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Flannery v. Flannery (12/19/97), 950 P 2d 126
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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, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
MICHAEL J. FLANNERY, )
) Supreme Court No. S-7478
Appellant, )
) Superior Court No.
v. ) 3KN-91-1034 CI
)
STEPHANIE FLANNERY, ) O P I N I O N
)
Appellee. ) [No. 4922 - December 19, 1997]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Kenai,
Rene J. Gonzalez, Judge.
Appearances: Carl J.D. Bauman, Hughes,
Thorsness, Gantz, Powell & Brundin, LLC,
Anchorage, for Appellant. Allan Beiswenger, Robinson, Beiswenger
& Ehrhardt, Soldotna, for Appellee.
Before: Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
Michael Flannery entered into an agreement in 1992 to pay
child support significantly exceeding the minimum amount required
by Alaska Civil Rule 90.3; in 1995 he moved to reduce his support
payments, claiming a material change of circumstances under Rule
90.3(h)(1). The superior court denied his motion. We conclude
that the superior court erred when it relied on a three-year
average of Michael's income to determine that he had not
experienced a reduction in income. Accordingly, we reverse and
remand.
II. FACTS AND PROCEEDINGS
Michael and Stephanie Flannery married in 1978 and
divorced in 1992. Their four children were born between 1979 and
1986.
Michael is a general surgeon who has practiced medicine
since 1973; he has practiced in Soldotna since 1990. He is the
only doctor employed by his professional corporation, and is its
sole owner and shareholder. During their marriage, Stephanie
worked as a nurse-bookkeeper for Michael's corporation. She now
resides in Mississippi where she has worked as a registered nurse
since 1992.
In 1991 Stephanie filed a domestic violence petition and
a complaint for divorce. After preliminary orders were entered,
including one requiring Michael to pay child support of $2,700 per
month, the Flannerys entered into a "Property, Custody, Visitation,
and Child Support Agreement." Judge Elaine Andrews incorporated
their agreement by reference into the June 1992 final divorce
decree.
The agreement provides for joint legal custody of the
children and gives primary physical custody to Stephanie during the
school years and to Michael during the summers. The child support
provisions state in relevant part: "The parties agree that
[Michael's] adjusted monthly income is $10,273. The parties agree
that there are unusual circumstances which justify departure from
the formula set forth in Alaska Civil Rule 90.3. The parties agree
that [Michael's] child support obligation is $3,600 per month
beginning June 1, 1992." The agreement also contains self-
executing provisions that reduce Michael's monthly child support by
$900 for each child who chooses to live with Michael. The
agreement does not address whether and how changes in Michael's
income or Stephanie's income might affect child support.
The agreement specified how it was to be modified.
Paragraph XXIV states, "No modification or waiver of any of the
terms herein shall be valid unless in writing and signed by both
parties."
Rule 90.3(a) controlled the calculation of child support
payable for the Flannery children because the parents did not share
physical custody. Rule 90.3(a)(2) specifies the percentages by
which Michael's adjusted income "must be multiplied"to calculate
child support: 20% for one child, 27% for two, 33% for three, and
36% for four. Rule 90.3(c) governs "exceptions." Rule 90.3(c)(2)
provides that Rule 90.3(a) and (b) (and thus the specified
percentages) "do not apply to the extent"the obligor parent's
adjusted annual income exceeds $72,000. Prior to July 15, 1995,
and at the time the parties entered into the agreement and the
court entered the divorce decree, this income "cap"was $60,000.
Alaska Supreme Court Order No. 1192 (March 10, 1995). If the
obligor's income exceeds the cap, "the court may make an additional
award only if it is just and proper, taking into account the needs
of the children, the standard of living of the children and the
extent to which that standard should be reflective of the
supporting parent's ability to pay." Alaska R. Civ. P. 90.3(c)(2).
In approving the agreement and incorporating it by
reference into the divorce decree, Judge Andrews found:
There is good cause to deviate from the child
support formula set forth in Alaska Civil Rule 90.3. The child
support formula set forth in the Property, Custody, Visitation and
Child Support Agreement is just and proper, taking into account the
needs of the children, the standard of living of the children, and
[Michael]'s ability to pay.
The "deviation"the court noted was the result of basing support on
all of Michael's income, including that exceeding the cap. Had the
parties adhered to the $60,000 cap then in effect, the support for
four children would have been $1,800 per month. Alaska R. Civ. P.
90.3(a)(2). Applying the Rule 90.3(a)(2) percentages to $10,273 --
Michael's monthly adjusted income as specified in the parties'
agreement -- the monthly support for four children would have been
$3,698.28, very similar to the $3,600 support the parties agreed to
and the court approved.
In 1993 the oldest child chose to live with Michael, who
then reduced his monthly child support payments to $2,700.
In early January 1995 the next oldest child chose to live
with Michael. Michael promptly filed a motion to modify the child
support agreement. Claiming that his medical practice had declined
and that he could no longer pay the agreed-upon child support,
Michael asked that the $60,000 cap be applied, although he admitted
his income exceeded $60,000. He asked that his obligation for the
four children be reduced to $1,800 per month, with a further
reduction of $450 for each child living with him. He supported his
motion with the affidavit of Annette Flannery, his present wife and
the bookkeeper of his corporation. The evidence would have
supported a finding that Michael's adjusted income had dropped
after January 1995 to about $6,000 or to somewhat "less than"
$6,000 per month.
Following a two-day evidentiary hearing, Judge Rene J.
Gonzalez denied Michael's motion for modification, finding that the
evidence did not support Michael's contention there had been a
substantial change of circumstances by a reduction of income to
"less than $6,000." The court stated that it was appropriate to
review Michael's income by calculating a three-year average,
because he was a private physician whose income might vary from
year to year. The court denied Michael's reconsideration motion.
This appeal followed.
III. DISCUSSION
A. Standard of Review
This court reviews modification of child support orders
under an abuse of discretion standard. Patch v. Patch, 760 P.2d
526, 529 (Alaska 1988). An abuse of discretion will be found only
if "based on the record as a whole this court is left with a
'definite and firm conviction that a mistake has been made.'"
Richmond v. Richmond, 779 P.2d 1211, 1216 (Alaska 1989) (citation
omitted). Under Alaska Civil Rule 52(a) "[f]indings of fact shall
not be set aside unless clearly erroneous." See Bergstrom v.
Lindback, 779 P.2d 1235, 1237 (Alaska 1989).
The interpretation of the parties' agreement is a
question of law, which we review applying our independent judgment.
Van Alfen v. Van Alfen, 909 P.2d 1075, 1077 n.4 (Alaska 1996)
(citation omitted).
B. Modifiability of the Agreement under Rule 90.3(h)(1)
The threshold question we must decide is whether a
private agreement that bases child support on income exceeding the
Rule 90.3(c)(2) cap is modifiable under Rule 90.3(h)(1). Michael
argues that "[t]he law of Alaska is clear that child support
payments, even if based on an agreement between the parties, are
subject to modification."
Stephanie contends that Michael's child support
obligation under the agreement -- a valid and binding contract
between the parties -- is self-executing and clear on its face, and
should be enforced without reference to Rule 90.3. [Fn. 1] She
also argues that the language governing modification of the
agreement is binding and that the child support obligation in the
agreement "would not be subject to modification by the court based
upon any change in circumstances."
Certainly superior courts have authority to modify a
child support order. Alaska Statute 25.24.170 confers broad
authority to do so. [Fn. 2] See also Alaska R. Civ. P. 90.3(h)(1).
We have not squarely decided whether and under what circumstances
the power to modify upon a showing of a material change of
circumstances encompasses orders based on agreements to pay more
child support than the Rule 90.3 guidelines require. It is clear,
however, that an order based on an agreement to pay less child
support than the guidelines require is modifiable under Rule 90.3.
Stephanie and Michael could not have agreed to child support
payments lower than those required under the Rule 90.3 guidelines
without obtaining judicial approval for the deviation under Rule
90.3(c)(1). See Cox v. Cox, 776 P.2d 1045, 1048-49 (Alaska 1989);
see also Taylor v. McGlothlin, 919 P.2d 1349, 1352 (Alaska 1996)
("The prohibition against parents agreeing privately to a level of
a child support below that called for by the provisions of Civil
Rule 90.3 is an integral component of Civil Rule 90.3.") (emphasis
added).
The broad language of these cases suggests that this
principle also applies to child support agreements that exceed the
Rule 90.3 requirements. In Cox, for example, we held that
"[p]arents may not make a child support agreement which is not
subject to the rule." Id. at 1048. In a case decided before Rule
90.3 was adopted, we stated 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." Curley v. Curley,
588 P.2d 289, 291-92 (Alaska 1979).
Of course an agreement to pay less than the rule requires
disadvantages the children; agreeing to pay more than the rule
requires does not [Fn. 3] (assuming the payments are sustainable
without threatening the obligor's ability to pay support in the
future). A court being asked to approve a deviation from the
support guidelines must look critically at an agreement that
proposes to pay less than the rule requires. Concern for the
children is no impediment to approving an agreement that calls for
greater support than the rule specifies. [Fn. 4] That does not
mean, however, that the mere existence of such an agreement, even
one containing language purportedly restricting amendment, places
modification beyond the power of the superior court. Child support
is a matter of public concern, and neither AS 25.24.170 nor Rule
90.3(h)(1) suggests that particular terms of an agreement can
totally restrict the court's ability to modify it so long as a
change of circumstances is proven.
The rationale underlying judicial modification of child
support agreements is consistent with a conclusion that existence
of the agreement should not altogether prevent the obligor from
invoking Rule 90.3 in order to seek modification of the agreement.
Commentary I.B. to Rule 90.3 states that the primary purpose of the
rule "is to ensure that child support orders are adequate to meet
the needs of children, subject to the ability of the parents to
pay." We recently explained that Rule 90.3(h)(1), which "provides
an exception to the general principle that final judgments should
not be disturbed,"recognizes "that courts have a special duty with
regard to the support of children whose parents have divorced."
Bunn v. House, 934 P.2d 753, 757 (Alaska 1997).
Further, it is not clear, given the present divided
custody status of the children in this case, that the agreement
calls for more total support than would be imposed if there were no
agreement. There is no fixed formula applicable to divided custody
under Civil Rule 90.3 and various methods have been employed.
These methods are described in Bunn, 934 P.2d at 754-57. All of
the methods require consideration of the incomes of both parties.
Thus the income of Stephanie as well as that of Michael would have
contributed to the children's court ordered support had there been
a divided custody calculation, whereas under the agreement only
Michael's income is contributed. Depending on the formula used and
the amount of the parties' income, the amount to be paid by
Stephanie for the support of children in Michael's custody plus the
amount to be paid by Michael for the support of the children in
Stephanie's custody could exceed the amount paid by Michael under
the agreement.
The clause in the agreement that no modification "shall
be valid unless in writing and signed by both parties"did not
prevent the superior court from entertaining a motion to modify
under Rule 90.3. The parties themselves invoked Rule 90.3 in their
agreement, explained in terms satisfying that rule why the payments
were based on income exceeding the rule's $60,000 cap, and obtained
court approval of their agreement. Under these circumstances, the
rule must take precedence over the terms of the parties' agreement.
We thus conclude that the agreement did not prevent
Michael from invoking Rule 90.3(h)(1) to seek modification based on
a claim of a material change of circumstances. [Fn. 5]
We further conclude that the factors set forth in Curley,
588 P.2d at 291-92, appropriately determine whether there has been
a material change of circumstances if, as here, the obligor parent
initially agreed to pay child support in excess of the amounts
minimally required by Rule 90.3. In Curley, we adopted a
"balancing of the equities approach"in which "the movant [must]
show by a preponderance of the evidence that there has been a
material and substantial change in circumstances." 588 P.2d at 292
n.9. We explained that "[t]he change ordinarily must be more or
less permanent rather than temporary." Id. at 291.
In deciding whether to grant modification under AS
25.24.170, the court must consider:
both the needs of the child or children
supported as well as the needs and financial abilities of both
parents. . . . [T]he trial court must examine the financial
situation of both parents and determine whether the equities
justify placing a greater burden on one and a correspondingly
lesser burden on the other.
Id. at 292. We have consistently followed Curley. See, e.g.,
Dewey v. Dewey, 886 P.2d 623, 629 (Alaska 1994); Arndt v. Arndt,
777 P.2d 668, 670 (Alaska 1989); Patch, 760 P.2d at 529. [Fn. 6]
In applying Curley to a claim that changed circumstances
justify modifying support set by an arms-length agreement to an
amount that continues to exceed the minimum set by the rule, the
court must make efforts to respect the parties' contractual
intentions and expectations. Thus, changes which the agreement
anticipated should not be the basis for modification absent a
showing of justification for relieving the parties of their
bargained-for exchange. This practice will also encourage the
parties to memorialize the circumstances that governed their
agreement.
C. The Applicability of the "Fifteen Percent Rule"
Michael also argues that he is entitled under the rule to
a presumption of a material change of circumstances. "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." Alaska R. Civ. P. 90.3(h)(1).
When Michael sought modification, two children continued
to reside with Stephanie. Per the agreement, Michael's support
obligation was therefore $1,800. Michael argues that his support
obligation as calculated under Rule 90.3 -- applying the present
$72,000 cap and taking into account the divided custody situation
-- is $726 per month. [Fn. 7] He therefore argues that the
resulting support obligation is more than 15% less than his
existing obligation of $1,800. This, he concludes, proves a
material change of circumstances, entitling him to modification.
We find this argument untenable. If an obligor initially
agrees to pay an amount in excess of that minimally required under
Rule 90.3 or if the court orders an additional award under Rule
90.3(c)(2), the "15% rule"does not apply. Aga v. Aga, 941 P.2d
1260, 1263 n.6 (Alaska 1997). If the presumption were available in
such a case, an obligor who agreed to pay child support more than
15% greater than the support required by Rule 90.3 could seek a
modification immediately after signing the agreement. Likewise,
the presumption would immediately arise in any case in which a
court ordered additional payments under Rule 90.3(c)(2).
As we stated in Bunn, "'[t]he 15% rule' is a rule of
materiality, not a definition of what constitutes a change of
circumstances. There must be a change of circumstances, either
factual or legal." Bunn, 934 P.2d at 758. We think that in
context of an agreement like the Flannerys', the 15% rule can be
used to demonstrate materiality, but the comparison cannot be
between the amounts Michael agreed to pay and what the rule
minimally requires. Instead, the amount Michael agreed to pay must
be compared to the amount the agreement would require in light of
the parties' contracting intentions and expectations. For example,
in a case in which the only change in circumstances is a reduction
in the obligor's adjusted income, and the parties based child
support on the obligor's uncapped income, multiplying the obligor's
uncapped changed income by the pertinent percentage yields the
support the parties presumptively would have specified had that
been the obligor's income when they entered into their agreement.
If the support so calculated is more than 15% less than the agreed-
upon support, materiality exists for purposes of seeking
modification.
D. Averaging Michael's Income
Michael sought modification in part because he claimed
that his monthly adjusted income had decreased from over $10,000 in
1992 to less than $6,000 in 1995. [Fn. 8] The court averaged
Michael's income for the three-year period between 1992 and 1994
and concluded that because Michael's average adjusted income was
$10,000 per month, his income had not declined as alleged.
Michael does not dispute the finding that his average
monthly income was approximately $10,000 per month. He instead
argues that the trial court erred in relying on the 1992-94
average, when the relevant period of "changed circumstances"began
in January 1995. He contends that the superior court should have
compared the $10,000 average with his substantially reduced 1995
income of $6,000 per month.
We agree with Michael's argument that because Rule
90.3(h)(2) provides that child support arrearages may not be
modified retroactively, it was incumbent upon him to "promptly
apply for a modification of child support when [the] material
change in circumstances occur[red]." Alaska R. Civ. P. 90.3,
Commentary X. He did just that, applying for modification in
January 1995 when his income allegedly declined. The superior
court erred in not considering January 1995 onward as the relevant
period of "changed circumstances,"instead of relying solely on the
1992-94 average. [Fn. 9]
On remand, the trial court should consider Michael's
adjusted income from January 1995 forward and should also determine
whether any reduction in income is permanent or temporary. See
Curley, 588 P.2d at 291 ("The change ordinarily must be more or
less permanent rather than temporary."); see also Patch, 760 P.2d
at 530 ("[A] trial court should be reluctant to modify child
support obligations when the obligor's loss of income appears only
temporary."). The trial court may also consider Michael's future
earning capacity. We have stated that a child support obligation
"is related, but not limited, to the parent's present income."
Patch, 760 P.2d at 529. As a general principle, the trial court
should "consider the nature of the changes and the reasons for the
changes, and then . . . determine whether, under all the
circumstances, a modification is warranted." Pattee v. Pattee, 744
P.2d 658, 662 (Alaska 1987) (citation omitted). [Fn. 10]
E. Divided Custody as a Material Change of Circumstances
Michael contends that the trial court erred in not
considering as a material change of circumstances the fact that as
of January 1995 he had primary physical custody of two of the four
children. Michael also argues that the fact of divided custody
entitles him to a recalculation of his child support obligation
under the divided custody formula outlined in Rule 90.3, Commentary
VI.B.3.
Stephanie argues that "[f]or there to be a 'substantial
change of circumstance,' something must occur which was not
contemplated by the parties at the time they had entered into their
initial agreement." We agree. The parties here expressly
contemplated possible changes in primary physical custody when they
entered into their agreement, and they calibrated the child support
provisions accordingly.
The Wyoming Supreme Court faced a similar issue in Kidd
v. Kidd, 832 P.2d 566 (Wyo. 1992), and found that the clear and
unambiguous child support provisions of a comprehensive divorce
settlement agreement could only be modified upon a showing by the
obligor of a "substantial change in circumstances not anticipated
at the time of the Agreement." Id. at 570.
For the same reason, the occurrence of the anticipated
event of divided custody is not in itself a basis for recalculation
using the divided custody formula suggested in the Rule 90.3
commentary.
F. Stephanie's Income
Michael argues that the superior court erred in not
considering Stephanie's improved financial situation as a material
change of circumstances, allegedly entitling him to a reduction in
his child support obligation and application of the Rule 90.3
guidelines. At the time of the modification hearing, Stephanie's
adjusted annual income from her job as a nurse was $39,708. It
appears that she had been employed in Michael's office prior to
their divorce.
Stephanie's improved employment situation is not,
standing alone, a per se material change of circumstances for
purposes of Rule 90.3(h)(1), nor does it return Michael to the
minimum requirements of the Rule 90.3 guidelines and excuse him
from the terms of the support agreement. Nevertheless, on remand,
the superior court should consider Stephanie's income. Curley, 588
P.2d at 292 (noting that the trial court must consider the
financial situation of both parents).
G. The $72,000 Cap
Rule 90.3(c)(2) permits child support to be calculated on
income exceeding $72,000 if there is good cause. Michael argues
that, in concluding that there was still good cause to deviate from
Rule 90.3, Judge Gonzalez "simply parroted"Judge Andrews's 1992
finding. He also contends that Stephanie failed to satisfy Rule
90.3(c)(2), which places the burden on the nonobligor parent to
"present evidence which justifies departure from [the] general
rule"of the $72,000 cap. Alaska R. Civ. P. 90.3, Commentary VI.D.
Where, as here, the obligor parent initially agrees to
waive the cap and later asks the court to apply the cap, the
obligor has the burden of showing that the Rule 90.3(c)(2) factors,
considered in light of the obligor's materially changed
circumstances, now warrant application of the cap. This should
generally be a difficult burden to meet, given our conclusion that
a successful showing of a material change of circumstances for
obligors in Michael's position does not entitle them to an
automatic reentry into the Rule 90.3 subcap guidelines.
Accordingly, Rule 90.3(c)(2) is not a "back door"through which
Michael can return to the minimum requirements of Rule 90.3.
Michael has submitted no evidence of circumstances that would
justify reimposition of the Rule 90.3(c)(2) cap.
H. Calculation of Support on Remand
Given the potential factual complexity of such disputes,
we decline to attempt to prescribe a single formula for
recalculating child support following a change of circumstances
after the parties have negotiated a child support obligation in an
amount exceeding the minimum required under Rule 90.3. We
nonetheless conclude that such an obligor, after proving a material
change of circumstances, is not entitled to an automatic reversion
to the Rule 90.3 schedule. Michael agreed to waive the cap. As a
result, he agreed to pay twice the minimum child support Rule 90.3
would have required, and agreed to a proportional reduction for
each child who chose to live with him. Since this was the
framework of the parties' negotiated agreement, any subsequent
recalculation must take this as its starting point.
On remand, if Michael is found to have experienced a
permanent material change of circumstances based on a decrease in
income, one possible approach would be to reduce his support
payments pro rata; for example a 20% decrease in income would
result in a 20% decrease in the agreed-upon support. This is just
one suggested approach, however; we leave it to the discretion of
the trial courts in this and other cases to explore other methods
of recalculating support. In this case, for example, other
possible changes, such as increases in Stephanie's income or
earning capacity, or the need to provide support equitably for the
children in the custody of both parents, may complicate a simple
pro rata comparison.
IV. CONCLUSION
In deciding whether Michael proved a change in
circumstances, it was error to ignore evidence that Michael's
income declined during the first six months of 1995 and to rely
exclusively on an average of his income for three prior years. We
REVERSE and REMAND for further proceedings consistent with this
opinion. [Fn. 11]
FOOTNOTES
Footnote 1:
Michael argues that we should not consider this argument
because Stephanie did not cross-appeal and did not timely move to
supplement the points on appeal. Stephanie was not obligated to
cross-appeal for us to consider her argument. See Fox v. Alascom,
Inc., 783 P.2d 1154, 1157 (Alaska 1989): "An appellee who does not
wish a change in the decree appealed from is not required to cross-
appeal in order to preserve his right to urge errors in a district
court's ruling that would, if accepted by the appellate court,
support an affirmance of the appealed decree."
Footnote 2:
AS 25.24.170 states:
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.
Footnote 3:
This generalization does not necessarily apply where the
obligor has custody of one or more children, as an increase in the
obligor's payments decreases the funds available for the support of
children in the custody of the obligor. See, e.g., Bussert v.
Bussert, 677 N.E.2d 68 (Ind. App. 1997) (Father, after obtaining
custody of one of three children, agreed to pay previous level of
support which exceeded guideline amount; later, the court approved
the father's request to reduce child support obligation to zero
because guidelines then called for no payment of support by either
parent; court explained that enforcement of the parties' agreement
would "compromise[] the standard of living of the child in Father's
custody"and was thus "contrary to public policy.").
Footnote 4:
We need not consider here whether a court should give
particular scrutiny to an agreement that, even though it specifies
support greater than the minimum the rule requires, nonetheless
might call for payments that represent a mere pittance given the
obligor parent's extraordinary wealth and income.
Footnote 5:
We emphasize again that child support and property divisions
are distinct issues that should be treated separately. We have
stated that
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, whereas child support awards can be changed
periodically under much more liberal standards. One should not be
a tradeoff for the other.
Arndt v. Arndt, 777 P.2d 668, 670 (Alaska 1989) (citation omitted).
Footnote 6:
Citing Rule 90.3(c)(1), Michael contends that Stephanie was
required to prove "good cause"by "clear and convincing evidence
that manifest injustice would result if the support award were not
varied." Alaska R. Civ. P. 90.3(c)(1). The quoted requirement
applies only to subparagraphs (A) and (B) of Rule 90.3(c)(1) and
does not apply to the cap provision found in Rule 90.3(c)(2).
Farrell v. Farrell, 819 P.2d 896, 902 (Alaska 1991) ("Subsection
(c)(2) contains its own standards and does not cross-reference
(c)(1).").
Footnote 7:
He also proposes an alternative method of calculating support
in a divided custody situation (the shared custody formula) that
yields a support obligation of $475.25 per month to Stephanie for
the two children in her custody.
Footnote 8:
Michael contends that because of the poor financial condition
of his professional corporation, his salary as of January 1995 "had
to be dropped to a financially responsible and sustainable level,
which is $9,000 per month gross, $6,000 per month net."
Footnote 9:
Had the superior court been asked to calculate Michael's
initial child support obligation under Rule 90.3, it could have
appropriately considered his three-year income average for the
purpose of estimating Michael's future income. However, none of
the cases involving a "three-year average"for that purpose
involved a motion to modify child support based upon an alleged
change in circumstances. See, e.g., Renfro v. Renfro, 848 P.2d
830, 833 (Alaska 1993).
The superior court permissibly might have looked at
financial information for past years to help determine whether the
alleged decline beginning in January 1995 was only temporary,
unproven, or voluntary. It appears that is not what the court did,
and it made no findings suggesting that it was rejecting the post-
1994 evidence on those grounds. Just because an obligor is a
private physician whose income "may vary from year to year"does
not in itself permit the court to ignore evidence of an alleged
income decline by looking exclusively at an average of past
earnings history unless it finds that any current declines are only
temporary.
Footnote 10:
We offer no opinion about whether Michael's income declined
after 1994, as he alleges, or whether any reduction was unproven,
temporary, or voluntary, as Stephanie argues. Additional evidence
may be available upon remand to aid the superior court in deciding
whether there was a change in circumstances that justifies a
prospective (post-1995 motion) reduction of Michael's support
obligation.
Footnote 11:
This result also requires that the award of costs and
attorney's fees to Stephanie must be vacated.
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