In Re the Marriage of Megan Marie Lantz and Jared James Lantz Upon the Petition of Megan Marie Lantz, N/K/A Megan Marie Danley, and Concerning Jared James Lantz

IN THE COURT OF APPEALS OF IOWA
No. 15-1989
Filed September 28, 2016
IN RE THE MARRIAGE OF MEGAN MARIE LANTZ
AND JARED JAMES LANTZ
Upon the Petition of
MEGAN MARIE LANTZ,
n/k/a MEGAN MARIE DANLEY,
Petitioner-Appellee,
And Concerning
JARED JAMES LANTZ,
Respondent-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Jasper County, Terry R. Rickers,
Judge.
Jared James Lantz appeals the administrative modification of his child-
support obligation for the parties’ minor children. AFFIRMED.
Samantha J. Gronewald of Sullivan & Ward, P.C., West Des Moines, for
appellant.
Thomas J. Miller, Attorney General, and Wayne J. Bergman, Christina F.
Hansen, and Shannon L. Wallace, Assistant Attorneys General, Child Support
Recovery Unit, for appellee State.
Considered by Potterfield, P.J., and Mullins and McDonald, JJ.
2
MULLINS, Judge.
Jared James Lantz appeals the administrative modification of his child-
support obligation for the parties’ minor children. We affirm.
I. Background Facts and Proceedings
Jared and Megan were divorced in August 2009. Megan was granted
physical care of their minor children, and Jared was ordered to pay $435 per
month in child support and $53.30 per month in medical support. On July 30,
2014, Megan sought a modification of Jared’s child-support obligation. On
September 8, the Child Support Recovery Unit (CSRU) issued a notice of intent
to review and adjust the child-support obligation. Jared acknowledged receipt of
this notice the following day and executed a waiver of personal service. Jared
also provided a financial statement to the CSRU, in which he indicated he was
unemployed and without income. On September 10, Megan executed a financial
statement to the CSRU in which she indicated she was married, unemployed,
and without income.
On October 1, 2015, the CSRU mailed Jared a notice of its decision to
review and adjust his child-support obligation and informed him he had fifteen
days to send a written challenge or ask for a court hearing. Jared claims he did
not receive the notice until October 17 and then sent a letter on October 22
contesting the adjustment. He also claims he called the CSRU on October 21
and 22 regarding the notice, but did not receive a call in return. On October 19,
the CSRU worker assigned to Jared’s modification attempted to call Jared, but
the number Jared had provided had been disconnected. Jared later explained to
the court he had changed his number but failed to inform anyone of that change.
3
On October 23, the district court entered its order approving the
administrative modification of Jared’s child-support obligation. On October 26,
Jared filed a letter claiming he did not receive notice and asking the court to set
aside the October 23 order. The State resisted Jared’s request. A hearing was
held on the matter on November 3, 2015, at which time Jared testified about his
current employment and income. The district court entered an order denying
Jared’s request on November 17. Jared appeals.
II. Standard and Scope of Review
District courts are vested with broad discretion in ruling on a motion to set
aside default judgment. Brandenburg v. Feterl Mfg. Co., 603 N.W.2d 580, 584
(Iowa 1999). Thus, we reverse those rulings only when that discretion has been
abused. Id. “Generally, we find such an abuse only when there is a lack of
substantial evidence to support the district court’s ruling.” Id. (citation omitted).
“We are bound by the district court’s findings of fact if supported by substantial
evidence, and we view the evidence in the light most favorable to the district
court’s ruling.” Id. (citation omitted). However, we resolve all doubts in favor of
setting aside a default judgment, as we prefer “to allow a determination of
controversies on their merits rather than on the basis of nonprejudicial
inadvertence or mistake.” Id. (citation omitted).
III. Analysis
A. Default Judgment
A default motion may be set aside “for good cause shown . . . for mistake,
inadvertence, surprise, excusable neglect or unavoidable casualty.” Iowa R. Civ.
P. 1.977. The burden rests with Jared to prove good cause to set aside the
4
default judgment. See Brandenburg, 603 N.W.2d at 584. “A determination of
whether a movant has established good cause is not a finding of fact; rather, it is
a legal conclusion, which is not binding [on appeal].” Id.
On appeal, Jared appears to rely upon the ground of excusable neglect.
We consider the following four factors when determining whether excusable
neglect constitutes good cause to set aside default judgment:
First, did the defaulting party actually intend to defend? Whether
the party moved promptly to set aside the default is significant on
this point. Second, does the defaulting party assert a claim or
defense in good faith? Third, did the defaulting party willfully ignore
or defy the rules of procedure or was the default simply the result of
a mistake? Last, whether relief is warranted should not depend on
who made the mistake.
Id. (quoting Cent. Nat’l Ins. Co. v. Ins. Co. of N. Am., 513 N.W.2d 750, 756 (Iowa
1994)).
At the hearing, the district court noted Jared consented in writing to the
jurisdiction of the court and to receipt of all papers by mail. There was no
requirement that anything be sent to Jared by certified mail. In denying Jared’s
request, the district court reasoned as follows:
There’s no clear-cut explanation—that allows the Court to reach a
conclusion as to how or why the notice that was mailed on October
1st as certified by the [CSRU] didn’t get to [Jared] until the 17th. As
[the State] noted in [its] statement to the Court, in order to set aside
a judgment that’s already been entered by the Court, a burden is
placed on the person seeking to set aside the judgment to show
that there was some unavoidable casualty or legal excuse that
justifies overturning the judgment.
However, the record indicates that there [we]re a couple
opportunities that [Jared] could have had to prevent this judgment
from being entered. Had, number one, he kept the [CSRU] advised
of his new phone number since they did, in fact, try to call him
before the judgment was entered and couldn’t reach him because
he changed his phone number and didn’t bother to tell them.
5
Also, if he’d taken immediate action when he received the
notice, he would have had a chance to stop the process before the
order was entered on the 23rd of October. By waiting even that
couple of days, it was his action that prejudiced his ability to try and
stop that from happening. It was certainly no fault of the [CSRU]
and obviously no fault of [Megan’s]. So the Court doesn’t find that
[Jared] has proven a sufficient legal ground to overturn the
judgment. The burden’s on [Jared] to prove that, and I find that
he’s failed to prove that.
While Jared argues he clearly intended to defend his case, even assuming
Jared did not receive the notice until October 17, as noted by the district court,
Jared did not take prompt action after that date or even inform the CSRU of the
telephone number where he could be reached. We cannot find the district court
abused its discretion in denying Jared’s request to set aside the default
judgment.
B. Modification
In his appeal, Jared also challenges the CSRU’s calculation of his
modified child-support obligation.1 Our review is de novo. See Iowa R. App. P.
6.907.
At the hearing, Jared stated he was earning $15.57 per hour and working
forty hours per week. He testified he “occasionally” worked overtime. Jared
argued his support obligations should be set on his hourly base pay and not take
into account his overtime and incentive pay because they are not guaranteed.
1
Jared also appears to challenge the CSRU’s calculation of Megan’s income. He did
not, however, raise this challenge before the district court, and we decline to consider it
on appeal. See Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (“It is a
fundamental doctrine of appellate review that issues must ordinarily be both raised and
decided by the district court before we will decide them on appeal.”).
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Following the evidentiary hearing and the district court’s denial of Jared’s
motion to set aside default judgment, the district court declined to modify the
child-support amount, reasoning:
[I]f the Court determined that the calculations were based on
numbers that were clearly false or fictitious or erroneous, the Court
still might have some inclination to somehow intervene in those
calculations. But it appears that the calculations were based on
actual earning numbers supplied to the State of Iowa by [Jared’s]
employer. Insomuch as it’s based on actual income numbers
averaged over the time of [Jared’s] employment, that would fit
within the calculations that are contemplated by the Iowa Supreme
Court’s child support guidelines.
So since the guidelines have been followed, then there’s no
reason or motivation for the Court to overturn the calculations on
that basis. The support was done per the guidelines, which is what
the Court is supposed to do is abide by the guidelines.
“Overtime wages are not excluded as income.” In re Marriage of
Kupferschmidt, 705 N.W.2d 327, 333 (Iowa Ct. App. 2005). To the contrary,
“[o]vertime wages are within the definition of gross income to be used in
calculating net monthly income for child support purposes.” Id. The only
exception to this is “where overtime pay appears to be an anomaly or is uncertain
or speculative.” Id. Similarly, incentive pay is considered as part of a party’s
income. See Markey v. Carney, 705 N.W.2d 13, 19 (Iowa 2005) (including
“overtime income, incentive pay, and bonuses as gross income”). While Jared
states he “occasionally” works overtime and he was not “quite sure” what his
incentive pay arrangement was, nothing in the record indicates these wages
should have been excluded. See id. (“[O]nce evidence of extra income has been
introduced . . . the burden is on the recipient of the income to establish that it
should be excluded from gross income as uncertain and speculative.”).
7
Further, where a party’s income varies, “[i]t is unrealistic and unfair to fix
child support obligations based solely on the most recent periodic income
amounts.” Kupferschmidt, 705 N.W.2d at 333 (citation omitted). Instead, as
done by the State in this case, it is appropriate to calculate income by averaging
the amounts made over a period of employment. See id. (“[I]t is reasonable for
the district court to calculate the parent’s income by averaging it over the term of
the contract.”); see also Markey, 705 N.W.2d at 19 (“If extra income is uncertain
or speculative, or if it is an anomaly, it is excluded. If it is reasonably expected to
be received, then it should be included in gross monthly income by averaging the
extra income over a reasonable period of time so the amount included fairly
reflects the amount that will be received.” (citation omitted)).
Accordingly, we affirm the decision of the district court.2
AFFIRMED.
2
Jared also claims he does not have a health benefit plan available at a reasonable
cost. This claim was not raised before the district court and we decline to consider it on
appeal. See Meier, 641 N.W.2d at 537.