IN THE COURT OF APPEALS OF IOWA
No. 22-0621 Filed December 21, 2022
IN RE THE MARRIAGE OF JEANETTE N. O’BRIEN AND JOHN J. O’BRIEN
Upon the Petition of JEANETTE N. O’BRIEN, Petitioner-Appellee,
And Concerning JOHN J. O’BRIEN, Respondent-Appellant. ________________________________________________________________
Appeal from the Iowa District Court for Dubuque County, Monica Zrinyi
Ackley, Judge.
John O’Brien appeals following the denial of his petition to modify the
spousal and child support provisions of his dissolution decree. AFFIRMED AS
MODIFIED AND REMANDED.
Stephanie R. Fueger and McKenzie R. Blau of O’Connor & Thomas, P.C.,
Dubuque, for appellant.
Anjela Shutts and Katelyn Kurt of Whitfield & Eddy, P.L.C., Des Moines, for
appellee.
Heard by Vaitheswaran, P.J., and Ahlers and Buller, JJ. 2
AHLERS, Judge.
In 2018, Jeanette and John O’Brien dissolved their twenty-one-year
marriage by stipulated decree. The decree provided Jeanette with spousal
support. The decree also obligated John to pay Jeanette child support. Since
entry of the decree, John’s employment has drastically changed. In response,
John filed this modification action seeking modification of his spousal support and
child support obligations.
I. Facts and Prior Proceedings
The parties married in 1997. John had an engineering degree. Jeanette
attended Iowa State University for three and one-half years to study fashion
merchandising but never graduated. John worked for John Deere since he
completed an internship with the company in 1989. Jeanette worked as a
receptionist until the birth of their first child. John and Jeanette would go on to
have two more children. John focused on his career at John Deere and a farming
operation he subsidized through his John Deere income.1 John’s base salary at
John Deere was $201,000; and he regularly received significant annual bonuses.2
Meanwhile, Jeanette focused on raising their children, caring for the family home,
1 John shares his crop-farming operation with his brother and his cattle operation with his brother and another man. However, it appears he runs the farming operation as a sole proprietor and has verbal agreements with the other men to split costs and profits in equal shares. 2 By “significant,” we mean the bonuses often nearly matched or even eclipsed his
base salary, as reflected in John’s annual wages shown on his tax returns and his Social Security earnings statements. Those documents show wages from John Deere in the amount of $516,655.44 in 2017, $314,690 in 2018, $380,295 in 2019, and $679,230 in 2020, though his severance package accounts for $309,420 of the 2020 wage figure. 3
and helping on the farm. Eventually Jeanette took a part-time job providing home
healthcare.
In 2017, Jeanette filed for dissolution. The parties’ 2018 decree obligated
John to pay Jeanette spousal support of $3500 per month until July 1, 2028, and
then $3000 per month terminating on June 30, 2030. It also obligated John to pay
Jeanette child support. In terms of property division, John paid Jeanette a
$450,000 equalization payment and must make an additional payment of $200,000
on or before September 1, 2024. The decree also divided the parties’ retirement
accounts and awarded Jeanette a portion of John’s John Deere pension. The
farming operation went to John.
Jeanette’s father passed away in 2016, but she did not receive her
inheritance until after she and John divorced.3 She used the money to pay off the
mortgage on her home—a home assessed at $415,000. She also continued to
work as a home healthcare worker, averaging twenty-nine hours a week at a rate
of $20 per hour.
John continued to work at John Deere and the farm following the
dissolution, continuing to use his John Deere income to subsidize and grow the
farming operation as planned. John intended to work at John Deere until he
reached sixty-two years old and then focus on the farm.4 Through those efforts,
the cattle operation has roughly doubled since the dissolution. Unfortunately,
John’s plan encountered a major obstacle when John Deere restructured in 2020
3 Jeanette’s mother passed away in 2003. 4 John was born in 1968 and was fifty-three years old at the time of the modification trial in 2021. 4
and eliminated John’s position, forcing his retirement. This forced retirement from
John Deere occurred roughly ten years before John planned on retiring. His last
day at John Deere was September 18, 2020. He received a $309,420 severance
payment—equaling roughly eighteen months of his base salary but less than one
year of wages when typical bonuses are considered. He invested that payment in
the farming operation.
Citing the loss of his John Deere employment, John petitioned to eliminate
or reduce his spousal support obligation and recalculate child support for the
parties’ youngest child (the only child remaining eligible for support). At trial, John
claimed his income from the farming operation was significantly lower than his
income when he still worked at John Deere and Jeanette no longer had a need for
spousal support. Following trial, the district court determined that, although John’s
change in employment was not contemplated at the time of dissolution, he “has
another income source that is meeting or could possibly exceed his prior capacity.”
The court declined to modify spousal support or child support and ordered John to
pay $10,000 of Jeanette’s attorney fees. In reaching this conclusion, the district
court made no findings of either party’s income.
John appeals.
II. Standard of Review
We review actions to modify terms of a dissolution decree de novo. In re
Marriage of Michael, 839 N.W.2d 630, 635 (Iowa 2013). “We will not disturb the
trial court’s conclusions ‘unless there has been a failure to do equity.’” Id. (quoting
In re Marriage of Wessels, 542 N.W.2d 486, 490 (Iowa 1995)). We review an
award of attorney fees for an abuse of discretion. Id. 5
III. Discussion
A. Spousal Support
First, John challenges the district court’s decision to not modify the spousal
support award. Under Iowa Code section 598.21C(1) (2021), “the court may
subsequently modify . . . spousal . . . support orders when there is a substantial
change in circumstances.”
In determining whether there is a substantial change in circumstances, the court shall consider the following: a. Changes in the employment, earning capacity, income, or resources of a party. b. Receipt by a party of an inheritance, pension, or other gift. c. Changes in the medical expenses of a party. d. Changes in the number or needs of dependents of a party. e. Changes in the physical, mental, or emotional health of a party. f. Changes in the residence of a party. g. Remarriage of a party. h. Possible support of a party by another person. i. Changes in the physical, emotional, or educational needs of a child whose support is governed by the order. j. Contempt by a party of existing orders of court. k. Entry of a dispositional or permanency order in juvenile court pursuant to chapter 232 placing custody or physical care of a child with a party who is obligated to pay support for a child. Any filing fees or court costs for a modification filed or ordered pursuant to this paragraph are waived. l. Other factors the court determines to be relevant in an individual case.
Iowa Code § 598.21C(1). However, the court considers more than substantial
changes in circumstance when deciding whether to modify spousal support. To
modify a decree under section 598.21C, we consider the following principles,
(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 6
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.
In re Marriage of Walters, 575 N.W.2d 739, 741 (Iowa 1998) (citation omitted).
John points to several changes since entry of the dissolution decree as
grounds supporting modification or elimination of his spousal support obligation.
At the forefront of his argument is his loss of his John Deere employment through
the company’s restructuring process. He highlights that both he and Jeanette had
anticipated he would work an additional ten years before he retired, so this change
was not contemplated at the time of the decree. John also notes it is unlikely he
would be able to find employment at a comparable salary in the area and if he took
a lower-paying job it would require him to hire others to complete the farm work he
now does. So, he reasons it is not practical for him to work off the farm, which he
claims produces less income than his John Deere job did. We agree with John
that he is not required to move out of the area and away from his farm to find
comparable employment, and we conclude that it is unlikely that he would be able
to secure a job with comparable compensation to his John Deere job in the area.
See In re Marriage of Blum, 526 N.W.2d 164, 165 (Iowa Ct. App. 1994) (finding
loss of employment to be a change of circumstances warranting modification when
payor refused to move to obtain comparably paying employment); In re Marriage
of Fidone, 462 N.W.2d 710, 712 (Iowa Ct. App. 1990) (finding a payor’s refusal to
move for employment opportunities did not make loss of employment voluntary or
self-inflicted). 7
The parties argue over John’s farm income, which is currently his sole
source of income other than his pension income from John Deere. We would be
aided in resolving this dispute if we had a finding by the district court as to John’s
farm income, but we have no such finding with which to work. See Benskin, Inc.
v. W. Bank, 952 N.W.2d 292, 307 (Iowa 2020) (noting that appellate courts are
courts of review, not first view). Nevertheless, we find it largely unnecessary to
resolve the disagreement over John’s farm income to resolve the spousal support
issue in this instance. Leading up to the original decree, the parties had a history
of John using his substantial John Deere income to finance the farming operation
with the expectation that the farming operation would continue to grow to the point
that, when John retired from John Deere, the farming operation would support him
and would become a legacy to hand down to the children. The pattern of John
using his John Deere income to finance the farming operation continued after the
dissolution until John lost the John Deere job. All that is to say that no matter how
much the farm operation has grown—and the parties dispute that figure—the
growth was contemplated when the original decree was entered. What is now
missing, unexpectedly, is the $300,000 to $500,000 of John Deere income that
John no longer has. We find this unexpected loss in income to be a substantial
change in circumstances that was not contemplated by the parties or the district
court when the original decree was entered. We also find the change to be
permanent or continuous.
Our finding that there is a substantial change of circumstances that is
continuous and was not contemplated by the district court at the time of entry of
the original decree does not end the inquiry, as we also need to consider whether 8
enforcement of the original spousal support obligation would result in positive
wrong or injustice. See Walters, 575 N.W.2d at 741. To answer that question, we
note that, after looking at John’s net worth and its growth, John is thriving
financially. John accumulated a net worth of around $3 million by the time of the
parties’ divorce. He managed to increase that amount by around fifty percent to
roughly $4.5 million in the time between the 2018 decree and the end of 2020.
This informs us that John’s financial picture is not as bleak as he claims. That
said, we are mindful that much of that growth comes from the infusion of capital
from John’s John Deere income—a golden goose no longer available to John.
We also need to consider the change in Jeanette’s financial picture to
determine whether enforcement of the original decree would result in injustice.
Jeanette is also not hurting financially. Since entry of the original decree, Jeanette
received a sizable inheritance that enabled her to pay off the remaining debt on
her $415,000 house and contribute to her investment portfolio. While Jeanette
claims her inheritance was contemplated at the time of the original decree, we
disagree. While the parties knew she was going to receive the inheritance, neither
party knew how much she would receive. The actual amount did not become
known and was not received by Jeanette until after entry of the original decree. In
short, this additional infusion of assets counts in the analysis.
In addition to her inheritance, Jeanette also has investment income and
receives $1828 per month from John’s pension from John Deere—an unexpected
early stream of income to Jeanette, given that it only came into being because of
John’s forced termination from John Deere. All of this is to say that we agree with
John that Jeanette is also on strong financial footing. Her net worth is now over 9
$2 million. She is set to receive an additional $200,000 property equalization
payment from John in 2024. She has no mortgage on her home or other debts.
John’s expert also explained that Jeanette can expect to receive $49,163 in annual
distributions between 2022 and 2027 and $90,917 from 2028 onward from her
investment portfolio without invading principal. Jeanette’s financial advisor did not
significantly dispute these calculations. Jeanette also works more than she did
before the divorce and at a higher hourly rate to make roughly $29,000 per year
before taxes, a significant increase from the imputed minimum wage used to
calculate Jeanette’s income at the time of the original decree.5
Given Jeanette’s strong financial health coupled with the unexpected loss
of John’s substantial John Deere income, we conclude Jeanette no longer requires
the same level of financial support from John as previously required. See Michael,
839 N.W.2d at 638–39 (reducing the spousal support award when the receiving
party had an improved financial situation). Although we find there is reduced need
by Jeanette and reduced ability to pay by John, we do not find it equitable to
eliminate the spousal support award, as suggested by John. Instead, we find it
equitable to reduce the spousal support award to $1500 per month to be paid on
the first of every month following procedendo until July 1, 2028, after which time
the award shall reduce to $1000 beginning on August 1, 2028 until Jeanette turns
sixty-two years old. Consistent with the terms of the parties’ stipulated decree,
spousal support shall terminate upon the earliest of any of the following events:
either party’s death or Jeanette’s remarriage.
5Jeanette makes $20 per hour and works an average of twenty-nine hours per week, grossing $580 per week. We assume she works fifty weeks per year. 10
B. Child Support
Next, John challenges the district court’s refusal to modify child support.
Specifically, the court stated, “the court declines to modify the child support
obligation as it was not pled in the answer filed herein.” We interpret this to be an
explanation for why the court did not consider Jeanette’s post-trial request for more
child support.6 Nevertheless, we note John requested recalculation of child
support in his modification petition. So, the matter was properly before the district
court, and the court should have addressed the merits of John’s request.
Like spousal support, the court may modify child support upon the
petitioning party establishing a substantial change in circumstances by a
preponderance of the evidence. See Iowa Code § 598.21C(1); In re Marriage of
Mihm, 842 N.W.2d 378, 382 (Iowa 2014). In determining whether to modify a child
support obligation, we consider the same factors that are used to determine
whether a substantial change in circumstances has occurred to modify spousal
support. See Iowa Code § 598.21C(1) (listing the same factors for determining
whether to modify child or spousal support). Here, the child support award in the
stipulated decree was based solely on John’s John Deere income and annual
bonus. That income no longer exists, though John’s undetermined farming income
remains. Meanwhile, Jeanette’s income has increased. To us, this amounts to a
change in circumstance that is “material and substantial, not trivial, more or less
permanent or continuous, not temporary, and . . . not within the knowledge or
6 Jeanette sought recalculation of child support to $1445.81 per month in a post- trial statement of authorities, but she had not requested such relief in her answer to John’s modification petition. 11
contemplation of the court when the decree was entered.” Mears v. Mears, 213
N.W.2d 511, 515 (Iowa 1973). Moreover, there is no evidence that John left his
John Deere job in an effort to avoid paying child support. See Walters, 575 N.W.2d
at 741.
We think recalculation of child support is required. However, we are again
left wondering what John’s annual income from the farm actually is. The district
court never determined John’s annual income after he left John Deere. Instead, it
stated John “has another income source that is meeting or could possible exceed
his prior earning capacity.” We remand to the district court to determine the parties’
annual incomes and recalculate the child support award. In doing so, the district
court should consider John’s actual income. See Iowa Ct. Rs. 9.5, .14. That
entails not only considering the gross revenue from John’s farming operation, but
also properly subtracting permissible business expenses, including straight-line
depreciation. See In re Marriage of Knickerbocker, 601 N.W.2d 48, 51–52 (Iowa
1999) (recognizing a party may factor in straight-line depreciation when
determining the party’s income for child support purposes).
C. Trial Attorney Fees
Finally, John appeals the district court’s order that he pay $10,000 of
Jeanette’s trial attorney fees. “In a proceeding for the modification of an order or
decree under [the dissolution] chapter the court may award attorney fees to the
prevailing party in an amount deemed reasonable by the court.” Iowa Code
§ 598.36. This is permissive language, and we give the district court considerable
discretion to fashion an attorney fee award. In re Marriage of Maher, 596 N.W.2d
561, 568 (Iowa 1999). However, those fee awards depend on the respective 12
parties’ ability to pay and must be fair and reasonable. In re Marriage of Guyer,
522 N.W.2d 818, 822 (Iowa 1994).
We conclude the district court abused its discretion in awarding Jeanette
attorney fees. The district court gave no indication that it considered the
appropriate factors, what factors were considered, or why it decided to award the
amount awarded. Without any such findings, we conclude the fees awarded by
the district court were not fair or reasonable in this instance. It appears the district
court failed to consider Jeanette’s ability to pay her attorney fees, a relevant
consideration. See In re Marriage of Bolick, 539 N.W.2d 357, 361 (Iowa 1995).
Jeanette has sufficient income to pay her own fees. More critically, the district
court should have determined John’s income to recalculate child support and
reduced spousal support in favor of John, so Jeanette should not have been
considered the prevailing party. Accordingly, Jeanette should not have been able
to recover attorney fees in this proceeding. See Iowa Code § 598.36.
IV. Conclusion
We modify the spousal support award to $1500 per month to reduce to
$1000 per month on August 1, 2028, ending at the earliest occurrence of either
party’s death or Jeanette’s remarriage. We remand to the district court to
determine the parties’ annual incomes and recalculate child support. In calculating
John’s income, the district court shall give proper consideration to legitimate
business expenses, including straight-line depreciation. We strike the award of
attorney fees to Jeanette. Costs on appeal are assessed to Jeanette.
AFFIRMED AS MODIFIED AND REMANDED.