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Rusenstrom v. Rusenstrom (6/4/99) sp-5130
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
ALLAN RUSENSTROM, )
) Supreme Court No. S-8118
) Superior Court No.
v. ) 3AN-93-08355 CI
CARRIE S. RUSENSTROM, ) O P I N I O N
Appellee. ) [No. 5130 - June 4, 1999]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage
Rene J. Gonzalez, Judge.
Appearances: Jennifer L. Holland and Max F.
Gruenberg, Jr., Gruenberg and Clover, Anchorage, for Appellant.
Cris W. Rogers and David S. Houston, Houston & Houston, Anchorage,
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
When Carrie and Allan Rusenstrom divorced, the court
awarded Carrie custody of their two daughters. It later ordered
Allan to provide his daughters with health insurance through a
policy funded by his employer. Although Alaska Civil
Rule 90.3(d)(1) allowed Allan's child support to be reduced by half
of the cost he actually paid for this coverage, the court declined
to grant any reduction, finding that he had failed to prove what
cost he actually paid. We reverse this decision because Allan lost
more than $300 in monthly pension contributions by insuring his
daughters; this is an actual payment of coverage costs. The court
also declined Allan's request to claim one of his daughters as a
tax exemption. We affirm this decision because Allan alleged no
material change in circumstances to justify this request.
I. FACTS AND PROCEEDINGS
Carrie and Allan Rusenstrom married on August 10, 1985,
and had two children, Kristen and Kaylee, before the marriage ended
in divorce in June 1994. The court awarded Carrie primary physical
custody of the girls and ordered Allan to pay monthly support under
the guidelines established by Alaska Civil Rule 90.3. The court
did not direct either parent to provide health insurance for the
girls. Allan nonetheless maintained health insurance for them
under an employer-funded policy that was available to him as a
member of the International Brotherhood of Electrical Workers. The
court also did not decide which parent would be entitled to claim
the girls as dependents for tax purposes. Carrie, as custodial
parent, claimed them as her dependents. [Fn. 1]
More than two years after the divorce, Allan moved to
modify the child support order, seeking credit against his child
support obligation for half the cost of insuring his daughters. He
also asked to be allowed to claim one of his daughters as a tax
The superior court amended the child support order to
require that Allan provide health insurance for his daughters, but
it denied him any credit for paying the cost of coverage. The
court also denied Allan's request for an exemption as to one of his
A. The Superior Court Erred in Denying Allan a Child Support
Credit for Maintaining Health Insurance for Kristen and Kaylee.
After the Rusenstroms divorced, this court amended Alaska
Civil Rule 90.3(d) to require divorcing parents to provide their
children with health care insurance if it is available. Under the
amended rule, parents must ordinarily share the cost of the
insurance, and if the non-custodial parent pays for the coverage,
the non-custodial parent is entitled to a child support credit for
the custodial parent's share of the payment. [Fn. 2]
Although the Rusenstroms' original child support order
did not address the topic of insurance, Allan voluntarily provided
medical coverage for his daughters. On August 30, 1996, after
Rule 90.3(d) was amended, he moved to modify the support order to
allocate to Carrie half the cost of this insurance. Claiming that
the girls' coverage cost him $339.20 per month, Allan requested a
monthly child support credit of $169.60 (one half of the claimed
Following a hearing, the superior court ordered Allan to
provide health insurance for his daughters, finding that "[t]he
parties' two minor children are in need of health care coverage by
insurance"and that "[t]he necessary health care coverage for the
children is available to Allan under the collective bargaining
agreement between IBEW and his employer." But the court further
found that "Allan ha[d] failed to offer any admissible evidence
. . . [of] the cost necessary to insure the two children." It thus
denied him any credit for the cost of maintaining this insurance.
Allan challenges this ruling, arguing that he presented
admissible evidence proving that his actual monthly cost for
insuring his daughters amounts to $339.20. In response, Carrie
maintains that Allan should receive no credit, since his employer
actually pays for the coverage. Alternatively, she claims that
Allan failed to prove that the girls' insurance is necessary.
1. Standard of review
We review rulings admitting or excluding evidence for
abuse of discretion. [Fn. 3] We review factual findings for clear
error. [Fn. 4] But in determining how legal doctrine applies to
undisputed facts, we rule de novo, without deference to the trial
court's judgment. [Fn. 5]
2. The admissibility of Allan's evidence of added cost
To support his claim that insuring Kaylee and Kristen
cost him $339.20 per month, Allan presented the affidavit of Donald
Parks (with attached exhibits) and his own affidavit. At the
hearing on Allan's motion, Carrie did not argue that this evidence
was inadmissible. The court nevertheless found that Allan had
"failed to offer any admissible evidence that the sum of $339.20 is
the cost necessary to insure the two children." The court's
reference to inadmissibility suggests that it denied Allan's motion
because his affidavits contained hearsay. Allan persuasively
disputes this ruling.
Absent a proper objection, hearsay is normally
admissible. [Fn. 6] Here, Carrie raised no hearsay objection.
Moreover, the trial court did not suggest that it considered the
evidence to be problematic on this ground. [Fn. 7] To the
contrary, when Allan offered to call Parks as a witness during the
hearing on his motion, the court indicated that his testimony was
unnecessary. [Fn. 8] Given these circumstances, if the trial court
denied Allan's motion on the ground that his evidence of added cost
was inadmissible hearsay, the court abused its discretion.
Carrie offers an alternative explanation for the trial
court's ruling, suggesting that, in finding no admissible evidence
of "the cost necessary to insure the two children,"the court meant
to say that Allan had failed to prove that the insurance package he
had chosen was actually necessary to meet the children's needs.
But this argument misconstrues the trial court's order,
which directs Allan to continue providing the coverage precisely
because it is "necessary health care coverage for the children
[and] is available to Allan under the collective bargaining
agreement." In finding that Allan failed to show that $339.20 was
the "cost necessary"to insure the girls, the court echoed the
words of the commentary to Civil Rule 90.3(d)(1), which it had
quoted in its decision. The commentary explains that the rule's
cost-sharing provision "is limited to that portion of the total
cost necessary to insure the children involved -- not the parent,
the parent's new spouse or children of another relationship."[Fn.
9] The court's reference to this commentary makes it obvious that
it found Allan's evidence deficient not in failing to prove the
need for the provided coverage, but in failing to prove the cost
that was allocable to his daughters.
3. Sufficiency of the added cost evidence
The remaining question is whether, considering his
hearsay evidence, Allan presented substantial evidence that his
monthly cost for insuring his daughters was $339.20. The evidence
on this point is essentially undisputed. Parks's affidavit
establishes that Allan receives a Health and Welfare Plan (H&W)
benefit from his employer of about $756 per month. This benefit is
used by his union to purchase insurance for Allan and, at Allan's
option, for his family. Allan's selection of the premium insurance
plan, which extends coverage to his family, results in the entire
H&W benefit being applied toward insurance coverage. But if Allan
purchased health insurance for himself alone, forty-eight percent
of his H&W benefit would be paid into his Money Purchase Pension
Plan (MPPP), which becomes available to him upon retirement.
Thus, were Allan to insure himself but not his family,
the cost of his insurance would be about $393; the remaining $363
(forty-eight percent of $756) per month of his H&W benefit would be
paid into his MPPP. Allan has selected the premium insurance, so
that none of the H&W benefit goes into his MPPP. In so doing he
forgoes a monthly benefit of about $363. [Fn. 10] Carrie offered
no conflicting evidence. Her only witness, Gregory Stokes,
corroborated Parks's affidavit. Stokes testified that he was
familiar with Allan's benefits package; he confirmed that if Allan
did not insure the girls, a portion of Allan's H&W benefit would be
paid into his MPPP.
In fact, Carrie apparently did not call Stokes to dispute
Allan's evidence concerning the increased cost of covering their
two daughters. She presented his testimony only to make the point
that Allan did not actually pay for this coverage -- that his
employer paid it. This was the heart of Carrie's opposition to
Allan's motion below, and it is the core of her argument on appeal.
Alaska Civil Rule 90.3(d)(1) permits a non-custodial parent to
receive child support credit for providing court-ordered health
insurance only if the insurance is "actually paid"by that parent.
[Fn. 11] According to Carrie, the cost of coverage is not
"actually paid"by Allan, since his employer pays for the
insurance. In Carrie's view, Allan would be entitled to receive
credit only if he personally paid the costs or if they were
reflected as deductions from his take-home pay.
Allan responds that he does "actually pa[y]"for the
insurance because he forgoes the benefit of future income in order
to maintain the insurance. He contends that "[m]oney put into his
retirement is just as valuable as money put into his pocket every
month . . . . Since retirement money is income to him, the loss of
it due to a health insurance election for the children represents
a very real cost to [him]."
Allan has the better argument. Civil Rule 90.3(d)(1)
allows Allan a credit for costs that he "actually paid,"but it
does not expressly require that Allan pay those costs directly or
out of his present take-home income. The Commentary to the rule
provides some insight into the purpose of the "actually paid"
requirement. It suggests that the rule mandates allocation of
insurance payments only when there is "actual cost"imposed on the
parent seeking a credit. [Fn. 12] By opting for employer-funded
insurance coverage over payments into a retirement plan, a non-
custodial parent incurs a cost as real as the cost of paying
directly. In keeping with the Commentary, we interpret Rule 90.3's
"actually paid"requirement to include this situation.
The record establishes that Allan paid an actual cost out
of his future income stream in order to maintain his children's
insurance. The record also establishes that this cost is
approximately the amount that Allan asserted as the basis for
requesting a child support credit. [Fn. 13] Accordingly, we
conclude that the superior court erred in finding that Allan failed
to produce admissible evidence sufficient to support his claim for
a child support credit.
We nevertheless note that Allan's evidence on this point
may not be conclusive. Although neither party addresses the issue,
the record suggests that Allan has remarried and that his new
spouse has a child. It therefore seems conceivable that Allan's
added cost for insuring his family provides coverage not only for
Kristen and Kaylee, but also for his new spouse and her daughter.
On remand, the court should resolve any remaining
uncertainty on this point. Because Rule 90.3(d)(1) entitles Allan
to a credit based only on his added costs for insuring Kristen and
Kaylee, he should receive no credit for any added costs reflecting
coverage of his new family members. The court may require Allan to
produce additional evidence concerning his coverage. If the plan
covers other family members, and evidence is unavailable on the
incremental cost of insuring only Kristen and Kaylee, the court
should determine Allan's costs for covering Kristen and Kaylee by
spreading the total added cost of family coverage pro rata among
all covered family members, and allocating to Carrie half of
Kristen's and Kaylee's prorated costs.
B. The Superior Court Did Not Err in Denying Allan's Motion
to Modify the Child Support Award to Allocate to Him a Dependency
The original child support order for Kristen and Kaylee
is silent as to who could claim a dependency tax exemption for
them. Under federal law, the custodial parent claims the exemption
unless that parent releases the claim. [Fn. 15] Allan moved for an
order requiring Carrie to release her claim as to Kaylee, so that
he could claim Kaylee as his exemption. [Fn. 16] The court refused
to modify the support order, finding that Allan had cited "no
authority . . . to support the modification of the judgment at this
late date to adjudicate issues dealing with tax exemptions."
Allan disputes this ruling, insisting that his motion was
timely and that ample authority exists to establish the court's
power to order release of Carrie's exemption. We need address only
the timeliness issue.
In Dewey v. Dewey, [Fn. 17] we stated that a parent may
seek modification of a child support order either by demonstrating
a "material change in circumstances"under Civil Rule 90.3(h)(1) or
by moving for relief under Civil Rule 60(b). [Fn. 18] Allan claims
that the trial court mistakenly considered his motion only under
Rule 60(b), which imposes time constraints on parties moving for
relief from a judgment. He faults the court for failing to
consider his motion under Rule 90.3(h)(1), which imposes no
comparable restrictions. Allan asserts that in the setting of
child custody disputes, the right to claim a dependency tax
exemption is a "custody or custodial concept"rather than a
"property division"issue. [Fn. 19] Therefore, Allan implies, a
party can raise the issue by a motion to modify support under Rule
Allan's assertion is correct to a point. In Waggoner v.
Foster, [Fn. 20] we treated the allocation of dependency exemptions
as a matter of child support subject to modification under the
rule. [Fn. 21] But before the trial court may modify a support
order under Rule 90.3(h)(1), the moving party must allege and prove
a material change in circumstances. [Fn. 22] Absent changed
circumstances, the sound principle of finality requires the order
to be treated as final. [Fn. 23]
We have previously recognized that both factual and legal
changes may amount to material changes in circumstances for
purposes of modification. [Fn. 24] Allan alleges no factual change
in circumstances. He argued before the trial court that the recent
amendment of Rule 90.3(d)(1)'s provisions dealing with insurance
coverage was a material change in circumstances. But a change in
child support guidelines allows the court to grant a motion for
modification based on changed circumstances only to the extent that
specific change in the rule is relevant to the change proposed in
the motion. [Fn. 25]
Here, the recent change in Rule 90.3(d) speaks to health
care issues and is undeniably relevant for purposes of altering the
original order's provisions relating to Allan's right to a credit
for providing his daughters with health insurance. But this change
is irrelevant to the issue of tax exemptions. Hence, the change in
the rule cannot be deemed "material"for purposes of Allan's motion
seeking modification to allow him a tax exemption.
Because Allan alleges no other change in law or facts
relating to the tax exemption allocation, and because he has failed
to allege or prove grounds for relief from judgment under Civil
Rule 60(b), we affirm the trial court's decision to deny his motion
for an exemption.
We REVERSE the denial of Allan's motion to allow credit
for his daughters' health insurance payments, AFFIRM the denial of
his motion to compel Carrie to execute a waiver of her claim to a
tax exemption, and REMAND for further proceedings as directed in
Federal law provides that, when a child's parents divorce, the
custodial parent is ordinarily entitled to claim the child as a
dependent. See 26 U.S.C.A. sec. 152(e) (West Supp. 1998).
As amended, Civil Rule 90.3(d)(1) reads in part:
The court shall address coverage of the
children's health care needs and require health insurance for the
children if insurance is available to either parent at a reasonable
cost. . . . The court shall allocate equally the cost of this
insurance between the parties unless the court orders otherwise for
good cause. An obligor's child support obligation will be
decreased by the amount of the obligee's portion of health
insurance payments ordered by the court and actually paid by the
See Williams v. Utility Equip. Inc., 837 P.2d 1112, 1115
See Murphy v. Murphy, 812 P.2d 960, 962-63 (Alaska 1991);
Larman v. Kodiak Elec. Ass'n, 514 P.2d 1275, 1278 (Alaska 1973).
A finding is clearly erroneous when, although there may be evidence
to support it, we are left with the definite and firm conviction on
the entire record that a mistake has been made. Kodiak Elec., 514
P.2d at 1278.
See D.L.M. v. M.W., 941 P.2d 900, 902 n.2 (Alaska 1997); see
also Luedtke v. Nabors Alaska Drilling, Inc., 834 P.2d 1220, 1223
(Alaska 1992) (quoting Foss Alaska Line, Inc. v. Northland Servs.,
Inc., 724 P.2d 523, 526 (Alaska 1986)).
See Alaska R. Evid. 103; Bird v. Starkey, 914 P.2d 1246, 1248
n.1 (Alaska 1996); see also 1 John W. Strong, McCormick on Evidence
sec. 55, at 221 (4th ed. 1992) (failure to object is a waiver).
Cf. Byrd v. State, 626 P.2d 1057, 1058 (Alaska 1980) (noting that
hearsay evidence that is not objected to is admissible); Cassell v.
State, 645 P.2d 219, 220-21 (Alaska App. 1982) (same).
In Vachon v. Pugliese, 931 P.2d 371, 381 (Alaska 1996), we
held that a trial court may make sua sponte evidentiary objections.
But we did not suggest that the court may exclude evidence sua
sponte without affording the parties prior notice of its intent to
do so. Unnoticed evidentiary rulings of this kind are disfavored
"to prevent unfairness, in that, if the counsel offering the
testimony were made aware of the objection to the testimony at the
time, he would have had an opportunity to cure it." 1 John W.
Strong, McCormick on Evidence sec. 55, at 224-25 n.20 (4th ed.
(quoting Electric Park Amusement Co. v. Psichos, 83 A. 766, 768
(N.J. 1912)); see also Thomson v. Wheeler Const. Co., 385 P.2d 111,
115 (Alaska 1963) (citing the importance of timely objections to
the fair and efficient administration of justice).
At the hearing, Allan relied on his affidavits. In response,
Carrie called IBEW Plan Administrator Gregory Stokes to testify
that the girls' insurance plan was an employer-funded benefit.
Before the parties proceeded to argue Allan's motion, the following
Court: Are the parties presenting any
Ms. Holland [Allan's Attorney]: We have no
further testimony unless the court would like to inquire of Mr.
Parks who we submitted an affidavit from. He will be available by
telephone. But I believe that all the --
Court: That -- Mr. Parks' affidavit doesn't
appear to disagree with Mr. Stokes' testimony.
Ms. Holland: That's correct your honor.
Court: Then what are the [closing] arguments?
Alaska R. Civ. P. 90.3 Commentary VII.A.
Allan actually seeks credit for one half of a more
conservative figure -- $339.20 -- the difference between the two
amounts apparently reflecting computational error.
See Alaska R. Civ. P. 90.3(d)(1); see also Alaska R. Civ. P.
90.3 Commentary VII.A. (50/50 split appropriate absent finding of
See Alaska R. Civ. P. 90.3 Commentary VII (1994-95) ("Only
actual cost to the obligor . . . may be credited."). The amended
version of the Commentary is silent with respect to the
interpretation of "actually paid,"but the rule itself has not
materially changed on this point. See Alaska R. Civ. P. 90.3
Commentary VII (1998-99).
See supra note 10 and accompanying text (discussing the
amount of Allan's requested credit).
The court did not deny Allan's motion on this basis, and while
the current record is not conclusive on the point, it points more
strongly to the conclusion that Allan's added cost covers just
Kristen and Kaylee. Gregory Stokes, who was familiar with Allan's
plan, testified that if Allan opted to forgo coverage for his
daughters, "[p]art of [his] contribution would be directed towards
[his] pension plan." The record indicates that, under the plan
options available to Allan, family size does not affect the cost of
family coverage -- in other words, family coverage is an all-or-
nothing option. Hence, Stokes's testimony that Allan's cost of
coverage would change if he deleted his daughters implies that they
are the only family members covered by his policy.
See 26 U.S.C.A. sec. 152(e) (West Supp. 1998).
Alaska has not yet determined whether a court may force a
custodial parent to release the claim.
886 P.2d 623 (Alaska 1995).
See Alaska R. Civ. P. 90.3(h)(1); Dewey, 886 P.2d at 626, 630
See Allen v. Allen, 645 P.2d 774, 776 (Alaska 1982) ("The
provisions of a decree adjudicating property rights, unlike
provisions for child support, child custody or alimony, constitute
a final judgment not subject to modification.").
904 P.2d 1234 (Alaska 1995).
See id. at 1235.
See Alaska R. Civ. P. 90.3(h)(1); see also Dewey v. Dewey, 886
P.2d at 629-30 (noting that the moving party must show a material
and substantial change in circumstances by a preponderance of the
See Bunn v. House, 934 P.2d 753, 757 (Alaska 1997).
See id. at 758.