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Aga v. Aga (7/25/97), 941 P 2d 1260
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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, phone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
AUGUST C. AGA, SR., )
) Supreme Court No. S-6949
Appellant, )
) Superior Court No.
v. ) 3KO-90-383 DR
)
GWENDOLYN A. AGA, ) O P I N I O N
)
Appellee. ) [No. 4855 - July 25, 1997]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Kodiak,
Donald D. Hopwood, Judge.
Appearances: Robin A. Taylor, Anchorage, for
Appellant. William W. Whitaker, Law Office of Charles A.
Winegarden, Kodiak, for Appellee.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, and Fabe, Justices.
RABINOWITZ, Justice.
I. FACTS AND PROCEEDINGS
August and Gwendolyn Aga were married in 1974. They were
divorced in 1990. The superior court's 1990 decree of divorce
adopted and incorporated the parties' child custody, child support
and property settlement agreement. The settlement agreement
provides in part:
(b) HUSBAND shall pay WIFE for the
support, care and maintenance of CHILDREN a sum computed in
accordance with Alaska Rule of Civil Procedure 90.3.
Notwithstanding the foregoing, HUSBAND agrees to pay not less than
$472.50 per month as child support or $945.00 total for both
children, irrespective of his income, and the calculation under
Civil Rule 90.3.[ [Fn. 1]]
According to August, child support amounts, when
calculated pursuant to this provision of the settlement agreement,
represented from 47% to 104% of his total income during the period
between 1991 and 1994. The $945 monthly total child support
obligation provided for in the settlement agreement appears to have
been based on August's 1989 income. [Fn. 2] This amount apparently
bears little relation to the level of August's current income.
Significantly, "Gwen does not dispute that August's current income
is more than 15% below his 1989 income."
As a result of the decrease in his annual income, August
filed a motion to modify his child support obligations in November
1994. [Fn. 3] Gwendolyn opposed the motion. In part, Gwendolyn
argued that
[t]he Defendant's memorandum tends to leave
the reader with the impression that his current obligation of $945
per month was arrived at by a Rule 90.3 calculation of his 1990
income in the first place. It was not.
The amount of the Defendant's child
support obligation was determined by agreement of the
parties. . . .
As the agreement demonstrates, the
Defendant was given assets, including the parties' business, that
were sufficient to generate substantial income. If the Defendant
has subsequently squandered these assets or become voluntarily
underemployed that should not affect his contactual [sic]
obligation to support his children.
August's motion to modify his child support obligations was denied
by the superior court. In its decision denying the motion, the
superior court emphasized that "August received $36,300 more in net
value as a result of the property division and debt allocation"and
then stated the rationale for its ruling:
The substantial difference in the net
value of property and the distribution of the
on-going business to August provided suffi-
cient consideration for the parties' child
support agreement and a sufficient basis for
the court to approve the support agreement.
August has not advanced a convincing
reason to modify the child support agreement
at this time. The motion to modify the amount
of child support is DENIED without prejudice
to any motion for relief from the effect of
the agreement under Civil Rule 60(b).
August then filed a motion for reconsideration which was denied by
the superior court. This appeal followed.
II. DISCUSSION
August's primary contention is that the superior court
erred in failing to modify his future child support obligations
pursuant to Civil Rule 90.3. Modifications of child support are
generally governed by AS 25.24.170 and Civil Rule 90.3(h)(1). [Fn.
4] A prospective modification may be made "upon a showing of a
material change in circumstances as provided by state law. A
material change in circumstances will be presumed if support as
calculated under this rule is more than 15 percent greater or less
than the outstanding support order." Civil Rule 90.3(h)(1). As
noted previously, Gwendolyn conceded that the decline in August's
annual income brings him within the ambit of the rule's presumed
material change in circumstances.
Here, the parties' settlement agreement set a fixed
minimum level of child support irrespective of the provisions of
Civil Rule 90.3. Although this court has held that "parties are
bound by settlement stipulations in the same manner as they would
be bound by contract,"Dewey v. Dewey, 886 P.2d 623, 625 (Alaska
1994) (citations omitted), it nonetheless is settled that "[a]
child support order may be modified notwithstanding the fact that
it was based on a separation agreement or stipulation signed by the
parties." Id. at 629 (citation omitted); see also Keating v.
Traynor, 833 P.2d 695, 696 (Alaska 1992) ("[A] parent may not waive
the requirements of Rule 90.3 by private agreement.").
As noted, in denying August's motion to modify child
support, the superior court relied on the parties' settlement
agreement and declined to apply Civil Rule 90.3. The stated
rationale for the superior court's decision is that "[t]he
substantial difference in the net value of property and the
distribution of the on-going business to August provided sufficient
consideration for the parties' child support agreement and a
sufficient basis for the court to approve the support agreement."
In essence, the superior court reasoned that the original property
division provided for in the parties' settlement agreement balanced
out child support levels which proved to be higher than amounts
computed in accordance with the formula found in Civil Rule 90.3.
We rejected a similar rationale in Arndt v. Arndt, 777 P.2d 668
(Alaska 1989).
In Arndt, the wife, in support of a contingent motion for
spousal support, argued that the original child support award was,
at least in part, a form of disguised alimony. Id. at 669. In
sustaining the superior court's denial of the motion, this court
said:
We have held that awarding one spouse a
greater share of the marital property simply to ease his or her
burden of child support constitutes reversible error. Houger v.
Houger, 449 P.2d 766, 771 (Alaska 1969). The policy underlying
Houger is equally applicable in this case. Division of marital
property by the court is separate and distinct from questions of
child support. Property divisions are final judgments which can be
modified only under limited circumstances, O'Link v. O'Link, 632
P.2d 225, 228 (Alaska 1981), whereas child support awards can be
changed periodically under much more liberal standards. One should
not be a tradeoff for the other.
Id. at 670.
Although Gwendolyn argues that "[i]n this case, there has
been no trade-off,"her argument is unpersuasive. It is apparent
from the text of the superior court's order denying August's motion
to modify child support that the court's analysis focused heavily
on the distribution of marital property as the basis for its
departure from the support guidelines provided for in Civil Rule
90.3. Gwendolyn cannot claim both that there was no trade-off and
that the reason the child support provision is fair is that August
received more property. As August observes, there is no indication
in the parties' settlement agreement itself that they intended to
balance an unequal property distribution with enhanced levels of
child support. If there was a trade-off, the arrangement contra-
dicts the teachings of Arndt. In the absence of a trade-off, the
justification offered by the superior court for declining to apply
Civil Rule 90.3 is inadequate.
The only explanation articulated by the superior court in
ruling on the motion to modify child support involves the unequal
property distribution. Given that under Arndt the superior court's
property division has no relevancy to child support modification
issues, we are left with the fact that the superior court failed to
enter any relevant findings of fact to support its conclusion that
"August has not advanced a convincing reason to modify the child
support agreement at this time."[Fn. 5]
On the basis of the foregoing, we conclude that the
superior court's denial of August's motion to modify child support
on the ground that an unequal distribution of property "provided
sufficient consideration for the parties' child support agreement,"
was erroneous. The superior court's rationale for rejecting the
motion is contrary to our holding in Arndt. The parties calculated
the $945 monthly child support payment by applying Civil Rule 90.3
to August's 1989 income, and Gwendolyn concedes that "August's
current income is more than 15% below his 1989 income." Therefore,
we remand this case to the superior court with instructions to
consider August's motion to modify child support under the
guidelines provided for in Civil Rule 90.3. [Fn. 6]
III. CONCLUSION
The superior court's denial of August Aga's motion to
modify child support is REVERSED and the case is REMANDED for
further proceedings consistent with this opinion. [Fn. 7]
FOOTNOTES
Footnote 1:
1 The settlement agreement contained additional provisions
relating to child support:
(c) Pursuant to Section (a)(2) of CR
90.3, twenty seven percent (27%) of HUSBAND'S adjusted income shall
be deducted from his monthly income and shall be forwarded directly
to WIFE. Adjusted income shall be calculated, in accord with CR
90.3(a)(1), by deducting from total income the following amounts:
(i) Federal Income Tax; (ii) FICA mandatory deductions; (iii) ESC;
and (iv) any other retirement or union dues which may become
mandatory.
(d) On or before April 20 of each year,
HUSBAND shall pay WIFE any additional child support which may be
due as a result of income HUSBAND has received from other sources
such as permanent fund dividends, which shall be computed pursuant
to Civil Rule 90.3 as well.
(e) The obligation of HUSBAND and WIFE
shall be modified in accord with CR 90.3 as each child reaches the
age of 18, marries, or is otherwise emancipated.
Footnote 2:
2 According to August's 1990 Civil Rule 90.3 Child Support
Guidelines Affidavit, his gross income was $66,168, his adjusted
gross income was $42,000, and his resulting Rule 90.3 annual child
support obligation was $11,340 ($945 monthly).
Footnote 3:
3 In his supporting memorandum, counsel for August argued:
The child support order entered in 1990
is $945 per month. Based upon defendant's 1994 income, the support
should be $540.10 per month, which is a change of well over 15
percent. Thus, there is a presumed material change in
circumstances pursuant to Civil Rule 90.3(h)(i) and the support
should be lowered immediately.
Footnote 4:
4 AS 25.24.170 provides:
Modification of judgment. (a) Subject to AS
25.20.110, any time after judgment the court, upon the motion of
either party, may set aside, alter, or modify so much of the
judgment as may provide for alimony, for the appointment of
trustees for the care and custody of the minor children or for
their nurture and education, for the care, nurture, and education
of unmarried 18-year-old children of the marriage while they are
actively pursuing a high school diploma or an equivalent level of
technical or vocational training and living as dependents with a
parent, guardian, or designee of the parent or guardian, or for the
maintenance of either party to the action.
(b) For the purposes of a motion to
modify or terminate child support, the adoption or enactment of
guidelines or a significant amendment to guidelines for determining
support is a material change in circumstances, if the guidelines
are relevant to the motion.
Civil Rule 90.3(h)(1) reads:
A final child support award may be
modified upon a showing of a material change of circumstances as
provided by state law. A material change of circumstances will be
presumed if support as calculated under this rule is more than 15
percent greater or less than the outstanding support order. For
purposes of this paragraph, support includes health insurance
payments made pursuant to (d)(1) of this rule.
Footnote 5:
5 We have previously held that a "lack of findings"in a
Civil Rule 90.3 child support modification context requires a
remand. Keating, 833 P.2d at 696.
Footnote 6:
6 We do not consider the application of the presumption in
Civil Rule 90.3(h)(l) in cases where the parties initially agree
that the noncustodial spouse will pay child support in excess of
the amount required by Civil Rule 90.3(a).
Footnote 7:
7 As a consequence of our disposition, we find it
unnecessary to address any other issue raised in this appeal.
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