and noncustodial parent. In re Marriage of McQueen, 493 N.W.2d 91, 92 (Iowa Ct.App.1992). The court must determine the parents' current income from the most reliable evidence presented. See In re Marriage of Powell, 474 N.W.2d 531, 533 (Iowa 1991)

. Application of the child support guidelines chart first involves a determination of net monthly income of each parent. In re Marriage of Lalone, 469 N.W.2d 695, 696 (Iowa 1991); In re Marriage of Miller, 475 N.W.2d 675, 678 (Iowa Ct.App.1991).

John's income. The district court took an average of John's earnings from 1999, 2000, 2001, and 2003 to determine his annual income was $80,000 for purposes of computing child support. His 2002 income, which was exceptionally high, was not averaged in with the other years. His earnings in that four-year period included salary and bonuses. In 1999, 2000, and 2001 John worked for the National Pork Board. As part of a National Pork Board reduction in force his job, together with the jobs of certain other employees of the Board, were terminated, and he received a severance package.

John then found employment on August 18, 2003 with the U.S. Food Service in Phoenix, Arizona as an employee at will. His annual salary was fixed at $65,000. After ninety days of continuous employment he would be in a program with a base salary plus commissions earned on a predetermined customer base and be eligible to participate in their management bonus opportunity plan. He testified the company had not paid a bonus in six years. He also received certain benefits including health, life, and disability insurance and retirement benefits. He left that employment after about two and a half months. He then went to work for Distributing Plus, Inc. for an annual salary of $65,000. He testified he was told there would be no bonuses in 2003 and he did not anticipate receiving a bonus in the future. John contends the district court should not have averaged his income or considered bonus income and that his child support obligation should be computed on his annual salary.

We recognize that in some cases the only equitable way to determine income for purposes of child support is to average income over a period of time. In re Marriage of Cossel, 487 N.W.2d 679, 681 (Iowa Ct.App.1992). In addressing the fluctuating income of a farmer we said:

To establish a monthly income for a self-employed person or one who has fluctuating monthly income, it generally is best to use an average of income from a period that accurately reflects the fluctuations in income. A farmer produces commodities that fluctuate in value.

Id.

We also noted in Cossel, 487 N.W.2d at 682, that the definition of income as used in the child support guidelines is most readily adaptable to the parent employed at a set monthly wage as opposed to a self-employed farmer whose income we averaged over a three-year period.

Cossel has been followed by a series of other cases where averaging earnings over several years was considered in determining a parent's income for purposes of applying the child support guidelines. In re Marriage of Mayfield, 477 N.W.2d 859, 862 (Iowa Ct.App.1991) (noting "net income" was properly found to equal average of last two years of taxable income); In re Marriage of Hoag, 380 N.W.2d 8, 10 (Iowa Ct.App.1985) (considering a five-year period of farming in determining income); see also In re Marriage of Robbins, 510 N.W.2d 844, 846 (Iowa 1994)

(stating "it is unrealistic and unfair to fix child support obligations based solely on the most recent periodic income amounts"); In re Marriage of Powell 474 N.W.2d at 534 (noting that when a parent's income is subject to substantial fluctuations, it may be necessary for the court to average the parent's income over a reasonable period when determining the current monthly income); see also In re Marriage of Knickerbocker, 601 N.W.2d 48, 52 (Iowa 1999).

John is employed at a wage. He is not self-employed. The fluctuations in his income over the period at issue are the result of earnings in prior employment. The credible evidence shows he changed jobs because he was let go by the National Pork Board as a result of its reduction in work force. While the income from his prior employment was greater, nothing in the record reflects that he has not sought employment where he would receive similar compensation. Nor is there any evidence that the change in his employment was made to reduce his income for purposes of reducing his child support obligation. See In re Marriage of Swan, 526 N.W.2d 320, 324 (Iowa 1995)

(holding that parents who reduce their income through an improper intent to deprive their children of support or in reckless disregard for their children's well-being are not entitled to a commensurate reduction in child support payments). Also, to get his new job John has been forced to relocate.

John also contends an amount considered bonus income should not have been added to his income. All income that is not anomalous, uncertain, or speculative should be included when determining a party's child support obligations. In re Marriage of Brown, 487 N.W.2d 331, 333 (Iowa 1992); In re Marriage of Russell, 511 N.W.2d 890, 893 (Iowa Ct.App.1993). Bonuses are frequently included in income. Lalone,469 N.W.2d at 696 (finding employee bonus amount included in "monthly income"); In re Marriage of Pettit, 493 N.W.2d 865, 868 (Iowa Ct.App.1992) (finding overtime and bonus income included in "monthly income").

When deciding whether bonuses are to be included in gross income, we examine the employment history of the payor over the past several years to determine whether the amount of money paid from year to year was consistent. If so the bonuses should be included in gross income. In re Marriage of Nelson, 570 N.W.2d 103, 105 (Iowa 1997); Russell, 511 N.W.2d at 893. While there is evidence John may earn a bonus and has earned bonuses in prior employment, he has no track record in his current employment to show that he has or will receive a bonus there.

While there is substantial precedent both to average income over several years and to include bonuses and expected bonuses in income for purpose of figuring child support, the facts here do not support income averaging nor do they support attributing additional income to John for what may be a bonus. John was forced to find a new job as a result of a workforce reduction. His new job is at less compensation and there is no track record in the new job to determine a bonus. John's income for purposes of determining child support is his salary of $65,000 a year, and we modify the district court's finding accordingly.

John also contends Susan can earn more than $20,000 a year, and an amount in excess of that should be attributable to her as her income. Susan worked until 1998 when she left the job market. At the time she exited she was earning $35,600 annually. Susan has been out of the job market since 1998.

While the parties seemed in agreement about Susan's decision to stay home and spend more time with the children initially, John...