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In Re the Marriage of Kenneth R. Michael and Melissa J. Michael

February 13, 2013


Appeal from the Iowa District Court for Black Hawk County, Andrea J. Dryer, Judge.

The opinion of the court was delivered by: Vogel, J.

A former husband appeals, and his former wife cross-appeals, a district court's order modifying their spousal support arrangement. AFFIRMED IN PART, REVERSED IN PART.

Considered by Eisenhauer, C.J., and Vogel and Tabor, JJ.

Kenneth Michael appeals the district court decision denying his request to immediately terminate or significantly reduce his spousal support obligation to his former wife, Melissa Michael. Melissa-cross appeals, arguing the district court erred by determining the support should terminate when Kenneth turns sixty-seven. Because we agree with Melissa there has not been a substantial change not contemplated by the decretal court, we reverse the early termination of spousal support. We affirm the district court in finding Kenneth need no longer pay Melissa's health insurance premium.

I. Background Facts and Proceedings

This appeal shines a light on the difficulty our courts face, when reviewing the terms of a dissolution decree after many years-if not decades-have passed, since former spouses have gone their separate ways and made new lives for themselves. To that end, the legislature and our case law have developed sound principles that guide our resolution when reviewing these situations.

The twenty-three year marriage of Kenneth and Melissa was dissolved by a stipulated decree in 1994. The decree provided Kenneth would pay spousal support in the amount of $450 per week for fifty-two weeks and then thirty-three percent of Kenneth's gross salary until such time as Melissa dies, remarries, or cohabits. Kenneth was also to provide medical insurance coverage for Melissa so long as he was obligated to pay spousal support. At the time of dissolution, Kenneth's salary was $47,000. Melissa was not employed outside the home, having been a homemaker throughout the marriage. Kenneth received all of his pension benefits accumulated during the marriage.

In 1998, Kenneth sought a modification of the spousal support provision. By that time, Melissa was employed at Principal Mutual Life Insurance Company with an annual salary of $17,551. Kenneth was remarried with an annual salary of approximately $78,000 plus significant bonuses. The district court, while finding various changes in the status and employment of the parties, denied Kenneth's petition. While the case was pending on appeal, the parties stipulated to a modification of spousal support setting the amount at a fixed rate of $480 per week until such time as Melissa remarries, dies, or cohabits. The medical insurance was not litigated nor was it mentioned in the stipulation.

In July 2011, Kenneth again filed a petition to modify the decree, requesting his spousal support obligation be terminated or significantly reduced. At the time of the hearing, Melissa was sixty-two years old and Kenneth was sixty-one years old. Melissa still worked at the same company she did during the 1998 modification, now called Principal Financial Group. Since the 1998 modification, Melissa's pension benefits vested and she, due to her and her employer's contributions, accumulated approximately $190,000 in retirement funds. With Kenneth's support payments of $24,960, and Melissa's W-2 wages of $29,201, plus $333 in interest and dividend income, she had a reportable income of $54,494 in 2010.

Kenneth claims to be not as fortunate. In 2008, the company he worked for during the dissolution was sold twice, and in February 2011, Kenneth's employment was terminated. Kenneth earned approximately $111,000 in 2010.

After his termination, Kenneth went to work for Venture Corporation, at an annual salary of $85,020.*fn1 Kenneth has approximately $90,614 in retirement funds. In 2010, Kenneth and his wife had a combined income of $154,213. From this, $26,575 was deducted as Melissa's spousal support, leaving $127,638 as their adjusted gross income.*fn2 While Melissa has relatively little debt, Kenneth has approximately $44,000 in credit card debt, as well as an approximately $144,000 encumbrance on his newly purchased condominium.

The district court granted Kenneth's petition to modify and held:

The changes in Melissa's income, the amount of time that she has held employment with a large Fortune 500 financial services company, and the pension and other resources that will be available to her upon retirement are circumstances not within the contemplation of the court at the time the original decree or subsequent modification was entered and are more or less permanent. For seventeen years Kenneth has provided weekly support to Melissa that has helped her build equity in her home and savings for the future. As the parties approach retirement age, the court finds that requiring Kenneth to make weekly support payments to Melissa until her death is inequitable because of the nature and amount of benefits that will be available to Melissa upon her retirement that Kenneth's employer does not provide.

The district court determined it was equitable for Kenneth to continue to pay $480 per week to Melissa, but only until he reaches age sixty-seven or until Melissa dies or remarries. It also found Kenneth should no longer be required to maintain medical insurance coverage for Melissa, and each party should be responsible for his or ...

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