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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Faulkner v. Goldfuss (5/10/2002) sp-5565

Faulkner v. Goldfuss (5/10/2002) sp-5565

     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,
     e-mail corrections @appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


KIMBERLY FAULKNER,       )
                              )    Supreme Court No. S-9658
             Appellant,            )
                              )     Superior Court No. 4FA-99-189
CI
     v.                       )
                              )    O P I N I O N
STEVEN GOLDFUSS,              )
                              )    [No. 5565 - May 10, 2002]
          Appellee.           )
________________________________)


          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks, Charles R. Pengilly, Judge.

          Appearances:  Kimberly L. Faulkner,  pro  se,
          North   Pole.   Lynn  E.  Levengood,  Downes,
          MacDonald & Levengood, P.C., for Appellee.

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

          EASTAUGH, Justice.

I.   INTRODUCTION

          I.    Kimberly  (Kim) Faulkner raises  numerous  issues

concerning child support, child custody, and property division in

her  divorce from Steven Goldfuss.  We affirm as to most of these

issues,  including child custody.   But because it was  error  to

disallow  Kim a deduction for the depreciation of several  rental

properties, to include as gross income child support Kim received

for  a  child  from a previous relationship, and to subtract  the

amount  of  that child support from her proposed deduction  under

Alaska  Civil  Rule  90.3(a)(1)(C), we vacate the  child  support

award  and  remand  for a recalculation of  child  support.   And

because  the  superior  court valued the marital  share  of  Kims

military  retirement  based  on the  number  of  months  she  was

employed  during coverture, rather than the number of points  she

earned during coverture, we remand for additional findings.

II.  FACTS AND PROCEEDINGS

          Kimberly  Faulkner  and  Steven  Goldfuss  married   in

October  1995  in  Anchorage.  They had two  children,  Ryan  and

Adrian.    Kim   also  had  two  minor  children  from   previous

relationships,  Dominique  (Nick) and  Lolitta.   Steven  adopted

Lolitta soon after he married Kim.

          During a 1997 separation Kim and Steven entered into  a

post-nuptial  agreement, which stipulated to the distribution  of

their  separate and marital property upon dissolution or divorce.

They  also  agreed to sell their jointly owned business,  Sail  N

Fun.

          In  January 1999 Kim filed a complaint for divorce.  In

December  1999  the  parties entered into  a  written  settlement

agreement  regarding child custody and visitation.   Among  other

things, it provided that the parties would share physical custody

of  the  children; it also specified the percentage of time  each

child was to spend with each parent.

          After  a  trial  in  January 2000, the  superior  court

granted  the  parties a divorce.  It awarded  Steven  sole  legal

custody  of  Ryan,  Adrian, and Lolitta.   Stating  that  it  was

attempting [t]o effectuate as closely as . . . it [could] .  .  .

the [December 1999 settlement] agreement between the parties, the

court  awarded  the  parties  shared  physical  custody  of   the

children.  The superior court quantified the percentage  of  time

each child would reside with each parent under the custody order.

It  also  divided  the  parties real and personal  property,  and

ordered  Kim  to  pay child support of $288.39  per  month.   Kim

appeals.

III. DISCUSSION

     A.                            Standard of Review

          We   review  a  child  support  award  for   abuse   of

discretion.1   We  will  find an abuse of discretion  only  when,

based  on  a  review  of the whole record, we  are  left  with  a

definite and firm conviction that a mistake has been made. 2  The

proper method of calculating child support is a question of  law,

which  we review de novo, adopting the rule of law that  is  most

persuasive in light of precedent, reason, and policy.3

          The  superior  court  has  broad  discretion  in  child

custody matters.4  We will reverse the superior courts resolution

of  custody issues only if we are convinced that the record shows

an  abuse  of discretion, or if controlling factual findings  are

clearly erroneous.5  An abuse of discretion is established if the

superior  court  has considered improper factors  in  making  its

custody   determination,  has  failed  to  consider   statutorily

mandated  factors,  or  has assigned disproportionate  weight  to

particular statutory factors while ignoring others.6   A  factual

finding  is  clearly erroneous if a review of the  entire  record

leaves  us  with  a definite and firm conviction that  the  trial

court has made a mistake.7

          The  superior court has broad discretion when  dividing

property  in a divorce action.8  Property division in  a  divorce

action consists of three steps: (1) determining what property  is

available  for  distribution; (2) valuing the property;  and  (3)

allocating  the  property equitably.9   We  review  the  superior

courts  determination of the property available for  distribution

for  abuse of discretion; we review de novo the legal conclusions

the superior court reaches while making this determination.10  The

valuation  of available property is a factual determination  that

we  review under the clearly erroneous standard.11  We review the

superior  courts equitable allocation of property  for  abuse  of

discretion, reversing only if the allocation is clearly unjust.12

     B.   Child Support

          The superior court ordered Kim to pay child support  of

          $288.39 per month.  Kim contends that the superior court

erroneously calculated her child support obligation, because  the

court (1) disallowed a deduction for depreciation; (2) imputed as

income to her the rental value of her apartment; (3) included  as

income  child  support she receives for a  child  of  a  previous

marriage;  (4)  failed  to make findings  regarding  her  claimed

deduction  for  net  operating losses; and (5) miscalculated  the

percentage  of  time  each  parent has physical  custody  of  the

children.13

          1.   It was error to deny Kim a deduction for the depreciation of
               her rental properties.
               
          Kims  child  support  guidelines  affidavit  claimed  a

$15,000   deduction  for  the  depreciation  of  several   rental

properties.14  Citing Hilderbrand v. Hilderbrand,15 the  superior

court  disallowed  Kims  proposed  depreciation  deduction.   Kim

appeals this ruling.

          The commentary to Alaska Civil Rule 90.3 states: 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.16   We have held that  the  superior  court

should   normally  allow  a  deduction  for  the  straight   line

depreciation   the  difference between the original  cost  of  an

asset and its scrap value divided by the estimated useful life of

the asset  of a child support obligors business real estate as an

ordinary and necessary business expense.17

          But   we   held  in  Hilderbrand  that  a  depreciation

deduction  is  not  allowed if it could not be  claimed  for  tax

purposes.18  Citing Hilderbrand, the trial court disallowed  Kims

proposed  depreciation  deduction.   The  court  did  not   find,

however, that the proposed deduction could not be claimed for tax

purposes.   Indeed,  Schedule E of the  parties  1995-97  federal

income  tax  returns, which Kim submitted to the superior  court,

claimed  a depreciation deduction for the same rental properties,

and  the  record  contains no evidence that the Internal  Revenue

          Service denied those deductions.  We therefore vacate the child

support  award and remand for recalculation of Kims child support

obligation,  allowing  Kim  a deduction  for  the  straight  line

depreciation of her rental properties.

          2.   The fair market rental value of Kims apartment was not
               imputed as income to her.
               
          1.   Kim asserts that the superior court erred by imputing as

income  to  her the fair market rental value of the apartment  in

which  she resides.  Kim lives rent-free in one unit of a  duplex

her  brother owns.  In return, she manages the property, collects

the  rent,  and pays the mortgage, utilities, and taxes.   Steven

argued  below that the superior court should impute as income  to

Kim  the difference between the fair market rental value  of  the

apartment and Kims expenses managing the property.  Although  the

superior   courts  amended  child  support  order  disallowed   a

$4,867.11  deduction for Kims expenses attributable  to  managing

the  duplex,  the court imputed no income to Kim.   We  therefore

perceive no error that harmed Kim.19

          3.   It was error to include as gross income and to subtract from
               Kims proposed Civil Rule 90.3(a)(1)(C) deduction the child
               support Kim receives for Nick.
               
          Kim  received $1,770 in child support for Nick, a child

of  a  previous marriage.  The child support order in the present

case  included this amount in Kims gross income.  The order  also

subtracted  $1,770 from Kims proposed deduction under Civil  Rule

90.3(a)(1)(C)   for  child  support  for  children   from   prior

relationships  living with the parent.  Kim argues  that  it  was

error  to include as income child support she received for  Nick,

and  to  reduce  her Civil Rule 90.3(a)(1)(C) deduction  by  this

amount.  We agree.

          The  commentary to Civil Rule 90.3 states that  [c]hild

support is not income.20  Although we have not adopted or approved

the  commentary,  we  often rely upon it for  guidance  in  child

support matters. 21  We conclude here that it was error to include

as gross income child support Kim received for Nick.

          We  also  agree that it was error to reduce Kims  Civil

Rule  90.3(a)(1)(C)  deduction by $1,770   the  amount  of  child

support she received from Nicks non-custodial parent.  Civil Rule

90.3(a)(1)(C)  provides that a child support obligor  may  deduct

from   gross  income  child  support  for  children  from   prior

relationships  living with the parent, calculated  by  using  the

formula provided by [Rule 90.3.]  The commentary elaborates:

          A  deduction . . . is allowed for the support
          of  the children of prior relationships  even
          if  the party is the custodial parent of  the
          prior   children  and  does  not  make  child
          support payments to the other parent  of  the
          children.  In this situation support provided
          directly  to  the children is  calculated  by
          Rule  90.3 as if the children from the  prior
          relationship were the only children.[22]
          
          Neither  Civil  Rule  90.3 nor its commentary  provides

that the amount of a Rule 90.3(a)(1)(C) deduction must be reduced

by  the  amount of child support a custodial parent receives  for

the  child  for  whom  the deduction is  claimed.   Rather,  Rule

90.3(a)(1)(C) provides that a custodial parents gross income  may

be reduced by that parents contribution, as calculated under Rule

90.3,  to  the  support of a child from a previous  relationship.

The  total cost of supporting a child is the sum of both  parents

contributions  as calculated under Rule 90.3, and  the  custodial

parents contribution is independent of and in addition to the non-

custodial parents contribution.  It was therefore error to reduce

Kims proposed Rule 90.3(a)(1)(C) deduction by the amount of child

support she received from Nicks non-custodial parent.

          These  two  errors require remand for  the  purpose  of

recalculating  Kims  support obligation  based  on  her  adjusted

annual income.

          4.   It was not error to fail to make findings regarding the
               deductibility of net operating losses.
               
          Kim  next  argues  that  the superior  court  erred  by

failing to make findings regarding whether and to what extent she

could  deduct previously incurred net operating losses from gross

income.   Federal taxpayers are permitted by 26  U.S.C.   172  to

          carry over and deduct net operating losses for a period of twenty

taxable years following the taxable year of the loss.  Civil Rule

90.3  and  its  commentary  do  not  specify  whether  previously

incurred  net operating losses may be deducted from  an  obligors

gross  income  when  calculating  child  support.   But  not  all

deductions  that the IRS allows may be deducted from an  obligors

income  as  determined  under  Rule 90.3.23   Because  previously

incurred  net  operating losses do not reflect upon  an  obligors

present ability to pay child support,24 we hold that they may not

be  deducted  from  an  obligors income  when  calculating  child

support.  The superior court did not err.

          5.   When child support is recalculated on remand, it should be
               based on the actual physical custody awarded.
               
          1.   Kim also contends that the superior court miscalculated the

percentage  of  time  each  parent has physical  custody  of  the

children under the courts child custody order.  Under Civil  Rule

90.3(b)(2), when parents are awarded shared physical  custody,  a

parents  child  support  obligation  depends  in  part   on   the

percentage of time the other parent will have physical custody of

the  children.  The superior court based its child support  award

on  its  physical custody award, and assumed that  the  two  boys

would  be in Stevens custody sixty-three percent of the year  and

in  Kims  custody  thirty-seven percent of  the  year,  and  that

Lolitta would be in Stevens custody sixty percent of the year and

in  Kims custody forty percent of the year.  Kim argues that  she

actually  has custody of Lolitta only thirty-six percent  of  the

year  and  custody of the boys only twenty-nine  percent  of  the

year.   Steven does not offer different figures, but argues  that

this  issue was raised and resolved after trial and asserts  that

the  courts  calculations were based on  the  time  the  children

actually spent with each parent.

          Kims  terse appellate arguments simply refer us to  the

record  and  contain no meaningful discussion of the issue.   Kim

bears  the  burden of demonstrating on appeal that  the  superior

court erred. Accurately counting the days awarded requires access

          to the Fairbanks North Star Borough school calendar, and neither

party  has  included  it  in  the record.   We  therefore  cannot

definitively  count  the days.  But as far as  we  can  tell,  it

appears  that per the award Lolitta was actually to  be  in  Kims

physical custody about thirty-nine percent of the year.   And  it

appears  that per the award the boys were actually to be in  Kims

physical  custody  about thirty-five percent  of  the  year.   It

therefore  appears  that Kims child support obligation  may  have

been based on custody divisions that were slightly inaccurate.

          We  assume  that  these  minor  differences  would  not

justify reversal.  But because child support must be recalculated

anyway  for  the reasons discussed above, the recalculated  award

should  be  based on the exact physical custody actually  awarded

the parties.25

     C.                       Child Custody

          1.   The  superior court did not err when  it  deviated
               from the parties custody agreement, because it did
               so  after  expressly  finding that  the  childrens
               bests  interests  required  that  deviation,   and
               because those findings were not clearly erroneous.
               
          Kim  argues that it was an abuse of discretion to enter

the  custody  award  because it deviated significantly  from  the

terms of the parties settlement agreement.

          In  making any custody determination  whether following

a  contested  trial or upon the parties agreement   the  superior

court must base its decision on the best interests of the child.26

Although  a  custody agreement does not bind the superior  court,

the  court  should deviate from the terms of a custody  agreement

only  upon  finding on the record that the childs best  interests

justify  a  deviation.27  The legislature has stated that  it  is

generally  desirable  to  assure  a  minor  child  frequent   and

continuing  contact  with both parents  after  the  parents  have

separated  or  dissolved their marriage and that  it  is  in  the

public  interest  to encourage parents to share  the  rights  and

responsibilities of child rearing.28

          In  December  1999  Kim  and  Steven  entered  into   a

          settlement agreement regarding child custody and visitation.  It

provided  that  the parties would share physical custody  of  the

children:   Ryan  and  Adrian  would  reside  with   Steven   for

approximately  sixty  percent  of  the  year  and  with  Kim  for

approximately  forty  percent of the year; Lolitta  would  reside

with  Steven and Kim each for approximately fifty percent of  the

year.

          The  superior  courts  written custody  and  visitation

findings  discussed  the  childrens best  interests.   The  court

stated  that  it believed that it was paramount and in  the  best

interest of the children to have one household to call home,  and

to  limit  the time of their separation; it nonetheless expressed

its  interest in attempting to accommodate the parties intentions

in  their custody agreement.  The court also mentioned the   best

interests in specifying the visitation.

          The  superior courts oral findings, which  counsel  did

not  fully  incorporate into the proposed  written  findings  and

conclusions,  were  more specific.  The oral  findings  expressed

reservations  about  the parties proposed  agreement  for  shared

custody and specifically indicated that the court was willing  to

accept the agreement only insofar as it served the childrens best

interests.   The  courts opening remarks about custody  described

the  need  for  a hard look at the settlement agreement.   Before

turning to the settlement agreement, the superior court expressly

emphasized its concurrence in two of the recommendations made  by

child custody investigator Jeanne Nay:

               [B]efore  I  take  a hard  look  at  the
          settlement  agreement,  I  guess  I  want  to
          express  some agreement and some disagreement
          with  Ms.  Nays  report.   Her  testimony,  I
          think,  perhaps  was more  helpful  than  her
          report.   But  a  couple  of  common  threads
          emerge  from both her testimony and from  the
          recommendations  in the report.   First,  and
          perhaps foremost, she stated the opinion that
          she  thinks its very important for all  three
          of these kids to have a primary residence,  a
          place  that  they  can  regard  as  home  and
          unambiguously  so.  Thats a  concern  I  very
          much  share, and I think that it  is  in  the
          interest  of  all three kids to  be  able  to
          regard one household as home to establish the
          level of continuity necessary to their belief
          that they have a home.
          
               She  also expressed significant  concern
          about the kids staying together, and when she
          said  that she was clearly referring  I asked
          her, she said she meant all three kids.   She
          thinks  its  extremely important  and  serves
          equally  the  interests  for  the  boys   and
          Lolitta   that  they  spend  as   much   time
          together,  [and]  that they be  separated  as
          little  as  possible.   I  also  share   that
          concern, and Im going to craft an order  that
          addresses  those two concerns as serving  the
          kids  interests perhaps above and beyond  all
          other concerns that certainly are important.
          
          These comments confirm that the superior court believed

that the childrens best interests required it to fashion an award

that  would keep all three children together as much as  possible

in  a  single household  one that they would unambiguously regard

as  their home  and that this goal would prevail above and beyond

the parties interest in their custody agreement.

          The   superior  court  then  turned  to   the   custody

agreement:  What I want to do is go through the stipulation,  the

settlement  agreement, and focus on what I  see  to  be  the  two

overriding   concerns  as  affecting  the  kids  best   interest.

Concerning  the agreements two most controversial  features   the

60/40  split as to Bryans and Adrians custody and the 50/50 split

as  to  Lolitta   the judge expressed reluctance  to  accept  the

agreement as written, again stressing his adoption of the custody

reports views:

          I  have some significant hesitation as to the
          breakdown  of 60/40 as to custody,  and  that
          hesitation is pretty much identical with  the
          hesitation    that   Ms.    Nay    expressed.
          Nonetheless,  I  think  that  her   principal
          concerns  can be addressed in the context  of
          the  stipulation, and Im not going to  reject
          it.   As  I  say,  though, Im accepting  that
          60/40   split  with  a  certain   degree   of
          hesitation.
          
               The  second one, my hesitation  is  even
          greater, but, again, Im willing to accept it,
          perhaps  with  some  emphasis  on  the   word
          approximately. I will do my best to create  a
          50/50  split with regard to custody, physical
          custody, of Lolitta, but its not going to  be
          perfect.   Again, I have some real hesitation
          as  to whether that provision is reconcilable
          with  my overriding concern to make sure that
          the kids have a single home.
          
These  oral comments amount to specific findings that it  was  in

the childrens best interests to deviate from the parties proposed

custody arrangement.

          It  also  appears that these findings are supported  by

the  evidence  cited by the superior court.   The  child  custody

investigator wrote a detailed and thorough custody  report.   She

concluded  that the three children desperately needed one  parent

to serve as their primary parent at a single, stable household to

call their home.  The investigator also emphasized that all three

children  were closely bonded, particularly stressing  the  close

bond  between  Lolitta  and the older son,  and  the  older  sons

emotional  reliance  on Lolitta.  The child custody  investigator

concluded  that a shared custody arrangement could not  meet  the

childrens needs and that the award of primary custody to  one  or

the other would be necessary.

          The   investigation   also   produced   evidence   that

negatively  reflected  on  Kims ability  to  parent  Lolitta  and

perhaps   the   other   children.   This  evidence   caused   the

investigator to question Kims ability to meet the childrens needs

if she were their primary parent.  The child custody investigator

had  reservations  about  Steven  as  well,  but  her  exhaustive

analysis  of  the  statutory best interests factors  led  her  to

conclude that Steven would clearly be the superior primary parent

for   all   three  children.   The  child  custody   investigator

thoroughly discussed the reasons for this opinion.

          The  child custody investigator testified at length  at

the  evidentiary hearing.  She there confirmed and elaborated  on

the conclusions reached in her report.  She explained her reasons

for  believing  that  Kims impulsive and unstable  behaviors  had

often  placed her children in physical and emotional danger;  she

described  various  ways in which Steven would  be  the  superior

parent;  she confirmed her belief that all three children  should

share  the  same primary household and visitation  schedule;  and

when specifically asked by the superior court if she thought that

the  court  should  override the parties custody  agreement,  Nay

answered Yes, firmly maintaining her position that childrens best

interests  would  be served only by awarding primary  custody  to

Steven.

          The  child  custody  investigators custody  report  and

testimony  reveal that her conclusions were based on  compelling,

case-specific  evidence,  and  not abstract  notions  about  good

parenting or the needs of typical children.

          In  short,  the superior court had before  it  evidence
amply  supporting its findings that the childrens best  interests
warranted  some  deviation  from  the  parties  proposed  custody
arrangement.   The  superior courts findings justified  deviation
from  the  agreement,  and because there was compelling  evidence
supporting those findings, the superior court did not clearly err
in  making  those findings.  We therefore affirm the custody  and
visitation award.29

          2.   It  was not an abuse of discretion to award Steven
               legal custody of Lolitta even though Steven is not
               Lolittas biological father.
               
          Kim  contends  that  because  Steven  is  not  Lolittas

biological  father   Steven  adopted  Lolitta  shortly  after  he

married Kim  it was an abuse of discretion to award Steven  legal

custody  of  Lolitta  absent a showing that  Kim  is  unfit,  has

abandoned Lolitta, or that Lolittas welfare requires that  Steven

receive  legal custody of Lolitta.  Kim cites Turner v.  Pannick,

where we held that [u]nless the superior court determines that  a

parent is unfit, has abandoned the child, or that the welfare  of

the  child requires that a non-parent receive custody, the parent

must be awarded custody.30

          Because  AS  25.23.130(a)(2) provides that an  adoption

creates  a relationship between the adoptive parent and child  as

if  the adopted person were a legitimate blood descendant of  the

          [adoptive parent], Turner is inapposite.  It was therefore not an

abuse of discretion to award Steven legal custody of Lolitta.

          We  do not mean to imply, however, that the fact of  an

adoption  may  not  be  relevant to custody determinations.   For

example,  AS  25.20.090(6)(A)  provides  that  the  court,   [i]n

determining  whether to award shared custody of a  child  .  .  .

shall  consider . . . the actual time spent with each parent.   A

biological parent potentially may have a longer relationship with

the child than an adoptive parent.  But the fact of adoption,  in

and of itself, does not disfavor the adoptive parent for purposes

of determining the legal custody of an adopted child.

          3.   It  was error not to make findings explaining  the
               decision not to appoint a guardian ad litem.
               
          Kim  moved  before  trial to have a guardian  ad  litem

appointed  to  represent  the interests  of  the  children.   The

superior court denied Kims motion without making any findings  on

the record explaining its decision.

          Alaska Civil Rule 90.7(c) provides that [i]f the  court

denies a motion for appointment of a guardian ad litem, the court

must  make  findings  to  explain  the  denial.   Similarly,   AS

25.24.310  states: Upon notification, the court  shall  determine

whether the minor or other child should have legal representation

or  other services and shall make a finding on the record  before

trial.31   We  therefore conclude that it was error not  to  make

findings  on  the  record explaining the courts decision  not  to

appoint a guardian ad litem.  If the superior court concludes  on

remand that its reasons for denying Kims motion have changed, the

court may, but is not required to, revisit the issue.

     D.   Property Division

          1.   Kims Alaska Air National Guard pension

          The superior court found that Steven was entitled to  a

marital share of [Kims] military pension and that Stevens marital

interest  in  [the]  pension [was] equal to 53  total  months  of

service  employment.   Kim argues that the  court  erred  (1)  by

basing  the marital share of Kims pension on the total period  of

coverture, and not just the duration of the marriage; and (2)  by

determining the marital share of Kims pension based on the number

of  months of employment during coverture rather than the  points

earned during coverture.  We address each argument in turn.

          We  disagree  with  Kims  assertion  that  because  the

parties  married in October 1995 and separated in  January  1999,

the  superior  court should have based the marital share  of  her

military   pension  on  a  maximum  of  thirty-nine   months   of

employment,  the duration of the marriage proper.  In  Murray  v.

Murray,  we  held  that the trial court is free to  consider  the

parties   entire   relationship,  including  any   period(s)   of

premarital  cohabitation,  in dividing  the  parties  property.32

Thus,  the  basis  for  calculating  the  marital  share  is  not

necessarily  limited to the period of the parties  marriage.   It

appears  from  the  record that the parties began  cohabiting  in

October  1994, fifty-one months before their eventual separation.

If  the  superior court finds on remand that the  parties  indeed

began  cohabiting in October 1994, it should adjust the coverture

period accordingly.

          We  agree with Kims contention that the superior  court

should have determined the marital share of Kims pension based on

the number of points earned during the period of coverture rather

than  the  number of months of employment during coverture.   The

marital  share  of  a  pension  is typically  determined  by  the

coverture  fraction, whose numerator is the number of  months  of

employment during coverture, and whose denominator is  the  total

number  of  months of employment at the time of  vesting.33   But

where the value of retirement benefits is not directly related to

the  length of employment  such as when retirement benefits  will

          be determined by the number of points earned as a result of the

nature  and  frequency  of the service  rendered   the  coverture

fraction  should  be modified so that the numerator  becomes  the

number  of points earned during the period of coverture, and  the

denominator becomes the total number of points earned.34  Because

Kims retirement is determined in part by the number of points she

will have earned35  Kim earns one retirement point for each day of

active duty  it was error to determine the marital share of  Kims

retirement  simply  based on the number of months  of  employment

during  coverture rather than the number of points earned  during

coverture.36  We therefore remand for additional findings.

          2.   The Oregon Street duplex

          The  parties  1997 post-nuptial agreement classified  a

duplex  on  Oregon Street as Kims separate property.  Thereafter,

Kim  and  Steven jointly acquired debt which was secured by  that

property,  and Kim concedes that Stevens name was  added  to  the

title.   The superior court therefore classified the property  as

marital.   Kim  contends that it was an abuse  of  discretion  to

classify the property as marital, because, she argues, there  was

no intent to transmute the Oregon duplex from separate to marital

property.

          Parties   to   a   divorce   may   stipulate   to   the

characterization of property.37  And absent a cognizable contract

defense,  such as fraud, stipulations should be enforced.38   But

Kims  counsel  conceded at trial that the  Oregon  Street  duplex

should be classified as marital property.  And when asked by  the

court:  Do you think anything that has been done or proposed does

violence  to [the] postnuptial agreement, Kims counsel  responded

No.  We therefore conclude that it was not an abuse of discretion

to classify the Oregon Street duplex as marital property.

          3.   The  superior courts valuation of the van was  not
               clearly erroneous.
               
          Kim  next argues that it was error to value the  Toyota

Sienna  van the court awarded her at $25,000, because the van  is

encumbered by a $20,000 debt.  Kim cites Mack v. Mack,  where  we

          stated that [g]enerally, the debt owed on any particular item of

property will factor into the trial courts determination  of  the

value  of it.39  But because the court allocated the van debt  to

Steven,  we conclude that it was not clearly erroneous  to  value

the van at $25,000.

          4.   It  was  not error to fail to value Sail N Fun  at
               the time of separation.
               
          Kim  next  argues  that the superior court  erroneously

failed  to value the parties jointly owned business, Sail N  Fun,

at the time of separation.  Kim admits that she did not seek such

a valuation at trial.  This argument was not preserved.40

IV.  CONCLUSION

          Because  it  was error to disallow Kim a deduction  for

the  depreciation  of several rental properties,  to  include  as

gross  income  child  support Kim receives for  a  child  from  a

previous  relationship, and to subtract the amount of that  child

support   from   her   proposed  deduction   under   Civil   Rule

90.3(a)(1)(C), we VACATE the child support award and  REMAND  for

recalculation  of  Kims  child support obligation.   Because  the

child  custody  order was based on best interests  findings  that

justified deviation from the parties custody agreement, we AFFIRM

the custody order.  And because the value of the marital share of

Kims military retirement should have been based on the number  of

points  earned  during  the period of coverture,  we  REMAND  for

additional findings regarding the military pension benefit.

_______________________________
     1     See  Gallant  v.  Gallant, 945 P.2d 795,  798  (Alaska
1997).

     2     Schuyler  v.  Briner, 13 P.3d 738, 741  (Alaska  2000)
(quoting State, Dept of Revenue, CSED v. Pealatere, 996 P.2d  84,
86 (Alaska 2000)).

     3    See Spott v. Spott, 17 P.3d 52, 55 (Alaska 2001).

     4    See Evans v. Evans, 869 P.2d 478, 479 (Alaska 1994).

     5     See  Farrell  v.  Farrell, 819 P.2d 896,  898  (Alaska
1991).

     6    See Evans, 869 P.2d at 480.

     7     Id. at 479 (citing Money v. Money, 852 P.2d 1158, 1161
(Alaska 1993)).

     8      Berry  v.  Berry,  978  P.2d  93,  95  (Alaska  1999)
(citations omitted).

     9    See id.

     10    See id.

     11    See id.

     12     See id. (citing Compton v. Compton, 902 P.2d 805, 808
n.2 (Alaska 1995)).

     13     Kim  also argues that the court miscalculated interim
child   support,  and  precluded  her  from  presenting  relevant
evidence  at  an  April 7, 1999 hearing regarding  interim  child
support.   But  Kim concedes that these alleged  errors  are  not
reversible in many of [their] effects.  We therefore do not reach
the merits of Kims arguments regarding interim child support.

     14      Kim   submitted  several  child  support  guidelines
affidavits  to the superior court.  The superior court considered
the affidavit submitted on January 21, 2000.

     15    962 P.2d 887 (Alaska 1998).

     16    Alaska R. Civ. P. 90.3 cmt. III.B (emphasis added).

     17     See,  e.g., Hilderbrand, 962 P.2d at 889-90; Nass  v.
Seaton, 904 P.2d 412, 416-17 (Alaska 1995) (holding it was  error
to  disallow  straight  line depreciation for  portion  of  child
support obligors residence obligor used in his business);  Eagley
v.  Eagley,  849 P.2d 777, 781 (Alaska 1993) (allowing  deduction
for straight line depreciation of child support obligors business
real estate as ordinary and necessary business expense).

     18    See Hilderbrand, 962 P.2d at 890.

     19    Steven argues that the superior court erred by failing
to impute as income to Kim the rental value of her apartment, and
that this error offsets and renders harmless any error in failing
to   give  Kim  a  deduction  for  depreciation  of  her   rental
properties.   See  supra Part III.B.1.  But  the  imputed  income
question  is a separate issue, which only by complete coincidence
could offset the error of disallowing the depreciation deduction.
We  therefore  cannot  affirm the child  support  order  on  this
alternative ground.  And because Steven did not cross-appeal  the
imputed income question, we decline to reach its merits.

     20    Alaska R. Civ. P. 90.3 cmt. III.A.

     21     See State, Child Support Enforcement Div. v. Bromley,
987  P.2d 183, 194 (Alaska 1999) (quoting Bunn v. House, 934 P.2d
753, 755 n.7 (Alaska 1997)).

     22    Alaska R. Civ. P. 90.3 cmt. III.D.

     23     See  Alaska R. Civ. P. 90.3 cmt. III.B (Ordinary  and
necessary  expenses do not include amounts allowable by  the  IRS
for   the   accelerated   component  of  depreciation   expenses,
investment tax credits, or any other business expenses determined
by the court to be inappropriate.).

     24     See  Zimin v. Zimin, 837 P.2d 118, 123 (Alaska  1992)
([T]he  goal of the Rule 90.3 guidelines is to obtain a realistic
estimate of an obligors adjusted annual income . . . .).

     25     In Part III.C.1 we discuss the deviation between  the
agreed-upon  custody and the awarded custody.   We  assume  there
that   the  award  actually  achieved  what  the  superior  court
intended, but allow the court to revisit custody if the award did
not achieve the numerical division the court intended.

     26     Crane  v.  Crane,  986 P.2d 881,  887  (Alaska  1999)
(citations omitted).

     27    See McClain v. McClain, 716 P.2d 381, 385 (Alaska 1986)
(holding that custody agreement has no binding force on the court
[and that] [t]he contractual intent of the parties is irrelevant.
The court must independently determine what arrangement will best
serve  the  childs interests.); see also Crane, 986 P.2d  at  885
(When  a  stipulation  is  admitted  by  both  parties  or  their
attorneys  in  open  court and there is  no  dispute  as  to  the
material  terms of the settlement, the stipulation is enforceable
between the parties absent fraud, duress, or concealment of other
facts  showing  the agreement was not made voluntarily  and  with
full  understanding.   However, when the subject  matter  of  the
agreement is child custody, the agreement must also meet the best
interests of the children.) (citations omitted).

     28    Ch. 88,  1(a), SLA 1982.

     29     Kim claims that the superior court miscalculated  the
effect  of its award.  As noted above in Part III.B.5, the number
of  days of actual physical custody and visitation awarded to Kim
for  all  three  children may have been slightly lower  than  the
superior court intended.  This deviation is irrelevant in context
of  Kims  argument that the court erred by failing to follow  the
parties  custody  agreement.   The superior  courts  reasons  for
choosing  not  to follow the parties agreement are unaffected  by
any  slight numerical deviations in the physical custody actually
awarded.   Because  the superior court will  have  to  accurately
determine   on  remand  the  custody  and  visitation  previously
awarded,  it may conclude that the award did not in fact  achieve
what  the  superior court intended.  We leave it to the  superior
court  to  adjust visitation if that is necessary to achieve  its
previously expressed intentions.

          Kim  also argues that it was error to award her custody
on  weekends when she drills with the National Guard.  Because we
remand  for further proceedings, we do not need to consider  this
argument.   But  the  court  on remand should  construct  to  the
maximum  extent possible a visitation schedule that  conforms  to
the parties availability; it should avoid scheduled weekend drill
and  annual  training  dates  or adopt  a  default  schedule  for
substitute visitation (for example, first weekend after a   drill
weekend conflict).

     30    540 P.2d 1051, 1055 (Alaska 1975).

     31     See  also Howlett v. Howlett, 890 P.2d 1125,  1127-28
(Alaska  1995)  (It is error for a trial judge to  fail  to  make
findings   on  the  record  explaining  its  decision  concerning
appointment of a guardian ad litem.) (citation omitted).

     32    788 P.2d 41, 42 (Alaska 1990).

     33    See Wainwright v. Wainwright, 888 P.2d 762, 763 (Alaska
1995).

     34     See In re Marriage of Poppe, 158 Cal. Rptr. 500,  504
(Cal. App. 1979).

     35     Kim  was  not employed full-time during most  of  her
marriage  to  Steven.  But Kim accrued points based on  full-time
service  before she married Steven, and she claims that  she  may
eventually  .  .  .  retire  as  a  full  timer.    Because   Kim
accumulated points at a slower rate during her marriage to Steven
than  she  did  before she married him, the number of  months  of
employment during coverture is not directly related to the number
of  points Kim earned during marriage, and hence to the value  of
Kims retirement benefit.

     36    Thus, Stevens share of Kims retirement benefit when she
eventually retires and stops earning points will be (x)(y)(points
earned  during  coverture/total points earned), where  x  is  the
percentage of Stevens marital share, and y is the total value  of
the benefit earned.

     37    Brown v. Brown, 947 P.2d 307, 309 (Alaska 1997) (citing
Laing v. Laing, 741 P.2d 649, 652 (Alaska 1987)).

     38    See id.

     39    816 P.2d 197, 199 (Alaska 1991) (citation omitted).

     40    See Zeman v. Lufthansa German Airlines, 699 P.2d 1274,
1280 (Alaska 1985).