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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Holmes v. Holmes (3/30/2018) sp-7233
Notice: This opinion is subject to correction before publication in the P ACIFIC 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
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
BRANLUND T. HOLMES, )
) Supreme Court No. S-16387
Appellant, )
) Superior Court No. 3VA-05-00049 CI
v. )
) O P I N I O N
TAMARA HOLMES, )
) No. 7233 - March 30, 2018
Appellee. )
)
A
ppeal from the Superior Court of the State of Alaska, Third
Judicial District, Valdez, Daniel Schally, Judge.
Appearances: Herbert M. Pearce, Law Office of Herbert M.
Pearce, Anchorage, for Appellant. Justin Eschbacher, Law
Offices of G.R. Eschbacher, Anchorage, for Appellee.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,
and Carney, Justices.
STOWERS, Chief Justice.
I. INTRODUCTION
The superior court issued an order modifying a father's child support
obligation. The father appeals, arguing that the court erred in multiple respects. He
asserts that the court erred in disallowing his claimed business losses from self-
employment and his claimed travel expenses when calculating his income. And he
argues that the court erred in not counting his at-will visitation with his children and in
recognizing an aberration in the school calendar when calculating the percentage of time
----------------------- Page 2-----------------------
he had custody of the children. We affirm the order of the superior court.
II. FACTS AND PROCEEDINGS
A. Background Facts
Branlund T. Holmes and Tamara Holmes are the parents of two minor
children. Branlund lives in Oregon; Tamara lives in Valdez. Under an August 2013
court order Tamara has physical custody of the children in Valdez during the school
year; Branlund has physical custody of the children in Oregon during "summer vacation
from one week after school gets out until a week before school begins" and during other
school vacations. Branlund is also permitted at-will visitation with the children in
Valdez after providing Tamara 30 days' notice.
In March 2014 the superior court issued a child support order. The only
disputed issue was whether Tamara had primary physical custody or custody was shared,
1 The court found that
which depended on the number of days each party had custody.
Tamara had primary physical custody in 2012 and 2013 but ruled that from 2014
onwards, the parties would exercise shared physical custody and Branlund would on
1 "A parent has primary physical custody (or primary custody) of children
. . . if the children reside with the other parent for a period specified in the custody order
of less than 30 percent of the year." Alaska R. Civ. P. 90.3(f)(2). "A parent has shared
physical custody (or shared custody) of children . . . if the children reside with that parent
for a period specified in writing in the custody order of at least 30, but no more than 70,
percent of the year . . . ." Alaska R. Civ. P. 90.3(f)(1). A parent with primary physical
custody receives child support in the amount of the adjusted annual income of the non-
custodial parent multiplied by a specified percentage based on the number of children the
parties have. See Alaska R. Civ. P. 90.3(a). Child support for parents with shared
physical custody is based on the incomes of both parents and the percentage of custody
each parent has, as well as the number of children the parties have. See Alaska R. Civ.
P. 90.3(b)(1).
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----------------------- Page 3-----------------------
average "have just over 115 overnights per calendar year." The court did not include at-
will visitation in this calculation because that had "historically not occurred with
sufficient regularity to be able to predict that there [was] a substantial chance of it
occurring regularly in the future."
In November 2014 Branlund filed a motion to modify child support "due
to the fact that [he] ha[d] experienced a change in employment which ha[d] resulted i[n]
a decrease in his pay of more than 15%." Tamara filed a partial opposition and cross-
motion for modification of child support arguing that Branlund's income had actually
increased and that she now had primary physical custody. An evidentiary hearing on the
matter was held in September and November 2015. The superior court issued an order
modifyingchild supportin February2016, agreeing with Tamarathat Branlund'sincome
had increased and that Tamara had primary physical custody. Branlund appeals multiple
aspects of this order.
B. Claimed Business Losses
Branlund claimed business losses from his oil spill consulting firm, HRM
2 and argued that these losses should be deducted from his income for the
Consulting,
purpose of calculating child support. HRM had not earned money in several years at the
time of the evidentiary hearing. The superior court did not allow Branlund's claimed
business losses, finding that "HRM Consulting ha[d] not earned income in several years
and [was] not likely to do so in any foreseeable future" and that "[a]llowance of such
losses [would] lower[] Branlund's income which [would] lower[] his child support
obligation, and this [did] nothing to benefit the children." Branlund appeals the
disallowance of his claimed business losses.
2 Branlund's briefs refer to the business as "HRH Consulting," but the record
reveals that the business was called "HRM Consulting."
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----------------------- Page 4-----------------------
C. At-Will Visitation
The August 2013 custody order provides, "The father will be allowed at
will visitation with the children in Valdez, Alaska if he provides a minimum of 30
days['] notice to the mother. The girls will stay with their father during the at will visits
in Valdez." Branlund's wife testified that because of at-will visitation Branlund had a
total of 131 days with the children in 2014 and was scheduled to have a total of 115 days
with the children in 2015. The custody order provided for 127 days in 2014 and 100
days in 2015 not counting at-will visitation.
In its March 2014 child support order the superior court included at-will
visitation that had already occurred when determining past visitation but did not include
an estimate of at-will visitation in its prospective order because Branlund had not
exercised at-will visitation regularly enough to allow the court to predict that it would
regularly occur in the future. In its February 2016 order the court did not include at-will
visitation, explaining, "There is no reason to revisit the prior determination to not include
so-called 'at will' overnights in the calculation of the number of annual overnights."
Branlund appeals this determination.
D. School Calendar
The custody order based custody on the Valdez school calendar, providing
that Branlund would have custody during "summer vacation from one week after school
gets out until a week before school begins." The superior court's March 2014 child
support order was based in part on the 2014 Valdez school calendar, a year when
summer vacation was two weeks longer than normal because of the construction of a
new school building. In its February 2016 child support order the court found this
aberration provided "sufficient cause to reexamine the number of overnights" and
accordingly reduced the number of summer overnights afforded to Branlund to reflect
the normal vacation length. Under this correction the court concluded that Tamara had
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----------------------- Page 5-----------------------
primary physical custody. Branlund appeals the court's decision to recalculate the
number of days each parent would have custody, arguing that all the facts about the
school calendar were known at the time of the prior order and cannot now be relitigated.
E. Travel Expenses
Branlund alleged that in a May 2009 hearing the court had orally ordered
that he be allowed to deduct work-related travel expenses - flights from his home in
Oregon to his job in Alaska - from his total income. He did not provide the superior
court with either the transcript or the recording of this alleged order. Branlund argued
that, in reliance on this alleged order, he had always deducted his travel expenses from
his income when calculating child support. In its February 2016 order the superior court
ruled that Branlund could not deduct his travel expenses from his income, noting that
Branlund himself described the deduction as for "self employment expenses and travel"
but he was no longer self employed. Branlund appeals, arguing that the superior court
was bound by its prior order.
III. STANDARD OF REVIEW
We reverse child support awards only if the superior court abused its
discretion, applied an incorrect legal standard, or clearly erred in its factual findings. 3
Given the broad definition of income in Alaska Civil Rule 90.3(a)(1), the superior court
has discretion in deciding whether certain funds should be included in income for Civil
4
Rule 90.3 purposes. We therefore review for abuse of discretion the superior court's
decision to disallow Branlund's claimed business losses. We review the factual findings
3 O'Neal v. Campbell , 300 P.3d 15, 16 (Alaska 2013).
4 Coghill v. Coghill, 836 P.2d 921, 926 (Alaska 1992) (citing Bergstrom v.
Lindback , 779 P.2d 1235, 1237 (Alaska 1989)).
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----------------------- Page 6-----------------------
the court made to reach this conclusion for clear error. 5
6
"[S]etting child support is in large part a predictive function." "[T]he
amount of visitation a parent will exercise in the future[] is . . . a prediction that can be
7 The trial court's act of predicting a future event is necessarily
based on past practices."
a discretionary act - the court considers a range of reasonable possibilities informed in
part by past practices and in part by forecasting the future.8 We review the superior
court's decision regarding at-will visitation for abuse of discretion.
"A final child support award may be modified upon a showing of a material
change of circumstances as provided by state law."9 "In deciding whether to modify
child support orders, trial courts have broad discretion," and "[w]e review a decision by
5 O'Neal, 300 P.3d at 16. In Gallant v. Gallant we said that "[d]etermination
of net income is a question of fact and is reviewed under the clearly erroneous standard."
945 P.2d 795, 800 (Alaska 1997). Determination of income for Civil Rule 90.3 purposes
often requires many findings of fact, which we review for clear error. See O'Neal , 300
P.3d at 16. But the decision whether to include certain funds when calculating income
is left to the superior court's broad discretion and should be reviewed for abuse of that
discretion. See Coghill , 836 P.2d at 926; see also Faulkner v. Goldfuss , No. S-13018,
*3, *5-6 (Alaska Mar. 24, 2010) .
2010 WL 1135745, at
6 Potter v. Potter , 55 P.3d 726, 730 (Alaska 2002).
7 Id.
8 See Cox v. Cox, 776 P.2d 1045, 1049 (Alaska 1989) (reviewing for abuse
of discretion when the superior court made "a prediction of annual income for the
foreseeable future" to determine child support); cf. Henrichs v. Chugach Alaska Corp.,
250 P.3d 531, 535 (Alaska 2011) ("Because there is a range of reasonable decisions a trial
judge might make in determining how long a bar from corporate board service to impose
upon a defendant, this determination is reviewed for abuse of discretion." (quoting
Martinez v. Cape Fox Corp., 113 P.3d 1226, 1229 (Alaska 2005))).
9
Alaska R. Civ. P. 90.3(h)(1).
-6- 7233
----------------------- Page 7-----------------------
the superior court to modify child support for an abuse of discretion." 10 "On the other
hand, whether the trial court applied the proper legal standard in determining that a
change of material circumstances occurred is an issue of law which we review de
novo."11
IV. DISCUSSION
A. The Superior Court Did Not Abuse Its Discretion In Disallowing
Branlund's Claimed Business Losses.
Branlund argues that the superior court should have allowed his claimed
business losses from HRM. We conclude that the superior court did not abuse its
discretion or clearly err in its factual findings when it disallowed these losses.
Civil Rule 90.3(a)(1) defines income for child support purposes as the
parent's total income from all sources minus specified exceptions that do not apply here.
The commentary to the rule explains, "Income from self-employment, rent, royalties, or
joint ownership of a partnership or closely held corporation includes the gross receipts
minus the ordinary and necessary expenses required to produce the income."12 Given
the broad definition of income, the superior court has broad discretion in determining
what to include in its income calculation,13 and we will reverse such a determination only
10 Richardson v. Kohlin , 175 P.3d 43, 46 (Alaska 2008) (citing Olmstead v.
Ziegler, 42 P.3d 1102, 1104 (Alaska 2002)).
11
Id. (citing Koller v. Reft , 71 P.3d 800, 804 (Alaska 2003)).
12
Alaska R. Civ. P. 90.3 cmt. III.B. "While this court has not officially
adopted or approved the commentary, we have relied on it for guidance in determining
adjusted annual income for self-employed parents." Eagley v. Eagley , 849 P.2d 777, 779
(Alaska 1993).
13
Coghill v. Coghill, 836 P.2d 921, 926 (Alaska 1992); see also Faulkner v.
Goldfuss, No. S-13018, 2010 WL 1135745, at *6 (Alaska Mar. 24, 2010) ("We have
(continued...)
-7- 7233
----------------------- Page 8-----------------------
if the superior court abused its discretion, applied an incorrect legal standard, or clearly
erred in its factual findings. 14
In this case it is undisputed that HRM had not generated any revenue in
several years and that Branlund earned all his income from full-time employment
completely separate from HRM. And, as Tamara noted in her written closing statement,
"despite discovery requests and an order to compel issued by the court, [Branlund] did
not produce a single receipt, canceled check or any other back-up documentation to
support his business deductions for HRM Consulting." Based on this the superior court
did not clearly err in "agree[ing] with Tamara" and finding that HRM would not earn
income "in any foreseeable future" and that "[a]llowance of such losses . . . [would do]
nothing to benefit the children"; nor did it abuse its discretion in denying the claimed
losses.
"The primary purpose of Rule 90.3 is to ensure that child support orders are
15
adequate to meet the needs of children, subject to the ability of parents to pay."
Deductions for self-employment expenses are "intended to apply to closely held
corporations that serve as an income source of the party in question."16 Allowing
deduction of losses from a corporation that did not serve as a source of Branlund's
income could undermine the primary purpose of Rule 90.3. We affirm the superior
13 (...continued)
interpreted Civil Rule 90.3 a number of times regarding what self-employment expenses
are and are not deductible, but we have never held that net losses from self-employment
income must or must not be deducted from a parent's other sources of income." (citing
Eagley , 849 P.2d at 778; Gallant v. Gallant, 945 P.2d 795, 800 (Alaska 1997))).
14
O'Neal v. Campbell, 300 P.3d 15, 16 (Alaska 2013).
15
Alaska R. Civ. P. 90.3 cmt. I.B.
16 Gallant, 945 P.2d at 800.
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----------------------- Page 9-----------------------
court's disallowance of Branlund's claimed business losses.
B. The Superior Court Did Not Abuse Its Discretion In Not Counting
At-Will Visitation Days Toward Branlund's Custody Percentage.
Branlund argues that the superior court should have credited him with
additional days of custody because of his at-will visitation. We conclude that the
superior court did not abuse its discretion when it declined to include at-will visitation
in its custody calculation.
We have held that generally "the percentage of time each parent has
custody must be determined by reference to the child custody order, not the parties'
17
actual conduct."
We have also commented that in a court order allowing for additional
visitation above that scheduled in the order "[t]he parties must be free to seek amended
prospective support orders based on realistic estimates of the total amount of custody the
18
parents will each exercise."
In the similar context of child support orders based on de facto custody we
have explained that "setting child support is in large part a predictive function" and that
"[t]he court must sometimes make what is little more than an educated guess based on
19 As with predictions of income, "the amount of visitation a parent
available evidence."
will exercise in the future, is . . . a prediction that can be based on past practices."20
Because there is a range of reasonable decisions a trial court may make when predicting
future visitation, we review the court's decision regarding at-will visitation for abuse of
17 Rowen v. Rowen , 963 P.2d 249, 254 (Alaska 1998) (citing Turinsky v. Long ,
910 P.2d 590, 595 (Alaska 1996)).
18 Turinsky, 910 P.2d at 594.
19 Potter v. Potter , 55 P.3d 726, 730 (Alaska 2002).
20 Id.
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----------------------- Page 10-----------------------
discretion.21
In its March 2014 child support order the superior court explained that at-
will visitation "ha[d] historically not occurred with sufficient regularity to be able to
predict that there [was] a substantial chance of it occurring regularly in the future."
Branlund did not appeal this order. Branlund filed his motion to modify child support
in November 2014, and Tamara responded and cross-moved to modify child support in
December 2014. At that point the prior child support order had been in place for less
than a year, and the record reveals that Branlund had exercised at most four days of at-
22 Any practices of the parties after the motions in
will visitation during that time.
November and December carried little weight: "post-litigation events should either be
discounted entirely or viewed with suspicion as evidence of the parties' practices."23 The
superior court did not abuse its discretion by not revisiting its prior decision.
Branlund argues that the superior court should have at least based the
retrospective portion of its order - the portion addressing the time between Branlund
filing the motion to modify child support in November 2014 and the superior court
21 See Cox v. Cox , 776 P.2d 1045, 1049 (Alaska 1989) (reviewing for abuse
of discretion when the superior court made "a prediction of annual income for the
foreseeable future" to determine child support); cf. Henrichs v. Chugach Alaska Corp. ,
250 P.3d 531, 535 (Alaska 2011) ("Because there is a range of reasonable decisions a trial
judge might make in determining how long a bar from corporate board service to impose
upon a defendant, this determination is reviewed for abuse of discretion." (quoting
Martinez v. Cape Fox Corp. , 113 P.3d 1226, 1229 (Alaska 2005))).
22
Tamara calculated, based on the 2013 custody order and the 2014 Valdez
school calendar, that Branlund would have custody of the children for 127 days in 2014;
the superior court adopted this calculation. Branlund's wife testified that Branlund had
custody of the children for 131 days in 2014, including at-will visitation.
23
Potter , 55 P.3d at 730 (citing Karpuleon v. Karpuleon , 881 P.2d 318, 321-22
(Alaska 1994)).
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----------------------- Page 11-----------------------
issuing its order in February 2016 - on what actually occurred. But again courts should
24
"view[] with suspicion" post-litigation practices of the parties.
The superior court did
not abuse its discretion in not counting the at-will visitation that Branlund actually
exercised after he filed his motion.
C. The Superior Court Did Not Improperly Ignore The Principle Of
Finality.
Branlund argues that the superior court ignored principles of finality when
it revisited the issues of the school calendar and Branlund's travel expenses. We
disagree.
We explained how principles of finality apply to child support rulings in
Bunn v. House : "Civil Rule 90.3(h)(1), recognizing that courts have a special duty with
regard to the support of children whose parents have divorced, provides an exception to
25
the general principle that final judgments should not be disturbed." Motions to modify
child support "do not technically raise res judicata concerns," but "the principle of
26 Therefore, "[t]here must be a material change of circumstances
finality is a sound one."
before a support order can be modified."27
A child support order may be modified when
28 Such changes include "shifts in the needs of
"certain fact changes [have] occurr[ed]."
the children"; "a change in one or both parents' level of income"; "[a] change in
24 Id.
25 934 P.2d 753, 757 (Alaska 1997).
26 Id.
27
Id. at 758.
28 Id.
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----------------------- Page 12-----------------------
29
custodial or visitation patterns"; and "certain changes in the law." A court may also
modify a child support order if "the needs of the children are not being met by the
30 While courts have broad discretion in deciding whether to modify
original order."
child support orders, "whether the trial court applied the proper legal standard in
determining that a change of material circumstances occurred is an issue of law which
we review de novo."31
As an initial matter Branlund concedes that his income changed by more
than 15% due to his change in employment and that this constituted a presumptively
material change of circumstances.32 He argues that this change of circumstances only
allowed the court to make modifications to child support that arose from this change. He
cites no authorities for the proposition that courts are so limited when modifying child
support. Ordinarily, "[t]rial courts have broad discretion in deciding whether to modify
child support orders."33 "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
34 And in cases where multiple material changes of circumstances have been
to pay."
alleged, we have stopped our analysis after concluding that one existed, while noting that
29 Id.
30 Id.
31 Richardson v. Kohlin , 175 P.3d 43, 46 (Alaska 2008) (citing Koller v. Reft ,
71 P.3d 800, 804 (Alaska 2003)).
32 See Alaska R. Civ. P. 90.3(h)(1) ("A material change of circumstances will
be presumed if support as calculated under this rule is more than 15 percent greater or less
than the outstanding support order.").
33
Petrilla v. Petrilla , 305 P.3d 302, 305-06 (Alaska 2013).
34 Alaska R. Civ. P. 90.3 cmt. I.B.
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35
the others "may bear on the amount of support due." The change in Branlund's income
due to his change in employment may have been enough to allow the superior court to
reopen the entire case, including the school-calendar and travel-expenses issues. We
need not reach this question, however, because there was a material change of
circumstances with respect to both issues.
1. School calendar
For its March 2014 order the superior court averaged the days each parent
had or would have custody in 2013 and 2014 to determine the number of days per year
each parent would have custody in the future. The result was that Branlund would have
custody for 115 days each year, just over 30% of the year. The court therefore
concluded that Branlund and Tamara had shared physical custody. 36
In its February 2016 order the court found that "[t]he 2014 Valdez school
calendar was anomalous based on the construction of a new school building." The
calendar that year provided for an extra two weeks of summer vacation and, therefore,
an extra two weeks that Branlund had custody in the summer. Averaging the days each
parent would have custody in 2015 and 2016 resulted in Branlund having custody for
107 days each year, or just under 30%. This constituted a material change of
37
circumstances from the previous custody calculation.
35 Boone v. Boone , 960 P.2d 579, 583 (Alaska 1998).
36 See Alaska R. Civ. P. 90.3(f)(1) ("A parent has shared physical custody (or
shared custody) of children . . . if the children reside with that parent for a period
specified in writing in the custody order of at least 30, but no more than 70, percent of the
year . . . .").
37
See Alaska R. Civ. P. 90.3(f)(2) ("A parent has primary physical custody
(or primary custody) of children for purposes of this rule if the children reside with the
other parent for a period specified in the custody order of less than 30 percent of the
(continued...)
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----------------------- Page 14-----------------------
Branlund characterizes Tamara's argument about the school calendar as
arguing that the superior court made a mistake in its March 2014 order. In May 2014,
after the superior court had issued its prior decision and after she had filed a motion for
reconsideration, Tamara filed a "Notice of Additional Information Regarding Child
Support Calculation" in which she explained that the 2014 school calendar was aberrant
and asked the court to base the custody percentage on other years. The superior court
denied her motion for reconsideration and Tamara did not appeal. Thus, Branlund
argues that the school-calendar issue was already decided and that there has been no
change of circumstances since that decision.
It is true that "the change in circumstances test relates to changes in external
38 But the superior court's March 2014 determination of custody
facts, not to mistakes."
percentage going forward was inherently predictive. The extra two weeks of summer
vacation had not even happened yet and the 2015-2016 school year was far in the future.
By February 2016 it was clear that the earlier prediction had not borne out. The court
used the same methodology it had used previously of averaging two years to reach a
custody percentage, and it relied on facts that had occurred after its prior order. The
court was responding to a change of facts, not correcting a prior mistake.
Branlund also argues that no material change of circumstances occurred
because he still had greater than 30% custody when including at-will visitation. But the
prior order did not count at-will visitation. Using the prior order's method for
determining custody percentage, there was a material change in fact. Branlund was free
to argue, and has argued, that his regular use of at-will visitation justified changing the
37 (...continued)
year.").
38 Bunn v. House , 934 P.2d 753, 758-59 (Alaska 1997) (quoting Larson v.
Larson , 661 P.2d 626, 628 (Alaska 1983)).
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----------------------- Page 15-----------------------
method for determining the custody percentage; but the aberration in the school calendar
still constituted a material change of circumstances sufficient to revisit the issue.
The superior court did not err in concluding that there had been a material
change of circumstances with respect to the school calendar. 39
2. Travel expenses
Branlund alleged that in a May 2009 hearing the superior court orally
ordered that he be allowed a credit for his travel expenses between Oregon, where he
lived, and Alaska, where he worked. He did not provide to the court a copy of the
transcript or the recording of this hearing. Branlund also alleged that he had deducted
his travel expenses every year when calculating his income for child support purposes.
Branlund argues that because he still lived in Oregon and worked in Alaska there was
no change of circumstances that would justify the court revisiting its prior order.
The superior court found that "[r]egardless of the history of the allowance
of the deduction in issue, Branlund's employment situation is now completely different
than it was in 2009. He himself has labeled the deduction a 'self employment expenses
and travel' deduction and is not now self-employed." Branlund argues that the deduction
was for all employment-related travel and not just self-employment travel. Even if true,
Branlund's employment situation had materially changed: his salary has decreased
39 Branlund also argues that "the superior court erred in failing to apply the
legal doctrine of res judicata." Branlund acknowledges that res judicata does not apply
to motions to modify child support but asks us to apply a "principle of finality" to the
case. In Bunn we explained, "While we believe that motions to modify child support,
under Alaska law, do not technically raise res judicata concerns, the principle of finality
is a sound one." Bunn , 934 P.2d at 757. But the requirement of a material change of
circumstances is the bulwark against violations of the principle of finality. See id. at 757-
58. We have determined that requirement has been met. Because Branlund has not
identified any separate principle of finality that we may apply, this res judicata argument
fails.
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----------------------- Page 16-----------------------
materially and he had not earned any revenue from self-employment in years. Given
these changes, and assuming that the superior court had previously permitted Branlund
a credit for his travel expenses, the court did not err in revisiting this employment-related
deduction.
V. CONCLUSION
We AFFIRM the superior court's order modifying child support in all
respects.
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