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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Horne v. Touhakis (8/14/2015) sp-7030

Horne v. Touhakis (8/14/2015) sp-7030

          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, email  





MARK HORNE,                                                   )     Supreme Court No. S-15337  


                             Appellant,                       )     Superior Court No.  3AN-08-05233 CI  


          v.	                                                 )     O P I N I O N 


BELINDA TOUHAKIS,                                              )    No. 7030 - August 14, 2015  


                             Appellee.	                       )


                   Appeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                   Third Judicial District, Anchorage, William F. Morse, Judge.  


                   Appearances:           Mark       Horne,      pro     se,    Anchorage.            No  

                   appearance by Appellee.  

                   Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  


                   Bolger, Justices.  

                   BOLGER, Justice.  


                   A child support obligor asked the superior court to reduce his child support  


obligation to the legal minimum after several of his business ventures failed.  During an  


evidentiary hearing, the obligor conceded that it would be fair to base his child support  

obligation on imputed income, and he estimated that he could earn a gross annual income  


of about $40,000 if he sought and obtained full-time employment.  The superior court  


concluded that the obligor underestimated his earning potential, and the court imputed  

----------------------- Page 2-----------------------

income  to  the  obligor  at  twice  the  obligor's  income  estimate.    Because  the  court's  


findings were insufficient to allow us to review its imputed income determination, we  

vacate and remand.  


                   Mark Horne and Belinda Touhakis were romantically involved for several  

years in the mid 2000s, though they never married and produced no biological children  

together.  During their relationship, Touhakis adopted a daughter.  When Horne and  

Touhakis ended their relationship, Horne requested custody and visitation rights as a  


psychological parent;  he simultaneously offered to provide child support.  Touhakis  


initially opposed Horne's continued involvement in her daughter's life, but the parties  


eventually settled in 2009.  Under the terms of the settlement, the parties agreed that  


Horne had established a psychological parent relationship with Touhakis's daughter and  

would have six-day-long visitation rights every 21 days.  They also agreed that Horne  

would pay Touhakis $1,750 monthly in child support under Alaska Civil Rule 90.3.  


                   Horne  is  a  self-employed  entrepreneur,  and  several  of  his  projects  and  

investments  began  losing  money  shortly  after  the  settlement.    In  his  2010-2012  tax  


filings, Horne reported adjusted gross losses of $87,731, $189,774, and $446,632.                                      In  

          1        A psychological parent is:  


                   one   who,   on   a   day-to-day   basis,   through   interaction,  


                   companionship, interplay, and mutuality, fulfills the child's  

                   psychological  need  for  an  adult.    This  adult  becomes  an  

                   essential focus of the child's life, for he is not only the source  


                   of the fulfillment of the child's physical needs, but also the  

                   source of his emotional and psychological needs.  

Carter v. Brodrick, 644 P.2d 850, 853 n.2 (Alaska 1982) (quoting Max F. Gruenberg,  

Jr.   &   Robert   D.   Mackey,  A   New   Direction   for   Child   Custody   in   Alaska ,   6  


U.C.L.A.-ALASKA  L.  REV .  34, 36 (1976)).  

                                                           -2-                                                     7030

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late 2012 he asked the superior court to modify his child support obligation to the legal  

minimum of $50 per month.2  

                    The court held an evidentiary hearing, where Horne was represented by  


counsel and Touhakis appeared pro se.   Horne submitted his 2010-2012 tax returns,  


testified about his financial situation, and called his accountant to the stand to verify the  


accuracy of his tax returns.  Horne testified  that he had not held a traditional job in  


approximately  20  years  but  that  in  early  2000  he  had  earned  about  $35,000  as  an  


operations manager for a stevedore company.  He further testified that, in light of his  


recent financial difficulties, he had been "looking a little bit" for regular employment and  


estimated that he was capable of making $18-20 per hour, or about $40,000 per year.  

Touhakis cross-examined both Horne and his accountant but did not submit any evidence  


of her own.  She did, however, indicate her belief that Horne could "do much more than  

[the minimum child support contributions]."  


                    The superior court granted Horne's motion in part.  The court found that  


Horne's income had fallen severely - a material change of circumstance warranting a  


modification to  his child support obligation.  But the court was unwilling to reduce  

Horne's obligation to the statutory minimum, noting that "Horne cannot expect [his  

daughter]  to  finance  his  speculative  ventures."    Instead  the  court  found  that  Horne  


"agreed to have income imputed to him" and based its modified child support order on  

                               3  Although the court relied in part on Horne's testimony that he was  


his potential income. 

capable of earning $20 per hour in full-time employment, the court concluded that Horne  


"underestimate[d] the market value of his skills and experience" and was capable of  


earning  "at  least  $40  per  hour  should  he  be  inclined  to  work  for  another  person  or  

          2         See Alaska R. Civ. P. 90.3(c)(3).  

          3         See Alaska R. Civ. P. 90.3(a)(4).  

                                                              -3-                                                            7030  

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company."  Based on this hourly wage, the court imputed a gross annual income of  


$83,200.   The court set Horne's monthly child support obligation at $1,050.  

                   Horne filed a motion for reconsideration raising three claims of error.  


Horne argued that the superior court failed to provide sufficient factual findings to enable  

appellate review of its imputed income determination.   He claimed that the child support  

modification was partially retroactive and that the court erred by using imputed income  

instead of actual income for the retroactive portion.  And he contended that the court  



should have reduced his child support obligation to reflect Rule 90.3's health care 



retirement   deductions.  The  superior  court  summarily  denied  Horne's  motion  for  



                   Horne   appeals,   renewing   the   claims   set   forth   in   his   motion   for  

reconsideration.  Touhakis has not participated in this appeal.  




                   "We review a modification of child support for abuse of discretion" 

"review factual findings regarding a party's income when awarding child support for  


clear error."   "Whether there are sufficient findings for informed appellate review is a  

          4        See Alaska R. Civ. P. 90.3(d).  

          5        See Alaska R. Civ. P. 90.3(a)(1)(B).  

          6         Childs  v.  Childs,  310  P.3d  955,  958  (Alaska  2013)  (citing  Swaney  v.  

Granger, 297 P.3d 132, 136 (Alaska 2013)).  

          7         Williams v. Williams,  252 P.3d 998, 1005 (Alaska 2011) (citing Koller v.  

Reft , 71 P.3d 800, 804 (Alaska 2003)).  

                                                             -4-                                                      7030

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question of law."   Interpretation of the civil rules is a question of law that we review de  




          A.	      The Imputed Income Findings Were Insufficient To Allow Appellate  


                   At  the  evidentiary  hearing,  Horne  accepted  the  imposition  of  imputed  


income and suggested $40,000 per year - or about $20 per hour - as a fair estimate  


of his potential gross earnings.  The superior court agreed that imputed income was  


appropriate but concluded that Horne "underestimate[d] the market value of his skills  

and experience."  The court found that Horne had gained marketable entrepreneurial  


skills from his experiences running  stevedoring and telecommunications businesses,  

buying and selling real estate, and investing in various businesses.  The court further  


found that Horne was likely to earn "at least $40 per hour should he be inclined to work  

for another person or company" and imputed to him a gross annual income of $83,200.  

Horne argues that the modification order should be vacated because the court's factual  

findings were insufficient to enable appellate review on this issue.   

                   Rule 90.3(a)(4) provides:  

                             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. . . .  Potential income will be based upon the  

                   parent's work history, qualifications, and job opportunities.  


                   The  court  may  also  impute  potential  income  from  non- 

                   income or low income producing assets.  

          8        Hooper v. Hooper , 188 P.3d 681, 685 (Alaska 2008) (citing                           Borchgrevink  

v. Borchgrevink , 941 P.2d 132, 137 (Alaska 1997)).  

          9        Johnson v. Johnson , 239 P.3d 393, 406 (Alaska 2010) (citing Duffus v.  

Duffus , 72 P.3d 313, 316 (Alaska 2003)).  

                                                            -5-	                                                     7030

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Although "courts [have] broad discretion to impute income based on realistic estimates  



of earning potential,"              the court's imputed income determination must be based on the  

four factors listed in the rule:  the parent's work history, qualifications, job opportunities,  

and potential income from non-income or low-income producing assets.11  

                    As a threshold matter, Horne appears to suggest that the superior court erred  

in  relying  on  imputed  income  at  all,  given  that  it  "did  not  make  formal  or  detailed  


findings that . . . Horne was voluntarily underemployed/unemployed."  But Horne not  


only inadequately briefed this argument but also agreed to have income imputed to him  



at the evidentiary hearing on this matter.  We therefore decline to consider this claim. 


                    Horne also argues that the superior court did "not adequately explain[] how  


it arrived at an imputed hourly wage of $40.00 per hour with any meaningful analysis  

of . . . work history, job qualifications, or available job opportunities" - three of the  

relevant factors under Rule 90.3.  Horne notes that "the court did not cite any specific  

occupation or industry, or find that any jobs currently exist and are available to [him] at  

          10        Reilly v. Northrop , 314 P.3d 1206, 1217 (Alaska 2013) (quoting                                  Beaudoin  

v. Beaudoin, 24 P.3d 523, 530 (Alaska 2001)) (internal quotation marks omitted).  

          11        See O'Connell v. Christenson, 75 P.3d 1037, 1041 (Alaska 2003).  



                    See Alaska Fish & Wildlife Conservation Fund v. State, 347 P.3d 97, 104  


n.33 (Alaska 2015) (finding waiver of inadequately briefed issue).  Horne also claims the  


superior court retroactively modified his child support order and argues that the court  

should have used actual, not imputed, income for the retroactive portion of the modified  

order.  But the modification order, which was effective the day after Horne's motion, was  


not retroactive.  See Alaska R. Civ. P. 90.3(h)(2) ("A modification which is effective on  


or after the date that a motion for modification . . . is served on the opposing party is not  


considered a retroactive modification."); see also Kyte v. Stallings, 334 P.3d 697, 699- 


700 (Alaska 2014) (applying Rule 90.3(h)(2)). Therefore this argument is without merit.  


                                                                -6-                                                         7030

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this wage amount."              And he compares his situation to                    O'Connell v. Christenson13 and  

other  cases  where  we  have  held   the  superior  court's  findings  insufficient  to  allow  

appellate review of an imputed income determination.  


                     In  O'Connell we vacated a child support order which was based on an  


imputed income assessment that appeared untethered from the evidence presented to the  

                       14   The obligor father claimed that his adjusted annual income was about  

superior court.                    

$8,000, and he testified that he had worked as a commercial fisherman, had earned an  


associate's degree in the computer industry, and currently owned two businesses - a  



computer  business  and  a  collection  agency.                                But  the  court's  imputed  income  

determination was based on none of this evidence; instead, "[t]he court's starting point  


seems to have been that a person working at a fast food counter would earn $20,000 in  


a year" and that the father "was capable of doing work substantially more remunerative  


than that."16  We concluded that these findings were inadequate because it was "not clear  


that  fast  food  employees  [actually]  receive  $10  per  hour,  or  that  [the  father  was]  


physically capable of such work.  Most importantly, it [was] not clear that employment  


opportunities  exist[ed]  .  .  .  that  would  pay  twice  this  figure  to  [the  father]."17  


Accordingly, we remanded for additional findings, authorizing the superior court to hold  


an additional evidentiary hearing if necessary or useful to further develop the record.18  


          13         75 P.3d 1037.  

          14        See id. at 1041.  

          15        Id. at 1040.  

          16        Id. at 1041.  

          17        Id.  

          18        Id. at 1041-42.  

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                    Similarly, in Koller v. Reft  we vacated a child support award and remanded   

for additional findings when the superior court "issued no findings explaining how it  



arrived at the [imputed income] figure" it announced.                              The obligor father - a doctor -  



submitted wage statements showing a gross income of $78,396 at his last job. 

superior court "intuited that [the father] could make more than $84,000 as a physician  


in  a  town  the  size  of  Kodiak,"  and  we  noted  that  "[s]ome  circumstantial  evidence  


supported this intuition, such as the fact that [he] had previously received the employee  

                                                                                            21   But though the superior  


of the year award and was made chief of staff at [a] hospital."  

court's  intuitions  were  "understandable,"  we  nevertheless  held  that  there  was  "no  


evidentiary support for the court's finding that [the father's] income was in excess of  


$84,000."22  We suggested that on remand, valid evidentiary support might take the form  


of information "concerning the availability of jobs in the area, how much other similarly  


situated doctors earn, [the father's] historical earnings, and what [the father] actually  


                    And in Barlow v. Thompson we vacated an imputed income determination  


in part because it was based on a single, insufficient data point:  the obligor father's  


testimony that his last full-time job, from approximately one year earlier, had earned him  


$15 per hour.            The superior court master used this figure to find that the father was  

          19        71 P.3d 800, 805 (Alaska 2003).

          20        Id.

          21        Id.

          22        Id.

          23        Id.

          24        221 P.3d 998, 1003 (Alaska 2009).  

                                                               -8-                                                         7030

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capable of earning $31,200 yearly, based on a forty-hour work week, fifty-two weeks per  


year.       We held that the master's findings were inadequate to allow appellate review of       

the imputed income determination.26  


                     We agree with Horne that the imputed income findings in the present case  


are analogous to the findings we found insufficient in O'Connell.  Here, as in O'Connell,  


the superior court (1) started with an hourly wage, (2) doubled that wage based on a  


determination  that  the  parent  was  capable  of  earning  more,  and  (3)  failed  to  make  


findings about the employment opportunities available that would provide this doubled  


wage.         Specifically, the superior court began with the $20 hourly wage suggested by  


Horne, doubled that wage based on the finding that Horne was "underestimat[ing] the  

                                                                     28  and did not suggest any specific jobs or  


market value of his skills and experience," 

fields where Horne might earn that wage.  We cannot affirm the court's imputed income  


determination based on these findings.  


                     We note that the parties failed to provide evidence that would have allowed  

the superior court to make more detailed findings.  The only relevant evidence before the  


court was Horne's current (negative) income, his position and salary from 2000,  and his  


descriptions of his various businesses and investments.   Horne presented little or no  


evidence  about  his  educational  background,  the  jobs  he  is  currently  qualified  to  


undertake, or the typical salaries earned in those positions.  And Touhakis introduced no  

evidence at all.  The parties bear responsibility for this dearth of evidence.  

           25        Id.  

           26        See id.  

           27        Cf. O'Connell v. Christenson, 75 P.3d 1037, 1041 (Alaska 2003).  

           28        The superior court noted that "admittedly it is difficult to determine the  

value of [entrepreneurial] skills when trying to impute income."  

                                                                   -9-                                                            7030

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                    Nevertheless, the lack of specific findings in the child support modification  

order  prevents  us  from  determining  whether  the  superior  court's  imputed  income  

determination  was  clearly  erroneous,  and  we  must  vacate  the  order  and  remand  for  


                                                                                                                        As we  

additional findings regarding the four factors enumerated in Rule 90.3(a)(4). 


noted in O'Connell, "[t]he court may find it useful to refer to the Alaska Department of  



Labor wage statistics for guidance in determining the amount of income to impute." 


The court is authorized to hold a supplemental hearing if it believes such a hearing will  

be necessary or useful.31  


          B.	       Rule 90.3(a)(1)(B)'s Retirement Deduction Is Not Available When The  

                    Superior Court Relies On Imputed Income.  


                    Horne also claims that the superior court erred by failing to adjust his child  

support  obligation  to  reflect  the  voluntary  retirement  contribution  deduction  of  

Rule 90.3(a)(1)(B).  Although Horne admits that he "is not currently contributing to a  


retirement plan," he argues that "[i]f the [superior] court is going to guess at . . . Horne's  


potential income . . . , [it] should also [assume] that if he [were] an employee, and [were]  

          29        We also note that the superior court is not required to modify Horne's  

original child support order if it determines that the reduction in his income is merely  


"temporary."  See Alaska R. Civ. P. 90.3 cmt. X.A.  

          30        75  P.3d  at  1041;  accord  Reilly  v.  Northrop,  314  P.3d  1206,  1217-18  

(Alaska 2013) ("The superior court ultimately agreed . . . that the average income of  


workers  in  'construction  and  extraction  occupations'  in  [the  obligor's  region]  (as  

reported by the U.S. Department of Labor) was the  best indicator of [the obligor's]  


potential income. . . .  The court's approach is the type of approach we have instructed  


the superior courts to use when determining imputed income.").  



                    Horne also notes that the superior court's modified child support order left  


the health care deduction "to be determined."  See Alaska R. Civ. P. 90.3(d).  On remand,  


Horne  will  have  the  opportunity  to  present  the  court  with  documentary  evidence  

allowing it to calculate the appropriate deduction for his health insurance expenses.  

                                                              -10-	                                                        7030

----------------------- Page 11-----------------------

able to participate in [an] employer provided retirement plan, he would do so at the  

maximum allowed by this rule."  


                                                                                         which we find contrary to       

                   Horne provides no legal support for this claim, 

the  sound  interpretation  of  Rule  90.3.    The  provision  dealing  with  deductions  for  


voluntary  retirement  plan  contributions  is  housed  under  subsection  (a)(1),  which  


concerns  actual  income.                  In  contrast,  subsection  (a)(4),  which  concerns  imputed  


income, contains no reference to deductions for retirement plan contributions.  Nothing  

in  the  rule's  plain  language,  structure,  or  commentary  suggests  that  the  voluntary  

retirement        contribution         provision       of    subsection        (a)(1)      should      be     applied      to  

subsection  (a)(4).    Accordingly,  the  superior  court  did  not  err  by  rejecting  Horne's  

request for this deduction.  

V.        CONCLUSION  


                   We VACATE the modified child support order and REMAND the case for  

further proceedings consistent with this opinion.  

          32       Horne cites Miller v. Clough , but that case involved actual contributions  

to a voluntary retirement plan.  See 165 P.3d 594, 603 (Alaska 2007).  

          33       See Alaska R. Civ. P. 90.3(a)(1)(B).  

                                                            -11-                                                       7030

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