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Laybourn v. Powell (9/27/2002) sp-5633
Laybourn v. Powell (9/27/2002) sp-5633
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
BRADLEY KENT LAYBOURN, )
) Supreme Court No. S-10074
Appellant, )
) Superior Court No.
v. ) 3PA-94-1074 CI
)
ROBERTA YVONNE POWELL, ) O P I N I O N
)
Appellee. ) [No. 5633 - September 27,
2002]
)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Palmer,
Beverly W. Cutler, Judge.
Appearances: D. Scott Dattan, Law Office of
D. Scott Dattan, Anchorage, for Appellant.
Tara N. Logsdon, Golter & Logsdon, P.C.,
Wasilla, for Appellee.
Before: Fabe, Chief Justice, Eastaugh,
Bryner, and Carpeneti, Justices. [Matthews,
Justice, not participating.]
BRYNER, Justice.
I. INTRODUCTION
Bradley Laybourn challenges an order modifying his
child support obligation and awarding partial attorneys fees to
his former wife. We affirm, holding (1) that the superior court
properly imputed income to Laybourn based on his efforts to
disguise actual earnings and conceal assets, (2) that the court
properly considered all of the evidence and did not express any
bias against Laybourn, and (3) that the courts award of enhanced
fees was authorized under Civil Rule 82 because of Laybourns
vexatious conduct.
II. FACTS AND PROCEEDINGS
Laybourns ex-wife, Roberta Powell, moved to modify his
child support payments for their daughter Kelcy. Powell argued
that Laybourns income greatly exceeded the amount on which his
existing child support payments had been based in 1997. Powell
further maintained that Laybourns wages and tax returns did not
accurately reflect his actual earnings because Laybourn was
hiding income. She supported these claims by relying on Linda L.
Saunders, a forensic accountant, who testified that Laybourn
appeared to be sheltering a large amount of his actual income.
Saunders testified that Laybourn had quit a lucrative
job shortly after the couple divorced in 1995 and had remained
self employed as an entrepreneur since then. Although the court
had reduced his child support payments in 1997, he had failed to
make any payments for nearly two years. Yet according to
Saunders, Laybourn established several partnerships shortly after
his divorce and frequently traded his labor for in-kind payments,
such as free rent in a building owned by one of the partnerships,
in an attempt to hide his income and assets. Saunders also
identified vast discrepancies between Laybourns claimed income
and both his lifestyle and bank account balances. In Saunderss
professional opinion,
[Laybourn] has actively participated in
financial activities and labor efforts
concerning property interests in Alaska . . .
[and] has engaged business partners and his
girlfriend to aid in the concealment of such
activities. . . . [Laybourns] financial
records and representations are riddled with
contradictions and claims of expenditures
contrary to customary reporting practices of
the IRS. . . . Laybourn has overtly disguised
his income and worked under the table for his
personal living expenses since he left the
Slope in 1996.
Saunders testified on the first day of a three-day
hearing. At the close of Saunderss testimony just before
Laybourn began presenting his side of the case the trial judge
commented on the compelling nature of Saunderss testimony and
cautioned Laybourn about the potential legal implications of
presenting evidence that might prove to be false. The case
proceeded, and the rest of the hearing consisted of witnesses
presented by Laybourn.
At the close of the hearing, the superior court granted
Powells motion for modification, finding that Laybourn was in
fact seeking to hide income and assets to avoid paying child
support. Based on evidence of his earnings history and
potential, the court estimated that he was easily capable of
earning an adjusted gross income of $72,000 and imputed this
amount to him as annual income for purposes of determining his
new child support obligation. As explained by the court, $72,000
represented Laybourns potential income based on his skills,
experience, and qualifications. The court also awarded enhanced
attorneys fees to Powell, citing Laybourns bad faith and
vexatious conduct in hid[ing] his income and assets. Laybourn
appeals.
III. DISCUSSION
A. Imputed Income1
Alaska Civil Rule 90.3 governs child support and
requires awards of support to be calculated as an amount equal to
the adjusted income of the non-custodial parent,2 multiplied by
certain factors. Rule 90.3(a)(1) broadly defines adjusted gross
income to include the parents total income from all sources, less
certain specified deductions. Under Rule 90.3(a)(4), the court
may impute potential income to a parent the court determines is
voluntarily and unreasonably . . . unemployed or underemployed
and also may impute potential income for non-income or low income
producing assets.
Here, the court found that Laybourn had consistently
underreported his income and was engaged in an ongoing scheme of
concealing assets and earnings. The court estimated his annual
adjusted gross income capacity to be at least $72,000. Those
findings are supported by substantial evidence and are not
clearly erroneous.
Laybourn nonetheless asserts that the court was
required to provide a strict accounting of its methods for
determining this income amount. In particular, Laybourn takes
issue with several categories of expenses that he claims the
superior court must have improperly considered in computing his
income. But Laybourns argument misconceives the basis of the
courts finding that his adjusted annual income totaled at least
$72,000: the court was not calculating his actual income;
instead, it was imputing income based on an estimate of Laybourns
earning capacity because he had made it impossible to calculate
his actual income accurately. Laybourns situation is thus
functionally equivalent to voluntary underemployment. Having
failed to give the court any accurate basis on which to compute
his actual earnings, Laybourn cannot be heard to complain that
its estimate based on his earning capacity is insufficiently
precise.3
Because the superior court did not clearly err in
finding that Laybourns total adjusted earning capacity from all
sources easily exceeded $72,000, we hold that the court did not
abuse its discretion in modifying his child support obligation.4
B. Alleged Bias
Laybourn also alleges that the superior court prejudged
his case and erred in failing to consider all of the evidence.
He bases his claim on the courts remarks at the close of Powells
evidence. Laybourn takes these remarks out of context. As
mentioned earlier, the trial court noted the compelling nature of
Saunderss expert testimony and warned Laybourn of the potential
dangers of presenting a defense based on demonstrably false
testimony. When read in light of the record as a whole, the
courts remarks fail to support Laybourns claim of bias. To the
contrary, they evince a genuine concern about Laybourns
understanding of the potential implications of further testimony
regarding what appeared to be a well-documented pattern of tax
evasion and fraud: the court simply wanted to be certain Laybourn
understood the evidently very real risk that he might incriminate
himself or his proposed witnesses. After sounding this note of
caution, the court heard two more days of testimony and, in the
end, expressly declined to find Laybourns defense entirely
lacking in credibility. The court then entered detailed findings
addressing all the evidence presented at the hearing. In the
context of the record as a whole, then, Laybourns claim of bias
is unpersuasive.
C. Attorneys Fees
Finally, Laybourn argues that the superior court abused
its discretion in awarding attorneys fees. The superior court
assessed $9,392.57 in attorneys fees under Alaska Civil Rule
82(b)s schedule of partial fees; the court enhanced this award by
$607.43 based on Laybourns vexatious conduct. The total fee
award was $10,000.
Laybourn initially claims that child support
modification cases qualify as post-judgment modifications and
enforcement actions and, as such, fall under the divorce
exception to Rule 82 and are not subject to fee awards under that
rule.5 But unlike post-judgment motions to modify custody, child
support motions raise issues solely pertaining to money and
property and, thus, do not fall under the divorce exception.6
Laybourn separately argues that the $607 enhancement of
fees was inappropriate. The superior court found that Laybourn
had engaged in bad faith and vexatious conduct in an attempt to
hide his income and assets; the court further characterized
Laybourns conduct as outrageous. Rule 82(b)(3)(G) expressly
authorizes courts to enhance fees in cases of bad faith or
vexatious behavior. The superior courts finding of vexatious
conduct is supported by the record, and the nominal fee
enhancement is not manifestly unreasonable.7 We thus find no
abuse of discretion.
IV. CONCLUSION
For these reasons, we AFFIRM the superior courts
judgment.
_______________________________
1 We review a trial courts findings of imputed income for
clear error. See Routh v. Andreassan, 19 P.3d 593, 595-96 (Alaska
2001) (determination of net income for child support purposes is
factual finding reviewed for error); Dunn v. Dunn, 952 P.2d 268,
270 (Alaska 1998) (using clearly erroneous standard). We deem a
factual finding to be clearly erroneous when we are left with a
definite and firm conviction on the entire record that a mistake
has been made, even though there may be evidence to support the
finding. Brosnan v. Brosnan, 817 P.2d 478, 480 (Alaska 1991)
(quoting Martens v. Metzgar, 591 P.2d 541, 544 (Alaska 1979)).
2 Alaska R. Civ. P. 90.3(a).
3 Cf. Benson v. Benson, 977 P.2d 88, 92 (Alaska 1999)
(permitting calculation of support arrearages and noting [a]
contrary holding would reward recalcitrant conduct of obligors).
4 We review modifications of child support for abuse of
discretion. Robinson v. Robinson, 961 P.2d 1000, 1002 (Alaska
1998). Under this standard, we will set aside an order for
modification if a review of the entire record leaves us with a
definite and firm conviction that a mistake has been made.
Hilderbrand v. Hilderbrand, 962 P.2d 887, 888 (Alaska 1998)
(internal quotations omitted).
5 See Hartland v. Hartland, 777 P.2d 636, 644 (Alaska
1989).
6 Lowe v. Lowe, 817 P.2d 453, 460 (Alaska 1991).
7 Kowalski v. Kowalski, 806 P.2d 1368, 1372 (Alaska
1991). Laybourn argues that Kowalski supports his claim that
enhanced fees are inappropriate. But Kowalski recognizes that an
attempt to mislead the court for purposes of defeating a
legitimate claim qualifies as vexatious conduct under Rule
82(b)(3)(G). Id. at 1373.
