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Robinson v. Robinson (7/17/98), 961 P 2d 1000
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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.
THE SUPREME COURT OF THE STATE OF ALASKA
CYNTHIA ROBINSON, )
) Supreme Court No. S-7924
Appellant, )
) Superior Court No.
v. ) 3UN-93-41 CI
)
DENNIS ROBINSON, ) O P I N I O N
)
Appellee. ) [No. 5011 - July 17, 1998]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Unalaska,
Michael L. Wolverton, Judge.
Appearances: David D. Clark, Law Office of
David D. Clark, Anchorage, for Appellant. James D. Babb, Jr., Law
Office of James D. Babb, Jr., Anchorage, for Appellee.
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
FABE, Justice.
I. INTRODUCTION
Cynthia Easton (formerly Robinson) appeals the superior
court's order decreasing the child support obligations of her ex-
husband, Dennis Robinson. She argues that a remand is required
because the superior court failed to enter findings of fact. She
also contends that the superior court erred in (i) failing to
consider all of Robinson's sources of income; (ii) calculating his
income based on his actual, rather than his potential, earning
capacity; and (iii) refusing to increase the support award to
reflect the high cost of living in Unalaska. We remand to the
superior court for findings and for consideration of Easton's
arguments.
II. FACTS AND PROCEEDINGS
Cynthia Easton and Dennis Robinson married in 1983 and
had four children together. In 1993 the couple dissolved their
marriage. Their dissolution agreement included a property
settlement and child support agreement. Pursuant to the agreement,
Easton assumed physical custody of all four children, and Robinson
promised to pay her $2,000 a month in child support.
The parties did not use the percentages in Alaska Civil
Rule 90.3 to calculate the child support figure. [Fn. 1] Instead,
Robinson agreed to pay more than the amount required by Rule 90.3
in part because he recognized that the cost of living in Unalaska
was higher than in the rest of the state.
Shortly after signing the dissolution agreement, Robinson
experienced a series of financial setbacks. First, in November
1993, the United States canceled its lease on one of his pieces of
property. This lease had provided him with $1,750 per month in
rental income. Then, in February 1994, Robinson's position as the
interim vice president of Ounalaska Corporation ended. This
position had paid $6,100 per month. As a result of these events,
Robinson quickly fell behind in his child support payments.
In July 1994 Easton filed a motion to show cause why
Robinson should not be held in contempt for failing to abide by the
dissolution decree. She alleged that he had violated the decree by
his failure to pay child support or to abide by other promises to
provide additional income for her and the children. At the time
that Easton filed her motion to show cause, Robinson had not paid
child support since November 1993.
Robinson opposed Easton's motion, arguing that he had
experienced financial setbacks beyond his control. He also filed
his own motion in September 1994, requesting the court to reduce
his child support obligations.
The superior court did not hold a hearing on Robinson's
child support modification motion until November 1995. At this
hearing, Robinson testified about the financial troubles caused by
the loss of his rental income and of his position as interim vice
president. He stated that he earned only $2,400 per month at his
current job, half of which went directly to CSED to pay off his
child support arrears. He also testified that if he had his tools,
he could increase his income three-fold by working as a mechanic.
Robinson claimed that Easton had stolen his tools, worth
approximately $10,000, and sold them.
The testimony at the November hearing, as well as at its
December continuation, demonstrated that Robinson had two sources
of income other than his wages: proceeds from the sale of two of
his properties in July 1995 and dividends from the Ounalaska
Corporation. Robinson had sold the two properties for a total
price of $100,000. Of the sale price, $20,000 was paid to him at
closing, with the remaining $80,000 to be paid in monthly $2,000
installments. After closing costs and broker's fees, Robinson was
left with approximately $6,700 from the down payment, all of which
went to CSED to pay his arrears. In addition, because CSED had
executed a lien on the properties, Robinson assigned seventy-five
percent, or $1,500, of the monthly mortgage payments to CSED as a
method of paying off his past due child support.
Before the superior court had ruled on the modification
motion filed by Robinson, CSED filed its own motion to modify child
support. Considering only Robinson's wages, CSED calculated his
adjusted annual income to be $18,444.30. It therefore concluded,
using the guidelines of Rule 90.3, that his monthly child support
payment should be $553 for the four children.
Easton opposed CSED's motion. She claimed that its
calculation of child support was inaccurate for three reasons: (i)
CSED had not considered all of Robinson's income in its
calculation; (ii) the child support award should have been based on
Robinson's potential earning capacity, which he had stated was
three times his current income; and (iii) the award should have
reflected the higher cost of living in Unalaska.
The superior court granted CSED's motion to modify in
October 1996 and set Robinson's new child support payments at a
total of $553 per month. The court entered the modification
without making any factual findings, written or oral, and without
responding to Easton's claims that modification was inappropriate.
Easton appeals, raising the same three objections to modification
that she raised in the superior court and also arguing that a
remand is required because of the lack of findings.
III. DISCUSSION
A. Standard of Review
This court reviews modifications of child support orders
under an abuse of discretion standard. See Patch v. Patch, 760
P.2d 526, 529 (Alaska 1988). An abuse of discretion will be found
only if "based on the record as a whole this court is left with a
'definite and firm conviction that a mistake has been made.'"
Richmond v. Richmond, 779 P.2d 1211, 1216 (Alaska 1989) (citation
omitted). Whether an item qualifies as income for the purposes of
Rule 90.3 is a question of law that we review de novo, adopting the
rule that "is most persuasive in light of precedent, reason and
policy." Nass v. Seaton, 904 P.2d 412, 414 (Alaska 1995) (citing
Guin v. Ha, 591 P.2d 1244, 1254 n.6 (Alaska 1979)).
B. Failure to Enter Findings of Fact
Easton correctly argues that the superior court's failure
to enter any findings supporting its decision requires a remand.
In the context of a request to modify child support under Rule
90.3, the trial court must provide "[a]dequate findings of fact .
. . so that a reviewing court may clearly understand the grounds on
which the lower court reached its decision." Waggoner v. Foster,
904 P.2d 1234, 1235 (Alaska 1995). Although we remand for further
findings, we briefly address the merits of Easton's arguments
opposing the modification motion in order to provide guidance to
the superior court.
C. Consideration of Income from All Sources
Easton argues that the court failed to consider two
sources of income in determining Robinson's new child support
obligations: the dividends he receives from the Ounalaska
Corporation and the proceeds from the sale of his property in
Unalaska. Easton is correct that CSED's income calculations, on
which the superior court apparently relied, did not include these
two sources of income.
1. The Ounalaska Corporation dividends
Robinson contends that his dividends should not be
considered income because they go directly to CSED to pay off his
child support arrears. We disagree.
Rule 90.3 provides that income "from all sources"should
be considered in determining an obligor's ability to pay. Alaska
R. Civ. P. 90.3(a)(1). The rule then provides a list of items that
can be deducted or excluded from gross income. Money used to pay
child support arrears for the children whose support is currently
at issue does not appear on this list. Significantly, however, the
rule does exempt from income "child support and alimony payments
arising from prior relationships . . . [that] are actually paid."
Alaska R. Civ. P. 90.3(a)(1)(B) (emphasis added). This provision
demonstrates that the rule is intended to exempt from the obligor's
income only child support payments for other children. [Fn. 2]
Furthermore, an interpretation of Rule 90.3 that would
permit parents in Robinson's situation to deduct from their income
money used to pay child support arrears is incompatible with the
underlying objective of the rule. "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 the parents to
pay." Alaska R. Civ. P. 90.3, commentary I.B. If an obligor were
permitted to deduct money used to pay arrears, then it would be in
his or her interest to accumulate arrears in order to decrease
future child support payments. Clearly, creating such an incentive
would jeopardize the rule's goal of providing for the needs of
children.
2. The proceeds from the property sale
Robinson also argues that the proceeds from the sale of
his property should not be considered income because they are being
used to pay his child support arrears. We reject his argument for
the reasons outlined above. On remand, the superior court should
consider both the Ounalaska Corporation dividends and the proceeds
from the property sale as income. [Fn. 3]
D. Consideration of Robinson's Potential Earning Capacity
Easton next argues that the superior court should have
calculated Robinson's child support obligations based on his
potential, rather than his actual, earnings. Her argument has
merit.
Modification of child support may be unwarranted if an
obligor has voluntarily reduced his or her income. See Vokacek v.
Vokacek, 933 P.2d 544, 549 (Alaska 1997); Pattee v. Pattee, 744
P.2d 658, 662 (Alaska 1987), overruled on other grounds by Nass v.
Seaton, 904 P.2d 412, 416 & n.7 (Alaska 1995). This court has
suggested that assessing voluntariness is essentially a question of
fact. See Vokacek, 933 P.2d at 549 (stating that the judge should
"consider the nature of the changes and the reasons for the
changes, and then [] determine whether under all the circumstances
a modification is warranted") (citation omitted). A court may find
that underemployment was voluntary even if the obligor acted in
good faith. See Kowalski v. Kowalski, 806 P.2d 1368, 1371 (Alaska
1991).
Easton has a plausible argument that Robinson has
voluntarily failed to realize his income potential. Robinson
testified at the November 1995 hearing that with mechanic's tools
he could increase his income three-fold. As the superior court
recognized, Robinson has at all times owned property that he could
use as collateral for a loan to buy these tools. His failure to
seek a loan could be considered a decision to remain voluntarily
underemployed. As a result, the superior court should consider
Easton's argument on this issue on remand.
E. Consideration of the Cost of Living in Unalaska
Finally, Easton argues that the superior court should
have increased Robinson's child support obligations above the Rule
90.3 amount because of the high cost of living in Unalaska. Again,
we conclude that her argument may have merit.
Easton submitted evidence to the superior court that the
cost of living in Unalaska is substantially higher than the cost of
living in Anchorage. Rule 90.3 permits superior courts to vary the
amount of child support otherwise required by the rule in order to
avoid "manifest injustice"and lists "extraordinary expenses"as a
circumstance justifying variation. Alaska R. Civ. P. 90.3(c)(1).
It therefore would have been within the superior court's discretion
to increase Robinson's child support obligations because of the
high cost of living in Unalaska. See Gross v. Gross, 355 N.W.2d 4,
8 (S.D. 1984) (stating that the trial court should consider the
increase in a mother's living expenses occasioned by moving from
Hand County, South Dakota to Tacoma, Washington in deciding whether
to modify a child support award).
Furthermore, Robinson claims that he agreed in the first
instance to pay more than Rule 90.3 required of him because he
recognized the additional expenses his family incurred by living in
Unalaska. We have recently decided that in ruling on child support
modification motions, superior courts should respect the intentions
of parties who contract for child support payments in excess of
Rule 90.3's requirements. See Flannery v. Flannery, 950 P.2d 126,
132 (Alaska 1997). [Fn. 4] As a result, in setting Robinson's new
child support obligations, the superior should consider his initial
promise to make payments that reflected the higher cost of living
in Unalaska.
IV. CONCLUSION
We REMAND to the superior court for findings. In
explaining the rationale for its decision on remand, the superior
court should address the three arguments that Easton raised below
and on appeal.
FOOTNOTES
Footnote 1:
In the dissolution form he and Easton filled out in June 1993,
Robinson estimated his adjusted gross income to be $38,483.09. His
actual adjusted gross income for 1993, as shown by tax returns, was
$55,751. Using this latter figure, Alaska Civil Rule 90.3 would
have required him to pay $1,672.53 a month.
Footnote 2:
Easton also argues that money used to pay child support
arrears should be included in income because it is a debt, and Rule
90.3 provides that "[p]rior or subsequent debts of the obligor,
even if substantial, normally will not justify a reduction in
support." Alaska R. Civ. P. 90.3, commentary VI.B.5. This
provision in the rule was not intended to apply to child support
debts. Instead, it explains that debt does not justify a reduction
in child support because "[t]he obligation to provide child support
is more important than the obligation to fulfill most other
obligations." Id. This rationale does not apply in the situation
where an obligor is indebted to CSED.
Footnote 3:
The record provides support for the conclusion that Robinson
inherited the property that he later sold. If on remand the
superior court determines that this property was indeed inherited,
only the interest from its sale and capital gain, if any,
calculated on the property's basis as inherited property, would
qualify as income under the guidelines of Rule 90.3. See Nass v.
Seaton, 904 P.2d 412, 416 (Alaska 1995) (stating that "the
principal amount of gifts and inheritances should not be considered
as income for purposes of Rule 90.3."); see also Alaska R. Civ. P.
90.3, commentary III.A (stating that "[t]he principal amount of
one-time gifts and inheritances should not be considered as income,
but interest from the principal amount should be considered as
income . . . ."). If the property is not inherited, only capital
gain from its sale and the interest portion of the payments should
be considered income to Robinson for purposes of Rule 90.3. See
Alaska R. Civ. P. 90.3, commentary III.A.16; see also Eagley v.
Eagley, 849 P.2d 777, 779 (Alaska 1993) (stating that although this
court has not officially adopted the commentary, we have relied on
it for guidance in determining adjusted annual income).
Footnote 4:
Indeed, the superior court may want to consider the effect of
Flannery on other aspects of its decision to modify Robinson's
child support obligations given Flannery's holding that Rule 90.3's
guidelines do not necessarily apply when a parent seeks to modify
a child support agreement in which he or she promised to pay more
than would be required by the rule. See Flannery v. Flannery, 950
P.2d 126, 134 (Alaska 1997).
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