IN RE MARRIAGE OF McDERMOTT, 705 N.W.2d 507 (Iowa App. 2005)

No. 04-1033Court of Appeals of Iowa.
Filed September 14, 2005

Appeal from the Iowa District Court for Chickasaw County, James L. Beeghly, Judge.

John McDermott appeals a modification decree ordering him to pay one-third of his oldest son’s postsecondary educational expenses. AFFIRMED.

Richard D. Stochl of Elwood, O’Donohoe, Stochl, Brown
Churbuck, New Hampton, for appellant.

Gregory W. Peterson of Elverson, Vasey Peterson, LLP, Des Moines, for appellee.

Considered by Sackett, C.J., and Huitink and Vaitheswaran, JJ.

VAITHESWARAN, J.

John McDermott appeals a modification decree ordering him to pay one-third of his oldest son’s postsecondary educational expenses. He also raises several other issues. We affirm.

I. Background Facts and Proceedings

John and Patricia McDermott married, had two children, and divorced. Later, they agreed that, if either child decided to pursue a postsecondary education, the parents’ support obligations would be governed by Iowa Code section 598.21(5A) (2003).

The parties’ older child, David, graduated from high school in 2003 with a 3.99 grade point average. He decided to attend the University of Northern Iowa (UNI) and asked his father to contribute to his educational expenses. John declined to pay anything, in the face of concern that David was not fully disclosing the assets available to him. Patricia applied for a modification of the dissolution decree.

Meanwhile, David completed his first year at UNI with a 3.83 grade point average. He then decided to transfer to the University of Iowa and made plans to attend summer school.

Patricia’s application for a modification of the decree proceeded to trial. Following trial, the district court ordered John to pay $4,542 toward David’s already-incurred expenses at UNI. The court also ordered him to pay $5,267 toward David’s second-year expenses at the University of Iowa and $890.33 toward his summer school expenses.

John appealed. He takes issue with the annual postsecondary education subsidy as well as other aspects of the district court’s ruling.

II. Annual Postsecondary Education Subsidy

Iowa Code section 598.1(8) defines a “postsecondary education subsidy” as an amount for educational expenses of a child between the ages of eighteen and twenty-two who “is, in good faith, a full-time student in a college, university, or community college. . . .” A court may order a postsecondary education subsidy if good cause is shown. Iowa Code § 598.21(5A) (a). John does not dispute that good cause has been shown. He simply disputes the calculation of the subsidy.

Iowa Code section 598.21(5A) prescribes the method for calculating the subsidy. First, the court is to determine the cost of the education, then the amount a child can be expected to contribute, and finally, the amount to be paid by each parent.[1]
A. Cost.

The cost of a postsecondary education shall include “the reasonable costs for only necessary postsecondary education expenses.” Iowa Code § 598.21(5A) (a) (1). In determining the annual cost of David’s postsecondary education, the district court relied on award letters David received from UNI and the University of Iowa. Those letters included the cost of tuition and fees, room and board, books and supplies, and personal and transportation expenses. The total cost at UNI was $13,626. The total cost at the University of Iowa was $15,801.

John disputes these cost figures. He contends the total cost of attending UNI was $10,650 rather than $13,626. He arrives at this figure by excluding “general living expenses.” As for the University of Iowa, John asserts that the cost was $12,586 rather than $15,801.

The Iowa Supreme Court has accepted our universities’ award letters as an accurate estimate of costs. In re Marriage of Neff, 675 N.W.2d 573, 579 (Iowa 2004); In re Marriage of Vannausdle, 668 N.W.2d 885, 890 (Iowa 2003). These award letters include estimates of personal expenses and transportation Neff, 675 N.W.2d at 579; Vannausdle, 668 N.W.2d at 886.

Based on these opinions, we conclude the costs specified in the award letters constitute “reasonable costs for only necessary postsecondary education expenses” within the meaning of Iowa Code section 598.21(5A) (a) (1). Therefore, the district court acted equitably in relying on the university award letters to determine the total cost of a postsecondary education. Notably, by doing so, the district court afforded John the benefit of a lower room and board expense than the expenses David actually incurred at UNI.[2]
B. Child’s Expected Contribution.

Iowa Code section 598.21(5A) (a) (2) provides that the court shall “determine the amount, if any, which the child may reasonably be expected to contribute. . . .” The district court declined to factor in expected contributions from David. The court noted that, although David had “substantial savings,” his goal was “to keep his savings intact until he attends law school after receiving his bachelor’s degree.” The court also found that student loans “should be excluded from the student contribution component of the formula.” John takes issue with these aspects of the court’s ruling, contending David had funds available to him that he could utilize for his college education. We agree with John although, in the end, his argument makes no difference to the bottom line.

Looking first at loans, UNI and the University of Iowa offered David direct unsubsidized loans of $2,625 annually. David testified he did not apply for these loans because he wished to avoid incurring indebtedness for his undergraduate education in light of his plans to go to graduate school. He also noted that graduate loans would accrue interest while he was in school. While David’s foresight is commendable, John is correct that, as a parent, he is entitled to have the court consider “the availability of financial aid whether in the form of scholarships, grants, or student loans.” Iowa Code § 598.21(5A) (a) (2). Cf. Vannausdle, 668 N.W.2d at 890 (not including student loans in calculation when it was “contrary to the wishes of the parties”). David was eligible for the unsubsidized student loans and they should have been considered, whether or not David applied for them.

David also had personal savings totaling $9,550.90. Again, notwithstanding his laudable intentions, we agree with John that David could “reasonably be expected to contribute” these funds toward his undergraduate education. As David suggests, one-fourth of this amount should be considered for the 2003-04 academic year and one-fourth should be considered for the 2005-06 academic year.

Turning to David’s wages, David testified he earned $1,703.85 as a grocery store clerk during the spring semester at UNI. He testified he would not obtain employment in the summer preceding the 2004-05 academic year because he was attending summer school. He had no employment for the fall of that year. Based on the evidence of wages David earned in 2004, John contends David could reasonably be expected to contribute $1,000 in earnings toward his college education. We conclude the evidence of David’s earnings during a single semester is too speculative to impute a contribution of $1,000 annually. Cf. In re Marriage of Neff, 675 N.W.2d 573, 580 (Iowa 2004) (concluding children with parents of limited means “must be expected to work during the school year and summers to help finance their educations . . .”).

Finally, David received awards and scholarships from UNI. The parties do not appear to dispute that these funds should have been deducted from the total cost specified in the UNI award letter.

Adding David’s loans, savings, and wages, we conclude David’s total contribution for each year was $5,013 in addition to the awards and scholarships listed in the UNI award letter.

C. Parents’ Expected Contribution.

To obtain the parents’ expected contribution, the child’s contribution is to be deducted from the cost and the balance apportioned between the parents, with the proviso that neither parent shall pay more than thirty-three and one-third percent of the total cost. Iowa Code § 598.21(5A) (a) (3).

The cost of David’s education at UNI was $13,626. After awards and scholarships totaling $1,750, this amount was reduced to $11,876. Subtracting David’s additional contribution of $5,013, the balance remaining is $6,863.

Turning to apportionment of the cost, the available financial information suggests John can readily afford to pay one-third of the total cost at UNI as reflected in the UNI award letter ($4,542). Therefore, his contribution is limited to $4,542, as the district court concluded.

As for David’s second year of college at the University of Iowa, the cost as reflected in the award letter was $15,801. David was not offered any scholarships or grants at the University of Iowa. Subtracting his expected contribution of $5,013, the balance to be apportioned is $10,788. John can readily afford to pay one-third of the total cost of $15,801 ($5,267). Therefore, his contribution is limited to $5,267 for the 2004-05 academic year, as the district court concluded.

III. Other Issues
A. Summer School Subsidy.

John argues the district court acted inequitably in ordering him to pay a portion of David’s summer school expenses. He notes David was only taking six credit hours rather than the twelve required to be considered a full-time student.

We are not persuaded by John’s argument. David was a full-time student during the academic year preceding summer school and in the following academic year. In addition, he testified that six hours of summer course work was “the equivalent of twelve hours in the fall because you’re doing it in half the time.” As David was a full-time student before, during, and after the summer of 2004, we conclude the district court acted equitably in ordering John to pay a portion of David’s summer postsecondary educational expenses.

B. Retroactivity of Child Support Increase.

The district court ordered an increase in child support for the parties’ younger child. The court initially applied the increase retroactively to a date preceding the filing of Patricia’s modification application. In a post-trial ruling, the court corrected this error. See Iowa Code § 598.21(8) (stating “[j]udgments for child support . . . may be retroactively modified only from three months after the date the notice of the pending petition for modification is served on the opposing party.”). On appeal, John takes issue with the court’s first retroactivity ruling. As that ruling is no longer in effect, we have nothing to review.

C. Bonus.

John’s employer paid him bonuses in addition to a salary. The district court ruled, “[i]n the event John receives a bonus from his employer he should be required to pay 17.3% of his net income after deductions provided for under the Child Support Guidelines.”

On appeal, John contends his bonuses “are speculative at best.” In his view, his child support obligation “should be based solely on his guaranteed $98,000 per year salary.” We disagree.

In calculating child support, a court is to include bonuses if the employment history over the previous years shows that the money paid was consistent. In re Marriage of Nelson, 570 N.W.2d 103, 105 (Iowa 1997). Bonus income was contemplated as early as 2000. In that year, the parties agreed John would pay twenty-five percent of any net bonus proceeds as child support, to be reduced to eighteen percent when David graduated from high school or turned eighteen. At trial, John acknowledged he received a bonus of $15,547 in 2002 and approximately $22,000 in 2003. This evidence is sufficient to establish the consistency of the bonus payments. While we acknowledge evidence of a possible decline in future bonus payments, the district court considered that evidence, requiring payment of additional child support only if John received a bonus.

D. Trial Attorney Fees.

The district court ordered John to pay Patricia $2,200 of her trial attorney fees. John takes issue with this ruling, noting that Patricia retained her brother, a Des Moines attorney, when she could have retained someone closer to home.

We conclude the district court did not abuse its discretion in making the award. In re Marriage of Miller, 524 N.W.2d 442, 445
(Iowa Ct.App. 1994). The court ordered John to pay less than half of Patricia’s attorney fees. In addition, the court noted that the fees were incurred due to “John’s unwillingness to participate in resolution of the issues involved in this trial.”

E. Appellate Attorney Fees.

Patricia requests appellate attorney fees. As she prevailed and has income that is significantly less than John’s, we order John to pay $1,000 toward her appellate attorney fees.

AFFIRMED.