Appeal from the Iowa District Court for Polk County, Peter A. Keller, Judge.
The opinion of the court was delivered by: Tabor, J.
Jeremy Chesley appeals the denial of his application to modify child support.
Considered by Vaitheswaran, P.J., and Tabor and Mullins, JJ.
Jeremy Chesley seeks to modify his child support payments. He was required to pay $585 per month for his two daughters under the dissolution decree issued in June 2010. The district court's modification order calculated Jeremy's obligations at $495 per month plus $68.75 in cash medical payments, which the court found did not demonstrate a substantial change in circumstances. Jeremy now argues the court miscalculated his support and that both parties' changed financial circumstances warrant modification.
Because the district court included four dependent exemptions when the parties have only two mutual children, we remand for the court to amend its calculations. In addition, because the original decree did not require Jeremy to provide cash medical support, without more evidence, the $68.75 payments should not be included in the modification order. After making these adjustments on remand, the district court should consider whether Jeremy's additional arguments justify further modification.
I. Background Facts and Proceedings
Jeremy and Jessica Chesley met in 1996. Jeremy had a son from a previous marriage who is now seventeen years old. The parties married in May 1999. Jeremy and Jessica are the parents of two daughters, who are now eleven and seven years old. The family lived in Tampa Bay, Florida until 2007, when they moved to Des Moines. The parties separated in August 2009. Jessica moved to an apartment with both daughters while Jeremy and his son remained in the family home.
Jeremy originally sold real estate and had a few lucrative years. But when the market slowed, the home went into foreclosure, forcing Jeremy and his son to move back to Florida with Jeremy's mother, who runs her own medical billing business. He worked for his mother's company an average of twenty-five to forty hours per week at a rate of ten dollars an hour.
Jessica filed a petition for dissolution on December 20, 2009. On June 9, 2010, the district court entered a stipulated decree dissolving the marriage.*fn1 The court awarded joint custody and placed physical care of both girls with Jessica. Jeremy had visitation, which included trips to Des Moines plus five weeks in the summer, with sole responsibility for transportation costs and travel arrangements.
The court found Jessica earned $32,500 annually and the parties stipulated that Jeremy's annual income was $27,500. The decree incorporated the guideline worksheet to require Jeremy pay $585 per month in child support. The decree required Jessica to provide medical insurance for the family and pay the first $250 per child for medical bills not covered by insurance, then the parties were to split the costs, with Jeremy paying forty-five percent and Jessica paying fifty-five percent.*fn2
On August 11, 2011, Jeremy applied to modify his child support payments. He requested the $585 monthly payments be reduced because his income decreased, while the birth of his son since the dissolution decree increased his expenses. Jeremy alleged Jessica was earning more income and her expenses decreased, and he criticized the original child support calculation as not adhering to the guidelines established by the Iowa Supreme Court.
During a March 15, 2012 modification hearing, the district court heard testimony from both parties, as well as Jeremy's current wife Debra. Jeremy testified his earlier income stipulation exaggerated his salary, and that he currently earns twelve dollars an hour for $24,960 annually. Jessica testified a portion of Jeremy's pay from his mother is in the form of cash for which he is not accounting. She also testified she earns fifteen dollars an hour working full-time at an engineering firm. Both parties submitted child support worksheets, tax documents, and other evidence verifying their financial affairs.
The court attached two child support worksheets to its March 23, 2012 modification ruling. In Exhibit 1, the court calculated the child support payment with Jeremy's annual income at $24,960. In Exhibit 2, the court substituted his annual income at $27,500. Determining Jeremy's annual salary to be $27,500, the court denied his petition to modify, reasoning: "Quite frankly, the Court believes and finds that the Respondent's earning capacity is ...