IN RE THE MARRIAGE OF BONNIE M. PALS AND JAMES J. PALS Upon the Petition of BONNIE M. PALS
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IN THE SUPREME COURT OF IOWA
No. 48 / 05-0507
Filed May 26, 2006
IN RE THE MARRIAGE OF BONNIE M. PALS
AND JAMES J. PALS
Upon the Petition of
BONNIE M. PALS,
Appellee,
And Concerning
JAMES J. PALS,
Appellant.
________________________________________________________________________
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Hancock County, John S.
Mackey, Judge.
Appeal from court’s refusal to modify dissolution decree to
terminate child-support obligation and to establish postsecondary
education subsidy for parties’ adult son.
DECISION OF COURT OF
APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED IN
PART, REVERSED IN PART, AND REMANDED.
Gary L. Berkland of Houser & Berkland, Belmond, for appellant.
Christopher C. Foy of Leslie, Collins & Foy, Waverly, for appellee.
2
CADY, Justice.
In this appeal from a decision by the district court on a petition for
modification of a decree for dissolution of marriage, the noncustodial
parent primarily challenges the denial of his request to terminate his
child-support obligation and to establish a postsecondary education
subsidy for his adult son. The district court and the court of appeals
both found he failed to show a substantial change in circumstances
justifying modification.
We granted further review.
We vacate the
decision of the court of appeals, affirm the decision of the district court
in part, reverse in part, and remand for further proceedings.
I.
Background Facts and Proceedings
Bonnie and James Pals were married on August 14, 1982. They
had two children. Nicole was born June 19, 1979 and was adopted by
James during the marriage. Joel was born August 30, 1985.
Bonnie and James were divorced on April 1, 1991.
The parties
stipulated that Bonnie would have primary physical care of the children,
and James would have reasonable visitation with them.
The court
ordered James to pay child support for both children pursuant to the
child support guidelines in the amount of $679 per month. Support was
to continue in that amount until Nicole turned eighteen or finished high
school, whichever occurred later; or married, died, or became selfsupporting. Additionally, the decree contained a separate provision that
provided:
In the event that the first child of the parties shall
continue with any post-secondary education, the required
level of support shall continue at the rate of $679 per month
until such time as the first child of the parties either
completes the post-secondary education or attains the age of
22, whichever shall first occur, pursuant to section 598.1(2),
The Code.
3
Once
the
obligation
to
support Nicole
terminated,
the
monthly
support obligation for Joel was reduced to $495. The decree contained
the same terms for termination of Joel’s support as for Nicole, and also
included the same provision to extend the support obligation in the event
Joel pursued a postsecondary education.
Nicole turned eighteen in 1997 and began college. Pursuant to the
decree, James continued to pay $679 in child support. Nicole married in
October 2000, an event under the decree that terminated James’s
obligation to provide support for her and reduced his support obligation
to Joel to $495 a month. Notwithstanding, James continued to pay $679
in child support each month until May 2004, when he filed a petition to
modify the decree.
Joel graduated from high school in 2004, and began college at
Northern Iowa Area Community College in the fall of that year.
He
moved from Bonnie’s house into a rental house he shared with three
roommates. During Joel’s first year of college, James paid the cost of
tuition and books not covered by scholarships and grants—$1,118.50.
In the modification proceeding, James alleged the following
changes since the time of the decree constituted a substantial change in
circumstances justifying modification:
(1) he retired as a teacher and
began receiving retirement benefits on June 1, 2004; (2) the legislature
enacted Iowa Code section 598.21(5A), providing for postsecondary
education subsidies, in 1997; (3) the parties never submitted a qualified
domestic relations order (QDRO) to the court for approval to implement
the original decree’s division of James’s IPERS benefits; and (4) his
income decreased, while Bonnie’s income increased.
James asked the
court to modify the decree to enter a QDRO dividing his IPERS benefits
according to the provisions of the original decree, terminate his child-
4
support obligation, and order a postsecondary
education
subsidy
for Joel. James also sought attorney fees.
The district court entered its judgment on March 1, 2005.
The
court concluded James failed to establish a substantial change in
circumstances to justify the termination of his child-support obligation
or the imposition of a postsecondary education subsidy. However, the
court found James overpaid $7912 in child support under the original
decree by continuing to pay $679 per month after Nicole’s marriage in
October 2000. Accordingly, the court offset his child-support arrearage
that had accumulated when he stopped paying support after he filed the
modification petition in May 2004, and gave James “a net credit of $3457
yet to be applied to the ongoing post-secondary support obligation owed
to Bonnie.”
Additionally, the court entered a QDRO implementing the
original decree’s division of James’s IPERS benefits and ordered each
party to be responsible for his or her own attorney fees and one half of
the court costs.
James appealed, and Bonnie cross-appealed. James claimed the
district court erred in failing to replace the child-support obligation
under the decree with an educational subsidy, effective August 2004. He
also asked that he be reimbursed for any child-support payments made
during the pendency of the appeal not paid over to Joel. Bonnie claimed
the district court erred in granting James a credit for the support
overpayment.
She further claimed the QDRO entered by the district
court did not accurately reflect the IPERS division in the original decree.
We transferred the case to the court of appeals. The court of appeals
reversed the portion of the district court judgment that gave James a
credit for the overpaid support, but otherwise affirmed the district court
decision. James applied for further review, which we granted.
5
II.
Standard of Review
“A proceeding to modify or implement a marriage dissolution
decree subsequent to its entry is triable in equity and reviewed de novo
on appeal.”
In re Marriage of Mullen-Funderburk, 696 N.W.2d 607,
609 (Iowa 2005) (citations omitted).
III.
Modification of Support for College-Aged Child
Dissolution decrees may be modified upon a substantial change in
circumstances.
Iowa Code § 598.21(8) (2003).
To constitute a
“substantial change in circumstances,” the changed conditions “ ‘must
be material and substantial, not trivial, more or less permanent or
continuous, not temporary, and must be such as were not within the
knowledge or contemplation of the court when the decree was entered.’ ”
In re Marriage of Rolek, 555 N.W.2d 675, 679 (Iowa 1996) (quoting Mears
v. Mears, 213 N.W.2d 511, 515 (Iowa 1973)). This is the longstanding
general approach to the modification of provisions in a decree of
dissolution of marriage, and it utilizes a fact-intensive analysis. See, e.g.,
In re Marriage of Jacobo, 526 N.W.2d 859, 864 (Iowa 1995) (“A party who
seeks a modification of a dissolution decree must establish by a
preponderance of the evidence that there has been a substantial change
in circumstances since the entry of the decree or its last modification.”
(citing In re Marriage of Lee, 486 N.W.2d 302, 304 (Iowa 1992); In re
Marriage of Bergfeld, 465 N.W.2d 865, 870 (Iowa 1991))); Prandy v.
Prandy, 241 Iowa 1050, 1053, 44 N.W.2d 379, 381 (1950) (“The changing
of a decree is only justified where it is shown that there has been a
substantial change of circumstances and is done to adapt the decree to
changed conditions of the parties.” (citing Metzger v. Metzger, 224 Iowa
546, 278 N.W. 187 (1938); Barish v. Barish, 190 Iowa 493, 180 N.W. 724
(1920); Hart v. Hart, 239 Iowa 142, 30 N.W.2d 748 (1948); Smith v.
6
Smith, 239 Iowa 896, 32 N.W.2d 662
(1948))).
However,
the
legislature has at times altered this approach by describing specific
circumstances
that
permit
modification.
See,
e.g.,
Iowa
Code
§ 598.21(8A) (“If a parent awarded joint legal custody and physical care
or sole legal custody is relocating the residence of the minor child to a
location which is one hundred fifty miles or more from the residence of
the minor child at the time that custody was awarded, the court may
consider the relocation a substantial change in circumstances.”); id.
§ 598.21(9) (“[A] substantial change of circumstances exists when the
court order for child support varies by ten percent or more from the
amount which would be due pursuant to the most current child support
guidelines established pursuant to subsection 4 or the obligor has access
to a health benefit plan, the current order for support does not contain
provisions for medical support, and the dependents are not covered by a
health benefit plan provided by the obligee . . . .”). Thus, it is necessary
to consider any statutes that may provide authority for a court to modify
a dissolution decree when a party seeks modification, including
modification of child-support provisions for a college-aged child.
Prior to July 1, 1997, Iowa did not have a specific statute to
determine
each
parent’s
contributions
to
their
children’s
college
education. Instead, our legislature defined child “support” under section
598.1(6) to generally include support of a child between the ages of
eighteen and twenty-two who was a fulltime college student.
Id.
§ 598.21(6) (1995). This definition permitted the court to impose a childsupport obligation on the noncustodial parent in the event the child
pursued a postsecondary education as a fulltime student.
In 1997, the legislature amended section 598.1(6) to remove the
postsecondary-support clause from the definition of support, redefined
7
support
to
terminate
at
age nineteen, and enacted a separate
statute to provide for a postsecondary education subsidy by both
parents. 1997 Iowa Acts ch. 175, §§ 185, 190; accord In re Marriage of
Mullen-Funderburk, 696 N.W.2d at 609 (discussing the amendments).
We considered the operation of the amended statute and subsidy
provision in In re Marriage of Sojka, 611 N.W.2d 503 (Iowa 2000).
In
Sojka, a parent sought to use the postsecondary-education-subsidy
statute to modify a pre-1997 decree that provided for continued monthly
support for a college-aged child, as well as payment of a portion of the
tuition, room and board, and other college expenses. Sojka, 611 N.W.2d
at 504.
We held the postsecondary-education-subsidy statute did not
apply retroactively to permit modification of college-support provisions of
a dissolution decree entered prior to the effective date of the statute. Id.
at 505. However, in 2002, our legislature enacted section 598.21(5A)(e)
to specifically authorize courts to retroactively apply the postsecondaryeducation-subsidy statute to modify prior decrees that imposed a
support obligation for college expenses. See 2002 Iowa Acts ch. 1018,
§ 17 (adding subparagraph (e), which provides, “A support order, decree,
or judgment entered or pending before July 1, 1997, that provides for
support of a child for college, university, or community college expenses,
may be modified in accordance with [section 598.21(5A)].”
In recently
commenting on the effect of this amendment, we stated, “any decree
providing for support of a child in college entered before July 1, 1997, is
subject to modification.” In re Marriage of Goodman, 690 N.W.2d 279,
283 (Iowa 2004) (citing Iowa Code § 598.21(5A)(e) (2003)).
In this case, the district court and the court of appeals rejected all
of the grounds James raised to support a modification of the childsupport provisions of the original decree, including the ground that the
8
enactment of the postsecondary- education-subsidy statute and the
subsequent declaration by the legislature that the statute applies to
decrees
entered
prior
to
July
1,
1997,
supported
modification.
Interpreting our recent holding in In re Marriage of Rosenfeld, 668
N.W.2d 840 (Iowa 2003), Bonnie claimed the postsecondary-educationsubsidy statute did not apply to allow modification in this case because
the original decree established the support obligation for Joel’s college
expenses. The district court and the court of appeals agreed with this
interpretation.
In Rosenfeld, we determined that the postsecondary-education
statute applied to a modification action brought after July 1, 1997 to
establish support for a college-aged child when the original pre-1997
decree did not establish any level of college-aged educational support.
See Rosenfeld, 668 N.W.2d at 847 (“Iowa Code section 598.21(5A) is
nevertheless applicable because the court did not fix college expenses
prior to the enactment of [section] 598.21(5A).” (Citation and footnote
omitted.)).
Bonnie, however, interpreted Rosenfeld to mean that the
flipside of our holding was also true—that the postsecondary-educationsubsidy statute would not apply if the pre-1997 decree did set collegeaged support.
In accordance with this reasoning, Bonnie argued that
James cannot use the postsecondary-education-subsidy statute to
change the support provisions under the original decree in this case to
reflect the provisions of the postsecondary-education-subsidy statute
because the original decree in this case, unlike the decree in Rosenfeld,
set the support obligation for James while Joel was in college.
We think Bonnie’s argument misreads Rosenfeld, and fails to
properly apply the postsecondary-education-subsidy statute to permit
modification of the child-support provisions of the decree in this case. In
9
In
re
Marriage
of
Mullen- Funderburk, we explained that the
postsecondary-education-subsidy statute applied in Rosenfeld because
the original pre-1997 decree did not establish any level of college-aged
educational support, and the issue was being decided for the first time
after the enactment of the statute. In re Marriage of Mullen-Funderburk,
696 N.W.2d at 610-11 (citing In re Marriage of Rosenfeld, 686 N.W.2d at
848).
In other words, subparagraph (e), providing for the retroactive
application of the statute, was not implicated in Rosenfeld because the
absence of a provision for college-aged support in the original decree
made the action an original adjudication.
Id. at 611.
Thus, the
postsecondary-education-subsidy statute applied to establish a subsidy.
See id. (explaining that original adjudications of college-aged support
“should be based on both the facts and the law in existence when the
determination is made”—i.e., section 598.21(5A), and do not require a
substantial change in circumstances).
However, the existence of a
provision for college-aged educational support in an original decree does
not mean by implication that the subsidy statute does not apply. This
implication ignores the clear legislative intent to permit modification of
prior decrees based on the subsequent change in the law. See Iowa Code
§ 598.21(5A)(e) (“A support order, decree, or judgment entered or pending
before July 1, 1997, that provides for support of a child for college,
university,
or
community
college
expenses
may
be
modified
in
accordance with this subsection.”). The result is that the postsecondaryeducation-subsidy statute, section 598.21(5A), applies whether or not
the original decree provided for college-aged support. If it did, subsection
(5A) applies by virtue of subparagraph (e). If it did not, subsection (5A)
applies because college-aged support is an original adjudication.
10
We recognize the language of
the
statute
provides
that
the
postsecondary education subsidy applies retroactively to modify decrees
entered prior to July 1, 1997 that provided for support of a child for
college “expenses.” Id. Thus, the subsidy statute can only be used to
modify child-support provisions in decrees for college expenses.
The
original decree in this case did not specifically designate that the
continued support after high school was for college “expenses.” However,
we think the support provision was nevertheless the type of provision the
legislature wanted to be covered under the retroactivity provision,
subparagraph (e).
Provisions in a divorce decree that extend a child-
support obligation while the child is in college necessarily consider
expenses associated with attending college.
See id. § 598.21(4)(a)
(stating that child support is for the “reasonable and necessary” expenses
of a child). This approach is also consistent with our pronouncement in
In re Marriage of Goodman that the retroactivity provision applies to preJuly 1, 1997 decrees “providing for support of a child in college.” See In
re Marriage of Goodman, 690 N.W.2d at 283.
We therefore reverse the judgment of the district court insofar as it
denied
modification
of
child
support
by
refusing
to
apply
the
postsecondary-education-subsidy statute, and remand the case to the
district court to eliminate James’s child-support obligation and to
determine whether there is good cause to establish a postsecondary
education subsidy for Joel under the law and the facts now in existence.
See Iowa Code § 598.21F(1) (Supp. 2005) (“The court may order a
postsecondary education subsidy if good cause is shown.”); see also In re
Marriage of Mullen-Funderburk, 696 N.W.2d at 511 (stating that
determinations of postsecondary education subsidies “should be based
11
on both the facts and the law in
existence when the determination
is made”).
We recognize that the application of the postsecondary-education
subsidy statute necessarily results in a termination of the prior support
obligation.
The legislature intended the standard under section
598.21(5A) and the new definition of “support” under section 598.1(9) to
apply retroactively to pre-July 1, 1997 decrees. Thus, if the district court
on remand finds no good cause to establish a college subsidy, the prior
decree must nevertheless be modified to eliminate the existing childsupport obligation under the decree.
If the district court finds good
cause for a subsidy, then the terms of the subsidy modify and replace
the existing child-support provision of the decree.
James has asked that the termination of his child-support
obligation be made retroactive to August 21, 2004, three months after he
served Bonnie with his original notice and petition for modification. See
Iowa Code § 598.21(8) (stating child-support obligations “may be
retroactively modified only from three months after the date the notice of
the petition for modification is served on the opposing party”). We leave
this issue to the district court on remand. We also leave it to the district
court to determine any claim of reimbursement for support not given to
Joel by Bonnie.
IV.
Overpayment
One final issue remains for our consideration.
The court of
appeals determined that James was not entitled to a credit for the
overpayment of monthly support after Nicole married, and it reversed the
district court modification decree insofar as it granted James a credit of
$3457 against future support payments.
12
“Courts
generally
do
not
allow a credit to the obligor spouse
for voluntary expenditures made on behalf of the child in a manner other
than that specified by a decree.” 24A Am. Jur. 2d Divorce and Separation
§ 1067, at 474 (1998); accord Harner v. Harner, 434 N.E.2d 465, 468 (Ill.
App. Ct. 1982) (“The general rule is that payments made for the benefit of
children which are voluntary and not pursuant to a divorce decree may
not be credited against other amounts due under the decree.”); In re
Marriage of McCurnin, 681 N.W.2d 322, 328 (Iowa 2004) (holding obligor
was not entitled to credit for overpayment of support because he was a
volunteer); Bradford v. Futrell, 171 A.2d 493, 497 (Md. 1961) (stating the
obligor “will not be credited for payments made when he unnecessarily
interposed himself as a volunteer and made payments direct to the
children of his own accord”); Webb v. Webb, 475 S.W.2d 134, 136 (Mo.
Ct. App. 1971) (“ ‘Decrees for child support should be strictly complied
with and credit should not be allowed for overpayments voluntarily
made.’ ” (quoting Wills v. Glunts, 151 S.E.2d 760, 762 (Ga. 1966))); Griess
v. Griess, 608 N.W.2d 217, 224 (Neb. Ct. App. 2000) (“The general rule
appears to be that no credit is given for voluntary overpayments of child
support, even if they are made under a mistaken belief that they are
legally required.”); Horne v. Horne, 239 N.E.2d 348, 350 (N.Y. 1968)
(“[P]ayments made by a father to or for the benefit of his children
voluntarily and not pursuant to a divorce decree may not be credited by
him against other amounts due and owing under the decree.”); Newton v.
Newton, 118 S.E.2d 656, 659 (Va. 1961) (“[I]t is the obligation of the
divorced husband to pay the specified amounts according to the terms of
the decree and that he should not be permitted to vary these terms to
suit his convenience. . . . To permit him to increase the amount of the
specified payments at one time, reduce them at another, and require an
13
adjustment of the differences in
the
future,
would
lead
to
continuous trouble and turmoil.”); Robert A. Brazener, Right to Credit on
Accrued Support Payments for Time Child is in Father’s Custody or for
Other Voluntary Expenditures, 47 A.L.R.3d 1031, 1037 (1973) (“Generally
speaking, a father is not entitled to credit against arrearages for
overpayments in support money which he made to the mother.”). See
generally Alice Wright Cain, Right to Credit on Child Support for Previous
Overpayments to Custodial Parent for Minor Child While Child Is Not Living
with Obligor Parent, 7 A.L.R.6th 411 (2005).
Normally, exceptions are
made only “when the equities of the circumstances demand it and when
allowing a credit will not work a hardship on the minor children.” Griess,
608 N.W.2d at 224 (citations omitted); see also 24A Am. Jur. 2d Divorce
and Separation § 1068, at 476-77.
James testified he overpaid because he “wanted [his] son to
continue to have the same standard of living he had had before.” It was
undisputed that James knew Nicole married, knew his support obligation
was $495 per month after Nicole married, and he knew he was
overpaying his support. See Palagi v. Palagi, 627 N.W.2d 765, 774 (Neb.
Ct. App. 2001) (equity did not demand giving obligor credit for
overpayment of support when he “knowingly and voluntarily” overpaid
and did not view the overpayments as “a ‘burden,’ but, rather, he was
predisposed all along to fund [his daughter’s college education”). This is
not the kind of case in which courts normally grant an exception to the
general no-credit-for-voluntary-overpayment rule to do equity, and we
see no reason to make an exception in this case. See, e.g., Griess, 608
N.W.2d at 224-25 (exception applicable when “[b]oth parties’ attorneys in
the original modification action had a hand in producing the erroneous
calculation of child support,” and granting a credit would “not work a
14
hardship on the children”); In re
Marriage of Olsen, 593 N.E.2d 859,
865 (Ill. App. Ct. 1992) (“It is obvious that the parties mutually
misunderstood the marital agreement provision and that Mr. Olsen paid,
in good faith, child support from both his bonuses and dividends,
believing that he was required to do so by the 20% provision.”); In re
Marriage of Tollison, 566 N.E.2d 852, 854 (Ill. App. Ct. 1991) (exception
applicable when “the overpayment was a result of a court wage deduction
order,” and that the obligor filed early on during the period of
overpayment “a motion for clarification wherein he indicated he had been
seeking clarification of the correct amount owed but to no avail,” which
should have put the obligee “on notice that [the obligor] was not waiving
any
rights
and
to
preclude
any
reliance
on
her
part
on
the
overpayments”); Jackson v. Jackson, 209 S.W.2d 79, 80 (Ky. 1948)
(father allowed credit for paying daughter’s private school tuition when
“the child would lose the credits she had earned if removed at that time
and placed in a public school”; father “paid the tuition for the remainder
of the term rather than cause the child the inconvenience and loss of
credits occasioned by a change of schools”; the payment “was made
under compulsion of circumstances created by [the mother]”); Goodson v.
Goodson, 231 S.E.2d 178, 182 (N.C. Ct. App. 1977) (remanding for trial
court to balance equities in light of these guidelines:
“Credit is more
likely to be appropriate for expenses incurred with the consent or at the
request of the parent with custody. Payments made under compulsion of
circumstances are also more likely to merit credit for equitable reasons.
The medical payments for Scott’s tonsillectomy and related treatment
would seem to fall within this category.”); see also Cain, 7 A.L.R.6th at
§§ 5-10 (listing cases in which credit allowed); Brazener, 47 A.L.R.3d at
§§ 4-7 (same). Accordingly, we reverse the portion of the district court
15
judgment that granted James a
credit for the overpayment of child
support.
V.
Conclusion
The district court and the court of appeals erred by concluding
that a postsecondary education subsidy was not permissible in this case.
By its terms, section 598.21(5A) allows for a postsecondary education
subsidy. We therefore vacate the decision of the court of appeals and
reverse the judgment of the district court insofar as it denied termination
of support and establishment of a postsecondary education subsidy. We
also reverse the judgment of the district court insofar as it granted
James a credit for overpayment of support. We remand the case to the
district court for proceedings consistent with this opinion.
DECISION OF COURT OF APPEALS VACATED; DISTRICT
COURT JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.
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