Alaska Supreme Court Opinions made Available by Touch N' Go Systems and Bright Solutions

Touch N' Go, the DeskTop In-and-Out Board makes your office run smoother. Visit Touch N' Go's Website.
  This site is possible because of the following site sponsors. Please support them with your business.

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Osmar v. Mahan (8/16/2002) sp-5608

Osmar v. Mahan (8/16/2002) sp-5608

     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,


MINDY LYNN OSMAR,             )
                              )    Supreme Court No. S-10299
             Appellant,            )
                              )    Superior Court Nos.
     v.                       )    3KN-00-175 CI & 3KN-00-123 DV
GARY LEE MAHAN,               )    O P I N I O N
              Appellee.              )    [No. 5608 - August  16,

          Appeal  from the Superior Court of the  State
          of  Alaska,  Third Judicial District,  Kenai,
          Harold M. Brown, Judge.

          Appearances:   Max  F.  Gruenberg,  Jr.   and
          Jennifer  L.  Holland,  Gruenberg,  Clover  &
          Holland,   Anchorage,  for   Appellant.    No
          appearance by Appellee.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          FABE, Chief Justice.


          When the trial court calculated Mindy Lynn Osmars child

support  obligation for her son, Steele, the  court  included  in

Mindys  income  the Social Security benefits that Ashley,  Mindys

child from a previous marriage, receives because of the death  of

Ashleys  father.  Yet, federal law restricts Mindys use of  these

benefits  to Ashleys care and maintenance; they are not available

to  support  Steele.  We therefore conclude that the trial  court

erred by including the payments in Mindys income for purposes  of

determining child support under Alaska Civil Rule 90.3.


          Mindy  Lynn Osmar and Chris Osmar married and  had  one

child,  Ashley  Osmar.  After the couples divorce,  Chris  became

disabled  and  died.   Mindy receives Social  Security  childrens

insurance benefits (CIB) ranging from $922 to $954 per  month  on

Ashleys  behalf  because  of Chriss disability  and  death.   The

checks  are from the United States Treasury and are made  out  to

Mindy  Osmar for Ashley M. Osmar and list Ashleys Social Security


          Mindy and Gary Lee Mahan were married in April 1997 and

separated  in  January 2000.  They have one son together,  Steele

Lee  Mahan, born July 3, 1998.  Mindy filed for divorce on  March

8, 2000 and both Mindy and Gary sought legal and physical custody

of  Steele and child support from each other.  Under the terms of

a Domestic Violence Protective Order, Mindy was awarded temporary

custody  of  Steele.  However, because of Mindys  work  schedule,

Mindy  has Steele from Sunday at 6:00 p.m. until Tuesday at  5:30

p.m.  and  Wednesdays, Thursdays, and Fridays from 9:00  a.m.  to

5:30 p.m.

          In  its order on interim child support of May 17, 2000,

the  superior  court concluded that although  Steele  spends  the

night  with  Mindy  less  than thirty  percent  of  the  time,  a

departure  from  the  overnight accounting method  was  warranted

because Steele spends a majority of his waking hours with  Mindy.

Accordingly, the superior court calculated child support based on

a  50/50  shared custody formula and ordered Mindy  to  pay  Gary

$26.61  per month for child support.  The superior court included

in  Mindys income the CIB payments that Mindy receives on Ashleys


          Mindy  moved  for reconsideration, arguing  that  [f]or

child support purposes, Ashley is irrelevant.  She is not a child

of  the marriage and her income and expenses are irrelevant.   In

ruling  on  the  motion for reconsideration, the  superior  court

interpreted Alaska Civil Rule 90.3 as requiring inclusion of  the

Social  Security benefits in Mindys income.  However, it  reduced

the  order  against Mindy from $26.61 per month to $0, concluding

that good cause existed under Rule 90.3(c)(1) to vary the award.

          After  a two-day trial in January 2001, the trial court

again  rejected Mindys argument that the Social Security benefits

should not be included in her income for Rule 90.3 purposes.   In

its April 6, 2001 decision, the superior court analyzed the three

cases on which Mindy relied  Miller v. Miller;1 State, Department

of  Revenue v. Fry;2 and Pacana v. State, Department of  Revenue3

and  reaffirmed  its  prior decision:   Because  Ashleys  father,

rather  than Plaintiff, is the source of the benefits to  Ashley,

Plaintiff is not entitled to an offset of those benefits  against

her  income  or  child support obligation.  The  superior  court,

however, adjusted its calculation of support on other grounds and

ordered Gary to pay Mindy $259 per month in child support.

          On  September 6, 2001, after having denied two  motions

by  Mindy for reconsideration, the superior court entered a child

support  order  requiring Gary to pay $270.50 to Mindy  in  child

support, effective April 6, 2001.  Mindy appeals both the interim

and final child support orders on the basis that the CIB payments

should not be included in her income.


     A.   Standard of Review

          We  generally will review a child support decision only

for  an abuse of discretion or for a determination of whether the

trial  courts factual findings are clearly erroneous.4   However,

whether  the  trial court properly included Social  Security  CIB

benefits in Mindys income is a question of law that we review  de

novo.5   Under this standard, we will adopt the rule of law  that

is most persuasive in light of precedent, reason, and policy.6

     B.   The Trial Court Erred by Including in Mindys Income CIB
          Security Payments Made to Mindy for Ashley.

          How  to  account for CIB payments that a child  from  a

          previous relationship receives and which are not attributable to

the  disability  of either of the parties is an  issue  of  first

impression  in this court.  The trial court included  the  Social

Security  CIB payments in Mindys income, justifying its  decision

on  the  basis that Rule 90.3 requires the court to consider  the

parents  total  income from all sources.  The court  went  on  to


          Section III.A. of the Commentary to Rule 90.3
          provides  that this directive be  interpreted
          broadly to include benefits which would  have
          been available for support if the family  had
          remained  intact.  The court notes  that  the
          social  security benefits at issue  here  are
          not  means-based sources of income, thus they
          are   not  deductible  on  this  basis.    In
          addition,  it would appear to the court  that
          the social security payments  albeit received
          for  her daughter  are made available to  Ms.
          Osmar  to do with as she sees fit.  The court
          sees  no  evidence to suggest that there  are
          any  restrictions whatsoever on the  uses  to
          which  Ms.  Osmar can put these funds.  Under
          these  circumstances, the  court  finds  that
          these  funds  are properly considered  income
          for  purposes  of calculating  child  support
          under  Rule 90.3 and plaintiff has  cited  no
          authority to the contrary.
          We  disagree  with the superior courts  analysis.   The

superior court is correct that Rule 90.3(a)(1) provides that, for

purposes  of  calculating  child  support,  income  includes  the

parents  total  income from all sources.  And the  commentary  to

Rule 90.3 indicates that income should be interpreted broadly  to

include  benefits which would have been available for support  if

the  family  had  remained  intact,  including  Social  Security,

veterans  benefits, and insurance benefits which  replace  earned

income  such  as  workers  compensation  or  periodic  disability


          However,  there  are  restrictions  on  Mindys  use  of

Ashleys Social Security CIB payments.  Federal law requires  that

Social Security disability and death benefits paid to a child  be

used for that childs maintenance:

          We  will consider that payments we certify to
          a representative payee have been used for the
          use  and  benefit of the beneficiary if  they
          are   used   for  the  beneficiarys   current
          maintenance.   Current  maintenance  includes
          costs  incurred  in obtaining food,  shelter,
          clothing, medical care, and personal  comfort
Mindy has a duty to invest or conserve for Ashley any payments in

excess  of  Ashleys maintenance needs.9  Mindy is constrained  by

federal  law  in  her  use of the Social  Security  payments  for

anything other than the maintenance and care of Ashley, and  that

money was therefore not available to Mindy to support Steele when

Mindy and Gary were still married and the family was intact.10

          In  addition,  under  Alaska  Civil  Rule  90.3,  child

support  is  not income.11  As Mindy correctly characterizes  it:

Here  the  payments are received because of the death of  Ashleys

father and come to Ashley, through Mindy, as a substitute for his

child support.  Thus they are not income to Mindy, but similar to

child  support  for Ashley.  The Social Security payments  should

have  been  excluded from Mindys income in calculating the  child

support award for Steele.

           This conclusion is consistent with our prior decisions

on how to account for Social Security benefits resulting from the

disability of a parent who is a party to a child support dispute.

In  Miller  v. Miller, we held that benefits payable to  a  child

must  be  included  as  income  of the  contributing  parent  for

purposes of establishing the appropriate amount of child  support

under Civil Rule 90.3.12  The contributing parent is then credited

for the Social Security payments made to the child on his behalf.13

We reasoned:

          The primary purpose of Civil Rule 90.3 is  to
          ensure that child support orders are adequate
          to meet the needs of children, subject to the
          ability  of  the  parents  to  pay.    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 childs  entitlement
          to  payments derives from the parent, and the
          payments  themselves represent earnings  from
          the parents past contributions.[14]
          Applying Miller to the present case, if Ashleys  father

were  still  alive, as the contributing parent he would  have  to

include  the  $954 in his income for purposes of calculating  his

child  support obligation for Ashley.  He would then be permitted

a  $954 credit toward his total child support obligation, and the

Social  Security payments for Ashley could satisfy his obligation

in full.  Since the payments would be included in Ashleys fathers

income,  it  follows that they should not be included  in  Mindys



          Mindy  is  restricted by federal law  to  use  the  CIB

payments  exclusively for Ashleys maintenance and must invest  or

conserve any amount paid to her for Ashley which exceeds the cost

of  Ashleys  maintenance.   Because  the  CIB  payments  are  not

available to Mindy for Steeles care, they should not be  included

in  her  income for purposes of Rule 90.3.  We REVERSE and REMAND

for  recalculation of the child support award in accordance  with

this decision.15

     1    890 P.2d 574 (Alaska 1995).

     2    926 P.2d 1170 (Alaska 1996).

     3    941 P.2d 1263 (Alaska 1997).

     4     Bennett  v.  Bennett, 6 P.3d 724, 726  (Alaska  2000);
Hermosillo v. Hermosillo, 962 P.2d 891, 893 (Alaska 1998).

     5    Hermosillo, 962 P.2d at 893 (Whether the superior court
appropriately considered CIB in the computation of [the  fathers]
child  support  arrears is a question of law that  we  review  de
novo.); see also J.L.P. v. V.L.A., 30 P.3d 590, 594 (Alaska 2001)
(The interpretation of Alaska Civil Rules governing child support
orders is reviewed de novo.).

     6    Miller, 890 P.2d at 576.

     7      Alaska   R.  Civ.  P.  90.3  cmt.  III.A.   Mandatory
deductions  are  subtracted from each parents  income,  including
[c]hild  support  and  alimony payments paid  to  another  person
arising out of different cases . . . if three conditions are met.
Alaska  R.  Civ. P. 90.3 cmt. III.D; see also Alaska  Civil  Rule
90.3(a)(1)(B).  A deduction is also permitted for  child  support
paid  for  children  from  prior relationships  living  with  the
parent,  even if the party is the custodial parent of  the  prior
children  and does not make child support payments to  the  other
parent  of the children.  Alaska R. Civ. P. 90.3 cmt. III.D;  see
also Alaska R. Civ. P. 90.3(a)(1)(C).

     8    20 C.F.R.  404.2040(a)(1) (2002).

     9     See  20  C.F.R.  404.2045(a) (After the representative
payee has used benefit payments consistent with the guidelines in
this  subpart  (see   404.2040 regarding use  of  benefits),  any
remaining amount shall be conserved or invested on behalf of  the

     10    See C.G.A. v. State, 824 P.2d 1364, 1367 (Alaska 1992)
(noting that the State may not order a noncustodial payee  parent
to  pay  over  a childs Social Security benefits to  a  custodial
parent, even if the payee parent was inappropriately spending the
beneficiarys funds, because federal law provides a remedy when an
appointed payee abuses her fiduciary duty).

     11     Faulkner v. Goldfuss, 46 P.3d 993, 998 (Alaska 2002);
Alaska R. Civ. P. 90.3 cmt. III.A.  Although the Internal Revenue
Codes definition of income differs from Rule 90.3s definition  in
other respects, it is noteworthy that federal income tax law also
excludes  child  support from income.  See  26  U.S.C.   71(c)(1)
(Subsection  (a) [providing that [g]ross income includes  amounts
received  as alimony or separate maintenance payments] shall  not
apply to . . . a sum which is payable for the support of children
of the payor spouse.).

     12     890  P.2d  574,  577-78 n.5 (Alaska  1995)  (emphasis

     13    Id. at 577.

     14    Id. (internal quotations and citations omitted).

     15     On  remand,  the  trial court is free  to  reconsider
whether  good  cause  exists to vary the newly  calculated  award
under Rule 90.3(c)(1).