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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Miller v. Clough (08/17/2007) sp-6148
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
| GLENN H. MILLER, | ) | |
| ) Supreme Court Nos. S- 11908/12108 | ||
| Appellant, | ) (Consolidated | ) |
| ) | ||
| v. | ) Superior Court No. 1JU-01-325 CI | |
| ) | ||
| MARIAN J. CLOUGH, formerly | ) | |
| known as MARIAN J. MILLER, | ) | |
| ) | ||
| Appellee. | ) | |
| ) O P I N I O N | ||
| MARIAN L. CLOUGH, formerly | ) | |
| known as MARIAN J. MILLER, | ) No. 6148 - August 17, 2007 | |
| ) | ||
| Appellant, | ) | |
| v. | ) | |
| ) | ||
| GLENN H. MILLER, formerly | ) | |
| known as GLENN J. MILLER, | ) | |
| ) | ||
| Appellee. | ) | |
| ) | ||
Appeal from the
Superior Court of the State of Alaska, First
Judicial District, Juneau, Patricia A.
Collins, Judge.
Appearances: Loren Domke, Loren Domke, P.C.,
Juneau, for Glenn Miller, Appellant/Appellee.
Deborah A. Holbrook, Juneau, for Marian
Clough, Appellee/Appellant.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, and Bryner Justices. [Carpeneti,
Justice, not participating.]
BRYNER, Justice.
I. INTRODUCTION
This appeal requires us to interpret Alaska Civil Rule
90.3(a)(4), which allows courts to impute potential income to a
voluntarily underemployed parent in calculating the parents child-
support obligation. The main issue presented is whether a
divorced parents remarriage to a person of wealth allows the new
spouses assets to be counted as potential income under this rule
if the parent remains underemployed. Because Rule 90.3(a)(4)
directs courts to consider only work history, qualifications, and
job opportunities in determining how much potential income should
be imputed, we conclude that the rule does not allow a new
spouses wealth to be counted as potential income of the remarried
parent. We therefore affirm the superior courts order denying
Glenn Millers attempts to pursue this theory through motions for
discovery and modification of his child-support obligation. We
also affirm the superior courts order denying Marian Cloughs
motion for attorneys fees. But we remand the case with
directions to correct three inaccuracies in the method used to
calculate the parties support.
II. FACTS AND PROCEEDINGS
Glenn Miller and Marian Clough divorced in 2001 and
shared equal custody of their children. In January 2002 the
superior court ordered Glenn to pay $356.38 per month in child
support. In calculating the amount of this award, the court
determined that Marian was voluntarily underemployed; it imputed
potential annual earnings to her of $52,700. In August 2002
Marian married John Clough. Glenn did not remarry but has lived
with another woman since August 2003.
In late 2004 the parties eighteen-year-old daughter
Gwenn began living with Glenn full-time. Soon after, Glenn filed
a pro se motion to modify the original custody order by awarding
full custody of Gwenn to him; he also moved for a corresponding
change in his child-support obligation.
In early 2005 Glenn now represented by counsel filed
a second motion to modify child support, arguing that his support
obligation should be modified not just because Gwenn was living
with him but also because Marian should have additional income
assigned to her by reason of her re-marriage to a wealthy second
husband. According to Glenn, Marians marriage to Clough gave her
access to her new spouses wealth and income, so the new income
should be imputed as potential income available to Marian, who
remained underemployed. In his reply to Marians opposition,
Glenn further asked the court for discovery of the Cloughs
household income, seeking production of their last three federal
income tax and trust returns as well as permission to depose the
Cloughs concerning their income and assets.
After hearing oral argument by the parties, Superior
Court Judge Patricia A. Collins issued an oral decision on the
record on March 17, 2005. The judge began by noting that Glenn
had effectively withdrawn his motion seeking custody of Gwenn by
acknowledging in reply to Marians opposition to that motion that
the court no longer had jurisdiction over Gwenns custody, since
Gwenn had already turned eighteen and was no longer a minor.
Judge Collins next addressed Glenns motion to impute
potential income to Marian based on her new spouses wealth. The
judge first determined that Marians remarriage did not qualify as
a changed circumstance warranting modification. Because
potential income had already been imputed to Marian under Rule
90.3(a)(4) before she remarried, the judge ruled that her
remarriage did not by itself justify a reexamination of her
potential income.
The judge nonetheless observed that the support award
might still be modified under Rule 90.3(c)s provision allowing
courts to deviate from the amount of support required under Rule
90.3(a) if unusual circumstances would make an award under [Rule
90.3(a)] unjust. But Judge Collins interpreted Rule 90.3(c)s
unusual circumstances exception narrowly, noting that the
commentary on this exception emphasizes that a variance
ordinarily will be justified only by clear and convincing
evidence that manifest injustice would result if the support
award were not varied.1 The judge further pointed to commentary
specifically stating that, although either party may attempt to
show that unusual circumstances justifying a variance exist in a
particular case, the income of a new spouse will not normally
warrant a variation.2 While acknowledging that the commentary
also mentions that a parent who does not work because of a new
spouses income may be assigned potential income,3 the judge
interpreted this as a reference to Rule 90.3(a)(4)s provisions
governing unemployment and underemployment, not as a suggestion
that a new spouses income should routinely be deemed an unusual
circumstance warranting a variance under Rule 90.3(c).
In the present case, potential annual income was
already imputed to Marian under Rule 90.3(a)(4) in the original
child-support order, which had been entered before Marians
remarriage. Judge Collins thus inquired whether Marians new
husbands wealth should be deemed to increase her imputed earning
potential under Rule 90.3(a)(4). Because this rule directs
courts to consider only work history, qualifications and job
opportunities when determining how much potential income to
impute to an underemployed parent,4 the judge reasoned that a new
spouses wealth could not alter the calculation of imputed income
under Rule 90.3(a)(4); rather, it could only be considered to
decide whether potential income should be imputed a decision
that had already been made in Marians case.
In Judge Collinss view, then, John Cloughs wealth would
justify reexamining the original child-support order only if
Glenn could specifically show that Marians access to the wealth
increased her actual income or required a variance from the
amount of support originally ordered to avoid manifest injustice.
Relying on this interpretation, Judge Collins rejected Glenns
core argument that John Cloughs income should be deemed to
enhance Marians potential earnings, finding this argument to be
inconsistent with Rule 90.3 and its commentary. In the courts
view, Glenn had not remotely established a prima facie case that
unusual circumstances would make application of the 90.3(a)(4)
formula, as reflected in the 2001 child-support calculations,
manifestly unjust.
Judge Collins went on to consider whether Glenn was
entitled to an order allowing him to pursue discovery of John
Cloughs income in order to develop a more persuasive unusual
circumstances argument. Given the intrusive nature of the
discovery request and the fact that it implicated the privacy
rights of a person who had no child-support obligation, the judge
suggested that, as a general matter, some threshold showing of
actual need should be required before discovery of this kind
would be allowed. At a minimum, the judge noted, she would be
willing to consider allowing such discovery only if both parties
agreed to provide income information concerning their domestic
partners.
Judge Collins then addressed the specifics of Glenns
request for discovery of Cloughs financial information. Given
her ruling that the information had no direct bearing on the
method for calculating Marians potential income under Rule
90.3(a)(4), the court focused on whether discovery should be
allowed to assist Glenn in determining whether unusual
circumstances warranted modification under Rule 90.3(c). The
judge noted that the court did not have a specific request before
[it] addressing this theory and was therefore unable to rule on
the issue. Judge Collins nonetheless encouraged counsel for both
parties to work out some mutually agreeable discovery method for
exploring a possible claim of unusual circumstances under
Rule 90.3(c), noting that Glenn could file an appropriate motion
if the parties were unable to settle any discovery disputes on
their own.
Judge Collins then briefly addressed the only
modification request that remained unresolved: Glenns motion to
modify support in light of Gwenns changed living arrangement.
The judge began by advising the parties that, as matters then
stood, she did not expect to award attorneys fees to either side
for work done to that point. The judge then invited each party
to submit proposed recalculations of support reflecting Gwenns
new living arrangements.
Several days after entering her oral decision, Judge
Collins issued a written order supplementing her on-record
ruling. The order confirmed that the court had deemed Glenn to
have withdrawn his motion for custody of Gwenn because she was no
longer a minor. It also determined that Marians remarriage to
John Clough did not by itself establish exceptional circumstances
warranting departure from the Rule 90.3(a)(4) support calculation
employed by [the] court in calculating support in 2001. Last,
the order ruled that the parties support obligations would be
recalculated in light of Gwenns move to her fathers home.
Glenn moved for clarification and asked the court to
set aside the orders effective date pending discovery of the
Cloughs household income. Glenns motion asserted that, despite
its refusal to impute household income to Marian, the court had
allowed discovery of the Cloughs income tax records and other
documents. Marian opposed Glenns motion, arguing that there was
no discovery issue properly before the court and none was decided
and that the court has ruled that the fact that Marian Clough has
married the man she was cohabiting with in 2001 does not
establish exceptional circumstances warranting departure from the
support calculation employed by the court in 2001.
Glenn then filed a motion for discovery, asking the
court to authorize disclosure of various financial records that
he had requested from the Cloughs, including copies of their
federal income tax and trust income tax returns for 2004 and
copies of any separation agreement, prenuptial agreement, or post-
nuptial agreement between them. Glenn asserted that he had
requested this discovery under Civil Rule 90.3(c)(1)[ ] [the
unusual circumstances exception to Rule 90.3(a)] in order that
household income of the Cloughs should be considered in setting
current child support. Glenns motion also disclosed that Mr.
Millers significant other, Joan Thompson, provided a copy of her
current year-to-date pay statement and her 2004 federal income
tax return to the Cloughs. The motion claimed that in its oral
decision, the court had opined that it would allow discovery but
insisted that it should be reciprocal.
In response to Glenns motion for clarification, Judge
Collins issued an order making it clear that, in the judges view,
no discovery motion was pending before the court and the court
had not refused to impute income to Marian. Judge Collins
summarized the status of the case as follows:
The court did impute income to Ms. Clough in
2001. The court did reject Mr. Millers
argument that a new spouses income should
always be added to the obligor parents income
(or imputed income, as here) to determine
child support and that remarriage, standing
alone, is a significant change in
circumstance. The court indicated that Mr.
Miller is free to conduct discovery to
determine if Ms. Clough derives any income
now that is greater than that which was
imputed to her in the 2001 order.
By separate order, Judge Collins denied Glenns motion
for an order authorizing discovery of the Cloughs financial
records, ruling that Glenns motion for discovery is, at best,
premature; the order nonetheless noted that Glenn remained free
to make an informal request for this information under Civil Rule
90.3(e)(2) a provision authorizing parties involved in child-
support proceedings to informally request and obtain financial
information from each other.5
Meanwhile, both Glenn and Marian had submitted child-
support affidavits and worksheets setting out their proposed
recalculations of child support based on Gwenns change of
residency. The parties proposals differed as to the proper
amount of deductions to be used in determining the parties
adjusted annual incomes. The superior court ultimately accepted
Marians proposed calculations, which resulted in an order
requiring Glenn to pay Marian $37 per month for March, April, and
May 2005 (the period from the date of the order until Gwenns
graduation from school terminated the parties duty of support);
after that, Glenn was to pay Marian $504 per month for the two
children remaining with her.
Marian then moved for attorneys fees, arguing that she
was the prevailing party because Glenn had filed at least seven
separate motions seeking to reduce his child-support obligation,
all of which had been denied or struck. Marian also claimed that
she deserved an enhancement of her fee award under Civil
Rule 82(b)(3), alleging that Glenn had failed to minimize his
fees, had pursued unreasonable claims, and had engaged in
vexatious and bad faith conduct.
The superior court denied Marians motion, noting that
both parties had prevailed on certain aspects of the support
dispute Marian on important support-related issues, including
whether remarriage automatically requires recalculation of child
support, and Glenn on his request to lower his child-support
obligation in light of Gwenns decision to live full-time with
him.
Both parties appeal.
III. DISCUSSION
A. Glenns Appeal
1. Refusal to impute income to Marian based on her
new spouses wealth
Glenn argues that the superior court erred in declining
to consider the wealth of Marians new spouse in calculating her
child-support obligation. He relies chiefly on Rule 90.3(a)(4),
which allows courts to impute potential income to an unemployed
or underemployed parent:
The court may calculate child support based
on a determination of the potential income of
a parent who voluntarily and unreasonably is
unemployed or underemployed. A determination
of potential income may not be made for a
parent who is physically or mentally
incapacitated, or who is caring for a child
under two years of age to whom the parents
owe a joint legal responsibility. Potential
income will be based upon the parents work
history, qualifications, and job
opportunities. The court also may impute
potential income for non-income or low income
producing assets.[6]
As previously mentioned, the superior court keyed on
the language in this provision that directs courts to base their
calculation of potential income upon the parents work history,
qualifications, and job opportunities.7 Glenn insists that the
court interpreted this language too narrowly, contending that the
court should have considered the totality of the circumstances in
deciding how much potential income should be imputed to Marian.8
Glenn points out that in 2002, before Marian remarried,
the superior court determined that she was voluntarily
underemployed and had the ability to earn a potential annual
income of $52,700. Glenn further notes that by 2005, when Glenn
moved to modify child support, Marian was married to John Clough
and continued to be underemployed. In Glenns view, Marians
situation had changed because her new spouse is a person of
significant income and wealth, which, according to Glenn, enables
Marian to enjoy an affluent lifestyle. Given these
circumstances, Glenn reasons, Cloughs wealth must be regarded as
a factor enhancing Marians potential income under Rule 90.3.
Glenn bolsters this argument by citing our decision in
Beaudoin v. Beaudoin,9 as well as the commentary to Rule 90.3.10
In Beaudoin, we noted that both Rule 90.3(a)(4) and our case law
specifically require courts to consider the totality of the
circumstances to decide whether income should be imputed.11 In
making this point, Beaudoin referred to the commentary to Rule
90.3(a)(4), which observes that [t]he court shall consider the
totality of the circumstances in deciding whether to impute
income.12
Glenn further points to the commentary to Rule
90.3(c)(1) the unusual circumstances exception noting that the
commentary expressly recognizes that [a] parent who does not
work because of the income of a new spouse (or other person in
the household) may be assigned a potential income.13 In addition,
Glenn cites case law from other states.14 Glenn claims that,
because Marian Cloughs imputed annual income of $52,700 is belied
by her affluent lifestyle, the superior court abused its
discretion in failing to examine how Marian actually lives and
her actual expenditures since she remarried.
In response, Marian rejects Glenns claim that the
superior court refused to consider her potential income under
Rule 90.3(a)(4), insisting that the court properly applied this
rule in the original child-support order by imputing annual
income to her of $52,700. Marian describes Glenns proposed
totality of the circumstances approach to Rule 90.3(a)(4) as
fundamentally inconsistent with Alaska law. Pointing to the
plain language of Rule 90.3(a)(4) and case law applying the
provision, Marian argues that Alaska courts have uniformly upheld
the principle that the earning potential of the parent must be
the basis for any child support award.
We agree with Marians understanding of Rule 90.3. The
plain language of Rule 90.3(a)(4) unambiguously directs that
[p]otential income will be based upon the parents work history,
qualifications, and job opportunities.15 This language does not
recognize any other permissible criteria to be used in
calculating the amount of potential income to be imputed to an
unemployed or underemployed parent under Rule 90.3(a)(4). Nor
does the commentary to Rule 90.3 advance Glenns totality of the
circumstances theory. The commentary to Rule 90.3(a)(4) confirms
the rules express language declaring that work history and other
related criteria will be the basis for calculating potential
income.16 The same commentary also observes that courts should
consider the totality of the circumstances in deciding whether to
impute income.17 But this observation addresses only the manner
in which they should make the threshold decision whether to
impute potential income to an underemployed parent, not the
manner in which they should determine the amount of potential
income to impute once the initial decision to impute has been
made. In effect, then, as Judge Collins correctly recognized,
this commentary directs courts to the language of Rule 90.3(a)(4)
for purposes of deciding how much potential income to impute.
Beaudoin v. Beaudoin aligns with this view. There, we
were required to decide whether potential income should be
imputed to a parent who had previously been her childrens primary
caregiver and had never held a paying job.18 We applied the
totality of the circumstances approach to decide this threshold
issue.19 We did not suggest that the totality of the
circumstances approach could be applied in determining the amount
of an underemployed parents potential income once the decision to
impute had been made.
Here, the superior court properly determined that Glenn
had failed to establish grounds for imputing more potential
income to Marian than the court had already found appropriate in
2001. On this point, Glenn essentially claimed that Marians
remarriage to a wealthy person amounted to a prima facie showing
that Marians potential income had increased. But in our
judgment, the superior court properly concluded that the language
of Rule 90.3(a)(4) bars direct reliance on a new spouses wealth
as evidence of increased earning potential.
The court also correctly recognized that Glenn could
have but had not moved to modify his support on the ground that
Cloughs wealth resulted in unusual circumstances justifying a
variance under Rule 90.3(c)(1). While Glenns discovery motion
belatedly mentioned this theory, it inaccurately claimed that the
theory had been raised in his earlier motion for modification.
Actually, Glenn had previously disclaimed reliance on the unusual
circumstances exception. Indeed, during the March 17, 2005,
proceeding in which Judge Collins issued her on-record denial of
Glenns motion for modification, Glenn expressly stated that his
motion was based exclusively on the potential income language of
Rule 90.3(a)(4).
Because the superior court correctly interpreted Rule
90.3(a)(4) to bar direct consideration of a new spouses wealth as
a basis for determining the amount of potential income to impute
to a remarried parent and also correctly recognized that Glenns
earlier motion sought modification solely on this basis, we
conclude that the court did not err in denying Glenns motion to
modify support in light of Marians remarriage to Clough.
2. Denial of Glenns motion for discovery
Glenn separately argues that the superior court erred
in denying his discovery motion. He claims that he was entitled
to discovery both under Civil Rule 26(b)(1), which generally
allows discovery of any relevant information,20 and under Rule
90.3(e), which specifically requires parties to a child-support
proceeding to produce statements of income with verifying
documentation.21 Glenn asserts that he was entitled to this
discovery in order to pursue an argument under Rule 90.3(c)(1)
that unusual circumstances justified varying Marians imputed
income as originally determined under Rule 90.3(a)(4).22
As we have seen, however, Glenn did not move to modify
his support on this basis, and, indeed, before moving for
discovery on this theory, he had disavowed reliance on Rule
90.3(c)(1)s unusual circumstances exception. Given these
circumstances, the superior court did not abuse its discretion in
declining to allow Glenn to raise this new theory in the
proceedings involving Glenns pending motion for modification
after the court had already ruled on and correctly denied that
motion under the theory that Glenn had originally pled. As the
superior court observed in refusing to order discovery, Glenns
motion for discovery on this unpled theory was at best,
premature.23 We thus uphold the superior courts discovery ruling.
3. Disputed items of adjusted annual income
Although the superior court denied Glenns motion to
modify child support on the basis of Marians new spouses wealth,
it granted his separate motion to modify support because of
Gwenns decision to live in Glenns home. The court directed the
parties to submit proposed child-support calculations reflecting
this change. In May 2005, after both parties filed DR-305 child-
support worksheets and affidavits, the court issued a modified
support order adopting Marians figures. Glenn challenges three
items in the superior courts calculations of the parties adjusted
annual income, all of which the court derived from Marians
worksheets.24
a. Glenns income tax liability
Glenn first contends that the superior court
underestimated his annual federal tax liability by adopting
Marians figures. Marians child-support worksheet projected
Glenns 2005 federal income tax liability from the estimated taxes
withheld from his January 2005 earnings. This method yielded an
annual tax liability of $3,311. By contrast, Glenns child-
support worksheet used the taxes Glenn had actually paid on the
similar wages in 2004; this resulted in a projected tax liability
of $4,780.
Glenn asserts that his withheld taxes underestimated
his actual tax liability because he was under-withholding and
that the taxes he actually paid in 2004 provide the most accurate
basis for estimating his 2005 taxes. Because the record provides
no indication that his tax liability would substantially decline
in 2005, Glenn reasons that the court should have used his
proposed calculations.
In support of his argument, Glenn cites Bergstrom v.
Lindback.25 In Bergstrom the superior court used withholding
figures instead of actual income tax liability to calculate
Bergstroms adjusted annual income for purposes of determining his
child-support obligation.26 We reversed, ruling that the court
should have relied on Bergstroms history of actual tax payments:
The amount of taxes withheld by an
employer may or may not reflect a taxpayers
actual tax liability. Although Civil Rule
90.3(a)(1)(A) refers to mandatory deductions
for federal income tax, we believe that
Bergstroms actual tax liability under
existing Internal Revenue Service
regulations, rather than the amount withheld,
is the proper basis for determining the
amount to be deducted from his income.
Therefore, the trial court erred in reducing
[Bergstroms] adjusted annual income by the
amount withheld rather than his actual tax
liability.[27]
Marian does not dispute the accuracy of Glenns 2004 tax
liability as a predictor of his future liability; instead, she
contends that it was not clearly erroneous for the superior court
to find that Glenns paycheck tax withholdings were an acceptable
measure of his 2005 tax liability. Marian points to a footnote
in Bergstrom in which we described evidence presented at trial
indicating that Bergstroms employer had made an error in
calculating the amount of taxes withheld from his wages.28 Marian
suggests that our ruling in Bergstrom hinged on this evidence,
and did not establish a general rule disfavoring use of withheld
taxes as an acceptable measure of future tax liability.
We disagree with Marians narrow reading of Bergstrom.
Our decision in Bergstrom recognized that [t]he amount of taxes
withheld by an employer may or may not reflect a taxpayers actual
tax liability.29 Given the general unreliability of withholding,
we declared that actual tax liability under existing Internal
Revenue Service regulations, rather than the amount withheld, is
the proper basis for determining the amount to be deducted from
[Bergstroms] income.30
Here, Glenn provided the superior court with his actual
tax liability on comparable wages for 2004, along with rate
schedules for his income level and taxpayer status. Marian
provided no information indicating that Glenns actual 2004 tax
liability would not accurately approximate his current and future
tax liabilities. Given these circumstances, we conclude that
Bergstrom required Glenns actual tax liability for 2004 to be
used because it was the most accurate available indicator of his
actual liability in the future.
b. Glenns retirement deduction
Glenn argues next that the superior court undercounted
his retirement deduction by disallowing his claimed deductions
for contributions to a voluntary retirement plan. In his child-
support worksheet, Glenn listed mandatory and voluntary annual
contributions totaling $3,927. Marians worksheets credited Glenn
only for a $519 mandatory retirement deduction. Glenn insists
that Rule 90.3(a)(1)(B) entitled him to a combination
mandatory/voluntary retirement deduction of 7.5% of his gross
income.
Marian acknowledges that she credited Glenn only for
his mandatory contribution. But she insists that this credit was
correct under the version of Rule 90.3 in effect when she filed
her proposed child-support calculations in April 2005. Marians
argument is accurate in a technical sense but lacks substantive
merit.
It is true that on April 7, 2005, when Marian filed her
proposed child-support worksheets, Rule 90.3(a)(1)(A) provided
that voluntary tax-deferred contributions to a qualified
retirement or pension plan or account up to 7.5% of the parents
gross income could be deducted if the parent is not a participant
in a mandatory retirement plan.31 This phrasing implied that a
parent could not claim credits for both voluntary and mandatory
contributions. But in February 2005, this court had issued an
order amending the rule to resolve this ambiguity in favor of
allowing combined credits. Our order provided that the amended
version would take effect on April 15, 2005 eight days after
Marian filed her worksheets.32 Because the amended rule was in
effect when the superior court issued its May 1, 2005, order
modifying the parties support, the amended rule allowing a
combined deduction applied to this case.
c. Marians income tax liability
Glenn last contends that the superior court
overestimated Marians income-tax liabilities. In her worksheets,
Marian assigned herself a tax liability of $6,260 on her imputed
income of $52,700. This $6,260 hypothetical liability was
identical to the figure agreed upon by the parties and approved
by the court in 2002 when it issued the original child-support
order. Glenns 2005 child-support worksheets proposed to assign
Marian a lower tax liability, $4,556, a figure Glenn calculated
using 2005 IRS tax tables. Glenn argues that this updated
calculation is more accurate and thus should have been used
instead of the original hypothetical figure, which, in his view,
had no factual basis.
In response, Marian points out that all of the original
figures used in connection with her imputed potential income were
necessarily hypothetical; because Glenn agreed with this
hypothetical tax liability in 2001 and urged the court to adopt
it, she contends, it is too late for him to change the figure
now. But Marians argument places form over substance. In
effect, it proposes to establish a rule that would lock all
future tax consequences of imputed potential income to
consequences existing at the time of original imputation. Such a
rule would conflict with basic principles of fairness requiring
tax-support calculations to be as accurate as reasonably
possible.
Marian does not dispute that calculating her tax
liabilities using the tax provisions applicable in 2002 produces
an outdated result. Yet she identifies no sound reason why the
outdated information should be acceptable in the modified order
if it would not have been in the original order. We thus
conclude that Marians ongoing tax liability must be calculated
using currently applicable tax tables.
B. Marians Appeal
At the conclusion of its oral decision denying Glenns
motion to impute income to Marian based on her new spouses
wealth, the superior court briefly commented that, as matters
then stood, it would not expect to award fees to either side.
After the court entered its modified child-support order adopting
Marians proposed calculations, Marian moved for an award of
attorneys fees under Rule 82. Marian now appeals the superior
courts denial of her motion, arguing that the court improperly
prejudged the issue in its on-record comments and that, in any
event, she deserved to be awarded fees because she was clearly
the prevailing party.33
At the outset, Marian suggests that, in its on-record
remarks, the court prematurely ruled out an award of attorneys
fees because it wanted to push the parties towards settlement.
But in our view, Marians argument casts an unreasonably harsh
light on the superior courts comments. At the March 17, 2005,
proceeding, Judge Collins stated:
[A]t this point, I can advise that I do not
anticipate that Im going to award either side
costs and attorneys fees for anything thats
been done to date. . . . I guess Im just
really concerned that were looking at the
potential for the dispute to cost more than
the child support. And while thats a factor
for the parties to consider as opposed to me,
I think its only fair to give that that level
of notice. . . . So, I mean, I encourage you
all I realize that it hasnt been successful
to date, but to see if some agreement can be
reached on that point.
On their face, these remarks simply informed the
parties of the courts impression that the proceedings so far had
been disproportionately contentious and that both parties might
be well advised to explore the possibility of settling amicably.
Because these remarks described impressions formed by the court
in the course of the present litigation, they cannot reasonably
be seen as expressing bias; instead, they candidly expressed
legitimate concerns held by the court at the time. Nor do the
remarks communicate any trace of a threat or hint of coercion;
they merely give the parties candid and fair notice of the courts
view of the case at the time and urge them to consider the
alternative of resolving the remaining issues in the case by a
mutually acceptable agreement. Viewing the remarks in context,
we fail to see any error.
Marian also challenges the superior courts ultimate
denial of her motion for fees on the ground that the ruling was
manifestly unreasonable because she had prevailed on all of the
substantive issues, whereas Glenn prevailed only in winning a
temporary reduction of his child-support obligation. Marian
likens her case to DeWitt v. Liberty Leasing Co.,34 where one
party recovered a judgment of $17,736.11 against an opponent who
won an offset claim of $93.64;35 on appeal, we reversed a trial
court order that refused to declare a prevailing party for
purposes of awarding fees, holding that the plaintiff had clearly
prevailed.36
But the circumstances here are distinguishable from
those in DeWitt. DeWitt merely involved a single claim for money
that was offset by a minimal counterclaim. In contrast, Glenn
litigated two legally and factually distinct motions to modify
child support: one sought a change reflecting his oldest
daughters decision to live with him; the other sought to impute
potential income to Marian based on her new spouses wealth. On
the first issue, despite Marians active opposition, the superior
court granted Glenns motion and recalculated support.37 On the
second issue, Marian prevailed, blocking Glenns efforts to obtain
discovery and modify support based on John Cloughs income. Given
that each party prevailed on non-overlapping claims, it was not
manifestly unreasonable for the superior court to determine that
neither party was the prevailing party for purposes of awarding
fees under Rule 82.38
IV. CONCLUSION
We AFFIRM the superior courts orders declining to
impute potential income to Marian on the basis of her new spouses
wealth and refusing to approve discovery to Glenn on this point.
We VACATE and REMAND for recalculation consistent with this
opinion the three items in the modified support order using
inaccurate figures submitted by Marian. We AFFIRM the superior
courts denial of Marians motion for Rule 82 fees.
_______________________________
1 Alaska R. Civ. P. 90.3 cmt. VI(A).
2 Id. cmt. VI(B)(5).
3 Id.
4 Alaska R. Civ. P. 90.3(a)(4).
5 Civil Rule 90.3(e)(2) provides in part:
While there is an ongoing monthly support
obligation, either party must provide to the
other party, within 30 days of a written
request, documents such as tax returns and
pay stubs showing the partys income for the
prior calendar year.
6 Alaska R. Civ. P. 90.3(a)(4).
7 Id.
8 The superior courts interpretation of the civil rules
presents a question of law that we review de novo. Fuller v.
City of Homer, 113 P.3d 659, 662 (Alaska 2005).
9 Beaudoin v. Beaudoin, 24 P.3d 523 (Alaska 2001).
10 The commentary to Civil Rule 90.3 has not been
officially adopted, but it can provide useful guidance in
applying the rule. See Caldwell v. State, 105 P.3d 570, 573 n.6
(Alaska 2005).
11 Beaudoin, 24 P.3d at 528 (quoting Alaska R. Civ. P.
90.3 cmt. III(C)).
12 Alaska R. Civ. P. 90.3 cmt. III(C).
13 Alaska R. Civ. P. 90.3 cmt. VI(B)(5).
14 For example, the Washington Court of Appeals, applying
a Washington statute, has recognized that although a new spouses
income cannot itself be included in calculating a divorced
parents gross income for child support purposes, half the new
spouses taxable capital gains, interest and dividend income must
be imputed to the parent under the presumption that property
acquired during a marriage is community property absent clear and
convincing evidence to the contrary. See In re Marriage of
Scanlon, 34 P.3d 877, 883 (Wash. App. 2001) (applying Wash. Rev.
Code 26.19.071(3)).
15 Alaska R. Civ. P. 90.3(a)(4) (emphasis added).
16 Alaska R. Civ. P. 90.3 cmt. III(C).
17 Id. (emphasis added).
18 Beaudoin, 24 P.3d at 524.
19 Id. at 528.
20 Alaska R. Civ. P. 26(b)(1).
21 Alaska R. Civ. P. 90.3(e).
22 We review the superior courts discovery rulings for an
abuse of discretion, and will not reverse unless, after reviewing
the entire record, we are convinced that the court erred.
Willoya v. State, Dept of Corr., 53 P.3d 1115, 1119 (Alaska
2002).
23 We reject Glenns effort to characterize the trial
courts comments concerning reciprocal discovery of household
income as an implied promise to grant Glenn discovery of the
Cloughs financial records if Glenn voluntarily disclosed his own
household financial information. In our view, a fair reading of
the record makes it clear that Judge Collins intended her
comments as a description of a threshold condition that the judge
would likely have imposed before approving discovery if Glenn had
properly raised the unusual circumstances theory in his motion
for modification and had then moved for discovery after
exhausting informal discovery procedures prescribed by the rules.
24 We will reverse the superior courts child-support order
only if the court abused its discretion or applied an incorrect
legal standard. Whether the court used the correct method of
calculating child support is a matter of law that we review de
novo. Caldwell, 105 P.3d at 573 (citing Turinsky v. Long, 910
P.2d 590, 593 n.10 (Alaska 1996)). But we review a trial courts
factual findings used to determine child support under the
clearly erroneous standard. Id. (citing Routh v. Andreassen, 19
P.3d 593, 595 (Alaska 2001)).
25 Bergstrom v. Lindback, 779 P.2d 1235 (Alaska 1989).
26 Bergstrom, 779 P.2d at 1236.
27 Id. at 1236-37 (footnote omitted).
28 Id. at 1237 n.5.
29 Id. at 1236 (emphasis added).
30 Id.
31 See Alaska Supreme Court Order No. 1526 (Apr. 15,
2005).
32 The amended version of the rule eliminated the original
language that seemingly allowed a deduction for voluntary
retirement contributions only if the claimant did not participate
in a mandatory plan. According to the Child Support Guidelines
Committee commentary, under Rule 90.3s new language,
Mandatory retirement contributions are a
deduction. Voluntary contributions, up to the
limit stated in the rule, are also a
deduction if the earnings on the retirement
account or plan are tax-free or tax-deferred.
If a parent is not a participant in a
mandatory plan, the limit on voluntary
contributions is 7.5 % of gross wages and
self-employment income. If a parent is a
participant in a mandatory plan, the limit on
voluntary contributions is 7.5 % of gross
wages and self-employment income minus the
amount of the mandatory contribution.
Attachment to Alaska Supreme Court Order No. 1526 (Apr. 15, 2005)
Commentary to Civil Rule 90.3(III)(D).
33 We review the superior courts prevailing-party
determination in an attorneys-fees dispute for abuse of
discretion. Interior Cabaret, Hotel, Rest. & Retailers Assn v.
Fairbanks N. Star Borough, 135 P.3d 1000, 1002 (Alaska 2006).
Prevailing-party determinations are ordinarily overturned only if
they are manifestly unreasonable. Jerue v. Millett, 66 P.3d 736,
740 (Alaska 2003).
34 DeWitt v. Liberty Leasing Co. of Alaska, 499 P.2d 599
(Alaska 1972).
35 Id. at 600.
36 Id. at 602.
37 Glenns success on the computational issues addressed in
this appeal reinforces his prevailing-party status on this first
motion for modification.
38 Because we affirm the superior courts denial of
attorneys fees to Marian, we do not need to decide whether Marian
would have been entitled to enhanced fees if the court had
awarded fees.
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