In RE the Marriage of Kenneth R. Michael and Melissa J. Michael Upon the Petition of Kenneth R. Michael, 2013 Iowa Sup. LEXIS 118

Background

Kenneth and Melissa Michael divorced in 1994; decree required Kenneth to pay weekly spousal support (initially $450, then one-third of his gross salary/bonuses) and to provide medical insurance for Melissa until her death, remarriage, or cohabitation.
The parties stipulated to a 1998 modification fixing spousal support at $480/week continuing until Melissa died, remarried, or cohabited; medical-insurance obligation remained unchanged.
Kenneth filed a modification petition in 2011 after job loss, a new lower-paying position (project manager at $85,020/year), mounting debts, health issues, and diminished bonus prospects; Melissa by 2011 had higher wages, vested pension (~$190,000), and employer-sponsored health insurance.
The district court found Melissa’s increased earnings, pension vesting, and employer insurance were substantial, unanticipated changes and (1) reduced Kenneth’s spousal support to continue only until he reaches age 67 (then terminate), and (2) terminated Kenneth’s obligation to pay Melissa’s health insurance immediately.
The court of appeals reversed the termination of spousal support (finding no substantial change) but affirmed termination of the health-insurance obligation; the Iowa Supreme Court granted further review.
The Supreme Court concluded a substantial change occurred, reduced Kenneth’s weekly support to $285/week (while preserving termination triggers of remarriage/death/cohabitation), and affirmed termination of the health-insurance obligation; each party pays half the appeal costs and no appellate fees were awarded.

Issues

Issue	Kenneth's Argument	Melissa's Argument	Held
Whether Kenneth showed a substantial change in circumstances to modify spousal support	His income and bonus prospects declined; increased debts and health issues; Melissa became financially independent and accrued retirement assets — so support should be reduced or ended now	Changes were within contemplation or insufficient; Melissa still needs support and the 1998 agreement should control	Court held substantial change existed (Melissa’s income/pension and Kenneth’s reduced/uncertain compensation); reduced support to $285/week but preserved termination only on remarriage/death/cohabitation
Whether Kenneth’s obligation to pay Melissa’s health insurance should be continued	He argued to terminate insurance payments due to Melissa’s employer coverage and changed circumstances	Argued continuation was appropriate	Court affirmed termination of Kenneth’s obligation because Melissa obtained employer-sponsored coverage not available/anticipated earlier
Whether district court erred by setting termination at Kenneth’s age 67	Kenneth sought earlier termination or immediate relief	Melissa cross-appealed district court’s termination-at-67	Supreme Court declined to fix a future automatic termination date; modified amount now and left future termination to future circumstances
Whether appellate attorney fees should be awarded	Kenneth sought attorney fees as prevailing party	Melissa sought appellate fees too	Court exercised discretion, found both parties partially prevailed and had comparable ability to pay, and denied appellate fee awards

Key Cases Cited

In re Marriage of Johnson, 781 N.W.2d 553 (Iowa 2010) (standard of review for modification decisions)
In re Marriage of Wessels, 542 N.W.2d 486 (Iowa 1995) (modification requires equity and substantial change not within original contemplation)
In re Marriage of Goodwin, 606 N.W.2d 315 (Iowa 2000) (attorney-fee review standard)
In re Marriage of McCurnin, 681 N.W.2d 322 (Iowa 2004) (consider unrealized earning potential vs. established earning potential in modification)
In re Marriage of Sjulin, 431 N.W.2d 773 (Iowa 1988) (earning potential relevant to modification)
In re Marriage of Rietz, 585 N.W.2d 226 (Iowa 1998) (modification appropriate when obligor’s high income is no longer likely)
In re Marriage of Wegner, 434 N.W.2d 397 (Iowa 1988) (both income and earning potential considered)
Page v. Page, 219 N.W.2d 556 (Iowa 1974) (decrease in real income with rising cost of living can justify modification)
In re Marriage of Francis, 442 N.W.2d 59 (Iowa 1989) (distinguishing traditional vs rehabilitative alimony)
In re Marriage of Maher, 596 N.W.2d 561 (Iowa 1999) (district court discretion on awarding attorney fees)
In re Marriage of Bolick, 539 N.W.2d 357 (Iowa 1995) (consider whether party defended trial court on appeal when awarding fees)
In re Marriage of Geil, 509 N.W.2d 738 (Iowa 1993) (courts should not prejudge future modification rights)
In re Marriage of Schlenker, 300 N.W.2d 164 (Iowa 1981) (final disposition should be based on circumstances then existing)