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Nunley v. State, Dept. of Revenue, Child Support Enforcement Div. (10/08/2004) sp-5837
Nunley v. State, Dept. of Revenue, Child Support Enforcement Div. (10/08/2004) sp-5837
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
JOHN M. NUNLEY, )
) Supreme Court No. S-11030
Appellant, )
) Superior Court No.
v. ) 3PA-01-1041 CI
)
STATE OF ALASKA, ) O P I N I O N
DEPARTMENT OF REVENUE, )
CHILD SUPPORT ENFORCEMENT ) [No. 5837 - October 8,
2004]
DIVISION (CSED), )
)
Appellee. )
_______________________________ )
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Palmer,
Beverly W. Cutler, Judge.
Appearances: John Nunley, pro se, Wasilla.
Diane L. Wendlandt, Assistant Attorney
General, Anchorage, and Gregg D. Renkes,
Attorney General, Juneau, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
CARPENETI, Justice.
I. INTRODUCTION
John Nunley appeals from an administrative child
support decision issued by the Department of Revenue finding that
he is voluntarily underemployed and ordering him to pay $209 per
month to support his child. The superior court upheld the
agencys decision on direct appeal. Because substantial evidence
supports the finding that Nunley is voluntarily underemployed,
and because the department imputed a reasonable annual income to
Nunley to determine his child support obligation, we affirm the
decision of the superior court.
II. FACTS AND PROCEEDINGS
John Nunley and his wife, Vansia Nunley, are the
parents of Morgan Nunley, born April 20, 1989. John was
incarcerated in December 1989, and Vansia began receiving public
assistance for Morgan that same month. The Child Support
Enforcement Division (CSED) opened a child support case for the
family and served Nunley with an administrative child support
order to reimburse the state $752 per month for Morgans support.
Nunley appealed the order by requesting an informal conference
with CSED. In his request, Nunley informed CSED that he had been
incarcerated since December 7, 1989 and that he had no assets.
After a telephonic conference on May 2, 1990, CSED reduced
Nunleys monthly obligation to $50.
In June 1992 Vansia gave birth to another child, Kiana.
Because the Nunleys were married at that time, John was presumed
to be Kianas father as a matter of law.1 In July 1994 CSED
issued a modified child support order requiring Nunley to support
Kiana and increasing the required support to $282 per month.
This amount was based upon an annual income of $15,010, which was
extrapolated from Nunleys reported earnings for the first quarter
of 1994. Nunley appealed the revised order by requesting an
informal conference with CSED, which was held on September 8,
1994. The informal conference officer, Chris Berg, upheld the
modified order, but he did not issue a written final decision as
required by department regulations2 or notify Nunley of his right
to appeal to a formal administrative hearing.3 The only record
of this meeting consists of brief notes in CSEDs computerized
case management system. According to these notes, Nunley
informed Berg that he quit his job after CSED sent a withholding
order to his employer. Nunley also refused to provide any
information to CSED, threatened to leave the state if CSED
attempted to locate him, and claimed that all of his assets were
in other peoples names so that CSED could not collect from him.
After Nunleys drivers license was suspended in 1997 for
non-payment of child support,4 he administratively appealed the
suspension. In a separate action in January 1998, Nunley moved
to vacate the administrative child support order pursuant to AS
25.27.195(b),5 which allows CSED to vacate a support order based
upon a default amount rather than an obligors actual ability to
pay. He claimed that he had been living at or below the poverty
line for several years and that CSED was requiring support in
excess of his ability to pay. In September 1998 the agency
responded with a letter explaining that the order was based upon
Nunleys demonstrated ability to pay.
Nunley treated this letter as a denial of his
administrative appeal and he appealed the support order to the
superior court in Palmer on October 23, 1998. CSED opposed the
motion as premature because Nunley had not exhausted his
administrative remedies, and it asked the superior court to
dismiss the appeal and require Nunley to seek a formal hearing
from the Department of Revenue. The department indicated that
Nunley retained the right to an administrative appeal because he
had not been notified in writing of his right to appeal from the
1994 informal conference. Because Nunley had not appealed CSEDs
order to a formal administrative hearing, there was no official
administrative record for the court to review on appeal.
Notwithstanding the lack of an administrative record, Nunley
filed a motion to proceed with the appeal in November 1999,
appending his own copy of his CSED file. The superior court
granted Nunleys motion on March 22, 2000.
Nunley later decided to pursue an administrative
appeal, and he requested a formal hearing before the Department
of Revenue on December 4, 2000 and withdrew his appeal to the
superior court on December 5, 2000. Prior to the formal hearing,
CSED conducted a paternity test to determine whether Nunley was
the father of Kiana. The test showed that he was not Kianas
father and the department determined that Nunley had no duty to
provide for her support. In preparation for the formal hearing,
CSED submitted a summary of the issues on appeal, the superior
court record, and a statement explaining why Nunley retained the
right to an administrative appeal so long after the informal
hearing. These materials, which included an affidavit from Berg
explaining his notes from the 1994 informal conference, were
provided to Nunley and his counsel. In the case overview, the
department argued that Nunley was and is voluntarily and
unreasonably un/underemployed, that $15,010 was a reasonable
estimation of his potential income based upon his actual earnings
in the first quarter of 1994, and that he should pay $209 per
month in support for his child, Morgan. The formal hearing was
held on June 28, 2001 before Revenue Hearing Examiner Kay L.
(Katy) Howard. Nunley attended this hearing with his attorney.
As the party attacking the child support determination,
Nunley bore the burden of proving, by a preponderance of the
evidence, that the departments income calculations were
incorrect.6 Both CSED and Nunley offered opening statements
focusing on the primary issue of whether Nunley was capable of
earning an income sufficient to pay $209 per month in child
support. Nunley testified that after his release from prison he
worked seasonally as a laborer on the farm of a family friend,
earning between $5 to $8 per hour. He claimed that although he
was a certified welder, his skills were out-of-date and he was
unable to find employment in this field. He testified that he
worked as a construction laborer for several months in 1993-94,
but that he was laid off in March or April 1994. It was upon the
basis of this employment that CSED extrapolated an annual income
of $15,010.
Nunley denied that he told Informal Hearing Officer
Berg that he had quit this job to avoid paying child support, and
claimed instead that Berg had either misunderstood him or lied.
On cross-examination he admitted that he had made only minimal
effort to secure full-time employment since 1994, applying for
two to three jobs per year, but he claimed that no employers
(except his family friends, who provided seasonal employment)
would hire him due to his criminal background. He acknowledged
that he lived with his mother and his girlfriend, both of whom
gave him money and paid for his living expenses, that he
frequently used a car owned by his mother and owned a motorcycle
registered to his girlfriend, and that he spent his free time
helping his girlfriend by cutting firewood, caring for her
horses, and baling hay.
Hearing Examiner Howard issued a final decision on July
31, 2001. She noted that child support can be based upon an
obligor parents potential income if a finding is made that he or
she is voluntarily and unreasonably underemployed, and she
articulated the legal standard for making such a determination.
She found that Nunley was underemployed as a result of purely
personal choices rather than economic factors and that $15,010
was the best estimate of his potential income. She based her
decision primarily upon Bergs entry in the CSED case management
system after his 1994 informal conference with Nunley and an
affidavit he submitted regarding that meeting. She found that
Nunleys description of this meeting was not credible, noting that
in the absence of any evidence to support Nunleys claim, she
would not enter a finding that a state employee acted dishonestly
in carrying out his official duties many years ago.
Howard commented that other evidence in the record
supported the finding that Nunley was voluntarily underemployed,
particularly the fact that he had applied for only one or two
jobs per year over a seven-year period. Howard noted that the
financial support of Nunleys mother and girlfriend allowed him to
remain underemployed since both provided him with a place to
stay, purchased food for him, and paid for his living expenses.
She also found Nunleys ownership of a motorcycle registered to
his girlfriend to be consistent with Bergs notes that Nunley had
threatened to hide his assets to prevent collection of child
support. Based upon the evidence as a whole, she found that
Nunley should pay child support for Morgan in the amount of $209
per month, and she affirmed the departments 1994 child support
determination.
Nunley filed a motion for reconsideration on August 9,
2001 which was denied by Deputy Commissioner of Revenue Larry
Persily on August 21, 2001. Persily found nothing to indicate
that the decision was based on any errors of fact, and he noted
that an annual income of $15,010 per year was based on full-time
employment at a rate of $7.22 an hour, a modest wage for a 50-
year-old worker with reasonable skills. He commented that while
Mr. Nunley has made a personal choice to live without full-time
employment, . . . it is unreasonable for his child to live
without full-time financial support from his father. Persily
concluded that [i]f, as Mr. Nunley states, he has chosen a career
as a seasonal farm laborer, then perhaps he needs to add to his
income by finding employment during the rest of the year. Civil
Rule 90.3 does not allow for a child support obligation to be
based solely on a parents seasonal income just because he or she
has chosen not to seek year-round employment.
Nunley appealed to the superior court on September 19,
2001, claiming that the support award was based upon an
unreasonable estimate of his earning potential and that it should
have been based upon his reported wages as a farm laborer. On
November 18, 2002 Nunley moved for an order compelling CSED to
release his suspended drivers license. The superior court
affirmed the formal hearing decision on February 28, 2003,
holding that the factual findings were supported by the record
and that Hearing Examiner Howard applied the correct legal
standard to determine that Nunley was voluntarily and
unreasonably underemployed. On the same day, the superior court
denied Nunleys motion to release his drivers license. Nunley
appeals both decisions.
III. STANDARD OF REVIEW
When the superior court acts as an intermediate court
of appeal, we directly review the underlying administrative
decision using our independent judgment.7 An agencys factual
findings are reviewed under the substantial evidence test.8
Substantial evidence is such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion. 9 We will
not evaluate the strength of the evidence but only note its
presence.10 We apply our independent judgment to questions of law
that do not implicate agency expertise.11
IV. DISCUSSION
Nunley raises eleven points on appeal, seven of which
variously restate his primary argument that CSED erred in finding
that he was voluntarily and unreasonably underemployed and in
setting his support obligation at $209 per month. He claims that
he faces limited employment opportunities due to his criminal
background, which requires registration as a sex offender; that
he has no control over who hires him and at what wage; and that
the support award was not based upon his demonstrated ability to
pay. For the reasons discussed below, we reject Nunleys
arguments and affirm the agencys decision. Nunley also alleges
various errors by the superior court, claiming that it
incorrectly applied case law defining voluntary underemployment,
that it lacked a factual basis for its findings, and that its
decision intentionally omitted the procedural history of this
case. Since we independently review the departments decision,
and since these alleged errors relate to the factual and legal
sufficiency of CSEDs determination that Nunley was voluntarily
underemployed, it is unnecessary to separately address these
alleged errors by the superior court.12 Nunleys claim that CSED
erred by suspending his license during the pendency of his appeal
is mooted by our decision today which concludes his appeal.
A. The Department of Revenue Correctly Found that Nunley
Is Voluntarily and Unreasonably Underemployed.
Nunley argues that he is not voluntarily underemployed
and that CSED is requiring him to pay child support in excess of
his actual ability to pay. Because this court will not relieve a
noncustodial parent from his child support obligations absent an
affirmative showing that the obligor parent cannot meet this
obligation,13 Nunley bears the burden of proving that he cannot
pay $209 per month to support his child.
Parents have both a common law and a statutory duty to
support their children.14 A child support award is based upon a
parents total income and the number of children that must be
supported,15 and the support amount can be based upon a parents
potential income if he or she is found to be voluntarily and
unreasonably unemployed or underemployed.16 A calculation of
potential income must be based upon the parents work history,
qualifications, and job opportunities.17 A parent will be found
to be voluntarily unemployed or underemployed if he or she has
engaged in voluntary conduct for the purpose of becoming or
remaining unemployed or underemployed.18 The key inquiry is
whether the lack of employment is the result of economic factors
or of purely personal choices.19 Unemployment or underemployment
can be found to be voluntary even absent a finding that the
parent is acting in bad faith to purposefully avoid a child
support obligation,20 because the relevant inquiry under Civil
Rule 90.3 is simply whether a parents current situation and
earnings reflect a voluntary and unreasonable decision to earn
less than the parent is capable of earning.21
In determining that Nunley was voluntarily
underemployed, Revenue Hearing Officer Howard relied upon
Informal Hearing Officer Bergs entry in CSEDs computerized case
management system summarizing his meeting with Nunley. According
to this entry, Nunley claimed that he quit his construction job
after the state sent his employer a withholding order, he refused
to provide information to CSED, he threatened to leave the state
to avoid paying child support, and he admitted to owning assets
registered in the names of other people. During the formal
hearing, Nunley claimed that the statements ascribed to him by
Berg were a fabrication, but Nunleys counsel also acknowledged
that Berg might have misinterpreted some of Nunleys comments. In
support of his claim that he was unable to pay $209 in monthly
child support, Nunley submitted evidence regarding his employment
and earnings history. Revenue Hearing Officer Howard found that
Nunleys claims lacked credibility, particularly in light of
evidence showing that he owned a motorcycle that was registered
in his girlfriends name, that his mother and girlfriend paid for
many of his living expenses, and that he had applied for very few
jobs since 1994.
Nunley attacks the departments reliance on Bergs notes
from the informal conference because he alleges that they omit
evidence demonstrating that he is not voluntarily underemployed,
they misrepresent his statements about his willingness to support
his son, and they provide an insufficient factual basis to
support Howards finding of voluntary underemployment. We agree
that Bergs five-sentence summary of his meeting with Nunley is an
insufficient basis upon which to find that Nunley is voluntarily
and unreasonably underemployed, and we are also troubled by
Howards unquestioning reliance upon Bergs notes from the informal
conference. If Bergs notes provided the only evidence to support
the agencys findings we would reverse and remand for a new
hearing. But Howard based her decision upon other evidence that
Nunley was voluntarily underemployed, and this evidence is
substantial.
Our concern regarding Howards reliance upon Bergs notes
is based on Howards statement, in response to Nunleys claims that
Berg had either misinterpreted or misrepresented his comments,
that absent evidence sufficient to establish [Nunleys] claim is
more likely than not true, I will not enter a finding that a
state employee acted dishonestly in carrying out his official
duties many years ago. While it is appropriate to presume that
state employees have properly discharged their official duties,22
such a presumption is rebuttable.23 The paucity of the written
record from the informal hearing, combined with Bergs failure to
issue a written decision or notify Nunley of his right to appeal,
cast doubt upon the reliability of these notes and it was error
to rely upon them so heavily. Nonetheless, in light of Howards
specific finding that [o]ther evidence in the record supports the
finding that Mr. Nunley was, and is, voluntarily and unreasonably
underemployed, we hold that this error was harmless.24
The evidence of Nunleys voluntary underemployment was
substantial. His testimony at the formal hearing demonstrates
that he is capable of performing a wide range of physical labor,
including repairing equipment, loading and driving trucks,
operating farm machinery, stacking vegetables, cutting firewood,
feeding horses, grading potatoes, and baling hay, not to mention
performing construction labor. Moreover, that testimony provided
no reason why he is unable to obtain full-time employment. He
introduced no evidence of physical or mental incapacity.25 He
applied for only ten to fifteen jobs between 1994, when he was
allegedly laid off from his construction job, and the 2001 formal
hearing. While he claims that his criminal record prevents him
from obtaining full-time employment, he admitted that he does not
always disclose this information. His record did not prevent him
from obtaining employment in the construction industry in 1993 or
as a farm laborer in subsequent years. It appears that the
primary obstacle to Nunleys obtaining full-time employment is his
unwillingness to actively seek it. Indeed, we have previously
held that a parent need not even have an employment history in
order to impute income to him for child support purposes because
Civil Rule 90.3 only bars a finding of voluntary underemployment
in two situations: when the underemployed parent is physically or
mentally incapacitated or is caring for a child under two years
of age to whom the parents owe a joint legal responsibility.26 In
all other situations, the rule and our case law specifically
require courts to consider the totality of the circumstances to
decide whether income should be imputed.27 The record reflects a
history of seasonal employment. Because substantial evidence
supports the conclusion that Nunley could reasonably have
expected to find full-time employment to support his child, we
hold that CSED did not err in determining that he was
unreasonably underemployed.
B. The Amount of Income Imputed to Nunley Was Reasonable
Given his Skills, Education, and Experience.
Nunley also contests the amount of income imputed to
him by CSED and claims that it is unrealistic to assume that he
could earn $15,010 per year. In support of this argument he
cites language in Bendixen stating that the wording of Civil Rule
90.3 obviously presupposes that some prospect of earning income
or some opportunity to find employment actually exists.28 He also
cites Bostic v. State,29 in which this court overturned a child
support determination because the obligor parent did not have
notice that voluntary underemployment would be an issue at the
formal hearing and because the record did not support the hearing
officers determination that the parent could earn a salary of
$40,000.30 Nunleys reliance on these cases is misplaced. In
Bendixen, we held that an obligor parents incarceration did not
amount to voluntarily unemployment.31 Nunley was not incarcerated
at the time of the hearing and CSED did not rely on his criminal
history to support its finding of voluntarily underemployment.
And unlike the obligor parent in Bostic, Nunley knew that
voluntary underemployment would be at issue during the formal
hearing, and the income imputed to him was based upon his actual
earnings.
CSED increased Nunleys child support obligation from
$50 per month, the amount he was required to pay while he was
incarcerated, to $282 per month based upon his reported earnings
in the first quarter of 1994. This support amount was based upon
an extrapolated annual income of $15,010 and an obligation to
support two children. Informal Conference Officer Berg declined
to modify this amount following an informal conference with
Nunley in 1994, though the department later reduced the support
obligation to $209 per month after it determined that Nunley was
not the father of Vansia Nunleys daughter, Kiana. After a formal
hearing in 2001, Revenue Hearing Examiner Howard found that
Nunleys actual work history provided the best estimate of his
earning capacity and she affirmed CSEDs support obligation of
$209 per month based upon an annual income of $15,010. Deputy
Commissioner Persily noted that this income works out to just
$7.22 per hour on a forty-hour week, which is a reasonable wage
for someone of Nunleys age and experience. In fact, this hourly
wage is consistent with Nunleys reported hourly earnings as a
farm laborer and is only barely above Alaskas minimum wage of
$7.15 per hour.32
Nunley is a trained welder, and he has work experience
as an agricultural worker and laborer, carpenter, pipefitter, and
truck driver. While any imputation of income is somewhat
speculative, the department reasonably relied upon Nunleys actual
earnings to determine his potential income. Had CSED relied upon
reported earnings from a period when Nunley made a significantly
higher hourly wage than he had historically earned, or than he
could reasonably expect to earn in the future, Nunley might have
grounds to attack the support calculation. But he provides no
credible evidence to rebut CSEDs finding in this case that he is
capable of earning barely above minimum wage.
C. Nunleys Claim of Error for CSEDs Suspension of His
Drivers License Is Moot.
Nunley also argues that the superior court erred in
denying his motion to stay the suspension of his drivers license
pending the outcome of his appeal of his child support order.33
This claim is moot because our holding today concludes Nunleys
appeal.
V. CONCLUSION
Because the record supports the finding that Nunley is
voluntarily underemployed, and because the department imputed a
reasonable annual income to Nunley to determine his child support
obligation, we AFFIRM the decision of the superior court.
_______________________________
1 See AS 18.50.160(d) (presumption of paternity applies
to mothers husband at time of birth). It was later proven that
Nunley is not Kianas father, so support for Kiana is not an issue
in this appeal.
2 See former 15 Alaska Administrative Code (AAC) 05.020
(1994) (review officer shall promptly issue written decision).
3 15 AAC 05.030 (describing process to request formal
agency hearing).
4 CSED has authority to suspend a persons drivers license
for nonpayment of child support. AS 25.27.246.
5 This statute provides that [u]pon the motion of an
obligor, the agency may, at any time, vacate an administrative
support order issued by the agency . . . that was based on a
default amount rather than on an obligors actual ability to pay.
6 15 AAC 05.030(h).
7 Crivello v. State, 59 P.3d 741, 744 (Alaska 2002).
8 Handley v. State, Dept of Revenue, 838 P.2d 1231, 1233
(Alaska 1992).
9 Id. (quoting Keiner v. City of Anchorage, 378 P.2d 406,
411 (Alaska 1963)).
10 Id.
11 Alaska Ctr. for the Envt v. State, 80 P.3d 231, 236-37
(Alaska 2003); Palmer v. Municipality of Anchorage, Police & Fire
Ret. Bd., 65 P.3d 832, 837 (Alaska 2003).
12 See VECO Intl, Inc. v. Alaska Pub. Offices Commn, 753
P.2d 703, 708 (Alaska 1988) (holding that this court directly
reviews merits of administrative determination, except to extent
that superior court held supplemental evidentiary proceedings;
and noting that petitioner must demonstrate error by agency, not
superior court).
13 Kowalski v. Kowalski, 806 P.2d 1368, 1371 (Alaska 1991)
(quoting Houger v. Houger, 449 P.2d 766, 769-70 (Alaska 1969)).
14 AS 25.20.030; Matthews v. Matthews, 739 P.2d 1298,
1299 (Alaska 1987) (superseded by rule on other grounds, as
recognized in Vachon v. Pugliese, 931 P.2d 371 (Alaska 1996)).
15 Alaska R. Civ. P. 90.3(a).
16 Alaska R. Civ. P. 90.3(a)(4); 15 AAC 125.020(b).
17 Id.
18 Bendixen v. Bendixen, 962 P.2d 170, 172 (Alaska 1998).
19 Vokacek v. Vokacek, 933 P.2d 544, 549 (Alaska 1997).
20 Kowalski v. Kowalski, 806 P.2d 1368, 1371 (Alaska
1991).
21 Beaudoin v. Beaudoin, 24 P.3d 523, 528 (Alaska 2001).
22 See Brigman v. State, 64 P.3d 152, 158 (Alaska App.
2003).
23 See Finkelstein v. Stout, 774 P.2d 786, 790 (Alaska
1989).
24 See Hayes v. Bering Sea Reindeer Prods., 983 P.2d 1280,
1283 (Alaska 1999) (error harmless unless prejudicial).
25 Alaska Civil Rule 90.3(a)(4) prohibits the imputation
of income for a parent who is physically or mentally
incapacitated. In this appeal, and for the first time in this
case, Nunley alleges that he has a hernia, which severely limits
his job opportunities. Because Nunley did not raise this claim
during the administrative proceedings it is not preserved for
appeal and is waived. Southwest Marine, Inc. v. State, Dept of
Transp. & Pub. Facilities, Div. of Alaska Marine Highway Sys.,
941 P.2d 166, 179 (Alaska 1997).
26 Beaudoin, 24 P.3d at 528.
27 Id. (citing Alaska R. Civ. P. 90.3 cmt. III.C).
28 Bendixen v. Bendixen, 962 P.2d 170, 172 (Alaska 1998).
29 968 P.2d 564 (Alaska 1998).
30 Id. at 569-70.
31 Bendixen, 962 P.2d at 172-73.
32 AS 23.10.065.
33 Both the superior court and this court have the
authority to stay the operation of a CSED decision pending
appeal. AS 25.27.220(f) and (h).
