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K. Cameron v. K. (Cameron) Hughes (2/7/92), 825 P 2d 882
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NOTICE: This opinion is subject to
formal correction before publication in the
Pacific Reporter. Readers are requested to
bring typographical or other formal errors to
the attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
KARL B. CAMERON, )
) Supreme Court No. S-3506
Appellant, )
)
v. ) Superior Court No.
) 3AN-77-2072 Civil
KATHRYN D. (CAMERON) HUGHES, )
) O P I N I O N
Appellee. )
______________________________) [No. 3805 - February 7, 1992]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Victor D. Carlson, Judge.
Appearances: William J. Soule, Law
Office of William J. Soule, Anchorage, for
Appellant. Thomas H. Dahl, Dahl and Hartke,
Anchorage, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
Justices.
RABINOWITZ, Chief Justice.
This appeal involves various orders which were entered
by the superior court subsequent to its grant of a divorce decree
which required appellant Karl Cameron to pay support for the
parties' minor child.
I. FACTS AND PROCEEDINGS
Karl Cameron and Kathryn (Cameron) Hughes were married
in July 1965. They had one child, Jolyna Marie Cameron, born
June 17, 1966. After 12 years of marriage, in December 1977,
Cameron and Hughes divorced. Under the parties' child custody
and support agreement, Cameron agreed to pay $200.00 per month in
child support and to assume responsibility for Jolyna's medical
expenses.
In 1983, Cameron injured his back and suffered
pulmonary problems while working in Kodiak. Since that time,
Cameron has received workers' compensation and social security
disability benefits. Following his injury, Cameron moved to
California.
Cameron was in arrears on his child support payments
and on December 12, 1985, the superior court reduced the
arrearages to judgment awarding Hughes a total of $26,746.31 for
unpaid child support.1 By March 1, 1989, the amount owed by
Cameron under the judgment had increased to $35,717.68. On March
1, 1989, the attorney for Cameron's workers' compensation carrier
was served with a writ of execution (garnishment) for the total
amount owed by Cameron to Hughes. Thereafter Cameron's workers'
compensation and disability benefits were, pursuant to execution,
deposited in the registry of the superior court. Cameron
estimated that as of May 24, 1989, $7,195.19 of his benefits had
been deposited in the court's registry.
Cameron claimed an exemption from execution in a
hearing before a superior court master. The master found that
the only income Cameron and his present wife had was comprised of
Cameron's social security and workers' compensation benefits,
totalling $4,158.52 per month. The master further found that
Cameron had assigned most of the $816 he received monthly as
social security benefits to the Internal Revenue Service for
payment of back taxes. The master concluded that since Cameron
was a California resident and was supporting a dependant spouse,
the non-resident debtor provision, AS 09.38.030(d), applied and
that it followed that any execution against Cameron was limited
by 15 U.S.C. 1673 to 50 percent of his aggregate disposable
earnings, which included his workers' compensation and social
security benefits.
The superior court, on June 20, 1989, approved the
master's report allowing Hughes to recover for child support,
medical payments, interest, and costs and attorney's fees. On
June 30, 1989, Cameron filed a petition for bankruptcy and
obtained an automatic stay of the superior court proceedings.
Then on July 24, 1989, Cameron filed an appeal to this court from
the superior court's final order allowing execution against 50
percent of his workers' compensation and social security
benefits. On March 6, 1990, the bankruptcy court granted Hughes'
motion to terminate the automatic stay in order to allow
resolution of Cameron's pending appeal to this court. The
bankruptcy court further awarded Hughes one-half of the funds
then deposited in its registry.
On September 19, 1990, Hughes moved the superior court
to modify the judgment it entered against Cameron in 1985 to
reflect the costs Hughes had incurred in collecting the judgment.
The superior court, on December 10, 1990, granted the motion
increasing the original judgment amount of $26,746.31 by adding
$37,714.75 in collection costs and attorney's fees. In addition,
the court ordered that the new total judgment of $64,461.06
accrue 10.5 percent interest per annum from December 12, 1985.
On September 19, 1990, Hughes also moved the superior
court for an order requiring Cameron to file a supersedeas bond
pursuant to Appellate Rule 204(d) or suffer dismissal of his
appeal. Hughes also moved this court for an extension of time to
file her appellee's brief until thirty days after the superior
court ruled on her motion to require Cameron to file a
supersedeas bond. The motion was denied by Justice Matthews, who
observed that a supersedeas bond is not required to maintain an
appeal. Thereafter, on December 10, 1990, the superior court
granted Hughes' motion and required Cameron to file a supersedeas
bond in the amount of $80,000 as a precondition to his
maintaining this appeal.
Subsequently, the superior court denied Cameron's
motion for reconsideration of the court's December 10, 1990
orders which required the filing of an $80,000 supersedeas bond
and increased the original judgment which had been entered
against Cameron by allowing post judgment collection costs and
attorney's fees. Cameron now appeals from these orders.
II. SUPERSEDEAS BOND
Cameron contends that the superior court erred in
requiring him to post a supersedeas bond pursuant to Appellate
Rule 204(d).2
The parties agree that a supersedeas bond is not
required in order to maintain an appeal. However, Hughes asserts
that considerations of justice require that a bond be posted.
She notes that Cameron's assets are now under the protection of
the bankruptcy court. Without the bond, she contends, she will
be unable to execute on the judgment if Cameron's appeal fails.
We conclude that by requiring Cameron to post a
supersedeas bond, the superior court violated the Bankruptcy
Court's stay and misinterpreted Appellate Rule 204(d). Cameron
correctly argues that the Bankruptcy Court's automatic stay was
not partially terminated for the purpose of authorizing the
superior court to require that Cameron post a $80,000 supersedeas
bond. Since the stay was terminated "solely for the purposes of
pursuing resolution of the pending Alaska State Court Appeal,"
the superior court's December 10, 1990 order requiring that
Cameron post a supersedeas bond violated the Bankruptcy Court's
stay.
More importantly, we hold that the superior court
lacked discretion under Appellate Rule 204(d)3 to grant Hughes'
motion which sought an order requiring appellant to post an
$80,000 supersedeas bond as a precondition to maintaining this
appeal. The supersedeas bond provisions of Appellate Rule 204(d)
come into play only if the appellant desires a stay pending
appeal. In the instant case, Cameron did not request a stay on
appeal and therefore, under the provisions of Rule 204(d), he
cannot be compelled to post a supersedeas bond. Accordingly, we
reverse and vacate the superior court's order requiring Cameron
to post an $80,000 supersedeas bond.
III. EXEMPTIONS
Cameron's primary contention in this appeal is that the
superior court erred in not applying the exemptions from
execution available in California, his present state of
residence, as provided for in AS 09.38.120.4
As a resident of California, Cameron asserts that his
workers' compensation benefits are "property" protected from
garnishment under AS 09.38.120(a), which provides that
"[n]onresidents are entitled to the exemptions provided by the
law of the jurisdiction of their residence." Specifically,
Cameron argues that the superior court erred in ruling that
workers' compensation benefits were "earnings"for purposes of AS
09.38.030, which in turn requires application of 15 U.S.C.
1673.
We hold that the superior court correctly applied AS
09.38.030(d) and 15 U.S.C. 1673 in allowing garnishment of 50
percent of Cameron's benefits.5 Alaska Statute 09.38.120 and all
of the other exemptions provided for in Alaska's Exemption Act
are subject to the limitations of AS 09.38.065(a)(1)(A), which
provides:
Notwithstanding other provisions of this chapter,
(1) a creditor may make a levy against
exempt property of any kind to enforce a
claim for
(A) child support.6
Cameron argues that the effect of AS 09.38.065 is
limited to "other provisions of this chapter"and does not apply
to the benefits under Workers' Compensation Act, Title 23,
Chapter 30. He also asserts that "the result afforded by the
trial court's ruling in this case is to make Cameron a pauper and
a ward of the state." Cameron supports his claim with what he
terms the "anti-lien provision" of the Alaska Workers'
Compensation Act, AS 23.30.160(b), which provides "[b]enefits
payable under this chapter are exempt from levy to enforce the
collection of a debt as provided in AS 09.38 (exemptions)."
According to Cameron, the court should read the anti-lien
provision in light of the maxim of construction that workers'
compensation laws should be liberally construed to effectuate
their beneficent purpose, to prevent garnishment of his benefits.
See Hood v. State Workmen's Compensation Bd., 574 P.2d 811
(Alaska 1978). Hughes counters that the workers' compensation
laws are intended to protect workers and their families from
outside creditors, not to protect workers from their families.
We reject Cameron's contentions. Cameron's reliance on
the anti-lien provision of the Workers' Compensation Act lacks
merit; section 160 provides that benefits are exempt from levy
"as provided in AS 09.38." As noted above, AS 09.38.065(a)(1)(A)
explicitly provides that for purposes of enforcing a claim for
child support a creditor may levy against exempt property.
The legislature's intent to provide for the dependents
of the judgment debtor, as well as the debtor, is further
evidenced by the legislature's statement of intent in enacting
the Alaska Exemptions Act:
It is the intent of the legislature to
modernize the procedures for execution on a
judgment and to afford to a judgment debtor
adequate protection of his personal property
and income necessary to provide for his own
needs and the needs of his dependents while
remaining independent of further assistance.
Anderson, 736 P.2d at 322-23 (Alaska 1987) (quoting Ch. 62 1,
SLA 1982).
In Anderson we held that the "notwithstanding"
provision in AS 09.38.065(a)(1)(A) allowed execution on otherwise
exempt property, a limited entry permit, to satisfy past due
child support, even in the face of express language to the
contrary in the Alaska Limited Entry Act, AS 16.43.150. The
limited entry act prohibited attachment of entry permits "under
any other process or order of any court." Id., at 324. In
concluding that section 09.38.065(a)(1)(A) applied, we relied
upon the legislature's consistent concern and support for "the
compelling public policy favoring enforcement of child support
obligations." Id., at 323 n.2. Unlike Anderson, where the two
acts conflicted, in the instant case the Alaska Exemptions Act
and the Workers' Compensation Act both clearly favor the
compelling public policy of enforcing child support obligations.
Accordingly, we affirm the superior court's June 30,
1989 order allowing garnishment of 50% of Cameron's workers'
compensa-tion and social security benefits pursuant to 15 U.S.C.
1673.
IV. MEDICAL EXPENSES, COSTS AND ATTORNEY'S FEES
We next address the question of whether the superior
court erred in its judgment of December 12, 1985, in allowing
Hughes to recover medical expenses, interest, costs and
attorney's fees as "child support." Cameron asserts that the
term "child support"is unambiguous and cannot be interpreted to
include medical expenses,7 interest, costs and attorney's fees.
Cameron further argues that the superior court erroneously relied
on 42 U.S.C. 662 and its definition of "child support" in
fashioning its judgment.
We reject Cameron's arguments. Alaska Statute
09.38.030(d) provides that in the case of a nonresident debtor
the limitations on garnishment imposed by 15 U.S.C. 1673 apply.
While Title 15 does not contain a definition of the term "child
support," 42 U.S.C. 662 defines the term broadly to include
payments for health care and "attorney's fees, interest, and
court costs, when and to the extent that the same are expressly
made recoverable as such pursuant to a decree, order, or judgment
issued in accordance with applicable State law." In regard to
the provisions of 42 U.S.C. 662, Cameron's position is that
this definition is only applicable to 42 U.S.C. 659. Section
659 provides that monies paid by the federal government to
individuals are subject to the same legal process for the
enforcement of child support and alimony obligations as monies
paid by other individuals or organizations. Because the intent
of the provision was to assure that all monies, federal and non-
federal, are treated identically for the purposes of garnishment
for child support and alimony obligations, we are not persuaded
that child support should be defined differently for federal and
non-federal monies. See Diaz v. Diaz, 568 F.2d 1061, 1063 (4th
Cir. 1977).
Therefore, the superior court did not err in defining
child support to include related medical expenses, interest,
costs and attorney's fees.
V. ATTORNEY'S FEES FOR POST JUDGMENT COLLECTION
Cameron argues that the superior court abused its
discretion in adding post judgment collection attorney's fees to
the sums owed to Hughes and erred by failing to make any findings
concerning the necessity and reasonableness of the awarded
attorney's fees. In O'Link v. O'Link, we held that the superior
court has broad discretion to award costs and attorney's fees
under Civil Rule 82 where a party seeks modification of an
arrearages judgment. 632 P.2d 225, 231 n. 15. (Alaska 1981).
However, we have limited the applicability of the rule to "costs
of the action." Id. at 231 (citing Alaska State Hous. Auth. v.
Riley Pleas, Inc., 586 P.2d 1244, 1249 (Alaska 1978)). Any award
of attorney's fees for legal services incurred subsequent to a
judgment for past due child support should be a cost of the
action to the extent that the fees were attributable to
reasonable and necessarily incurred legal efforts by Hughes to
collect the judgment. Therefore, we reverse the superior court's
December 12, 1990 order awarding collection costs and remand the
issue for a full hearing in order to determine the amount of
attorney's fees reasonably and necessarily incurred by Hughes to
enforce the judgment.
The judgment and orders of the superior court are
AFFIRMED in part, REVERSED in part, and the matter REMANDED for a
full hearing on the issue of post judgment attorney's fees.
_______________________________
1. The award amount consists of the following items:
$12,000 for unpaid child support, $4,466.05 for medical expenses,
$42.96 for costs, $3,118.50 in attorney's fees and $7,018.80 in
interest.
2. Since this is a purely legal question, the standard of
review is de novo. Anderson v. Anderson, 736 P.2d 320, 321
(Alaska 1987).
3. Appellate Rule 204(d) provides in pertinent part:
Whenever in a civil case an appellant
entitled thereto desires a stay on appeal, he
may present to the superior court for its
approval a supersedeas bond which shall have
such surety or sureties as the court
requires.
4. On questions of statutory interpretation, the standard
of review is de novo. Anderson, 736 P.2d at 321.
5. Hughes argues that the court should have allowed
garnishment of 55 percent of Cameron's benefits under 15 U.S.C.
1673(2) because the liability "arose prior to the receipt of the
benefit." We agree with Cameron's argument that Hughes waived
that point by failing to cross-appeal. See Jackson v. Nangle,
677 P.2d 242, 247 n.3 (Alaska 1984).
Hughes represents that Cameron and his present wife have
moved to dissolve their marriage in California. Hughes argues
that if the dissolution is finalized, she will then be entitled
to garnish 65 percent of Cameron's earnings because Cameron will
no longer be supporting a spouse. Cameron asserts that the
superior court's June 20, 1989 determination is res judicata on
the question. However, since Cameron's divorce had not occurred
at the time of the superior court's order, res judicata does not
bar consideration of the issue. Hughes is free to seek a
modification of the order after Cameron's divorce is finalized.
6. Cameron argues that his workers' compensation benefits
are property. Therefore, we need not reach the issue of whether
workers' compensation benefits are property or earnings.
Even if Cameron's workers' compensation benefits were
considered earnings, they would be subject to execution under AS
09.38.030(c)(1). In this regard AS 09.38.030(c)(1) provides:
"[a] creditor may levy upon earnings exempt under (a) and (b) of
this section if the creditor's claim is . . . enforceable against
exempt property under AS 09.38.065(a)(1)."
7. We note that the Child Custody and Property Settlement
Agreement entered into by the parties on July 14, 1977 provides
that in addition to the monthly support payments of $200, Cameron
"shall pay and be responsible for medical expenses." In light of
this agreement, there is little doubt that in this instance child
support should include medical expenses.
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