                   IN THE COURT OF APPEALS OF IOWA

                                    No. 14-0305
                             Filed November 26, 2014


IN RE THE MARRIAGE OF VICKI M. VAN VELDHUIZEN
AND RANDY H. VAN VELDHUIZEN

Upon the Petition of
VICKI M. VAN VELDHUIZEN,
      Petitioner-Appellee,

And Concerning
RANDY H. VAN VELDHUIZEN,
     Respondent-Appellant.
________________________________________________________________


      Appeal from the Iowa District Court for Lyon County, Patrick M. Carr,

Judge.



      Randy Van Veldhuizen appeals from the district court’s ruling on Vicki Van

Veldhuizen’s application to modify the parties’ dissolution decree. AFFIRMED

AS MODIFIED, AND REMANDED.




      Andrew B. Howie of Hudson, Mallaney, Shindler & Anderson, P.C., West

Des Moines, for appellant.

      Missy J. Clabaugh of Jacobsma & Clabaugh, P.L.C., Sioux Center, for

appellee.



      Heard by Danilson, C.J., and Doyle and Tabor, JJ.
                                               2


DOYLE, J.

          Randy Van Veldhuizen appeals the district court’s order modifying the

dissolution of marriage decree between him and Vicki Van Veldhuizen. Randy’s

claims on appeal fault the district court for: (1) maintaining the parties’ shared

physical care of the parties’ five minor children; (2) improperly calculating his

child support obligation; (3) establishing a “common fund” provision for child-

related expenses; and (4) awarding Vicki trial attorney fees.              Vicki requests

appellate attorney fees. We affirm as modified, and remand for recalculation of

child support.

I.        Background Facts and Proceedings

          Randy and Vicki Van Veldhuizen divorced in 2011. Vicki is thirty-nine

years old and Randy is forty-seven years old. Vicki became pregnant with the

parties’ oldest child when she was sixteen years old. Over the years, Randy and

Vicki had seven more children, five of which are still minors.

          In October 2011, the parties signed a nine-page “Stipulation and

Agreement” which set forth the terms ending their marriage.1 They agreed to

joint legal custody of their minor children (at that time, six of the children were

minors), with the physical care to alternate “on a week to week schedule,

exchanging the children at 5:00 p.m. Sunday evening,” and with Randy having

the children every Sunday from 9:00 a.m. to 1:00 p.m. to take them to church.

          Paragraph 9(f) of the stipulation provided that each party would be

responsible for daycare, food, and clothing expenses when the children were in

their respective care, and further stated:

1
     Vicki was unrepresented by counsel at the time the stipulation was entered.
                                          3


       In lieu of paying child support, [Randy] shall be responsible for all of
       the children’s expenses including allowance, school tuition, “field
       trips and lunches, extracurricular activities, vehicle insurance[,] and
       prom expenses. The parties further agree [Randy] shall be
       responsible for up to $12,000 per child to purchase a vehicle for
       each minor male, and to pay for wedding expenses for each minor
       female. The parties shall equally split any graduation expenses.

       The stipulation set forth additional terms, including in part: Randy would

maintain medical insurance for the children and would be responsible for any

uncovered medical expenses; Randy would be entitled to claim all minor children

as tax exemptions; Randy would receive sole ownership and responsibility of the

family home, farmland, farm products, farm equipment, and other farm-related

assets and liabilities; Randy would purchase a $185,000 home for Vicki; the

parties would divide the marital household goods, personal property, and

vehicles; Randy would pay Vicki a property settlement of $720,000 in monthly

distributions of $4000.

       The district court entered a three-page decree of dissolution incorporating

the parties’ stipulation. The decree included a finding that the parties’ stipulation

with regard to child expenses is “in compliance with the Guidelines and any

variance is justified and appropriate as [Randy] will pay for the children’s

expenses as provided under paragraph 9(f) of the Stipulation and Agreement

along with being responsible for their medical insurance coverage.”

       Less than one year after the dissolution decree was filed, Vicki filed a

petition to modify the physical care arrangement for the parties’ (now five) minor

children. Vicki alleged a substantial and material change in circumstances had

occurred, claiming Randy had “badmouthed” her to the children, interfered with

and not supported the children’s relationship and time with her, failed to share
                                          4


information with her, “and in all other ways attempted to alienate the children

from [her].” Vicki further alleged the parties’ “lack of communication and lack of

mutual respect does not support shared physical care and is detrimental to the

children.” Vicki claimed it was in the best interests of the children to be placed in

her physical care “so that they have an open relationship with both parents

without any interference and or badmouthing about the other parent as such

conduct hinders their relationship with both parents.” Vicki also requested a

modification of child support, medical support, and dependency exemptions, and

an award of attorney fees.

       Randy filed an answer denying a change of circumstances, and stated if

the court found there has been a material and substantial change of

circumstances, then he should be awarded physical care of the minor children.

       By the time of the modification hearing, both parties had changed their

positions. At the direction of the district court, the parties completed a pretrial

stipulation, which provided in part:

       Wife: Vicki believes it would be in the best interests of children that
       the parties continue with joint/shared physical care under which
       they currently operate with the exception of her Sundays no longer
       being interrupted and the children remaining in her care all day on
       the Sundays when the children are in her physical care. . . . If the
       court does not find it to be in the best interests of the children that
       joint/shared physical care continue to be exercised, Vicki would
       then propose that she be awarded primary physical care of the
       minor children with Randy being granted frequent, liberal and
       reasonable rights of visitation.

       Husband: Proposes primary physical care subject to wife’s
       visitation.

The parties acknowledged the child support and visitation issues were dependent

on the court’s ruling with regard to physical care.
                                          5


       Trial took place over two days in August 2013. The court heard testimony

from Randy and Vicki, their two adult sons, their sixteen-year-old son, a Lyon

County deputy sheriff, a school teacher, and a school counselor. The court also

received a number of exhibits evidencing, in part, the communications between

the parties, including tape recordings and transcriptions of some of their

conversations.

       In February 2014, the district court entered its order on Vicki’s petition for

modification.2 The court found the provision relating to the children’s expenses

(paragraph 9(f) of the parties’ original stipulation) had been “problematic” and

conflicts had arisen about how to pay for certain expenses. The court boiled the

conflicts down to Randy’s coercive and retributive control over the payment of

expenses.      The court discussed several instances of troubling behavior by

Randy, including: Randy’s reimbursement of $4.84 to Vicki for a prescription

expense, which he had the children deliver to her in pennies; Randy’s

conversation with the parties’ oldest daughter in which he told her that because

he was the one paying for her wedding, “he will decide who attends,” and that

Vicki could not; and Randy’s threats to Vicki that her “life will be hell” because he

is able to spend unlimited amounts of money to engage in litigation with her. The

court found:

       The present situation is clear to the Court. [Randy] is using the
       existing shared care arrangement and his control over the payment

2
 Meanwhile, a contempt proceeding was initiated by Vicki, alleging several instances of
contemptuous behavior by Randy, including his failure to return the children to Vicki
pursuant to the terms of their physical care arrangement. The district court denied
Vicki’s request to reopen the record in the modification proceeding with regard to the
contempt proceeding, stating, “[T]he evidence proposed to be entered into the record
would be cumulative of evidence already in the record.”
                                           6


       of expenses for the children, and the absence of child support, to
       inflict retribution on [Vicki]. The record is not clear about the source
       of the profound anger and resentment harbored by [Randy].
       Having seen the parties testify in person, however, the Court is
       convinced that it is real and intractable. This anger leads [Randy]
       to pressure the children to choose between him and [Vicki]. The
       proposition that alliance with him will be rewarded financially is
       strongly implied.

       Ultimately, the court maintained the shared care arrangement, stating:

       [T]he Court is going to accept [Vicki’s] request to retain the joint
       physical care arrangement. The Court does so despite misgivings
       about [Randy’s] troubling behaviors.          This is the least bad
       alternative. There is no perfect solution to the family discord
       evident in this record. A full award of physical care to [Vicki] would
       deprive the children of time with their father.[3]

       The court struck paragraph 9(f) of the original stipulation that had been

incorporated into the dissolution decree, and ordered Randy to pay child support

to Vicki in the amount of $3062.47 per month.4             The court also struck the

provision with regard to Randy’s physical care every Sunday morning, finding the

provision was “unduly restrictive” and provided Randy with “too much coercive

power, which he [was] inclined to use.”5          The court ordered the parties to

establish a “joint bank account for the benefit of the children,” to which they

would each deposit $750 monthly. The court specifically delineated a number of

expenses of the children, and ordered “either party, acting alone, [to] draw

checks on the account” to pay for those expenses.                 Other findings and

conclusions by the court will be set forth below as relevant.

       Randy appeals.

3
  The court previously noted it had considered Vicki’s testimony that the children wanted
to spend time with each of their parents.
4
  For purposes of calculating child support, the court imputed an annual income of
$15,000 to Vicki, and determined Randy’s average annual income was $377,558.
5
  Randy does not appeal that issue.
                                           7


II.    Standard of Review

       This modification action was tried in equity, and review is de novo. Iowa

R. App. P. 6.907; In re Marriage of Johnson, 781 N.W.2d 553, 554 (Iowa 2010).

Although we are not bound by the findings of the district court, we give them

deference because the district court was present to listen to and observe the

parties and witnesses and evaluate the parties as custodians.6 In re Marriage of

Zebecki, 389 N.W.2d 396, 398 (Iowa 1986); In re Marriage of Cupples, 531

N.W.2d 656, 657 (Iowa Ct. App. 1995); see also Iowa R. App. P. 6.904(3)(g).

And, “[t]here is good reason for us to pay very close attention to the trial court’s

assessment of the credibility of witnesses.” In re Marriage of Vrban, 359 N.W.2d

420, 423 (Iowa 1984). The court deciding the case

       is greatly helped in making a wise decision about the parties by
       listening to them and watching them in person. In contrast,
       appellate courts must rely on the printed record in evaluating the
       evidence. We are denied the impression created by the demeanor
       of each and every witness as the testimony is presented.

Id. (internal quotation marks and citations omitted); see also State v. Teager, 269

N.W. 348, 351 (Iowa 1936) (noting the factfinder “had the advantage of being

confronted with the witnesses, with an opportunity to observe their demeanor and

candor, or the lack of it, and were in a much better position to judge and pass

upon the weight and credibility of the testimony,” unlike the reviewing appellate

court “with nothing but the cold, naked, printed testimony before [it]”).              A

witness’s facial expressions, vocal intonation, eye movement, gestures, posture,

body language, and courtroom conduct, both on and off the stand, are not


6
 “Credibility” in this context, we believe, goes beyond mere truthfulness; it encompasses
a witness’s motive, candor, bias, and prejudice.
                                           8


reflected in the transcript.    Hidden attitudes, feelings, and opinions may be

detected from this “nonverbal leakage.”          See Thomas Sannito & Peter J.

McGovern, Courtroom Psychology for Trial Lawyers 1 (1985). Thus, the trial

judge is in the best position to assess a witness’s interest in the trial, their motive,

candor, bias, and prejudice. See Teager, 269 N.W. at 351.

III.   Physical Care

       Randy contends the parties’ dissolution decree should be modified to

place physical care of the parties’ children with him.         Once a physical care

arrangement is established, the party seeking to modify it bears a heightened

burden, and we will modify the arrangement only for the most cogent reasons.

See Dale v. Pearson, 555 N.W.2d 243, 245 (Iowa Ct. App. 1996).

       [T]he applying party must establish by a preponderance of
       evidence that conditions since the decree was entered have so
       materially and substantially changed that the children’s best
       interests make it expedient to make the requested change. The
       changed circumstances must not have been contemplated by the
       court when the decree was entered, and they must be more or less
       permanent, not temporary. They must relate to the welfare of the
       children.

In re Marriage of Frederici, 338 N.W.2d 156, 158 (Iowa 1983). If the parent

seeking physical care has shown a substantial change in material circumstances,

then we consider whether the party has also shown “an ability to minister more

effectively to the children’s well-being.” Id.

       In support of his contention that a substantial change in circumstances

exists, Randy alleges Vicki mistreated the children and they preferred remaining

in his care. This allegation was brought to the district court’s attention at trial,

and the court astutely noted Randy’s position in the modification had “evolved
                                          9


over time.”7 On the issue, the court considered Randy’s testimony, which was

supported in part by the testimony of the parties’ two adult sons and sixteen-

year-old son, that Vicki was mean to the children, paddled them with a board,

locked the food pantry, and made them prepare their own meals.

       The court expressly stated it “attach[ed] little credibility to this evidence.”

The court explained, “These claims first came to light only as trial of this matter

approached, long after the actual claimed events would have occurred. The

claimed behaviors were all known or knowable long before the parties’ divorce.”

The court further stated although it did not “ignore” evidence that the parties’

sixteen-year-old “refuses, at present, to see his mother,” it determined the son’s

“opinion about his own primary care is not entitled to much weight”—likely in light

of the court’s misgivings with regard to Randy’s credibility and influence over his

children’s testimony, as described above.

       On that note, we reiterate the district court’s finding that the testimony of

the parties’ sons supports an implication the sons believe an alliance with the

father would be financially rewarding. Needless to say, in light of the district

court’s express credibility findings, we give little—if any—weight to this evidence

in determining what physical care arrangement will best serve the children’s

interests.

       In our de novo review, we conclude Randy falls far short of proving either

a substantial change in circumstances, or that he could provide superior care for

7
  Even in his appellate brief, Randy acknowledges, “Vicki was the party who primarily
sought the modification . . . .” One would think Randy would have brought his
allegations to light during the dissolution proceedings, or at a minimum, that he would
have proactively sought modification had these issues been a real or imminent threat to
the children.
                                         10


the children such that modification of the physical care arrangement is warranted.

There are many aspects of Randy’s behavior and testimony that are troubling to

the court. Clearly this family has had some difficult adjustments, but we believe

Randy’s actions have caused the situation to be far more tumultuous for these

children than it should be. In the simplest terms, the fact that Randy boasts that

the children call the nanny “mom,” and points to this portion of his testimony as a

selling point for his claim on appeal makes his lack of support for Vicki’s

relationship with the children even more transparent.         Any claim by Randy

otherwise is not founded in the record. The majority of the problems between

these parties and in turn, any stress relayed to the child, are caused by Randy.

We affirm on this issue.

IV.    Child Support

       Randy claims the district court incorrectly determined his child support

obligation8 by (1) “wrongly adding depreciation expenses” to his income, and

(2) failing to include his $455 monthly payment for the children’s health insurance

on the child support worksheet. We address these issues in turn.

1.     Depreciation Expenses

       Randy claims the district court incorrectly calculated his income by “adding

back” 6/7ths of his Section 179 depreciation. According to Randy, his correct

average annual income (with none of the Section 179 depreciation added back

in) is $162,289.25.        Randy claims his child support obligation should be

calculated using an income for him of $162,289.25 rather than $377,558.


8
  Randy does not challenge the court’s modification of child support; rather, he takes
issue with the amount of support ordered.
                                        11


      “The purpose of the child support guidelines is to provide for the best

interests of the children after consideration of each parent’s proportional income.”

In re Marriage of McDermott, 827 N.W.2d 671, 684 (Iowa 2013). In calculating

child support, the court must first determine the parents’ current monthly net

income “from the most reliable evidence presented.”            In re Marriage of

Knickerbocker, 601 N.W.2d 48, 51 (Iowa 1999).

      The child support guidelines define “net monthly income” as gross monthly

income less specifically enumerated deductions.       See Iowa Ct. R. 9.5.     The

guidelines do not specifically provide for a deduction for depreciation expenses,

but the Iowa Supreme Court has determined “depreciation should not

categorically either be deducted as an expense or treated as income, but rather

that the extent of its inclusion, if any, should depend on the particular

circumstances of each case.” In re Marriage of Gaer, 476 N.W.2d 324, 328

(Iowa 1991). As the court observed:

      Depreciation is a mere book figure which does not either reduce the
      actual dollar income of the defendant or involve an actual cash
      expenditure when taken. On the contrary, it represents additional
      cash available to the defendant by permitting substantial tax
      deductions and, ultimately, tax savings. The fact that the defendant
      may use some or all of the cash represented by depreciation to pay
      off principal indebtedness on the property is of no consequence
      since such payments, in effect, increase his net worth and estate by
      increasing his equity.

Gaer, 476 N.W.2d at 328 (quoting Stoner v. Stoner, 307 A.2d 146, 152 (Conn.

1972)).

      In Gaer, the court examined, at length, the various approaches to

depreciation employed throughout the country and concluded that Iowa courts

may deviate from the guidelines and consider the effect of depreciation when
                                          12

justice requires. Id. More specifically, the court recognized some allowance may

be necessary to ensure the continued success of a business and a straight-line

depreciation method may be employed when necessary. Id. at 329. The holding

in Gaer was reaffirmed by our supreme court in Knickerbocker, 601 N.W.2d at

52, and McDermott, 827 N.W.2d at 685, where the court again allowed

deductions under a straight-line depreciation method.

       “There are no hard and fast rules governing the economic provisions in a

dissolution action; each decision depends upon the unique circumstances and

facts relevant to each issue.” Gaer, 476 N.W.2d at 326. In terms of whether

depreciation should be allowed, however, the primary consideration is not the

best interests of the business, but the best interests of the child.   See In re

Marriage of McKenzie, 709 N.W.2d 528, 533-34 (Iowa 2006).

       Randy operates a 500-head dairy operation, does row crop farming, raises

cattle, and has some rental income. Randy submitted no financial affidavits in

this action; rather, he provided tax returns for the years 2008-2011.         In

calculating Randy’s average annual income, the district court summarized its

analysis of the tax returns as follows:

       [Randy] reports gains, and some losses, on the sale of depreciated
       livestock and machinery on Schedule D and Form 4797. He
       reports his main farm income on Schedule F. He has some rental
       income shown on Schedule E. He takes very significant Section
       179 elections to expense recovery property. The Court has
       prepared Exhibit A. Exhibit A converts the Section 179 expense
       deductions to a 7-year useful economic life and adds back in 6/7ths
       of the elected cost of depreciable property, including animals,
       placed in service. The Court has netted gains and losses on
       Schedule D and Form 4797. Exhibit A shows a four-year average,
       net, guideline income of $377,558 for [Randy].
                                         13


       We conclude it was proper for the district court to allow some depreciation

under a straight line method of depreciation in order to do justice between the

parties. See Knickerbocker, 601 N.W.2d at 52. Reasonable depreciation on

farm machinery and other assets related to the farm and livestock business is an

expense realistically necessary to maintain that business, and “such expenses

should be considered in calculating Randy’s income.” See id. The child support

guidelines “provide flexibility on the question whether to allow or disallow all or

any part of depreciation as a deduction from gross income.” Gaer, 476 N.W.2d

at 326. We find no reason to disturb the district court’s calculation of Randy’s

income in regard to this issue.

2.     Health Insurance Premiums

       Randy also challenges the child support calculation, alleging the district

court failed to include his $455 monthly payment for the children’s health

insurance on the child support worksheet.       Randy testified he provides the

children’s health insurance, which costs ninety-one dollars per child per month.

This testimony was unrefuted by Vicki.

       Randy is correct that the cost of the children’s health insurance premium

should have been deducted as part of calculating his child support obligation.

See In re Marriage of Nelson, 570 N.W.2d 103, 106 (Iowa 1997). We remand to

the district court for recalculation of Randy’s child support obligation under the

current guidelines while accounting for Randy’s expense in providing health

insurance for the children.
                                          14


V.     Child-Related Expenses Fund

       Randy takes issue with the district court’s order requiring the parties to

establish a joint bank account, into which they would each deposit $750 per

month to use to pay for child-related expenses. Randy claims it is “inequitable

for the district court to require [him] to pay child support and also contribute $750

to a fund for child-related expenses.” At a minimum, Randy claims: “If the bank

account remains in place, there should be provisions that if a party causes an

overdraft on the account, that party shall be solely responsible for the overdraft

charges and fees.”

       Vicki takes no issue with striking this provision of the court’s ruling, noting

she “has been greatly concerned with having to maintain this joint account with

Randy and the likelihood that Randy will use this account to exercise further

control over her and the children as well as to create more conflict.” 9         Vicki

reiterated this concern at oral argument. In light of the parties’ agreement on this

issue, and without considering whether such a requirement would be equitable or

appropriate under these circumstances,10 we reverse the court’s order with

regard to the child-related expense fund.

VI.    Trial Attorney Fees

       Randy claims the district court abused its discretion in awarding Vicki

$2500 toward her trial attorney fees. In support of his contention, Randy points
9
  The court delineated a number of expenses of the children, and ordered “either party,
acting alone, [to] draw checks on the account” to pay for those expenses.
10
   “The child support guidelines take into account the reasonable costs of living,
including educational expenses, for dependent children.”            In re Marriage of
Kupferschmidt, 705 N.W.2d 327, 334 (Iowa Ct. App. 2005). “Expenses for clothes,
school supplies and recreation activities are considered under the guidelines, and a
separate support order covering such expenses is improper absent a finding that the
guidelines amount would be unjust or inappropriate.” Id.
                                        15


to his monthly payments of $4000 to Vicki per the parties’ cash settlement, and

states although Vicki was the party “who primarily sought modification,” she

“dropped her key motivating point” in the modification—physical care—by the

time of trial. Randy also construes Vicki’s testimony at trial (“I don’t feel I need

to”) to support his claim that Vicki knew she had the funds to pay her own

attorney fees, but wanted him to pay them.

       An award of trial attorney fees rests in the sound discretion of the trial

court and should not be disturbed on appeal in the absence of an abuse of

discretion.   In re Marriage of Romanelli, 570 N.W.2d 761, 765 (Iowa 1997).

Whether attorney fees should be awarded depends on the parties’ respective

abilities to pay, see In re Marriage of Sullins, 715 N.W.2d 242, 255 (Iowa 2006),

and fees awarded must be fair and reasonable, see In re Marriage of Guyer, 522

N.W.2d 818, 822 (Iowa 1994). Here, we find the district court did not abuse its

discretion in ordering Randy to pay a portion of Vicki’s attorney fees. We affirm

on this issue.

VII.   Appellate Attorney Fees

       Vicki seeks an award of $5413 in appellate attorney fees. An award of

appellate attorney fees is not a matter of right but rests within this court’s

discretion. In re Marriage of Berning, 745 N.W.2d 90, 94 (Iowa Ct. App. 2007).

We consider the needs of the party making the request, the ability of the other

party to pay, and whether the party making the request was obligated to defend

the district court’s decision on appeal. Id. After considering these factors, we

award Vicki $5000 in appellate attorney fees.
                                        16


VIII.   Conclusion

        Upon consideration of the issues raised on appeal, we affirm the district

court’s order on Vicki’s petition for modification but for the provision relating to

the child-related expenses fund, which we strike from the decree. We remand to

the district court for recalculation of Randy’s child support obligation under the

current guidelines while accounting for Randy’s expense in providing health

insurance for the children. We conclude the court did not abuse its discretion in

awarding Vicki trial attorney fees, and we award Vicki $5000 in appellate attorney

fees.

        Costs assessed to Randy.

        AFFIRMED AS MODIFIED, AND REMANDED.
