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Osmar v. Mahan (8/16/2002) sp-5608
Osmar v. Mahan (8/16/2002) sp-5608
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
MINDY LYNN OSMAR, )
) Supreme Court No. S-10299
Appellant, )
) Superior Court Nos.
v. ) 3KN-00-175 CI & 3KN-00-123 DV
)
GARY LEE MAHAN, ) O P I N I O N
)
Appellee. ) [No. 5608 - August 16,
2002]
________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Kenai,
Harold M. Brown, Judge.
Appearances: Max F. Gruenberg, Jr. and
Jennifer L. Holland, Gruenberg, Clover &
Holland, Anchorage, for Appellant. No
appearance by Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
FABE, Chief Justice.
I. INTRODUCTION
When the trial court calculated Mindy Lynn Osmars child
support obligation for her son, Steele, the court included in
Mindys income the Social Security benefits that Ashley, Mindys
child from a previous marriage, receives because of the death of
Ashleys father. Yet, federal law restricts Mindys use of these
benefits to Ashleys care and maintenance; they are not available
to support Steele. We therefore conclude that the trial court
erred by including the payments in Mindys income for purposes of
determining child support under Alaska Civil Rule 90.3.
II. FACTS AND PROCEEDINGS
Mindy Lynn Osmar and Chris Osmar married and had one
child, Ashley Osmar. After the couples divorce, Chris became
disabled and died. Mindy receives Social Security childrens
insurance benefits (CIB) ranging from $922 to $954 per month on
Ashleys behalf because of Chriss disability and death. The
checks are from the United States Treasury and are made out to
Mindy Osmar for Ashley M. Osmar and list Ashleys Social Security
number.
Mindy and Gary Lee Mahan were married in April 1997 and
separated in January 2000. They have one son together, Steele
Lee Mahan, born July 3, 1998. Mindy filed for divorce on March
8, 2000 and both Mindy and Gary sought legal and physical custody
of Steele and child support from each other. Under the terms of
a Domestic Violence Protective Order, Mindy was awarded temporary
custody of Steele. However, because of Mindys work schedule,
Mindy has Steele from Sunday at 6:00 p.m. until Tuesday at 5:30
p.m. and Wednesdays, Thursdays, and Fridays from 9:00 a.m. to
5:30 p.m.
In its order on interim child support of May 17, 2000,
the superior court concluded that although Steele spends the
night with Mindy less than thirty percent of the time, a
departure from the overnight accounting method was warranted
because Steele spends a majority of his waking hours with Mindy.
Accordingly, the superior court calculated child support based on
a 50/50 shared custody formula and ordered Mindy to pay Gary
$26.61 per month for child support. The superior court included
in Mindys income the CIB payments that Mindy receives on Ashleys
behalf.
Mindy moved for reconsideration, arguing that [f]or
child support purposes, Ashley is irrelevant. She is not a child
of the marriage and her income and expenses are irrelevant. In
ruling on the motion for reconsideration, the superior court
interpreted Alaska Civil Rule 90.3 as requiring inclusion of the
Social Security benefits in Mindys income. However, it reduced
the order against Mindy from $26.61 per month to $0, concluding
that good cause existed under Rule 90.3(c)(1) to vary the award.
After a two-day trial in January 2001, the trial court
again rejected Mindys argument that the Social Security benefits
should not be included in her income for Rule 90.3 purposes. In
its April 6, 2001 decision, the superior court analyzed the three
cases on which Mindy relied Miller v. Miller;1 State, Department
of Revenue v. Fry;2 and Pacana v. State, Department of Revenue3
and reaffirmed its prior decision: Because Ashleys father,
rather than Plaintiff, is the source of the benefits to Ashley,
Plaintiff is not entitled to an offset of those benefits against
her income or child support obligation. The superior court,
however, adjusted its calculation of support on other grounds and
ordered Gary to pay Mindy $259 per month in child support.
On September 6, 2001, after having denied two motions
by Mindy for reconsideration, the superior court entered a child
support order requiring Gary to pay $270.50 to Mindy in child
support, effective April 6, 2001. Mindy appeals both the interim
and final child support orders on the basis that the CIB payments
should not be included in her income.
III. DISCUSSION
A. Standard of Review
We generally will review a child support decision only
for an abuse of discretion or for a determination of whether the
trial courts factual findings are clearly erroneous.4 However,
whether the trial court properly included Social Security CIB
benefits in Mindys income is a question of law that we review de
novo.5 Under this standard, we will adopt the rule of law that
is most persuasive in light of precedent, reason, and policy.6
B. The Trial Court Erred by Including in Mindys Income CIB
Social
Security Payments Made to Mindy for Ashley.
How to account for CIB payments that a child from a
previous relationship receives and which are not attributable to
the disability of either of the parties is an issue of first
impression in this court. The trial court included the Social
Security CIB payments in Mindys income, justifying its decision
on the basis that Rule 90.3 requires the court to consider the
parents total income from all sources. The court went on to
explain:
Section III.A. of the Commentary to Rule 90.3
provides that this directive be interpreted
broadly to include benefits which would have
been available for support if the family had
remained intact. The court notes that the
social security benefits at issue here are
not means-based sources of income, thus they
are not deductible on this basis. In
addition, it would appear to the court that
the social security payments albeit received
for her daughter are made available to Ms.
Osmar to do with as she sees fit. The court
sees no evidence to suggest that there are
any restrictions whatsoever on the uses to
which Ms. Osmar can put these funds. Under
these circumstances, the court finds that
these funds are properly considered income
for purposes of calculating child support
under Rule 90.3 and plaintiff has cited no
authority to the contrary.
We disagree with the superior courts analysis. The
superior court is correct that Rule 90.3(a)(1) provides that, for
purposes of calculating child support, income includes the
parents total income from all sources. And the commentary to
Rule 90.3 indicates that income should be interpreted broadly to
include benefits which would have been available for support if
the family had remained intact, including Social Security,
veterans benefits, and insurance benefits which replace earned
income such as workers compensation or periodic disability
payments.7
However, there are restrictions on Mindys use of
Ashleys Social Security CIB payments. Federal law requires that
Social Security disability and death benefits paid to a child be
used for that childs maintenance:
We will consider that payments we certify to
a representative payee have been used for the
use and benefit of the beneficiary if they
are used for the beneficiarys current
maintenance. Current maintenance includes
costs incurred in obtaining food, shelter,
clothing, medical care, and personal comfort
items.[8]
Mindy has a duty to invest or conserve for Ashley any payments in
excess of Ashleys maintenance needs.9 Mindy is constrained by
federal law in her use of the Social Security payments for
anything other than the maintenance and care of Ashley, and that
money was therefore not available to Mindy to support Steele when
Mindy and Gary were still married and the family was intact.10
In addition, under Alaska Civil Rule 90.3, child
support is not income.11 As Mindy correctly characterizes it:
Here the payments are received because of the death of Ashleys
father and come to Ashley, through Mindy, as a substitute for his
child support. Thus they are not income to Mindy, but similar to
child support for Ashley. The Social Security payments should
have been excluded from Mindys income in calculating the child
support award for Steele.
This conclusion is consistent with our prior decisions
on how to account for Social Security benefits resulting from the
disability of a parent who is a party to a child support dispute.
In Miller v. Miller, we held that benefits payable to a child
must be included as income of the contributing parent for
purposes of establishing the appropriate amount of child support
under Civil Rule 90.3.12 The contributing parent is then credited
for the Social Security payments made to the child on his behalf.13
We reasoned:
The primary purpose of Civil Rule 90.3 is to
ensure that child support orders are adequate
to meet the needs of children, subject to the
ability of the parents to pay. Social
security benefits payable to a child are
geared toward fulfilling the same objective.
Although the benefits are payable directly to
the child rather than through the
contributing parent, the childs entitlement
to payments derives from the parent, and the
payments themselves represent earnings from
the parents past contributions.[14]
Applying Miller to the present case, if Ashleys father
were still alive, as the contributing parent he would have to
include the $954 in his income for purposes of calculating his
child support obligation for Ashley. He would then be permitted
a $954 credit toward his total child support obligation, and the
Social Security payments for Ashley could satisfy his obligation
in full. Since the payments would be included in Ashleys fathers
income, it follows that they should not be included in Mindys
income.
IV. CONCLUSION
Mindy is restricted by federal law to use the CIB
payments exclusively for Ashleys maintenance and must invest or
conserve any amount paid to her for Ashley which exceeds the cost
of Ashleys maintenance. Because the CIB payments are not
available to Mindy for Steeles care, they should not be included
in her income for purposes of Rule 90.3. We REVERSE and REMAND
for recalculation of the child support award in accordance with
this decision.15
_______________________________
1 890 P.2d 574 (Alaska 1995).
2 926 P.2d 1170 (Alaska 1996).
3 941 P.2d 1263 (Alaska 1997).
4 Bennett v. Bennett, 6 P.3d 724, 726 (Alaska 2000);
Hermosillo v. Hermosillo, 962 P.2d 891, 893 (Alaska 1998).
5 Hermosillo, 962 P.2d at 893 (Whether the superior court
appropriately considered CIB in the computation of [the fathers]
child support arrears is a question of law that we review de
novo.); see also J.L.P. v. V.L.A., 30 P.3d 590, 594 (Alaska 2001)
(The interpretation of Alaska Civil Rules governing child support
orders is reviewed de novo.).
6 Miller, 890 P.2d at 576.
7 Alaska R. Civ. P. 90.3 cmt. III.A. Mandatory
deductions are subtracted from each parents income, including
[c]hild support and alimony payments paid to another person
arising out of different cases . . . if three conditions are met.
Alaska R. Civ. P. 90.3 cmt. III.D; see also Alaska Civil Rule
90.3(a)(1)(B). A deduction is also permitted for child support
paid for children from prior relationships living with the
parent, 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. Alaska R. Civ. P. 90.3 cmt. III.D; see
also Alaska R. Civ. P. 90.3(a)(1)(C).
8 20 C.F.R. 404.2040(a)(1) (2002).
9 See 20 C.F.R. 404.2045(a) (After the representative
payee has used benefit payments consistent with the guidelines in
this subpart (see 404.2040 regarding use of benefits), any
remaining amount shall be conserved or invested on behalf of the
beneficiary.).
10 See C.G.A. v. State, 824 P.2d 1364, 1367 (Alaska 1992)
(noting that the State may not order a noncustodial payee parent
to pay over a childs Social Security benefits to a custodial
parent, even if the payee parent was inappropriately spending the
beneficiarys funds, because federal law provides a remedy when an
appointed payee abuses her fiduciary duty).
11 Faulkner v. Goldfuss, 46 P.3d 993, 998 (Alaska 2002);
Alaska R. Civ. P. 90.3 cmt. III.A. Although the Internal Revenue
Codes definition of income differs from Rule 90.3s definition in
other respects, it is noteworthy that federal income tax law also
excludes child support from income. See 26 U.S.C. 71(c)(1)
(Subsection (a) [providing that [g]ross income includes amounts
received as alimony or separate maintenance payments] shall not
apply to . . . a sum which is payable for the support of children
of the payor spouse.).
12 890 P.2d 574, 577-78 n.5 (Alaska 1995) (emphasis
added).
13 Id. at 577.
14 Id. (internal quotations and citations omitted).
15 On remand, the trial court is free to reconsider
whether good cause exists to vary the newly calculated award
under Rule 90.3(c)(1).
