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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Laybourn v. Powell (9/27/2002) sp-5633

Laybourn v. Powell (9/27/2002) sp-5633

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


BRADLEY KENT LAYBOURN,   )
                              )    Supreme Court No. S-10074
               Appellant,          )
                              )    Superior Court No.
          v.                  )    3PA-94-1074 CI
                              )
ROBERTA YVONNE POWELL,   )    O P I N I O N
                              )
               Appellee.      )         [No. 5633 - September 27,
2002]
                                                                )

          Appeal  from the Superior Court of the  State
          of  Alaska, Third Judicial District,  Palmer,
          Beverly W. Cutler, Judge.

          Appearances:  D. Scott Dattan, Law Office  of
          D.  Scott  Dattan, Anchorage, for  Appellant.
          Tara  N.  Logsdon,  Golter &  Logsdon,  P.C.,
          Wasilla, for Appellee.

          Before:   Fabe,   Chief  Justice,   Eastaugh,
          Bryner,  and Carpeneti, Justices.  [Matthews,
          Justice, not participating.]

          BRYNER, Justice.

I.   INTRODUCTION

          Bradley  Laybourn  challenges an  order  modifying  his

child  support obligation and awarding partial attorneys fees  to

his  former wife.  We affirm, holding (1) that the superior court

properly  imputed  income to Laybourn based  on  his  efforts  to

disguise  actual earnings and conceal assets, (2) that the  court

properly  considered all of the evidence and did not express  any

bias  against Laybourn, and (3) that the courts award of enhanced

fees  was  authorized  under Civil Rule 82 because  of  Laybourns

vexatious conduct.

II.  FACTS AND PROCEEDINGS

          Laybourns ex-wife, Roberta Powell, moved to modify  his

child  support payments for their daughter Kelcy.  Powell  argued

that  Laybourns income greatly exceeded the amount on  which  his

existing  child support payments had been based in 1997.   Powell

further  maintained that Laybourns wages and tax returns did  not

accurately  reflect  his  actual earnings  because  Laybourn  was

hiding income.  She supported these claims by relying on Linda L.

Saunders,  a  forensic  accountant, who testified  that  Laybourn

appeared to be sheltering a large amount of his actual income.

          Saunders  testified that Laybourn had quit a  lucrative

job  shortly  after the couple divorced in 1995 and had  remained

self  employed as an entrepreneur since then.  Although the court

had reduced his child support payments in 1997, he had failed  to

make  any  payments  for  nearly  two  years.  Yet  according  to

Saunders, Laybourn established several partnerships shortly after

his divorce and frequently traded his labor for in-kind payments,

such as free rent in a building owned by one of the partnerships,

in  an  attempt  to  hide his income and assets.   Saunders  also

identified  vast discrepancies between Laybourns  claimed  income

and  both  his lifestyle and bank account balances.  In Saunderss

professional opinion,

          [Laybourn]   has  actively  participated   in
          financial   activities  and   labor   efforts
          concerning property interests in Alaska . . .
          [and]  has engaged business partners and  his
          girlfriend to aid in the concealment of  such
          activities.  .  .  .  [Laybourns]   financial
          records and representations are riddled  with
          contradictions  and  claims  of  expenditures
          contrary to customary reporting practices  of
          the IRS. . . . Laybourn has overtly disguised
          his income and worked under the table for his
          personal  living expenses since he  left  the
          Slope in 1996.
          
          Saunders  testified  on the first day  of  a  three-day

hearing.   At  the  close  of Saunderss  testimony   just  before

Laybourn  began presenting his side of the case  the trial  judge

commented  on  the compelling nature of Saunderss  testimony  and

cautioned  Laybourn  about the potential  legal  implications  of

presenting  evidence  that might prove to  be  false.   The  case

proceeded,  and  the rest of the hearing consisted  of  witnesses

presented by Laybourn.

          At the close of the hearing, the superior court granted

Powells  motion  for modification, finding that Laybourn  was  in

fact  seeking  to  hide income and assets to avoid  paying  child

support.    Based  on  evidence  of  his  earnings  history   and

potential,  the  court estimated that he was  easily  capable  of

earning  an  adjusted gross income of $72,000  and  imputed  this

amount  to  him as annual income for purposes of determining  his

new child support obligation.  As explained by the court, $72,000

represented  Laybourns  potential income  based  on  his  skills,

experience, and qualifications.  The court also awarded  enhanced

attorneys  fees  to  Powell,  citing  Laybourns  bad  faith   and

vexatious  conduct in hid[ing] his income and  assets.   Laybourn

appeals.

III. DISCUSSION

     A.   Imputed Income1
          
          Alaska  Civil  Rule  90.3  governs  child  support  and

requires awards of support to be calculated as an amount equal to

the  adjusted income of the non-custodial parent,2 multiplied  by

certain factors.  Rule 90.3(a)(1) broadly defines adjusted  gross

income to include the parents total income from all sources, less

certain  specified deductions. Under Rule 90.3(a)(4),  the  court

may  impute potential income to a parent the court determines  is

voluntarily  and  unreasonably . . . unemployed or  underemployed

and also may impute potential income for non-income or low income

producing assets.

          Here,  the  court found that Laybourn had  consistently

underreported his income and was engaged in an ongoing scheme  of

concealing  assets and earnings.  The court estimated his  annual

adjusted  gross  income capacity to be at least  $72,000.   Those

findings  are  supported  by substantial  evidence  and  are  not

          clearly erroneous.

          Laybourn   nonetheless  asserts  that  the  court   was

required  to  provide  a strict accounting  of  its  methods  for

determining  this income amount.  In particular,  Laybourn  takes

issue  with  several categories of expenses that  he  claims  the

superior  court must have improperly considered in computing  his

income.   But  Laybourns argument misconceives the basis  of  the

courts  finding that his adjusted annual income totaled at  least

$72,000:  the  court  was  not  calculating  his  actual  income;

instead, it was imputing income based on an estimate of Laybourns

earning  capacity because he had made it impossible to  calculate

his  actual  income  accurately.   Laybourns  situation  is  thus

functionally  equivalent  to voluntary  underemployment.   Having

failed  to give the court any accurate basis on which to  compute

his  actual  earnings, Laybourn cannot be heard to complain  that

its  estimate  based  on his earning capacity  is  insufficiently

precise.3

          Because  the  superior court did  not  clearly  err  in

finding  that Laybourns total adjusted earning capacity from  all

sources  easily exceeded $72,000, we hold that the court did  not

abuse its discretion in modifying his child support obligation.4

     B.   Alleged Bias

          Laybourn also alleges that the superior court prejudged

his  case  and erred in failing to consider all of the  evidence.

He  bases his claim on the courts remarks at the close of Powells

evidence.   Laybourn  takes these remarks  out  of  context.   As

mentioned earlier, the trial court noted the compelling nature of

Saunderss  expert testimony and warned Laybourn of the  potential

dangers  of  presenting  a defense based  on  demonstrably  false

testimony.   When  read in light of the record as  a  whole,  the

courts  remarks fail to support Laybourns claim of bias.  To  the

contrary,   they   evince  a  genuine  concern  about   Laybourns

understanding of the potential implications of further  testimony

regarding  what appeared to be a well-documented pattern  of  tax

evasion and fraud: the court simply wanted to be certain Laybourn

understood the evidently very real risk that he might incriminate

himself  or his proposed witnesses.  After sounding this note  of

caution, the court heard two more days of testimony and,  in  the

end,  expressly  declined  to  find  Laybourns  defense  entirely

lacking in credibility.  The court then entered detailed findings

addressing  all  the evidence presented at the hearing.   In  the

context  of the record as a whole, then, Laybourns claim of  bias

is unpersuasive.

     C.   Attorneys Fees
          
          Finally, Laybourn argues that the superior court abused

its  discretion in awarding attorneys fees.   The superior  court

assessed  $9,392.57  in attorneys fees under  Alaska  Civil  Rule

82(b)s schedule of partial fees; the court enhanced this award by

$607.43  based  on Laybourns vexatious conduct.   The  total  fee

award was $10,000.

          Laybourn   initially   claims   that   child    support

modification  cases  qualify as post-judgment  modifications  and

enforcement  actions  and,  as  such,  fall  under  the   divorce

exception to Rule 82 and are not subject to fee awards under that

rule.5  But unlike post-judgment motions to modify custody, child

support  motions  raise  issues solely pertaining  to  money  and

          property and, thus, do not fall under the divorce exception.6

          Laybourn separately argues that the $607 enhancement of

fees  was  inappropriate.  The superior court found that Laybourn

had  engaged in bad faith and vexatious conduct in an attempt  to

hide  his  income  and  assets; the court  further  characterized

Laybourns  conduct  as  outrageous.  Rule  82(b)(3)(G)  expressly

authorizes  courts  to  enhance fees in cases  of  bad  faith  or

vexatious  behavior.   The superior courts finding  of  vexatious

conduct  is  supported  by  the  record,  and  the  nominal   fee

enhancement  is not manifestly unreasonable.7   We thus  find  no

abuse of discretion.

IV.  CONCLUSION

          For  these  reasons,  we  AFFIRM  the  superior  courts

judgment.

_______________________________
     1    We review a trial courts findings of imputed income for
clear error. See Routh v. Andreassan, 19 P.3d 593, 595-96 (Alaska
2001) (determination of net income for child support purposes  is
factual finding reviewed for error); Dunn v. Dunn, 952 P.2d  268,
270 (Alaska 1998) (using clearly erroneous standard).  We deem  a
factual finding to be clearly erroneous when we are left  with  a
definite and firm conviction on the entire record that a  mistake
has  been made, even though there may be evidence to support  the
finding.    Brosnan v. Brosnan, 817 P.2d 478, 480  (Alaska  1991)
(quoting Martens v. Metzgar, 591 P.2d 541, 544 (Alaska 1979)).

     2    Alaska R. Civ. P. 90.3(a).

     3     Cf.  Benson  v. Benson, 977 P.2d 88, 92 (Alaska  1999)
(permitting  calculation  of support arrearages  and  noting  [a]
contrary holding would reward recalcitrant conduct of obligors).

     4     We review modifications of child support for abuse  of
discretion.   Robinson v. Robinson, 961 P.2d 1000,  1002  (Alaska
1998).   Under  this  standard, we will set aside  an  order  for
modification if a review of the entire record leaves  us  with  a
definite  and  firm  conviction that a  mistake  has  been  made.
Hilderbrand  v.  Hilderbrand, 962 P.2d  887,  888  (Alaska  1998)
(internal quotations omitted).

     5     See  Hartland v. Hartland, 777 P.2d 636,  644  (Alaska
1989).

     6    Lowe v. Lowe, 817 P.2d 453, 460 (Alaska 1991).

     7     Kowalski  v.  Kowalski, 806 P.2d  1368,  1372  (Alaska
1991).   Laybourn argues that Kowalski supports  his  claim  that
enhanced fees are inappropriate.  But Kowalski recognizes that an
attempt  to  mislead  the  court  for  purposes  of  defeating  a
legitimate  claim  qualifies  as  vexatious  conduct  under  Rule
82(b)(3)(G).  Id. at 1373.