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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. State, Dept. of Revenue v. Wallace (09/02/2005) sp-5938

State, Dept. of Revenue v. Wallace (09/02/2005) sp-5938

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     publication  in  the  Pacific  Reporter.   Readers  are
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OF REVENUE, ) Supreme Court No. S- 11552
) Superior Court No.
v. ) 1KE-94-43 DR
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
          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
          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
     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

     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

     8    881 P.2d 318 (Alaska 1994).

     9     See Civil Rule 90.3 Commentary  10; see also 42 U.S.C.

     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.