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In re Marriage of Hackett

Court of Appeals of Iowa

June 6, 2018


          Appeal from the Iowa District Court for Dubuque County, Monica L. Ackley, Judge.

         The husband appeals the spousal-support, child-support, and attorney-fee provisions in the dissolution decree.

          REMANDED. Kelsey J. Streinz of Kintzinger, Harmon, Konrardy, P.L.C., Dubuque, for appellant.

          Jamie A. Splinter of Splinter Law Office, Dubuque, for appellee.

          Considered by Vogel, P.J., Bower, J., and Blane, S.J. [*]

          BLANE, Senior Judge

         Michael Hackett appeals from the decree dissolving his marriage to Kimberly Hackett. Michael claims the district court's award of rehabilitative alimony at $1500 per month for seven years was inequitable, the court improperly used his former salary rather than current earnings to determine his child-support obligation, and the court abused its discretion when it ordered him to pay the full amount of Kimberly's attorney fees-including fees from her contempt action. Kimberly asks that we affirm the district court's decree and award her appellate attorney fees.

         I. Background Facts and Proceedings.

         Michael and Kimberly were married in 2000 and became parents to twins in 2002.[1]

         Before the parties married, Kimberly obtained a degree in hotel and restaurant management. When the parties first married, Kimberly was employed in the hospitality field and earned approximately $45, 000 each year. After the twins were born in 2002, Kimberly ceased working outside of the home for a number of years. She returned to work part-time in 2007 and later, after the parties separated, began working outside of the home full-time in 2015. She anticipated earning $32, 000 in 2017-her largest salary since leaving the workforce in 2002.

         Michael is close to having sufficient credits for a college degree, but he never completed the necessary requirements. His lack of a college degree has not prevented him from rising within the publishing industry; in 2015, the last full year of his employment with McGraw Hill, Michael earned $191, 679.20 in taxable income.[2]

         Michael was fired from McGraw Hill for conduct violating the company's "Travel & Expense Guidelines." According to the testimony of a human resource (HR) manager for the company, Michael's personal use of his corporate credit card was brought to the attention of Michael's manager in late 2015. After noticing excess charges for Amazon and iTunes, his employer refused to pay a number of his charges; Michael's manager discussed the issue with Michael in December of that year. As the HR manager testified, rather than seeing his spending habit on the company credit card improve after receiving a warning, "it got more questionable." When the company received and reviewed his next expense report, in February 2016, the company noted "duplicate" expenses-on a single weekend when Michael was traveling for work, Michael had charged four meals of room service to his hotel room at times he was actually in a meeting elsewhere. Michael later admitted he had taken his girlfriend with him on the work trip. Following an investigation into various charges on the corporate credit card, Michael was fired in May 2016.

         The next month, Kimberly filed for dissolution. She also filed an application for temporary relief, asking the court to order Michael to pay spousal support and child support during the pendency of the dissolution. The application also noted that the home expenses, such as the mortgage, needed to be paid and the family was without health insurance since Michael lost his employment.

         The parties reached an agreement, which the court adopted by a Temporary Order in early August, whereby Michael agreed the money he received for unemployment-$425 weekly-would be given to Kimberly to pay the marital home mortgage. Additionally, Michael agreed to provide health insurance for the entire family, and the parties agreed the marital home needed to be sold, with Kimberly and the twins residing in the home until it sold.

         By the parties' agreement, the issue of temporary matters was again brought to the court for a hearing in October.[3] Michael was still unemployed and, in its written order, the court noted Kimberly had "been profoundly struggling with no monetary assistance from" Michael. Although the parties cashed out Michael's 401k from McGraw Hill in June-approximately $110, 000 in funds-Michael had not used any of those funds to pay the mortgage or support for the children; instead, he had "been frivolously spending money, eating out at expensive restaurants, traveling with and supporting his new girlfriend, who [was then] residing with him in a cottage in Galena." Additionally, Michael had "been pursuing a music career and play[ed] guitar in a band." He had also recently purchased a motorcycle and accoutrements for approximately $12, 000.

         The court ordered Michael to sell the motorcycle and use the proceeds to make payments for the children's school needs and child support. The court also ordered Michael to pay monthly child support of $2252, effective October 1. The court used Michael's "prior earnings" in reaching the amount owed. Additionally, in lieu of temporary support, Michael was ordered to pay the mortgage on the family home. At the time, it was believed Michael's parents were paying for the health insurance for the family.

         In March 2017, Kimberly filed an application to show cause, alleging Michael had violated the court's October order nineteen times, including seven counts for his failure to provide insurance, one count for failing to turn over the motorcycle so Kimberly could sell it, six counts for failing to pay child support, four counts for failing to pay the mortgage, and one count for failing to close a bank account as ordered.

         In early April, the dissolution trial and the contempt action took place contemporaneously. Kimberly testified that when the parties cashed out Michael's 401k, they agreed to divide the money into three equal parts. Each of them received one-third to do with as they pleased, and the final third was placed in a joint bank account to pay family bills, such as the home mortgage, the lease on their vehicles, and their cellular phone bills. Kimberly paid the bills with the one-third of the 401k set aside for bills until it ran out in October 2016. Between October and April, during which Michael had been ordered to pay certain family bills and child support, Michael paid child support one month and the mortgage one month. He did not make any of the other ordered payments. Kimberly testified she had to pay family bills from her third of the 401k she had received as her money and used all but $5000. Also during trial, Kimberly testified that though it was believed at the time of the October hearing on temporary matters that the family had health insurance coverage, Michael had not used the $5000 his parents gave him to pay the insurance premiums. Instead, he deposited the money into his account and spent it on other things before the account was billed by the insurance company. The family was uninsured for a number of months, and during that time, Michael underwent back surgery. The family then had approximately $50, 000 in medical bills as a result.

         Michael testified that he became employed in January 2017. He was working as an independent contractor for a non-profit organization with a three-month contract for $25, 000. At the time of the April trial, Michael testified his initial contract would be renewed the next week for a second three-month period; he was to be paid at the same rate on the second contract.

         The parties agreed that their only assets were the marital home, which they were attempting to sell; Kimberly's 401k, which had a balance of $14, 705; and the motorcycle Michael had purchased, which he had not yet sold. The house was initially listed for sale at the price of $525, 000 but had been on the market for a number of months; at the time of trial the parties reduced the price to $479, 900. The mortgage on the home was approximately $241, 250.

         In the dissolution decree, the court ordered Michael to pay child support in the monthly amount of $1784.55 plus $837.50 in cash medical benefit. The obligation is based on "his earning capacity" rather than his actual income. In doing so, the court noted that his earning capacity was much higher than his current contract pay and the "conduct that caused him to lose his employment was selfish and thoughtless as that relates to the impact it would have on his [twins]." Additionally, the court found that Michael's loss of job and decrease in earnings was a result of his "intentionally disregard[ing] his obligation to his family." The court used incomes of $45, 000 for Kimberly and $201, 000 for Michael.[4]Additionally, Michael was ordered to pay Kimberly rehabilitative spousal support in the amount of $1500 for seven years. Kimberly was allowed to keep her entire 401k. The parties were ordered to split equally the future profits from the sale of the marital home, but Michael was ordered to pay out of his half of the sale proceeds all of the ordered payments he had failed to make under ...

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