Marriage of McKamey, In re, 92-1795

• Decision Date: 28 June 1994
• Docket Number: No. 92-1795,92-1795
• Parties: In re the MARRIAGE OF Susan G. MCKAMEY and Dennis J. McKamey. Upon the Petition of Susan G. McKamey, Petitioner-Appellee, And Concerning Dennis J. McKamey, Respondent-Appellant.
• Court: Iowa Court of Appeals

Page 95

522 N.W.2d 95

In re the MARRIAGE OF Susan G. MCKAMEY and Dennis J. McKamey.

Upon the Petition of Susan G. McKamey, Petitioner-Appellee,

And Concerning Dennis J. McKamey, Respondent-Appellant.

No. 92-1795.

Court of Appeals of Iowa.

June 28, 1994.

Stephen P. Wing of Dwyer, Wing, Zamora, Taylor & Walters, Davenport, for appellant.

Arthur L. Buzzell, Davenport, for appellee.

Considered by HAYDEN, P.J., and SACKETT and CADY, JJ.

SACKETT, Judge.

Respondent-appellant Dennis J. McKamey appeals from a decree dissolving his marriage. He contends the property division is not equitable and he was ordered to pay more child support than was contemplated by the child support guidelines. We affirm.

Dennis and petitioner-appellee Susan G. McKamey were married in 1974. At the time of trial, the parties were both thirty-seven years old and had two children, Stacy, born in 1976, and Brett, born in 1978. Susan works at the community hospital and earns minimum wage for thirty-six hours a week. The hospital, in addition to her salary, pays her health insurance. Dennis is a sole proprietor of a muffler and oil change shop. The trial court valued the assets and liabilities and apportioned them between the parties. Based on the trial court's values, Susan received net equities of $34,000 and Dennis received net equities of $52,000. Dennis was ordered to pay Susan $8000 to equalize the property division and alimony of $30 a week for four years.

Dennis contends, in apportioning the assets and in fixing his income, the trial court did not do equity. Our review is de novo. Iowa R.App.P. 4. We give weight to the fact findings of the trial court, especially when considering the credibility of witnesses. Iowa R.App.P. 14(f)(7). 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 Weidner, 338 N.W.2d 351, 356 (Iowa 1983).

Dennis bought the shop in 1985 with the help of a loan from his mother of $55,000. The business is located in a building owned by the parties and subject to a debt to Dennis's mother of about $25,000 and a debt to a bank of about $56,000. Dennis valued his business equipment and inventory at about $17,000. He claimed his accounts receivable were $7200 but not all collectable, and James's accountant testified they should be discounted about ten percent. His balance sheet shows an owner's equity of $21,000. His tax returns show business earnings for the prior three years of an average of $15,500. Susan testified cash was taken from the business that was not reported.

The trial court found Dennis's financial statement not credible and valued the business at $35,000. Dennis contends there was not evidence supporting that value but the only value that should be placed on the business is $24,440.

We find the value placed on the assets by the trial court to be well within the permissible range of evidence and will not disturb them on appeal. See In re Marriage of Bare, 203 N.W.2d 551, 554 (Iowa 1973); In re Marriage of Griffin, 356 N.W.2d 606, 608 (Iowa App.1984).

Dennis next contends the child support ordered was excessive. Dennis reported an average three-year profit from his business of about $15,000; however, the trial court did not find this figure accurately represented the income Dennis had available for child support purposes. The trial court specifically found Dennis pays personal expenses, including transportation and living expenses, and deducts these expenses as business expenses and also Dennis supplements his household income by paying wages of $10,000 a year which he also deducts. These wages were first paid to his wife and now are paid to his girlfriend. The trial court, therefore, found Dennis's income was $30,000 a year or, at least, he had the ability to generate income of $30,000 a year. Dennis argues the trial court did not give him proper credit for depreciation in arriving at this figure.

The child support guidelines are applicable. See In re Marriage of Powell, 474 N.W.2d 531, 533 (Iowa 1991) (under child support guidelines, there is rebuttable presumption that amount of child support that would result from application of guidelines is correct); In re Marriage of Ludwig, 478 N.W.2d 416, 419 (Iowa App.1991) (application of child support guidelines is mandatory unless court makes written findings that adjustment is necessary); Iowa Dep't of Human Servs. ex rel. Gonzales v. Gable, 474 N.W.2d 581, 582(IowaApp.1991)(childsupportguidelinesaretobeusedindeter); InreMarriageofToedter,473N.W.2d233,235(IowaApp.1991)(trialcourtwasrequiredtoappl ychildsupport); InreMarriageofRodgers,470N.W.2d43,45(IowaApp.1991)(levelofchildsupportshouldhave beensetinac,absentanyindicationthatguidelineswereina).

Before applying the guidelines there needs to be a determination of the net monthly income of the custodial and non-custodial parent. See Powell, 474 N.W.2d at 533 (court must determine the parents' current income from most reliable evidence presented); In re Marriage of Lalone, 469 N.W.2d 695, 696 (Iowa 1991) (application of child support guideline chart first involves determination of net monthly income of each parent); In re Marriage of Miller, 475 N.W.2d 675, 678 (Iowa App.1991) (first step in using the child support guidelines is to arrive at "net monthly income").

This is one of a series of cases that have come before the Iowa appellate courts seeking further definition of "net monthly income" as used in the guidelines. See In re Marriage of Gaer, 476 N.W.2d 324, 326-30 (Iowa 1991) (in determining income available for child support, self-employed truck driver would be allowed deduction for straight line method of depreciation of truck); Powell, 474 N.W.2d at 533-34 (court may determine current monthly income based upon income prior to temporary unemployment); Lalone, 469 N.W.2d at 697 ("net monthly income" excluded alimony paid); State ex rel. Dep't Human Serv. v. Burt, 469 N.W.2d 669, 671 (Iowa 1991) (amount father ordered to pay to be applied toward his accrued obligation for public assistance advanced in past is not deductible from gross income in determining net income under child support guidelines); In re Marriage of Mayfield, 477 N.W.2d 859, 861-62 (Iowa App.1991) ("net income" was properly found to equal average of last two years of taxable income); Miller, 475 N.W.2d at 678-79 ("net monthly income" did not exclude alimony paid); In re Marriage of Jennings, 455 N.W.2d 284, 287-88 (Iowa App.1990) (net monthly income under the guidelines means gross monthly income less specifically enumerated deductions).

The definition of income as used in the guidelines is most readily adaptable to the parent employed at a set monthly wage. We agree with Dennis, the definition of income in the guidelines is not easily applied to the earnings of self-employed persons who experience month-to-month and/or year-to-year fluctuations in income. The translation of the income of a self-employed person or an employed person who has varying wages to a monthly "net income" is difficult. However, the difficulty in making the computation is not sufficient justification for not making the computation.

Generally in fixing child support, we consider as gross income what is referred to as "total taxable" income on the Federal 1040 and as "net income" on the IA 1040. See In re Marriage of Cossel, 487 N.W.2d 679, 683 (Iowa App.1992). Dennis's business showed it made about $15,000 in 1990 and about...