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Vokacek v. Vokacek (3/7/97), 933 P 2d 544
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Notice: This opinion is subject to formal 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
SUSAN L. VOKACEK, )
) Supreme Court Nos. S-6790/6840
Appellant and, )
Cross-Appellee, ) Superior Court No.
) 1KE-86-345 CI
v. )
) O P I N I O N
JAMES M. VOKACEK, )
) [No. 4792 - March 7, 1997]
Appellee and )
Cross-Appellant. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, First Judicial District, Ketchikan,
Michael A. Thompson, Judge.
Appearances: A. Fred Miller, Ketchikan, for
Appellant and Cross-Appellee. William F.
Tull, Tull & Associates, Palmer, for Appellee
and Cross-Appellant.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, and Fabe, Justices.
FABE, Justice.
I. INTRODUCTION
In this post-divorce proceeding, Susan Henry (formerly
Vokacek) challenges the superior court's order granting James
Vokacek a child support credit, the court's award of attorney's
fees, and the interest rate applied by the court to past due child
support. Susan further contends that the court erred in failing to
enforce the parties' property settlement agreement.
James Vokacek cross-appeals, arguing that the superior
court erred in its valuation of a homesite entry permit and in its
calculation and allocation of his child support payments. James
also contends that the court's award of attorney's fees to Susan
was excessive.
II. FACTS AND PROCEEDINGS
Susan and James were married in August 1981 in Anchorage.
They were divorced in December 1986, and Susan was granted custody
of their two minor children. In their property settlement
agreement, James promised to pay child support of $250 per month
per child while "gainfully employed"and $100 per month if
unemployed. James also agreed "to at all times make best efforts
to remain gainfully employed."
The agreement also gave James ownership of the couple's
homesite entry permit in Thorne Bay in exchange for his lump sum
payment to Susan of $5,000 before October 21, 1986. James paid the
$5,000 to Susan in January 1987, and Susan then signed a quitclaim
deed relinquishing her interest in the homesite. However, James
failed to "prove up"on the homesite entry permit, (EN1) and his
interest expired in November 1991. Despite James's forfeiture of
the interest, the State Department of Natural Resources was still
willing to allow Susan to proceed with the homesite application.
In December 1993 James stipulated to a modification of the divorce
agreement awarding the homesite entry permit to Susan, and the
trial court approved this modification in January 1994. (EN2)
In the seven years following the divorce, James failed to
fulfill the majority of his child support obligations. James's
father died in June 1993, leaving roughly half of his estate to
James. (EN3) In February 1994, after learning about James's
inheritance, Susan moved the court for post-judgment relief seeking
past due child support and an order directing the estate of James's
father to withhold distribution to James until his past due child
support was paid. Susan also moved the court for an increase in
the child support order. The court held an evidentiary hearing in
April 1994.
In June 1994 the superior court entered orders granting
Susan $22,052.21 in past due child support and interest. (EN4) The
court ordered the personal representative of James's father's
estate to withhold this amount from James's inheritance and pay it
over to Susan. The court also ordered the personal representative
to pay $25,000 to a bank to be invested and distributed to Susan
for child support at the rate of $250 per child per month during
the children's minority. Finally, the court awarded Susan $1,500
in attorney's fees.
Susan filed a motion for reconsideration requesting an
increase in the amount of attorney's fees and an increase in the
amount to be deposited in trust for the future support of the
children. James filed a "Motion for a New Trial." The superior
court granted a new hearing, which was held in August 1994. On
October 6, 1994, the court made the following findings:
Two issues present themselves after the
hearing on reconsideration of August 26, 1994.
First, it is now clear, and the parties
agree/concede that the Five Thousand Dollar
($5,000.00) payment required in paragraph four
of the December 15, 1993,[ (EN5)] agreement was in
fact made, if a few months late. In the June
14, 1994, Order the Court treated defendant's
December 15, 1993, transfer of his interest in
the property to plaintiff as a "wash"--
satisfying the debt, although supporting an
award of Five Thousand Fifty-Seven and
87/100th Dollars ($5,057.87) in interest. . .
. Therefore the judgment of June 13, 1994,
will be modified to credit defendant with Five
Thousand Dollars ($5,000.00) for the transfer
and to delete the Five Thousand Fifty Seven
and 87/100th Dollars ($5,057.87) interest
item. This difference reduces the judgment by
Ten Thousand Fifty-seven and 87/100th Dollars
($10,057.87).
The second issue to be resolved stems from the
confusing accounting employed by the [Child
Support Enforcement Division]. The Court in
the June 14, 1994, Order abandoned all hope of
making sense of the numbers shown on their
ledgers. . . . Only One Thousand Four Hundred
Forty-Seven Dollars ($1,447.00) . . . was
"post divorce"and will be considered as child
support. Adding this credit into the
arrearage calculation of Sixteen Thousand Nine
Hundred Ninety-Four and 34/100th Dollars
($16,995.34) reduces the same to Fifteen
Thousand Five Hundred Forty-seven and 34/100th
Dollars ($15,547.34). Less Ten Thousand
Fifty-seven and 87/100th Dollars ($10,057.87)
the judgment now reads Five Thousand Four
Hundred Eighty-nine and 47/100th Dollars
($5,489.47).
The court's award of $101.64 in costs to Susan was not
disturbed, but the amount of the trust account to be established
was increased to $27,000. The court also reconsidered its initial
award of attorney's fees and increased the award to $3,659.69.
Thus, the October 1994 order awarded Susan $9,250.80, bearing
interest from June 13, 1994, until paid.
Susan filed a motion for reconsideration alleging that
the $5,000 credit James received against the child support
arrearages was erroneous. Susan also requested that the court add
$250 in previously awarded costs to the judgment. On October 11,
1994, the court issued an amended judgment awarding Susan
$9,500.80, which reflected the addition of $250 in costs previously
awarded to Susan.
III. DISCUSSION
Susan raises the following issues on appeal: (1) whether
the superior court erred in reducing the judgment against James by
$10,057.87; (2) whether the superior court erred in not enforcing
the portion of the property settlement agreement where James agreed
to "at all times make best efforts to remain gainfully employed;"
(3) whether the award of attorney's fees was inadequate; and (4)
whether the court erred in ordering that interest on past due child
support would accrue at 10.5% per annum.
James's cross-appeal raises additional issues: (1)
whether the superior court erred in valuing the Thorne Bay homesite
at $5,000; (2) whether the superior court erred in its calculation
and allocation of his child support payments; and (3) whether the
court's award of attorney's fees to Susan was excessive.
A. Whether the Superior Court Erred in Granting James a
Credit against Past Due Child Support
Susan argues that the superior court erred in granting
James a child support credit of $5,000 based upon his stipulation
to a modification of the parties' divorce decree transferring
ownership of the parties' homesite entry permit to Susan. Susan
asserts that the court lacked the authority to take this action.
(EN6)
1. Did an agreement exist?
Susan maintains that while she and James agreed to modify
the divorce decree to permit Susan the opportunity to prove up on
the homesite entry permit, they made no agreement that James would
receive a child support credit or any other consideration in return
for this agreement. Susan further argues that James had lost his
right to proceed with the homesite entry permit and thus gave up
nothing in signing the stipulation. Susan therefore contends that
James is not entitled to a credit against child support arrearages.
The stipulation provided:
The parties stipulate that the Divorce Decree
entered on December 15, 1986 should be
modified to award the following described
property to Plaintiff, Susan L. Henry
(formerly Vokacek).
. . . .
The basis for this Stipulation is that there
are child support arrearages due to Plaintiff;
that Defendant has lost the ability to patent
the above property and that the Department of
Natural Resources is willing to allow
Plaintiff to patent the above described
property on the Court's entry of this
Stipulated modification.
James argues that his perception of the stipulation was
that "if I signed the property and the house over to her, that
would take care of the back child support."
Significantly, Susan's attorneys drafted the stipulation,
the meaning of which is now at the heart of this appeal. Although
Susan asserts that the language in the stipulation regarding child
support arrearages was "mere surplusage,"its inclusion is highly
suggestive of an agreement to reduce the arrearages. The plain
language of the stipulation states as the first "basis"for the
stipulation "that there are child support arrearages due." Given
that this was drafted by Susan's attorneys, it is indicative of an
intent on Susan's behalf that a portion of James's outstanding
child support obligation would be reduced in exchange for his
stipulation.
The trial court examined both the written agreement and
extrinsic evidence regarding the parties' intent and their
reasonable expectations at the time the stipulation was entered.
"Because extrinsic evidence was presented . . . regarding
interpretation of the parties' agreement, we are confined to
determining whether the facts support the trial court's
interpretation." Fairbanks N. Star Borough v. Tundra Tours, Inc.,
719 P.2d 1020, 1025 (Alaska 1986) (citing Jackson v. Nangle, 677
P.2d 242, 247 n.4 (Alaska 1984)). We will not reverse the trial
court's factual findings unless they are clearly erroneous. Id.
While there was no explicit agreement between these parties that
James would receive credit in a specified dollar amount against his
child support arrearages, the superior court's ruling that the
stipulation was intended to provide at least a partial offset
against those arrearages was not clearly erroneous.
2. Did the court err in its calculation of the value
of the Thorne Bay homesite entry permit?
In its order of June 14, 1994, the superior court found
that "the stipulation . . . does not state precisely how the
alteration should impact these arrearages." It determined,
however, that "[t]he equitable way to handle this exchange is to
view it as a 'wash' against the original $5,000 debt from defendant
to plaintiff."(EN7) On appeal James argues that the correct value
of the homesite is $10,000, rather than $5,000 as the superior
court determined. James offers nothing in support of this
valuation except his own opinion that "he considered the value of
the realty to be at least $20,000."(EN8) James appears to be
asking this court to credit his arrearages for the value of the
actual homesite property; however, the stipulation did not award
Susan actual realty, but instead transferred to her the homesite
entry permit.
The trial court was entitled to take into account the
value of $5,000 Susan and James assigned to the homesite entry
permit in their original property settlement agreement. There was
no evidence that the value of the permit itself had increased in
value. Moreover, Susan's uncontradicted testimony indicates that
she would have to expend approximately $10,000 in order to patent
the homesite. Therefore, the trial court did not err in finding
that $5,000 was the appropriate value to be placed on the permit
upon its transfer to Susan. (EN9)
B. Whether the Superior Court Erred in Failing to Enforce
the Parties' Divorce Agreement
Susan argues that the superior court erred in failing to
enforce the portion of the property settlement in which James
agreed to make his best effort to remain employed. The parties'
divorce agreement provides in relevant part:
The HUSBAND shall pay unto the WIFE through
the Child Support Enforcement Division the sum
of Two Hundred Fifty ($250.00) Dollars per
month per child while the HUSBAND is gainfully
employed and One Hundred ($100.00) Dollars per
month per child when the HUSBAND is unemployed
for the maintenance and support of the above
named children of the parties during their
minority or until sooner emancipated. Husband
covenants and agrees to at all times make best
efforts to remain gainfully employed.
(Emphasis added.) Susan contends that James's failure to remain
employed is purely voluntary. She maintains that all past child
support should have been calculated at the rate of $250 per month
per child.
The court examined James's work history, finding:
Mr. Vokacek's testimony and affidavit shows
[sic] that he left his steady employment in
Thorne Bay after October of 1988 to relocate
to Wasilla. He quickly moved to Kodiak to
enter the fishing industry there but was
unable to gain paying employment and he moved
yet again, in January of 1989 to Ouzinkie,
near Kodiak. There he lived a "subsistence"
lifestyle of "boat sitting"and odd jobs
bartered for the necessities. In September,
1992, he returned to his parents' home to care
for them. They have since passed on -- the
last in June of 1993.
In 1989 he had some portion of 2 months of
regular employment; in 1990 some portion of 2
months; and in 1992 some portion of 6. He
worked three months in 1993 (albeit not "full
time"); spent three months in jail, and was
unemployed the other six. He is and has been
employed since 5-1-94.
In Pattee v. Pattee, 744 P.2d 658 (Alaska 1987), we held
that it was an abuse of discretion for a trial court, without
considering all of the circumstances, to base its child support
order on the existing income of a noncustodial father who
voluntarily quit a well-paying job to return to school. We
concluded:
On the one hand we do not believe that an
obligor-parent should be "locked in"to a
particular job or field during the minority of
his or her children . . . . On the other
hand, the children of the marriage and the
custodial parent should not be forced to
finance the noncustodial parent's career
change. We believe the better rule is stated
by the Montana Supreme Court: "[T]he judge
[is] to consider the nature of the changes and
the reasons for the changes, and then to
determine whether under all the circumstances
a modification is warranted." In re Marriage
of Rome, 621 P.2d 1090, 1092 (Mont. 1981).
Id. at 662 (citations omitted); see also Nass v. Seaton, 904 P.2d
412, 418 (Alaska 1995); Pugil v. Cogar, 811 P.2d 1062, 1065-67
(Alaska 1991); Patch v. Patch, 760 P.2d 526, 529 (Alaska 1988)
(concluding even where noncustodial parent does not voluntarily
resign from job, trial court must consider all circumstances of
change in employment to determine whether modification of amount of
child support is warranted).
While the superior court correctly identified the issue
before it as whether Mr. Vokacek's periods of unemployment were "a
result of economic factors or purely personal choices,"the
superior court never resolved this issue, instead finding:
Had Mr. Vokacek been an accountant, shoe
salesman, or other such city dweller and chose
to move to the "boondocks"the court would
most likely find that his idleness over the
past few years was by choice and unjustified
under our case law. However, Mr. Vokacek made
this lifestyle choice at least as early as
1983 when the couple moved to their remote
homesite in Thorne Bay. Had the family stayed
together things might well not have been
significantly different.
In the above finding the court appears to reason that
since James has never been an "accountant, shoe salesman or other
such city dweller,"his periods of unemployment have not been by
choice. In the next sentence, however, the court refers to James's
decision to live a subsistence lifestyle in a remote part of Alaska
as a "lifestyle choice,"which was consistent with that made prior
to the parties' divorce. Given the lack of clarity of the finding
as to whether James "at all times [made] best efforts to remain
gainfully employed"subsequent to the divorce, this issue is
remanded to the superior court for further findings as to whether
James's periods of unemployment were voluntary and for
recalculation of the child support due, as necessary.
C. Whether the Superior Court's Award of Attorney's Fees of
$3,659.69 to Susan Constitutes an Abuse of Discretion
(EN10)
The superior court originally awarded Susan $1,500 in
attorney's fees pursuant to Alaska Civil Rule 82. After the
hearing on reconsideration, however, the court awarded Susan
$3,659.69 finding that
Plaintiff's June 22, 1994, Motion for
Reconsideration makes a compelling argument in
that it reveals considerably more and more
complex litigation activity than the Court had
discerned. That effort has, of course, only
been exaggerated by these later proceedings.
Returning to Alaska R. Civ. P. 82 and applying
the schedule therein results in an award of
twenty percent (20%) of the "contested with
trial"amount of Five Thousand Four Hundred
Eighty-nine and 47/100th Dollars ($5,489.47) -
- One Thousand Ninety-nine and 69/100th
Dollars ($1,099.69); and ten percent (10%)
(first $25,000.00) and three percent (3%)
(next $2,000.00) of the Twenty-seven Thousand
Dollars ($27,000.00) prospective support
obligation -- Two Thousand Five Hundred
Dollars ($2,500.00) plus Sixty Dollars
($60.00) or Two Thousand Five Hundred Sixty
Dollars ($2,560.00) -- a total of Three
Thousand Six Hundred Fifty-nine and 69/100th
Dollars ($3,659.69).
Susan argues that this award is inadequate and seeks an
additional award of attorney's fees based on James's lack of good
faith and vexatious conduct. Susan also contends that full actual
reasonable attorney's fees should be awarded in child support
arrearage actions.
James argues that the attorney's fees award to Susan is
excessive and disproportionate to the amount of child support
arrearages. James maintains that the fee award based on the amount
to be placed in trust is inappropriate because the value and
placement of the trust were never in issue. (EN11) James also
argues that he, not Susan, is the prevailing party, and as such
should have been awarded attorney's fees. (EN12)
Attorney's fees are appropriately awarded under the
prevailing party standard of Rule 82 for post-judgment money and
property issues. Lowe v. Lowe, 817 P.2d 453, 460 (Alaska 1991).
Rule 82(2) directs payment of attorney's fees to the prevailing
party in a civil suit in accordance with set percentages. Rule
82(3)(G) provides for variation from the calculation under Rule
82(2) if the court determines a variation is warranted because of
"vexatious or bad faith conduct."
In support of her argument that James did not proceed in
good faith and engaged in vexatious conduct Susan refers to various
postponements and continuances James was granted as well as the
failure of James to produce certain evidence.
We conclude that the superior court's award of fees does
not constitute error. Where the question is whether a party has
acted in bad faith or engaged in vexatious conduct, we have
emphasized that "mere evasiveness in responding, contentiousness
over difficult issues, or delay in completing testimony do not, in
themselves, constitute bad faith or vexatious conduct. . . .
Conduct justifying an increased award must be such that the parties
are prevented from litigating the action on an equal plane."
Kowalski v. Kowalski, 806 P.2d 1368, 1373 (Alaska 1991). The
superior court did not find that the record demonstrates conduct by
James which rises to this level, and we agree. However, given our
holding that the superior court made a math error, the issue of
attorney's fees must be remanded to the court for recomputation
based on the corrected judgment sum.
D. Whether the Superior Court Erred in its Order Directing
Interest on Past Due Child Support to Accrue at 10.5% Per
Annum
Susan argues that the trial court erred in its amended
judgment dated October 11, 1994, in providing that interest on past
due child support would accrue at the rate of 10.5% per annum.
(EN13) Susan maintains that the correct interest rate is 12% per
annum pursuant to AS 43.05.225(2)(B), AS 25.27.020, and AS
25.27.025.
AS 43.05.225(2)(B) provides:
Unless otherwise provided
(2) the interest rate is 12 percent a
year for
. . . .
(B) arrearages for child support as
provided in AS 25.27.025 unless a lesser rate
authorized by that section applies.
AS 25.27.025 provides:
The rate of interest imposed under AS
25.27.020(a)(2)(C)[ (EN14)] shall equal the rate
imposed under AS 45.05.225 or a lesser rate
that is the maximum rate of interest permitted
to be imposed under federal law.
James admittedly owes child support arrearages that date
back many years. He acknowledged these arrearages in an affidavit
executed March 8, 1994. Although James argues that Susan has
"fail[ed] to state a prima facie case for imposition of the 12
percent interest rate to the alleged arrearages,"in part because
she failed to prove that James had notice of the arrearages,
James's assertion that he had no notice of the arrearages is
without merit.
While in its order of June 14, 1994, the superior court
directed that "[i]nterest on child support arrearages accrues at
12% per year (or 1% per month),"the court erroneously directed in
its amended order of October 11, 1994, that interest on child
support arrearages would accrue at 10.5%.
IV. CONCLUSION
We AFFIRM the order of the superior court granting James
a $5,000 credit against child support arrearages; REMAND the
calculation of the judgment owed to Susan to allow correction of a
mathematical error; REMAND the issue of whether James's periods of
unemployment were voluntary for further findings; REMAND the issue
of attorney's fees for recomputation based upon the correct
judgment sum; and REVERSE the court's order directing interest on
child support arrearages to accrue at 10.5% per annum.
ENDNOTES:
1. "Proving up"is the perfection of an ownership interest in
the homesite. An interest is perfected when the permit holder
meets the State's requirements to obtain a deed to the property.
The State owns the land, and under a homesite program gives the
permit holder the right to live on the land and attempt to meet the
State's length of residency and land improvement requirements to
obtain a deed to the land. Until a deed is obtained the permit
holder's interest in the land is not alienable. AS 38.08.040 -
.120.
2. According to James's testimony, he had been trying to sign
over his interest in the permit to Susan for a couple of years, but
the Department of Natural Resources did not allow him to do so
until he signed the stipulation to modify the divorce agreement.
3. James's share of the estate was worth more than $90,000.
4. This represents the court's calculation of past due child
support in the amount of $16,997.34 and $5,057.87 in interest. The
interest arises from James's 1986 obligation to pay Susan $5,000 in
exchange for the homesite at Thorne Bay. The court erroneously
found that James had never paid Susan the original $5,000, and
although the court viewed the transfer of the property back to
Susan in 1993 as creating a "wash"with regard to the $5,000, the
court held that the interest on the obligation at 10.5% left
$5,057.87 due and payable to Susan as interest.
5. The court is referring to the parties' December 15, 1986
property settlement agreement.
6. In his cross-appeal, James asserts that "Susan's own
accounting and testimony revealed two payments of $5,000 each"as
the basis for his contention that the superior court erred in its
calculation and allocation of credit for child support payments he
made. A review of Susan's testimony does not indicate she received
duplicate payments, nor does James ever contend that he made
duplicate payments. In addition, James concedes that the Child
Support Enforcement Division's audit work sheet confirms only one
$5,000 payment.
7. During the proceedings prior to this order both parties were
under the impression that James had not paid the $5,000 to Susan in
exchange for her interest in the homesite entry permit.
8. James argues that at the time of the stipulation the homesite
belonged entirely to him. In fact, at the time of the stipulation
James's homesite entry permit had expired, and he no longer had any
interest in the realty located at Thorne Bay.
9. In calculating the amount of the judgment for back child
support owed to Susan, the trial court made a mathematical error.
On June 13, 1994, the superior court found that James owed Susan
$16,994.34 in child support. The court also found that James owed
Susan $5,057.87 in interest based upon the court's mistaken belief
that James had never paid Susan $5,000 for her interest in the
homesite entry permit as agreed in their original property
settlement. The court added these two amounts to reach a subtotal
of $22,052.21. The court did not, however, include in the total
the $5,000 that it believed to remain unpaid by James, since it
considered this to be a "wash"with the transfer of the Thorne Bay
property.
During the reconsideration hearing on August 26, 1994, the
court found, and the parties agreed, that James's parents had paid
Susan $5,000 for her interest in the homesite permit on his behalf.
Thus, on October 6, 1994, the court ordered that James be credited
both for the $5,000 payment as well as for the $5,057.87 in
interest, a total credit of $10,057.87. The court also found that
James was entitled to a credit of $1,447 for previously paid child
support. In applying these credits, the court first deducted
$5,057.87 from the original subtotal of $22,052.21, leaving
$16,994.34, the original arrearage calculation. The court then
deducted $1,447 to arrive at $15,547.34 total arrearages due.
Finally, the court deducted an additional $10,057.87, representing
the $5,000 and $5,057.87 credits to arrive at a subtotal of
$5,489.47. Thus, the court erroneously subtracted $5,057.87 twice
from the amount due Susan, and the correct amount of the trial
court's judgment should have been $10,547.34. This error can be
corrected by the superior court on remand pursuant to Alaska Civil
Rule 60(a).
10. This court reviews an award of attorney's fees under Alaska
Civil Rule 82 for abuse of discretion. Lowe v. Lowe, 817 P.2d 453,
460 (Alaska 1991); O'Link v. O'Link, 632 P.2d 225, 231 (Alaska
1981). Under this standard
[w]e will find that a trial court abused its
discretion only "when we are left with a
definite and firm conviction, after reviewing
the whole record, that the trial court erred
in its ruling."
Buster v. Gale, 866 P.2d 837, 846 n.9 (Alaska 1994) (quoting Peter
Pan Seafoods, Inc. v. Stepanoff, 650 P.2d 375, 378-79 (Alaska
1982)). "An abuse of discretion is established where it appears
that the trial court's determination as to attorney's fees was
manifestly unreasonable." Kowalski v. Kowalski, 806 P.2d 1368,
1372 (Alaska 1991) (quoting Palfy v. Rice, 473 P.2d 606, 613
(Alaska 1970)).
11. James contends that he agreed to set aside in trust sufficient
money to cover contingent remaining support. James's citations to
the record, however, do not support his argument.
12. James offers no legal support for this argument.
13. Susan agrees that interest on costs and attorney's fees
accrues at the rate of 10.5% per annum.
14. AS 25.27.020(a)(2)(C) provides in part:
subject to AS 25.27.025 and to federal law, a
uniform rate of interest on arrearages of
support that shall be charged the obligor upon
notice if child support payments are 10 or
more days overdue or if payment is made by a
check backed by insufficient funds.
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