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State, Dept. of Revenue v. Wallace (09/02/2005) sp-5938
State, Dept. of Revenue v. Wallace (09/02/2005) sp-5938
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
| STATE OF ALASKA, DEPARTMENT
| ) |
|
OF REVENUE, | ) Supreme Court No. S-
11552 |
|
| ) |
|
Appellant, | ) |
|
| ) Superior Court
No. |
|
v. | ) 1KE-94-43
DR |
|
| ) |
|
DARRYL J. WALLACE, | ) O P I N I O
N |
|
| ) |
|
Appellee. | ) [No. 5938 - September 2,
2005] |
|
| ) |
|
|
|
|
Appeal from the Superior Court of the State
of Alaska, First Judicial District,
Ketchikan, Michael Thompson, Judge.
Appearances: Susan L. Daniels, Assistant
Attorney General, Anchorage, Gregg D. Renkes,
Attorney General, Juneau, for Appellant.
Omar P. Calimbas, Alaska Legal Services
Corporation, Juneau, for Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
MATTHEWS, Justice.
In 1994 Darryl Wallace was ordered to pay child support
at the rate of $50 a month until, in the words of the support
order, he is released [from prison] and obtains employment then
Civil Rule 90.3 will be in effect. Another provision of the
order similarly stated that [c]hild support will increase when he
is released from jail and obtains employment. Wallace was
released from prison and began earning wages in 1997, but
initially neither the mother nor the Child Support Services
Division (CSSD) tried to obtain more child support from Wallace.
It was not until 2004 that CSSD moved to make Wallace liable for
increased support. CSSDs motion sought increases not only in
future support payments, but also for back child support for the
period 1997-2004 when Wallaces higher income would have supported
higher payments under the income formulas in Civil Rule 90.3.
Wallace argued in response that he could not be liable for
support increases for any period prior to CSSDs motion, because
an increase would be contrary to the $50 obligation in the
original support order, which could not be modified
retroactively, per Civil Rule 90.3(h)(2). The superior court
agreed, and rejected making the increase effective before the
date of CSSDs motion to enforce. CSSD, through the Department of
Revenue, appeals. We believe the original order expired by its
terms when Wallace was released in 1997, and that therefore
neither the order nor Rule 90.3(h)(2) should prevent the superior
court from awarding back child support. We therefore reverse.
This appeal turns on the significance of the 1994
order, which is an issue of law reviewed de novo.1 Civil Rule
90.3(h)(2) states:
No Retroactive Modification. Child
support arrearage may not be modified
retroactively, except as allowed by AS
25.27.166(d) [i.e., where paternity is
disestablished, circumstances not present
here]. A modification which is effective on
or after the date that a motion for
modification, or a notice of petition for
modification by the Child Support Services
Division, is served on the opposing party is
not considered a retroactive modification.
The part of the rule that says that a [c]hild support arrearage
may not be modified retroactively has been taken to mean that
CSSD cannot collect back child support for payments different
from any amounts prescribed in the original child support order,
even in cases where the obligation is sought to be increased
rather than decreased.2 Wallaces argument is that the original
child support order required him to pay $50 indefinitely, that
references to his release from prison merely anticipated that
CSSD would move for modification of the order at that time, and
that CSSD has attempted to collect back child support in
contravention of the order. In response, CSSD argues that the
order lapsed upon Wallaces release from prison and does not
preclude its motion to collect back child support from Wallace
based on his higher income for the period 1997-2004.
We agree that the original support order applied only
so long as Wallace was in prison, and that the order does not
preclude increases covering the period following his release.
Rule 90.3(h)(2) applies only to attempts to modify a pre-existing
order; it does not prevent attempts to collect back child support
for periods not covered by any order.3 The key issue is
therefore whether the original order expired when Wallace was
released from prison and got a job (in which case the superior
court could impose a retroactive obligation as of that date
without regard to the order), or whether instead Wallace is right
that the order contained an indefinite $50 obligation, and that
the will increase language merely anticipated a future motion by
CSSD to increase the obligation when Wallace was released (in
which case any increases could go back only as far as CSSDs 2004
motion). Wallaces reading of the order has some plausibility, but
we reject it for two reasons. First, it would rely on an
inadvertent slip-up to work a forfeiture of support-obligation
increases plainly intended by all involved when the order was
first entered. The rule against retroactive modification was
designed primarily to prevent obligor parents from arguing that
their support arrearages should not be collected because the
obligation should have been lower in the first place.4 Although
we appreciate (as we have already noted) that the rule by its
terms also applies to attempts by the custodial parent to
retroactively increase the obligor parents support obligations,5
we are less willing to give obligor parents the benefit of the
doubt in construing support orders where doing so would help the
obligor parent avoid supporting his or her children to the extent
permitted by that parents resources.6 Second, we think Wallaces
reading of the order is less persuasive than CSSDs, especially in
light of our reluctance to short-change Wallaces daughter. The
order does not say that Wallaces support obligation may increase,
or that it can be increased on CSSDs motion the order says that
the obligation will increase, and that Wallaces obligation to pay
$50 lasts only until he is released and gets a job.7 This might
imply an automatic increase, yet instead the order says that [n]o
automatic increases in child support are ordered. Reading these
provisions together, we understand the order as requiring Wallace
to pay $50 only until he left prison and got a job, and that the
order no longer applied at all when those conditions ceased to
exist.
In Karpuleon v. Karpuleon we discussed the question of
whether prospective modifications, suspensions, or terminations
written into child support agreements are prohibited retroactive
modifications.8 This question implicated federal law, insofar
as Rule 90.3(h)(2) was intended to restate and comply with a
federal statute prohibiting retroactive modification of child
support arrearages.9 We quoted the following response of the
Department of Health and Human Services to public comments to
proposed regulations issued under the federal statute:
Federal law and regulations do not
preclude the States from having laws that
permit automatic prospective suspension or
prospective termination upon the development
of specific circumstances such as the
emancipation or death of a child. Such
modifications by operation of law upon the
occurrence of an event known to both parties,
if applicable generally to all child support
orders in the State, would not appear to
contradict the intent of the law.[10]
We held in Karpuleon that an agreement that specified that if the
parties child moved in with the non-custodial spouse, the
custodial spouse would pay support to her, rather than vice
versa, was a permitted prospective automatic termination and
shifting of the obligation because the details of when it would
occur were sufficiently clear that the parties should be held to
their agreement.11 We also noted that to the extent our decision
becomes binding precedent, it will meet the contemplated
requirement of being applicable to all child support orders in
the State where similar circumstances exist.12 We concluded by
stating:
Policy considerations may have dictated a
different result if the agreement had not
been in writing, or had the timing of the
childs change in residence been more
nebulous. However, in reaching our decision,
we are merely upholding the written agreement
between the parties, as incorporated into the
decree of dissolution. We also note that our
decision will not cause a retroactive
modification of the support obligation, but
will merely enforce the shifted obligation,
as contemplated in the written agreement.[13]
Here, as with the prospective modification in Karpuleon, the
circumstances giving rise to the prospective termination release
from prison and subsequent employment seem sufficiently specific
and clear. Further, given the precedential effect of this
decision, these circumstances will meet the generally applicable
standard mentioned in the federal commentary. We conclude
therefore that treating this order as providing for prospective
termination does not violate the federal policies underlying the
ban on retroactive modifications.
Once it is established that the order expired, Duffus
v. Duffus makes it clear that Civil Rule 90.3(h)(2) does not
preclude CSSDs motion to seek higher support obligations for the
period following this expiration.14 We therefore REVERSE that
part of the superior courts order that rejects CSSDs attempt to
collect higher support obligations for the period preceding CSSDs
motion. We REMAND the case for proceedings to determine what
support obligations Wallace should owe based on his income during
the period following his release from prison and commencement of
employment.
_______________________________
1 Duffus v. Duffus, 72 P.3d 313, 316 (Alaska 2003);
Crayton v. Crayton, 944 P.2d 487, 489 n.1 (Alaska 1997).
2 See, e.g., Alaska R. Civ. P. 90.3 cmt. X(B); Yerrington
v. Yerrington, 933 P.2d 555, 558 (Alaska 1997) (Although the
plain language of the rule applies only to arrearages, we have
held that, appropriately interpreted, this rule prohibits both
retroactive decreases and increases in child support awards prior
to the date the modification motion is served on the opposing
party.).
3 Duffus, 72 P.3d at 320-21.
4 Rule 90.3(h)(2) is intended to restate a federal
statute prohibiting retroactive modification of child support
arrearages. See Alaska R. Civ. P. 90.3 cmt. X(B); see also 42
U.S.C. 666(a)(9). The Federal Register notice that accompanied
issuance of the regulations implementing this statute explains
the impetus for the retroactivity rule:
The vast majority of such retroactive
modifications when they occurred had the
effect of reducing the amount of child
support ordered. Thus, for example, an order
for $200 a month for child support, which was
unpaid for 36 months, should accumulate an
arrearage of $7,200. Yet, if the obligor was
brought to court, having made no prior
attempt to modify the order, the order might
be reduced to $100 a month retroactive to 36
months prior to the date of modification.
This has the effect of reducing the arrearage
from $7,200 to $3,600. The order could be
reduced without placing any diligence
requirement on the absent parent to petition
in a timely manner to reduce the order, if
for some reason his or her ability to comply
with the order had changed. Such laws further
permitted arguments to be made about changed
circumstances in prior periods at a time when
evidence may not have been easily attained or
available. Rebuttal by the obligee, thus, was
extremely difficult.
Prohibition of Retroactive Modification of Child Support
Arrearages, 54 Fed. Reg. 15,758 (1989).
5 Yerrington, 933 P.2d at 558; Boone v. Gipson, 920 P.2d
746, 749 (Alaska 1996).
6 See Alaska R. Civ. P. 90.3 cmt. I(B) (The primary
purpose of Rule 90.3 is to ensure that child support orders are
adequate to meet the needs of children, subject to the ability of
parents to pay.).
7 The original order explained that it departed from the
Civil Rule 90.3 formula for calculating child support because
Darryl is currently in jail and has no income. He agrees to pay
$50.00 a month until he is released and obtains employment then
Civil Rule 90.3 will be in effect. (Emphasis added.) Similar
language was used in the part of the order explaining why there
would be no income withholding: Darryl has no income and has
agreed to pay $50.00 a month. Child support will increase when
he is released from jail and obtains employment. (Emphasis
added.)
8 881 P.2d 318 (Alaska 1994).
9 See Civil Rule 90.3 Commentary 10; see also 42 U.S.C.
666(a)(9).
10 Karpuleon, 881 P.2d at 321 (quoting Prohibition of
Retroactive Modification of Child Support Arrearages, 54 Fed.
Reg. 15,761).
11 Id. at 321.
12 Id. at 321.
13 Id. at 321-22.
14 72 P.3d at 320-21.
