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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Child Support Recovery Services Inc. v. Inn at the Waterfront (8/18/00) sp-5307

Child Support Recovery Services Inc. v. Inn at the Waterfront (8/18/00) sp-5307

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
	


CHILD SUPPORT RECOVERY 		)
SERVICES, INC., ex rel. S.C.,	)
A Minor,					)
)	Supreme Court No. S-8691
   Appellant,		)
)	Superior Court No.
v.					)	1JU-89-377 CI
)
INN AT THE WATERFRONT, INC.,	)	O P I N I O N
)
   Appellee.		)	[No. 5307 - August 18, 2000]
______________________________)



Appeal from the Superior Court of the State of 
Alaska, First Judicial District, Juneau,
	Larry Weeks, Judge.


Appearances: Kenneth Kirk, Anchorage, for 
Appellant.  Dennis C. Bailey, Dillon & 
Findley, Juneau, for Appellee.  Diane L. 
Wendlandt, Assistant Attorney General, 
Anchorage, and Bruce M. Botelho, Attorney 
General, Juneau, for Amicus Curiae State of 
Alaska, Department of Revenue, Child Support 
Enforcement Division.


Before:	Matthews, Chief Justice, Eastaugh, 
Fabe, Bryner, and Carpeneti, Justices.  


PER CURIAM
BRYNER, Justice, with whom EASTAUGH, Justice, 
joins, concurring.




Child Support Recovery Services, Inc. (CSRS) appeals the 
grant of summary judgment by the superior court in favor of Inn at 
the Waterfront, Inc.  For the reasons stated in Judge Larry Weeks's 
thorough and thoughtful summary judgment decision, relevant 
portions of which we set out in Appendix A, we affirm the grant of 
summary judgment.  We add the following with respect to points 
specifically raised on the appeal:
1. At oral argument, counsel for appellant CSRS  
abandoned reliance on AS 25.27.260(b).   Accordingly, we have 
excised Judge Weeks's analysis of the legislature's 1994 amendment 
of AS 25.27.260, which added subsection (b).
2. CSRS first appeared in this case in 1993 when the 
Child Support Enforcement Division assigned its enforcement right 
to CSRS.  The sole defendant at the time, Cullinane, did not object 
to this substitution, and the superior court allowed it.  No 
question of CSRS's standing to pursue this case was raised until 
the superior court's summary judgment ruling.  There, Judge Weeks 
ruled:


Finally, AS 25.27.260(b) which permits 
recovery by an individual as opposed to the 
state, was not enacted until a year after the 
last [order to withhold and deliver] was 
served in this case.  The court believes that 
this fact precludes the individual plaintiff 
CSR[S] from recovery. 

CSRS appealed the superior court's conclusion that it lacked 
standing to bring this action and argued in this court that Inn at 
the Waterfront should be equitably estopped from arguing lack of 
standing.  Because at oral argument CSRS abandoned reliance on AS 
25.27.260(b), and because we conclude that summary judgment was 
properly granted on the merits, we do not address CSRS's argument 
that Inn at the Waterfront should be equitably estopped from 
arguing that CSRS did not have the right to maintain its action.  
For this reason, and because the parties have not briefed the 
issue, we decline to address whether the state may assign its 
enforcement right to a private collection agency such as CSRS.
The judgment entered by the superior court is AFFIRMED.
    	APPENDIX A**
	MEMORANDUM AND ORDER
I. INTRODUCTION


This case is before the court on defendant Inn at the 
Waterfront's motion for summary judgment, or in the alternative, 
for relief from judgment under Civil Rule 60(b)(5), and for costs 
and fees.  CSRS opposes both motions.  Resolution of the pending 
issues depends on the court's interpretation of AS 25.27.260: Civil 
liability upon failure to comply with an order or lien.
1.	Factual Background
In 1981, a Nevada court established a child support 
obligation for William J. Cullinane, the non-custodial parent of a 
minor child, S.C.  In 1986, the Alaska Child Support Enforcement 
Division (CSED) began efforts to collect unpaid child support due 
under the Nevada order.  Those efforts included the issuance of 
three Orders to Withhold [Income] and Deliver Property (WIDs) to 
Inn at the Waterfront, Inc., based on CSED's understanding that Inn 
was Cullinane's employer.  The WIDs were issued pursuant to AS 
25.27.250, formerly AS 47.23.250.3


The first WID, dated May 12, 1988, instructed Inn inter 
alia to withhold and deliver to CSED all of Cullinane's real or 
personal property in its possession, fifty-five percent of his 
wages and earnings when payable, and fifty percent of any 
unemployment insurance benefits when payable, up to $23,321.74, the 
amount of arrearage, interest and penalties due as of the date of 
the WID.  The second WID, dated April 5, 1989, set forth the same 
withholding instructions but raised the maximum allowable 
withholding to $31,307.74 to reflect Cullinane's arrearage, 
interest and penalties due as of the date of the second WID.  The 
third WID, dated September 30, 1993, instructed Inn to withhold and 
deliver by the same terms as the first two WIDs, with the exception 
that Inn should withhold sixty percent of Cullinane's wages and 
earnings when payable, up to $57,455.05, the amount of arrearage, 
interest and penalties due as of the date of the third WID.  The 
legal sufficiency of the WIDs has not been argued.  Likewise, Inn 
has not argued about whether it received the WIDs or whether it 
failed to withhold or deliver Cullinane's income or assets in its 
possession as required by the terms of the WIDs.  On a motion for 
summary judgment the court infers CSRS prevails on this issue.4
CSED initiated litigation in 1989 against Cullinane.  
Additional parties, including Inn, Ann House and Cullinane 
Corporation, were joined in the litigation as a result of their 
association with Cullinane.  Prosecution of the case was assumed by 
CSRS in 1993.  On February 27, 1995, in the context of a cross 
motion for summary judgment on the issue of liability, this court 
determined Inn was "liable for any unpaid WIDs accruing from the 
time the first WID was served."


Cullinane's outstanding arrearage obligation was reduced 
to judgment on January 2, 1996.  On July 22, 1996, Cullinane paid 
$70,653.33 in full satisfaction of the outstanding judgment for 
child support arrearage plus interest and costs of execution.5  
CSED issued a notice of intent to close the case, addressed to 
Cullinane, on November 6, 1996.  CSED filed notice of full 
satisfaction of the judgment against Cullinane on November 15, 
1996.  On March 12, 1997, CSED notified Inn that the September 30, 
1993 withholding order (WID No. 3) was terminated.
2.	Summary of Parties' Arguments
Inn argues summary judgment is appropriate in this case 
because it was liable only for "unpaid WIDs" which no longer exist. 
 Inn interprets AS 25.27.260 to impose joint and several liability 
on the obligor-employee and his or her employer for the accrued and 
unpaid support arrearage indicated in the WIDs.  According to Inn, 
this court's January 1996 judgment was "fully executable either 
against Mr. Cullinane or Inn to the extent of the unpaid WIDs."  
According to Inn, satisfaction of the underlying judgment against 
Cullinane necessarily relieves Inn of continuing liability.


CSRS argues Inn's liability for failure to comply with 
the WIDs in violation of AS 25.27.260 is continuing and independent 
of Cullinane's liability.  It says that Inn's liability may be as 
much as $70,653.33.  According to CSRS, Cullinane's satisfaction of 
the underlying arrearage obligation terminated the withholding 
requirement of the WIDs but did not erase Inn's liability based on 
its previous non-compliance.  
Inn also argues AS 25.27.260 should not be construed as a 
penalty absent express legislative intent.  Inn argues against 
permitting a double recovery or a civil penalty in excess of the 
criminal fine provided in AS 11.51.122 for "aiding the nonpayment 
of child support."6  CSRS argues AS 25.27.260 should be construed 
as a penalty in that its purpose is to encourage employers to obey 
WIDs.  According to CSRS, employers should not be permitted to 
disobey WIDs without consequence.
Inn argues a construction of AS 25.27.260 which permits 
double recovery is inconsistent with other provisions of the child 
support enforcement act and the statute's express purpose of 
enforcing the child support obligations of responsible parents.  
CSRS argues it does not seek a double recovery from the same 
person.  CSRS also argues the policies underlying the legislative 
enactment of strong enforcement mechanisms would warrant a double 
recovery.


As an alternative to summary judgment, Inn argues the 
full satisfaction of the arrearage obligation underlying the WIDs 
operates as a release of Inn's liability and Inn should therefore 
be granted relief from judgment pursuant to Civil Rule 60(b)(5).  
CSRS argues relief from judgment under Civil Rule 60(b)(5) is 
inappropriate because no judgment yet exists against Inn from which 
the court can give it relief.
3.	Summary Judgment and Civil Rule 60(b) Standards
The court may grant summary judgment pursuant to Civil 
Rule 56 when there are no genuine issues of material fact and the 
moving party is entitled to judgment as a matter of law.7  Once the 
moving party establishes by competent evidence the absence of 
genuine issues of material fact, the non-moving party must clearly 
and specifically demonstrate that it can produce admissible 
evidence disputing the moving party's evidence.8   All reasonable 
inferences of fact are drawn in favor of the non-moving party.9 
Civil Rule 60(b)(5) provides for relief from a final 
judgment, order, or proceeding where "the judgment has been 
satisfied, released, or discharged, or a prior judgment upon which 
it is based has been reversed or otherwise vacated, or it is no 
longer equitable that the judgment should have prospective 
application." 
II.	ISSUE

Is Inn's civil liability under AS 25.27.260 
for failure to comply with the WIDs continuing 
and independent of or joint and several with 
the full satisfaction of William Cullinane's 
child support judgment?


III.	DISCUSSION

The legislative intent of AS 25.27.260 is 
ambiguous, but suggests that Inn's liability 
for failure to comply with the WIDs is joint 
and several with William Cullinane's support 
obligation.
In the context of a prior summary judgment motion by 
defendant Ann House, this court found Inn liable for its failure to 
comply with the terms of the three WIDs it received concerning 
Cullinane.  That finding was based on application of AS 25.27.260 
to facts in this case which are not in dispute.  Alaska Statute 
25.27.260 provides:
Civil liability upon failure to comply with an 
order or lien.  (a) If a person, political 
subdivision, or department of the state (1) 
fails to make an answer to an order to 
withhold and deliver within the time 
prescribed in AS 25.27.250; (2) fails or 
refuses to deliver property in accordance with 
an order issued under AS 25.27.250; (3) pays 
over, releases, sells, transfers, or conveys 
real property subject to a lien recorded under 
AS 25.27.230 to or for the benefit of the 
obligor or any other person; (4) fails or 
refuses to surrender upon demand property 
attached; or (5) intentionally fails or 
refuses to honor an assignment of wages or an 
income withholding order under AS 25.27.062 
that was served by the agency through personal 
service by a process server or through 
certified mail, return receipt requested, the 
person, political subdivision, or department 
of the state is liable to the agency in an 
amount equal to 100 percent of the amount 
constituting the basis of the lien, order to 
withhold and deliver, attachment, or 
withholding of wages or income, together with 
costs, interest, and reasonable attorney fees. 
 (Emphasis added.)



Inn's liability arose from its failure to answer and to withhold 
and deliver income and property in accordance with the three WIDs 
issued pursuant to AS 25.27.250.10  Inn does not contest its 
liability for "unpaid WIDs" as established in this court's order of 
February 1995, but argues its liability has since been extinguished 
by Cullinane's payment in full of his child support arrearage.  The 
legislative intent behind Chapter 27 of Title 25 and the meaning 
conveyed by the statute's language and context are ambiguous, but 
do support a finding of joint and several liability.
1.	Legislative Intent
In interpreting a statute, the court's goal is to give 
effect to the intent of the law-making body with due regard for the 
meaning that the language employed in the statute conveys to 
others.11  Alaska Statute 25.27.260 is one of numerous enforcement 
provisions enacted in 1977 by the state legislature to increase the 
effectiveness of child support collections.  The express purpose of 
the 1977 act is as follows:


PURPOSE.  Common law and statutory procedures 
governing the remedies for enforcement of 
support for financially dependent minor 
children by responsible parents have not 
proven sufficiently effective or efficient to 
cope with the increasing incidence of 
financial dependency.  The increasing workload 
of courts, district attorneys, and the 
attorney general has made such remedies 
uncertain, slow and inadequate, thereby 
resulting in a growing burden on the financial 
resources of the state which is required to 
provide public assistance grants for basic 
maintenance requirements when parents fail to 
meet their primary obligations.  The state, 
therefore, exercising its police and sovereign 
power, declares that the common law and Alaska 
statutes pertaining to the establishment and 
enforcement of child support obligations shall 
be augmented by additional remedies in order 
to meet the needs of minor children.  It is 
declared to be the public policy of this state 
that this Act be construed and administered to 
the end that children shall be maintained from 
the resources of responsible parents, thereby 
relieving, at least in part, the burden 
presently born by the general citizenry 
through welfare and welfare-related programs.12

Subsequent amendments to the provisions of Chapter 27 have been 
accompanied by similar statements of purpose and intent: 
LEGISLATIVE FINDINGS AND PURPOSE.  (a) The 
legislature finds that the effect on the 
general public of the failure of parents to 
support their children is vast and far 
reaching.  The harmful effects of unpaid child 
support touch not only the poor but reach far 
beyond, diminishing the overall quality of 
life for all Alaskans.  The purpose of the 
amendments in this Act is to enhance the 
efforts of those persons who seek to enforce 
the payment of child support obligations by 
noncustodial parents having the duty of 
support.

. . . .



(c) The legislature also finds that the 
hardship experienced by children in families 
who may rely on support from a noncustodial 
parent should not be a necessary condition 
that must be endured by those families.  
Statutory tools have been provided to enable 
the child support enforcement agency to 
collect unpaid child support owed by a parent, 
including the authority to order an employer 
to withhold and deliver part of an employee's 
earnings.  This tool, however, is not usable 
against a self-employed parent who owes child 
support.  The legislature finds that if 
delinquency in making child support payments 
could be reflected in a person's credit 
history, an effective collection and deterrent 
tool would exist - a tool that would be 
effective against those self-employed parents 
who owe child support.13

The Senate adopted the following letter of intent to accompany the 
1994 amendments to the Act:
Apart from the statutory changes enacted in 
this bill, the legislature wishes to convey 
its intent that the Child Support Enforcement 
Division distinguish between obligors, 
employers and others who voluntarily meet 
their support, withholding or other 
obligations under this chapter and those who 
do not.  To the extent allowed by this chapter 
and federal law, this distinction should be 
actively reflected in all agency 
communications as well as in the nature, 
extent and timing of enforcement actions, 
subject to reasonable precautions to avoid 
uncollectability of funds necessary for 
support.14



Chapter 27 as amended was enacted to satisfy the federal mandate 
for compliance with 42 U.S.C.  651 - 667.15  The relevant portion 
of the federal statute, 42 U.S.C.  666(b)(6)(C), requires:
The employer must be held liable to the State 
for any amount which such employer fails to 
withhold from income due an employee following 
receipt by such employer of proper notice 
under [the previous subparagraph requiring 
employers to withhold and deliver the amount 
specified in the notice to the agency or other 
entity authorized to collect].

Federal regulations promulgated by the federal Office of Child 
Support Enforcement also require:
(iv) That the withholding [provision created 
by the state] is binding upon the employer 
until further notice by the State; . . .

(vi) That, if the employer fails to withhold 
wages in accordance with the provisions of the 
notice, the employer is liable for the 
accumulated amount the employer should have 
withheld from the absent parent's wages[.]16



Thus, the express intent of the legislature with regard to the 
provisions of Chapter 27 has consistently been to increase the 
ability of the state to enforce child support obligations and, 
toward that goal, to impose federally mandated liability on 
employers who fail to aid in that enforcement effort.  The 
imposition of joint and several liability on the employer comports 
with that intent.  The employer becomes a readily available source 
of funds in cases where funds are not available from the obligor.  
This responsibility on employers is new and significant.  It is a 
"penalty" even with joint and several liability; the non-compliant 
employer ends up paying the employee's child support.
2.	Statutory Enforcement Obligations








In effect, the state has recruited employers as private 
child support enforcement agencies.  The WID statute is one of 
several provisions in Chapter 27 which impose enforcement 
obligations on employers.  For example, AS 25.27.06217 provides for 
income withholding orders which must be implemented by employers.  
Alaska Statute 25.27.06318 limits an employer's discretion with 
regard to health care coverage required under a medical support 
order.19  Alaska Statute 25.27.070 provides for assignment of wages 
which must be implemented by the employer.20  Alaska Statute 
25.27.062(k) requires employers subject to withholding orders to 
maintain independent records on obligor-employees and notify CSED 
in the event of termination.21  Alaska Statute 25.27.075 requires 
employers with 20 or more employees to report hirings to CSED.22  


These statutory enforcement obligations are not 
voluntary; an employer is subject to civil penalties and liability 
for failure to comply.  In addition to civil liability under AS 
25.27.260, an employer is subject to a civil penalty of up to 
$1,000 for failure to comply with the reporting statute.23  An 
employer is subject to a maximum $1,000 civil penalty for 
retaliatory discharge of an obligor-employee based on receipt of a 
withholding or reporting order.24  The WID provision likewise 
provides for employer liability for failure to comply.  Alaska 
Statute 25.27.250(j) provides: "A person, political subdivision, or 
department that fails to comply with an order to withhold and 
deliver served under this subsection is subject to penalties under 
AS 25.27.260."  Imposition of this liability is a significant 
change to child support enforcement law and provides material 
benefit to the state's ability to collect support.  The state has 
the option of pursuing recovery from the obligor and/or the non-
compliant employer.  In either event, the support obligation may be 
met.  
3.	Statute Creates Joint, not Independent Liability


Under AS 25.27.260(a), liability is measured by the 
extent of the employer's noncompliance with the WID.  A 
noncompliant employer is liable "to the agency" for "100 percent of 
the amount" due under the WID, plus costs, interest and fees.25  
Each of the WIDs expressly state: "this order is binding until you 
receive a notice of satisfaction of requirement from the State of 
Alaska."  Prior to receiving notice of satisfaction, the employer 
can satisfy its obligation by "delivery to the agency of the money 
or other property due, owing, or belonging to the obligor."26  
Property turned over to the state is held in trust for application 
against the liability of the obligor or for return to the obligor 
depending on a final determination of liability or nonliability 
under the chapter.27
The employer's liability for failure to comply therefore 
depends on the terms of the WID.  In a case where CSED issues a WID 
and pursues a recovery against the employer within a relatively 
short period of time, the employer's liability would be limited.  
The enforcement statute in a case like that would operate like a 
civil contempt order; the employer could avoid increased liability 
by complying with the WID.  This is not that type of case.  


In this case, Inn failed to withhold or deliver beginning 
in May 1988.  Inn's liability under the statute potentially equaled 
Cullinane's $70,000 support arrears obligation.  To permit CSRS to 
recover a windfall of $70,000 from an employer is a new and onerous 
burden and should be found only if it is clear that the legislature 
intended that burden.  Neither the express legislative intent nor 
the language of the statute supports this application of the 
penalty.
In Alaska, the law tries to avoid double recovery unless 
it is clearly intended as a policy matter.28  Reading AS 25.27.260 
to create joint and several liability for the unpaid WIDs in this 
case is consistent with that policy in the law.  The court believes 
Inn is liable for unpaid WIDs under the statute.  There are now no 
unpaid WIDs.
4.	Limited Case Law from Other Jurisdictions Suggests 
Reluctance to Impose Liability

The Alaska Supreme Court has not construed AS 25.27.260, 
and there are very few cases dealing with similar statutes in other 
jurisdictions.  This may be a function of judicial reluctance to 
recognize this form of statutory liability.  In any event, the 
federal mandate is very broad and the resulting state statutes are 
widely variant.  As noted below, some state statutes provide for 
liability to the obligee instead of or in addition to liability to 
the state.  Several provide for a specific fine while others appear 
to rely on traditional contempt proceedings to enforce the support 
orders.  


In Dunahee v. Chenoa Welding & Fabrication, Inc., the 
court imposed a statutory $100 per day fine on an employer who 
failed to timely comply with a withholding order.29  Although the 
applicable statute required the employer to forward withheld child 
support "within 10 days of paying the employee,"30 the employer 
wrote out a check each week but only mailed them once a month to 
the obligee.31  The obligee sued to impose the statutory penalty.32 
The court considered the statute's legislative history 
and the federal mandate of Title 42 before concluding the 
imposition of a penalty was appropriate.33  According to the court, 
"the penalty will serve to compensate the plaintiff for any 
hardship and will deter future noncompliance by the employer."34  
The court also noted, 
without the application of a penalty, 
employers would have an incentive to not send 
in a withheld child support payment in a 
timely manner.  The longer a withheld child 
support check is not mailed to the obligee, 
the longer those funds are available for the 
employer to use to its own advantage.35 
 




In Crenshaw v. Refuse Service, Inc.,36 the Missouri Court 
of Appeals considered a case arising from a contempt prosecution by 
the county attorney against an employer, Refuse Service, Inc., for 
failure to comply with an Order to Withhold and Pay Over issued by 
the Division of Child Support Enforcement.  In dicta, the court 
noted the Missouri statute "imposes liability on an employer who 
fails or refuses to withhold or pay over the amounts as ordered.  
Under subsection 8, the employer is liable to the party holding the 
support rights for the amount which should have been withheld and 
paid over under the order."37  The statute authorizes an action by 
the director of the enforcement department against the employer or 
"other payor."38  The Missouri statute provides for a fine, not to 
exceed $500, in addition to potential liability for "the amounts to 
be withheld or paid, court costs and reasonable attorney's fees."39 
 		However, the Crenshaw court did not impose either the 
fine or the liability.  Instead it held the contempt order was not 
a "final judgment" until enforced by actual incarceration or 
imposition of a per diem fine.40  Therefore, the court found the 
order was not amenable to appellate review and dismissed the 
appeal.41  
In Burrs v. Burrs,42 the Court of Appeals of Ohio, Second 
District, affirmed a trial court judgment fining a corporate 
employer and holding it civilly liable for failure to obey a 
notification requirement of a withholding order issued by the 
Montgomery County Bureau of Support.  The Ohio statute required an 
employer to notify the county enforcement agency of any lump-sum 
payments over $500 to be paid to an obligor-employee.43  The holding 
focused on the necessary mental state for the corporate employer, 
but the court noted a distinction between the fine, which it 
considered "in the nature of a criminal contempt, since . . . it is 
neither intended to coerce future compliance nor to compensate [the 
obligee] for [the employer's] past failure to comply."44  By 
contrast, the court noted the employer's statutory liability "would 
appear to be in the nature of a civil contempt."45  The employer's 
civil liability was measured by the total amount of the arrearage 
in child support and alimony.46  


Although the court did not directly address the issue, 
the Ohio notification statute in Burrs appears to impose joint and 
several liability.  The purpose of the notification statute is to 
prevent disbursements to the obligor-employee which should go to 
the obligee under the support order.  In the event the employer 
does not notify the support enforcement agency and the money is 
paid to the obligor, the employer is liable to the extent the money 
disbursed could have satisfied the arrearages.  Arguably, the same 
logic could be applied to the Alaska WID statute.  
These cases illustrate the difficult situation courts 
face when construing statutes like AS 25.27.260.  The Alaska 
legislature provided for a specific penalty amount in addition to 
other duties in AS 25.27.062(j), the income withholding order 
statute.  If they had wanted to make sure AS 25.27.260 provided for 
an additional penalty above and beyond joint liability the 
legislature could have said so.  It did not.  The lack of guidance 
from other jurisdictions reinforces this court's conclusion to not 
find independent liability or allow a double recovery in this case 
under that statute absent clear legislative direction.
. . . .
IV.	CONCLUSION


An employer or other person, political subdivision, or 
department of the state is liable to the state under AS 
25.27.260(a) for failure to comply with a WID.  Given the lack of a 
clear legislative intent that the statute should be construed to 
impose liability independent of the support obligation, the court 
finds Inn's liability for failure to comply with the WIDs regarding 
William Cullinane was joint and several with Cullinane's.  Summary 
judgment as to CSRS's claim under AS 25.27.260 is GRANTED.
/s/ 	Larry Weeks
Larry Weeks
Superior Court Judge


BRYNER, Justice, with whom EASTAUGH, Justice, joins, concurring.
I agree with the court's decision to affirm the summary 
judgment but would rely on a narrower ground for affirming.  
In the present case, counsel for CSRS substituted for the 
attorney general's office as plaintiff's counsel of record and, 
contemporaneously, substituted CSRS for CSED as the nominal 
plaintiff.  In so doing, counsel for CSRS made it clear that CSRS 
was serving in the capacity of a private collection agency 
representing the obligee parent, Nancy Bowen.  And counsel 
represented that "[t]he State of Alaska has always been merely a 
nominal party in this matter, prosecuting on behalf of the 
custodial parent and the dependant [sic] child.  This substitution 
of parties is intended only to replace the nominal party." 
The attorney general's office confirmed the narrow scope 
of the substitution, indicating that this case was one of "several 
collection cases" prosecuted by CSED with the attorney general's 
representation, that CSED had instructed the attorney general's 
office to cooperate with CSRS and CSRS's attorney "in turning 
collection of the child support arrearages in this case over to 
CSRS," and that the attorney general's office agreed, "[t]oward 
that end," that substitution of counsel and of the nominal party 
was appropriate "in this instance."


By the explicit and unambiguous terms of this 
substitution agreement, the state authorized CSRS to replace CSED 
and to assert the agency's legal interests only to the extent that 
CSED had acted in Bowen's stead to collect her past due child 
support; the stipulation unequivocally contemplated that CSRS would 
only assert Bowen's right to collect "child support arrearages."
Assuming, then, that AS 25.27.260(a) goes beyond creating 
joint and several liability and literally holds noncompliant 
employers liable for a penalty equivalent to the amount of 
outstanding child support arrearages, CSRS simply had no authority 
to prosecute an action to enforce this penalty.  Any penalty 
authorized by AS 25.27.260(a) under joint and several employer 
liability could not plausibly be characterized as "child support 
arrearages."  Under AS 25.27.260(a), this penalty would be payable 
to the state, and would not be due or owed to Bowen.  CSED's right 
to recover the penalty for the state thus differs markedly from its 
right to recover past due child support for Bowen.  Accordingly, I 
would affirm on this narrow basis: no matter how broad 
AS 25.27.260(a)'s penalty might be, the penalty action belonged to 
the state, the state never assigned it to CSRS, and CSRS had no 
right to pursue it under the substitution agreement.1
Interpretation of AS 25.27.260(a) presents a close and 
difficult question that we need not answer here.  In my view, we 
would best leave the question open for a case in which we must 
decide it.2 



 	The principal effect of this provision, for purposes of 
this discussion, was to permit recovery by an individual, as 
opposed to the state.  Alaska Statute 25.27.260(b) provides:

(b) A person, political subdivision, or 
department of the state that intentionally 
fails or refuses to honor a properly served 
income withholding order under AS 25.27.062 
that is not being enforced by the agency is 
liable to the obligee in an amount equal to 
100 percent of the amount ordered to be 
withheld together with costs, interest, and 
reasonable attorney fees.
**	As reprinted in this Appendix, the superior court's 
summary judgment order has been redacted to delete extraneous 
discussion.  The original labeling of the section headings of the 
superior court order has been retained, but footnotes and page 
numbers have been renumbered.  The order has also been technically 
edited in accordance with this court's Manual of Technical Rules 
for Publication.  In addition, quotations of relevant statutory 
provisions have been added in some footnotes.
3	CSED may issue a WID upon "reason to believe that there 
is in the possession of a person, political subdivision, or 
department of the state property that is due, owing or belonging to 
the obligor."  AS 25.27.250(c).  The WID must be properly served 
and contain all necessary information.  See AS 25.27.250(d).  The 
recipient of the WID is given 14 days to respond.  This gives the 
employer an opportunity to communicate to the state in the event 
the employer no longer employs the obligor or for some other reason 
does not believe it should be bound by the WID.  The state 
expressly assumes liability "for such actions [by] people 
withholding or delivering money or property to the agency in 
accordance with this section."  Former AS 25.27.250(h).
4	See Sea Lion Corp. v. Air Logistics of Alaska, Inc., 787 
P.2d 109, 116 (Alaska 1990).
5	According to Ann House, president and principal owner of 
defendant Inn, Cullinane obtained the funds to satisfy the judgment 
as part of a $100,000 loan assumed by Inn in July 1996.  See 
Affidavit of Ann House, filed December 15, 1997 in support of Inn's 
reply to motion for summary judgment.
6	Inn does not indicate whether or not it has been 
criminally fined.
7	See Geolar, Inc. v. Gilbert/Commonwealth Inc. of Mich., 
874 P.2d 937, 940 n.5 (Alaska 1994) (citations omitted).  
8	See Southeast Alaska Constr. Co. v. State, Dep't of 
Transp. and Pub. Facilities, 791 P.2d 339, 342 (Alaska 1990) 
(citations omitted).
9	See Sea Lion Corp., 787 P.2d at 116 (citation omitted).
10	At oral argument CSRS argued the basis for Inn's 
liability under AS 25.27.260 was Inn's wilful and intentional 
failure or refusal to obey the WIDs.  The "intentional" language in 
(a)(5) refers to wage assignment and income withholding orders 
under AS 25.27.062, not WIDs.  The court finds Inn's liability 
arises under AS 25.27.260(a)(1) and (2).
11	See Muller v. BP Exploration (Alaska) Inc., 923 P.2d 783, 
787 (Alaska 1996) (citation omitted); Cook v. Botelho, 921 P.2d 
1126, 1129 (Alaska 1996) (citation omitted).
12	Ch. 126,  1, SLA 1977.  The court does not agree with 
Inn's argument that the language in this statement precludes a 
recovery from someone other than the "responsible" obligor-parent. 
 This position is also in conflict with Inn's argument that AS 
25.27.260 imposes joint and several liability on an employer.
13	Ch. 144,  1, SLA 1984.  The 1984 act added AS 25.27.273, 
Reporting of payment information concerning delinquent obligors.
14	Committee Substitute for Senate Bill (C.S.S.B.) 190, 18th 
Leg. 2d Sess. (1994), 1994 Senate Journal 3463.
15	Alaska's receipt of federal funding for Aid to Families 
with Dependent Children has been conditioned on compliance with the 
child support enforcement provisions of federal Title 42 and the 
regulations promulgated thereunder.
16	45 C.F.R.  303.100(f)(iv), (vi) (1997).
17 	AS 25.27.062 provides, in relevant part:

(a) A judgment, court order, or order of 
the agency under this chapter providing for 
support must contain an income withholding 
order.  Except as provided in (m) of this 
section, the income withholding order must 
provide for immediate income withholding if 
the support order is

(1) being enforced by the agency and 
was issued or modified on or after July 8, 
1994;  or

(2) not being enforced by the agency 
and was issued on or after July 8, 1994.

(b) An income withholding order must 
direct the obligor, the obligor's employer, 
future employer, and any person, political 
subdivision, or department of the state to 
withhold money due or to be due the obligor 
and pay the money to the agency, in an amount 
determined under (i) of this section.  A court 
that issues a support order on or after July 
8, 1994 shall send a copy of the order to the 
agency.
18	AS 25.27.063 provides:

(a) A medical support order issued under 
AS 25.27.020(a)(9) or 25.27.060(c) must 
require that the obligor provide health care 
coverage for the child to whom the duty of 
support is owed.

(b) If an obligor who is required to 
provide health care coverage under a medical 
support order is eligible for family health 
coverage through an employer, the court or 
agency issuing the medical support order shall 
send a copy of the medical support order to 
the employer.  If the agency has notice that 
the obligor has changed or will be changing 
employment and is or will be eligible for 
family health coverage through the new 
employer, the agency shall send a copy of the 
medical support order to the new employer.

(c) An employer who receives a copy of a 
medical support order under (b) of this 
section

(1) shall allow the employee named 
in the order to enroll the child under the 
family coverage without regard to restrictions 
relating to enrollment periods if the child is 
otherwise eligible and is not already enrolled 
under the family coverage;

(2) shall, if the employee fails to 
apply for enrollment of a child under (1) of 
this subsection, enroll the child under the 
employee's family coverage upon application by 
the child's other parent or custodian, the 
child support enforcement agency, or the 
Department of Health and Social Services;

(3) may not disenroll or eliminate 
coverage of the child while the employee is 
still employed by the employer unless the 
employer has eliminated family health coverage 
for all of its employees or has received 
written evidence that

(A) the employee is no longer 
required by court order or administrative 
order to provide the child's insurance 
coverage;  or

(B) the child is or will be 
enrolled in comparable health coverage through 
another insurer that will take effect not 
later than the effective date of the 
disenrollment or elimination of coverage;  and

(4) shall withhold from the 
employee's compensation the employee's share, 
if any, of premiums for health coverage to the 
extent permitted under 15 U.S.C. 1673(b) 
(Consumer Credit Protection Act) and pay the 
withheld amount to the appropriate insurer;  
if federal regulations allow the employer to 
withhold less than the employee's share of the 
insurance premium, the employer may withhold 
the lesser amount and pay it to the 
appropriate insurer.

Effective July 1, 2001, subsection (b) will provide:

(b) If an obligor who is required to 
provide health care coverage under a medical 
support order is eligible for family health 
coverage through an employer doing business in 
the state, the court or agency issuing the 
medical support order shall send a copy of the 
medical support order to the employer.

Ch. 132,  54(b), SLA 1998.
19	The employer must permit enrollment regardless of 
restrictions relating to enrollment periods and cannot disenroll or 
eliminate a child's coverage without satisfying certain statutory 
requirements.
20	AS 25.27.070 provides:

(a) In a proceeding in which the court 
has ordered either or both parents to pay for 
the support of a child, the court may, on its 
own motion or motion of a party or the agency 
on behalf of a party, after notice and an 
opportunity for hearing, order either parent 
or both parents to assign to the custodian of 
the child that portion of salary or wages of 
either parent due them currently and in the 
future sufficient to pay the amount ordered by 
the court for the support, maintenance, 
nurture and education of the child.

(b) The order of assignment is binding 
upon an employer upon service of a copy of the 
order upon the employer and until further 
order of the court.  The employer may, for 
each payment made under the order, deduct $1 
from other wages or salary owed to the 
employee.

(c) The assignment made under court order 
has priority as against an attachment, 
execution or other assignment unless otherwise 
ordered by the court.

(d) An employer may not terminate an 
employee's employment because wages of the 
employee are subject to an order under this 
section.
21	AS 25.27.062(k) provides:

An employer who is withholding income of an 
obligor under an order that provides that the 
withheld income shall be paid to the agency 
shall notify the agency promptly when the 
obligor gives or receives notice of 
termination of employment and provide to the 
agency the obligor's last known home address 
and the name and address of the obligor's new 
employer, if known.  The employer shall keep a 
record of the order to withhold income from 
the obligor for three years after the employer 
notifies the agency that the obligor has 
terminated employment.  If, within that 
three-year period, the obligor is reemployed 
by the former employer, the employer shall 
immediately implement the order against the 
obligor's earnings unless the employer has 
received notice from the agency that the order 
is no longer applicable to the obligor.  If 
the obligor is reemployed by the former 
employer after that three-year period, the 
employer is not required to implement a 
withholding order against the obligor's 
earnings until the employer receives a new 
order to withhold the obligor's income under 
this chapter.
22	AS 25.27.075 provides, in relevant part:

(a) An employer doing business in the 
state shall report to the agency the hiring, 
rehiring, or return to work of each employee. 
 The report shall be made within the time 
limits set out in (b) of this section.    The 
report must contain the name, address, and 
social security number of the newly hired 
employee, the name and address of the 
employer, and the identifying number assigned 
to the employer by the United States 
Department of the Treasury, Internal Revenue 
Service.
23	See Ch. 132,  54(b), SLA 1998 (stating the amended AS 
25.27.075(h), which becomes effective July 1, 2001).
24	AS 25.27.062(f). 
25	AS 25.27.260(a).
26	AS 25.27.250(g); see also AS 25.27.253(a) ("A person, 
political subdivision, or department of the state shall withhold 
the earnings of the obligor subject to an order or lien at each 
succeeding interval of payment until the entire amount of the debt 
stated in the order to withhold and deliver has been withheld.").
27	See AS 25.27.250(f).
28	See Maynard v. State Farm Mut. Auto. Ins. Co., 902 P.2d 
1328, 1334 (Alaska 1995) (citation omitted).  See also State Farm 
Fire & Cas. Co. v. Nicholson, 777 P.2d 1152, 1159-60 (Alaska 1989); 
Murray v. Feight, 741 P.2d 1148, 1160 (Alaska 1978); Schreiner v. 
Fruit, 519 P.2d 462, 466 (Alaska 1974).
29	652 N.E.2d 438 (Ill. App. 1995).  Here, the employer paid 
the withheld wages directly to the obligee -- this is essentially a 
wage assignment although the court uses the term "withholding."
30	Id. at 441.
31	Id. at 445.
32	See id. at 440.
33	See id. at 442-45.
34	Id. at 444.
35	Id. at 444-45.
36	908 S.W.2d 845 (Mo. App. 1995).
37	Id. at 846.
38	Mo. Rev. Stat.  454.505.1 (1994).
39	Id.  454.505.8.
40	Crenshaw, 908 S.W.2d at 846.
41	See id.
42	585 N.E.2d 918 (Ohio App. 1991).
43	See id. at 919.
44	Id. at 920.
45	Id.
46	See id. at 919-21.
1	As the court correctly notes, CSRS has disclaimed 
reliance on AS 25.27.260(b)'s provision giving Bowen the right to 
maintain a direct penalty action.  See Opinion at 2. 
2	The court's decision to resolve this question when it 
could be readily avoided seems particularly unfortunate because the 
question is one of great significance to CSED, which is not a party 
here.  Although CSED has filed an amicus brief forcefully arguing 
that the superior court's interpretation of the statute is unduly 
narrow, and although the superior court did not have the benefit of 
this briefing when it ruled, this court today adopts by reference 
the superior court's decision without addressing CSED's arguments, 
thus precluding full consideration of the agency's position.

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