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Child Support Enforcement Div. v. Fry (11/22/96), 926 P 2d 1170
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Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501, telephone (907) 264-0607, fax (907) 264-
0878.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, DEPARTMENT )
OF REVENUE, CHILD SUPPORT ) Supreme Court No. S-6471
ENFORCEMENT DIVISION, )
) Superior Court No.
Appellant, ) 3AN-85-13292 CI
)
v. )
) O P I N I O N
ROGER DALE FRY; VANESSA KAY )
FRY, ) [No. 4437 - November 22, 1996]
)
Appellees. )
______________________________)
)
STATE OF ALASKA, DEPARTMENT )
OF REVENUE, CHILD SUPPORT ) Supreme Court No. S-6542
ENFORCEMENT DIVISION, )
) Superior Court No.
Appellant, ) 3AN-85-14439 CI
)
v. )
)
MELVIN HAWKINS, )
)
Appellee. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Larry D. Card, Judge.
Appearances: Scott Davis, Assistant Attorney
General, Fairbanks, and Bruce M. Botelho,
Attorney General, Juneau, for Appellant in S-
6471. Terisia K. Chleborad, Assistant
Attorney General, Anchorage, and Bruce M.
Botelho, Attorney General, Juneau, for
Appellant in S-6542. Kenneth C. Kirk,
Anchorage, for Appellee Roger Dale Fry.
Gregory Peters and Carol H. Daniel, Alaska
Legal Services Corporation, Anchorage, for
Appellee Melvin Hawkins.
Before: Rabinowitz, Matthews, Compton, and
Eastaugh, Justices. [Moore, Chief Justice,
not participating.]
EASTAUGH, Justice.
I. INTRODUCTION
In two cases parents obliged to pay child support were
given credit for children's insurance benefits (CIB) paid to the
children because the obligor parents were eligible for federal
social security benefits. The State of Alaska Child Support
Enforcement Division (CSED) appealed in both cases. Miller v.
Miller, 890 P.2d 574 (Alaska 1995), decided after CSED commenced
these consolidated appeals, resolves most of CSED's arguments. The
remaining issues are not ripe, or are not properly before us. In
each case we affirm in part and remand in part.
II. FACTS AND PROCEEDINGS
A. State of Alaska, CSED v. Fry
Roger and Vanessa Fry (EN1) married in 1979 and had one
child, Alexandria. When their marriage was dissolved, the court
ordered Roger to pay $320 in monthly child support beginning August
1, 1985.
Roger suffered a work-related injury in August 1985 and
failed to maintain his child support payments. As of November 1989
his child support arrearages were approximately $12,000. In
November 1989 Roger became eligible to receive federal social
security disability benefits. His disability made Alexandria
eligible that same month to receive children's insurance benefits.
(EN2) Also in November 1989 Vanessa began receiving Aid to
Families with Dependent Children (AFDC). In 1994 Alexandria
received a lump-sum payment of $23,218 for CIB accrued from
November 1989 through January 1994. She also began receiving
monthly CIB payments of $492.
In October 1993 the superior court found that Roger did
not have the present ability to pay child support and held that the
CIB payments were "to be credited to [Roger]." In November the
State moved for relief from this order, arguing that CIB payments
should not be counted as child support. By order of June 17, 1994,
the superior court held that Alexandria's CIB payments may offset
Roger's child support obligations. The superior court also held
that any arrearage accrued during Roger's disability may be offset
by the lump-sum CIB payment. The superior court held that
arrearages accumulated before the disability may not be offset by
CIB payments. CSED appeals. (EN3)
B. State of Alaska, CSED v. Hawkins
In 1979 Melvin Hawkins became permanently disabled as a
result of brain surgery. In 1983 he married Mary Chuitt. Two
children were born of the marriage. As a result of Melvin's
disability, the children received monthly CIB payments of $76 per
child. The marriage was dissolved in 1985 and Melvin was ordered
to pay child support of $76 per month per child. From the testimony
of Mary Hawkins and the Hawkins' attorney at the dissolution
hearing, it appears the parties intended the child support payments
to be satisfied by the CIB payments. The dissolution order entered
by Judge Victor D. Carlson, however, did not explicitly state that
CIB payments would satisfy Melvin's support obligations.
Mary sporadically received AFDC benefits between 1984 and
1994. CSED did not credit the CIB payments against Melvin's child
support obligation and sought recovery from Melvin for support
arrearages. The superior court held that the CIB should offset
Melvin's child support obligation per the order the superior court
had previously entered in the Fry litigation discussed above. CSED
appeals.
III. DISCUSSION
A. Offsetting CIB Payments against Child Support
The superior court decided both cases before we issued our
decision in Miller v. Miller, 890 P.2d 574 (Alaska 1995). In that
case we decided the primary legal issue in the cases now before us,
i.e., whether CIB payments should be credited as child support. As
we recognized in Miller, the majority position is that CIB should
be treated as earned income of the parent from whom CIB eligibility
is derived. Id. at 576 (citing Pontbriand v. Pontbriand, 622 A.2d
482, 484 (R.I. 1993); Bruce I. McDaniel, Annotation, Right to Credit
on Child Support Payments for Social Security or Other Governmental
Dependency Payments Made for Benefit of Child, 77 A.L.R.3d 1315,
sec. 5 (1977 & Supp. 1994)). In Miller we stated:
The majority view thus regards social security
benefits as earnings of the contributing parent
and, for this reason, allows benefits paid to
a child on the parent's behalf to be credited
toward child support obligations.
We find the majority view persuasive. The
primary purpose of Civil Rule 90.3 "is to
ensure that child support orders are adequate
to meet the needs of the children, subject to
the ability of the parents to pay." Alaska R.
Civ. P. 90.3 Commentary I(B). Social security
benefits payable to a child are geared toward
fulfilling the same objective. Although the
benefits are payable directly to the child
rather than through the contributing parent,
the child's entitlement to payments derives
from the parent, and the payments themselves
represent earnings from the parent's past
contributions.
890 P.2d at 577 (citations omitted). We continue to find this
reasoning persuasive.
In effect, CSED argues that we should reconsider Miller
on the theory that CSED's arguments were not fully briefed or
considered there and merit further consideration. CSED's arguments
do not persuade us that we should overrule Miller.
CSED first argues that CIB are not earned by the
contributing parent, but rather represent a gratuity to children
from the federal government. In support, the State cites the fact
that parents pay no additional premium to obtain coverage for
children and that CIB payments do not reduce the parents' benefits.
Notwithstanding these facts, CIB are contingent upon the parent's
eligibility for social security benefits. 42 U.S.C. sec. 402(d).
The work history of the parent determines eligibility and the
benefit levels are calculated according to the parent's earnings
history. 42 U.S.C. sec.sec. 402(d)(2), 413-15. In reality, if the
parent had low past earnings or an insufficient work history, CIB
would be correspondingly less or nonexistent. See 42 U.S.C.
sec.sec. 402(d), 413-15.
CSED similarly argues that the superior court should have
considered the CIB payments to be income of the children, rather
than income of the non-custodial parent. Our reasoning in Miller -
- that the benefits are earnings derived from past contributions and
should be counted as the non-custodial parent's income -- correctly
disposes of this argument. 890 P.2d at 578.
CSED also argues that non-custodial parents should be
required to pay the minimum amount of support, notwithstanding the
CIB payments. (EN4) We decided this issue in Miller and rejected
an argument that CIB payments should not offset the $50 monthly
minimum child support. We stated of Civil Rule 90.3(c)(1)(B):
This provision might be interpreted to require
an out-of-pocket payment of at least $50 by
Sonny. Such an interpretation, however, would
cast the rule in a distinctly penal light and
would be inconsistent with its primary purpose
of ensuring that the needs of children are
adequately met. We decline to construe Rule
90.3 as precluding Sonny's social security
benefits from offsetting the full amount of his
support obligation.
890 P.2d at 578 n.7.
CSED also argues in Fry that Miller creates a disparity
between children of intact and divorced families. Its argument is
based on an assumption that a child receiving CIB payments in an
intact family also receives additional support from the disabled
parent's own benefits. This is a doubtful assumption, unsupported
by any legal or factual authority cited by CSED. To the extent this
proposition might be valid, its effect will be minimized because,
for reasons discussed below, CIB payments must be counted as part
of the obligor parent's income.
In short, the better-reasoned approach offsets CIB against
child support obligations. The reasons articulated in Miller are
equally persuasive when a child also receives AFDC. CIB eligibility
and benefit calculations, based on parental work history and
earnings, are the same regardless of whether a child receives public
assistance. 42 U.S.C. sec.sec. 402(d), 413-15. The fact that a
child receives AFDC assistance does not justify withholding an
offset of CIB against an obligor parent's ongoing support
obligations to his or her children.
CSED argues in Fry that Miller impairs the State's ability
to collect reimbursement for AFDC payments. Assuming that is so,
it does not convince us Miller was decided incorrectly. We also
note that CSED has not established that it attempted to require
Roger Fry to reimburse the State for AFDC payments.
CSED argues in Fry that we should apply Miller only
prospectively. We need not decide that issue. Mr. Fry and Mr.
Hawkins both squarely raised the offset question before we issued
Miller and should therefore receive the benefit of that decision.
See Plumley v. Hale, 594 P.2d 497, 505 (Alaska 1979) (holding that
fairness may require that litigants who successfully urge the
adoption of a new rule benefit from retroactive application of that
rule). Whether other persons should also receive such an offset is
not now before the court.
CSED alternatively argues in Hawkins that if CIB payments
are to be considered income of the non-custodial parent, it was
error not to include those payments in the father's adjusted annual
income. We agree. We issued Miller after the superior court ruled
on this issue. We there held that CIB received by the child should
be included in the non-custodial parent's income when child support
is calculated. Miller, 890 P.2d at 578. We remand Hawkins for
calculation of child support based on income which includes the CIB.
(We note that Hawkins will not have to pay child support as long as
the CIB payments continue to equal or exceed the recalculated child
support obligation.)
B. Offsetting CIB Payments against Support Arrearages
Roger Fry accumulated unpaid child support arrearages both
before and after he became eligible for disability benefits and thus
both before and after his disability rendered his daughter eligible
to receive CIB. She received a lump-sum CIB payment in early 1994,
representing benefits that accrued from November 1989 through
January 1994, and continued to receive monthly CIB payments
thereafter. The superior court held that the lump-sum CIB payment
should be credited against the arrearages accrued after Roger's
disability began. It also held that CIB payments should not offset
arrearages accumulated before the disability began.
The superior court contemplated that the arrearages and
offset be calculated, but no order or judgment form before us
specifies what arrearages the court attributed to Roger Fry or what
credit was allowed or to be allowed. It appears CSED may have
appealed before those calculations could be made. It is also
unclear whether the superior court, when referring to Roger's
"disability,"was referring to his 1989 eligibility to receive
disability benefits or his 1985 work-related injury. Depending upon
the superior court's view, the total pre-disability arrearages would
be substantially different.
We decline to review these non-final rulings and to
consider piecemeal the issue of whether to credit CIB against
arrearages. We prefer to await entry of a final judgment. Although
we have chosen to review the offset issue shared in the Fry and
Hawkins cases, in part to respond to CSED's arguments that Miller
should be reconsidered, appellate consideration of the arrearage
issue should await a final judgment. (EN5)
IV. CONCLUSION
We reaffirm and extend Miller to hold that ongoing support
obligations of obligor parents are offset by CIB payments made to
their children, including children who have received AFDC
assistance.
For the reasons expressed above, we AFFIRM the judgment
in Hawkins and the order crediting Hawkins with the CIB payments,
but remand for recalculation of Hawkins's monthly child support
obligation. In Fry, we conclude that there is no final judgment;
treating CSED's appeal as a petition for review, we affirm the order
crediting the CIB payments against Roger Fry's ongoing monthly child
support obligation. (EN6) Given the uncertainty about the amounts
of the arrearages and the offsets contemplated by the superior
court, we decline to consider whether CIB payments should be offset
against Fry's support arrearages accumulated either before or after
he became disabled and eligible for social security benefits.
ENDNOTES:
1. Vanessa Fry did not enter an appearance in this appeal.
2. CIB payments are retroactive to the date of the parent's
eligibility for social security benefits. 42 U.S.C. sec. 402(d)(1).
3. Roger Fry argues that the State filed an earlier appeal on
December 10, 1993, depriving the superior court of jurisdiction to
enter the June 17, 1994, order which is the subject of the present
appeal. That earlier appeal, taken from an October 29, 1993 order
and designated No. S-6111, was actually accepted for filing on
December 17, 1993. However, on December 15, 1993, the superior
court entered an order requesting additional information and
scheduling a hearing. On January 28, 1994, we granted the State's
motion to dismiss No. S-6111. The superior court consequently had
jurisdiction to enter the June 17, 1994 order.
Nonetheless, the June 17, 1994, order is not a final judgment
appealable as of right because it did not decide what arrearages
remained after the credit allowed by the superior court. See Alaska
R. App. P. 204. The order apparently contemplated further
calculations before a judgment could be entered. We choose to treat
CSED's appeal as a petition for review of that portion of the order
that offset CIB payments against Roger Fry's current child support
obligation. Alaska R. App. P. 403.
4. Civil Rule 90.3 requires that the non-custodial parent "must
be ordered to pay a minimum child support amount of no less than
$50.00 per month except as provided in paragraphs (a)(3) and (b)."
Alaska R. Civ. P. 90.3(c)(1)(B).
5. Other potential issues which are neither briefed nor argued,
and on which we indicate no view, are whether CIB payments made to
a child subsequent to payment of AFDC benefits by the State
discharge the obligor parent's liability to the State under an
assignment theory pursuant to AS 47.25.345, under a subrogation
theory pursuant to AS 25.27.130(a), or under a direct statutory
liability theory pursuant to AS 25.27.120(a).
6. In his last argument, Roger Fry requests an enhanced appellate
attorney's fee award. Technically, Fry's argument raises no issue
for consideration by the full court because Fry does not seek review
of a ruling of the superior court. Attorney's fees may be allowed
to a prevailing appellee pursuant to Alaska Appellate Rule 508(b)
and (e). Such awards are addressed in the first instance to a
single justice. Alaska R. App. P. 503(f). That award is subject
to reconsideration by the full court. Alaska R. App. P. 503(g).
Fry seems to argue that he is entitled to an enhanced fee because
he, by allegedly pressing his case on behalf of other disabled
obligors, is a public interest litigant and because our earlier
ruling in Miller renders the State's position frivolous. Although
the amount of any award is initially addressed to the discretion of
a single justice, we note that Fry could not be considered a public
interest litigant and that the State's position is not frivolous.
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