Marriage of Walters, In re, 96-708

• Decision Date: 25 March 1998
• Docket Number: No. 96-708,96-708
• Citation: 575 N.W.2d 739
• Parties: In re the MARRIAGE OF Helena R. WALTERS and Douglas L. Walters. Upon the Petition of Helena R. Walters, Appellee, And Concerning Douglas L. Walters, Appellant.
• Court: Iowa Supreme Court

Page 739

575 N.W.2d 739

In re the MARRIAGE OF Helena R. WALTERS and Douglas L. Walters Upon the Petition of Helena R. Walters, Appellee And Concerning Douglas L. Walters, Appellant.

No. 96-708.

Supreme Court of Iowa.

March 25, 1998

Gary F. McClintock of Hoeger & McClintock, Independence, for appellant.

Tom Jenk of Jenk & Goen, Dyersville, for appellee.

Considered by LARSON, P.J., and CARTER, SNELL, ANDREASEN, and TERNUS, JJ.

SNELL, Justice.

Douglas L. Walters appeals from district court and court of appeals decisions denying his application for modification of his child support obligation. For the reasons set forth below, we vacate the decision of the court of appeals, reverse the judgment of the district court and remand for further proceedings.

I. Background Facts and Proceedings

Douglas and Helena Walters were married on June 2, 1972. They are the parents of four children. Their marriage was dissolved by decree on May 4, 1992. Both parties have since remarried. At the time of the decree, the parties entered into a stipulation which was incorporated into the decree. All provisions of the decree except for the dissolution of the marriage were later set aside and issues of division of property, child custody and child support were considered by the district court. On March 2, 1993, the district court entered a decree granting Helena primary physical care of the three minor children. Douglas was ordered to pay $987.32 per month in child support. The amount was set to decrease to $845.52 per month in August 1993, when the second-oldest child, Crystal, began college. However, under the provisions of the decree Douglas was still required to pay $250 per month directly to Crystal for her college education, with Helena contributing an additional $100 per month. Douglas paid child support, albeit somewhat inconsistently, and as of July 1994 he was current with his obligation.

At the time the district court established the amount of child support Douglas was required to pay, he was employed by the United States Postal Service as postmaster for the town of Lamont, Iowa. He earned approximately $42,000 per year. In August 1994, the postal service fired Douglas when it discovered he had been embezzling funds. Douglas ceased making child support payments at that time. Douglas was subsequently convicted and incarcerated from November 13, 1994 to November 7, 1995. In January 1996, Douglas obtained employment as a factory laborer at a rate of $5.75 per hour. His gross weekly earnings are approximately $230.

Douglas filed an application for modification of child support on November 10, 1994, arguing that a substantial change in circumstances had occurred which warranted a recalculation of his child support obligation. A hearing on the application was held on March 2, 1996. At the time of the hearing, Douglas was nearly $17,000 in arrears on his child support obligation. The two children remaining at home at that time were Nicole, sixteen, and Caitlyn, eight. The district court denied Douglas' application for modification, finding that his incarceration and subsequent inability to find employment comparable to his preconviction job as postmaster did not constitute a substantial change in circumstances. The district court also found Douglas in contempt for failing to obtain release of the money in his postal service pension fund for satisfaction of his child support arrearage. Douglas appealed.

We transferred the case to our court of appeals, which affirmed en banc. The court concluded that while Douglas did not embezzle to avoid his child support obligation, his conduct constituted a reckless disregard for his children's well-being. The court opined that a reduction in his support obligation would be tantamount to rewarding him for his misdeed. The court noted that Douglas had obtained release of his pension fund to be applied in part toward his accrued support obligation. One judge dissented from the majority opinion, arguing that the majority's refusal to modify the support obligation was unreasonable because Douglas simply cannot make the payments. The dissent cited the statistics that Douglas' net monthly income is $870 and his child support obligation is $845.52, rendering fulfillment of his obligation nearly impossible. We granted Douglas' application for further review.

II. Scope of Review

Our scope of review of a child support modification action is de novo. In re Marriage of Bolick, 539 N.W.2d 357, 359 (Iowa 1995); Iowa R.App. P. 4. We give weight to the trial court's factual findings, especially when considering the credibility of witnesses, but are not bound by them. Bolick, 539 N.W.2d at 359. We recognize that the district court "has reasonable discretion in determining whether modification is warranted and that discretion will not be disturbed on appeal unless there is a failure to do equity." In re Marriage of Vetternack, 334 N.W.2d 761, 762 (Iowa 1983).

III. Discussion

Pursuant to Iowa Code section 598.21(8) (1995), a court may modify an order of child support when a "substantial change in circumstances" has been shown to exist. One of the factors which the court is to consider is: "Changes in the employment, earning capacity, income or resources of a party." Iowa Code § 598.21(8)(a ). This is the factor relied on by Douglas in his quest to have his support obligation reduced. The party seeking the modification must prove the change in circumstances by a preponderance of the evidence. In re Marriage of Feustel, 467 N.W.2d 261, 263 (Iowa 1991).

There are several principles regarding satisfaction of the statutory standard which can be gleaned from our prior modification cases:

(1) there must be a substantial and material change in the circumstances occurring after the entry of the decree; (2) not every change in circumstances is sufficient; (3) it must appear that continued enforcement of the original decree would, as a result of the changed conditions, result in positive wrong or injustice; (4) the change in circumstances must be permanent or continuous rather than temporary; (5) the change in financial conditions must be substantial; and (6) the change in circumstances must not have been within the contemplation of the trial court when the original decree was entered.

Vetternack, 334 N.W.2d at 762. We also note the existence of the following trends in our modification cases: "(1) a growing reluctance to modify decrees; (2) current inability to pay has become less a consideration and long range capacity to earn money has become more of a consideration; and (3) any voluntariness in diminished earning capacity has become increasingly an impediment to modification." Id. at 763.

With regard to the voluntariness issue, we have stated:

[A] parent may not rely on a claim of decreased income to obtain a modification of a support order if the parent's reduced earning capacity and inability to pay support is self-inflicted or voluntary. Therefore, 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.

In re Marriage of Swan, 526 N.W.2d 320, 323-24 (Iowa 1995) (citation omitted).

This principle has been applied in various situations. In some, our court and the court of appeals have found an obligor's decreased earning capacity to be the result of involuntary factors and thus have granted a request for modification. See, e.g., In re Marriage of Foley, 501 N.W.2d 497, 500 (Iowa 1993) (finding that obligor's reduction in income due to termination of employment for insubordination was not voluntary or self-inflicted); Boquette v. Boquette, 215 Iowa 990, 992, 247 N.W. 255, 256 (1933) (obligor's demotion with resulting lower salary justified reduction of support obligation); Nicolls v. Nicolls, 211 Iowa 1193, 1197, 235 N.W. 288, 289 (1931) (discharge from employment and inability to obtain job with comparable pay justified reduction of support obligation); In re Marriage of Drury, 475 N.W.2d 668, 672 (Iowa App.1991) (finding honorable discharge from military and concomitant loss of military pay for failure to comply with weight limits was not voluntary or self-inflicted); In re Marriage of Fidone, 462 N.W.2d 710, 712 (Iowa App.1990) (granting modification to parent who lost job and refused to move 1200 miles to take another job with less security).

On the other hand, our court and the court of appeals have sometimes found an obligor's actions resulting in decreased earning capacity to be voluntary and self-inflicted and therefore refused to modify the child support obligation. See, e.g., In re Marriage of Dawson 467 N.W.2d 271, 275-76 (Iowa 1991) (refusing to reduce child support obligation for obligor who quit job to finish education and take a job with lower pay); Vetternack, 334 N.W.2d at 763 (court unwilling to modify obligation for obligor who committed felony and was incarcerated but who had equity in home from which obligation could be satisfied); Ellis v. Ellis, 262 N.W.2d 265, 267-68 (Iowa 1978) (finding obligor's voluntary retirement at time when he still had substantial earning capacity to be voluntary and self-inflicted); Reed v. Reed, 260 Iowa 1166, 1168-69, 152 N.W.2d 190, 191 (1967) (refusing to modify support obligation when obligor voluntarily quit job to return to school); In re Marriage of Bales, 439 N.W.2d 228, 230 (Iowa App.1989) (declining to modify obligation when obligor quit job paying $15,000 per year to take job paying $5900 per year).

Our court, as well as the court of appeals, has previously considered the question of whether an obligor's incarceration constitutes a substantial change in circumstances justifying modification of a support obligation. In Vetternack, the father-obligor was incarcerated following his conviction for terrorism. Vetternack, 334 N.W.2d at 762. He filed a petition for...