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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Law Offices of Steven D. Smith, P.C. v. Ceccarelli (6/17/2016) sp-7108

Law Offices of Steven D. Smith, P.C. v. Ceccarelli (6/17/2016) sp-7108

           Notice:   This opinion is subject to correction before publication in the P                     ACIFIC  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, email  

                                                                                                                            

           corrections@akcourts.us.  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                       



LAW  OFFICES  OF  STEVEN  D.                                     )  

SMITH,  P.C.,                                                    )          Supreme  Court  No.  S-15615  

                                                                 )  

                                 Appellant,                                                                                            

                                                                 )          Superior Court No. 3AN-14-05219 CI  

                                                                 )  

           v.                                                                                    

                                                                 )          O P I N I O N  

                                                                 )  

              

DANA CECCARELLI,                                                                                              

                                                                 )          No. 7108 - June 17, 2016  

                                                                 )  

                                 Appellee.                       )  

                                                                 )  



                                                                                                               

                                   

                      Appeal from the Superior Court of the State of Alaska, Third  

                                                                                                

                      Judicial District, Anchorage, Mark Rindner, Judge.  



                                                                                                                    

                      Appearances:  Steven D. Smith, Law Offices of Steven D.  

                                                                                                                 

                      Smith, P.C., Anchorage, for Appellant.  Carl D. Cook, Law  

                                                                                                 

                      Office of Carl D. Cook, P.C., Anchorage, for Appellee.  



                                                                                                                         

                      Before:         Fabe,  Winfree,  Maassen,  and  Bolger,  Justices.  

                                                                     

                      [Stowers, Chief Justice, not participating.]  



                                            

                      MAASSEN, Justice.  



I.         INTRODUCTION  



                                                                                                                               

                      A  superior  court  order  required  the  Child  Support  Services  Division  



                                                                                                                                               

(CSSD) to audit the child support and spousal support accounts of a divorced couple.  



                                                                                                            

The audits revealed that the agency had collected too much child support from the ex- 



                                                                                                                                 

wife and that the ex-husband owed her the overpayment as well as arrearages in spousal  



                                                                                                                        

support.  The ex-wife's attorney filed an attorney's lien on money in the ex-husband's  


----------------------- Page 2-----------------------

possession that the attorney claimed was owed to his client, then filed a separate action                                                                                                                                                                                                                                                                                                                                                                                                                               



to enforce the lien. The ex-husband paid the money to CSSD, which turned it over to the                                                                                                                                                                                                                                                                                                                                                                                                                                                    



 ex-wife.    



                                                                                    The superior court granted summary judgment to the ex-husband on the                                                                                                                                                                                                                                                                                                                                                                                  



 attorney's lien claim, concluding that the lien was invalid because the ex-husband was                                                                                                                                                                                                                                                                                                                                                                                                                                              



required to pay the money for the overpayment and the spousal support arrearages                                                                                                                                                                                                                                                                                                                                                    



 directly to CSSD.                                                                                               The attorney appeals.                                                                                                                          



                                                                                    We   conclude   that   the   attorney's   lien   satisfied   the   requirements   of   the  



 governing   statute,   AS   34.35.430(a)(3).     We   therefore   reverse   the   superior   court's  



 summary judgment order and remand for further proceedings.                                                                                                                                                                                                                                                                                                                                             



II.                                       FACTS AND PROCEEDINGS                                                                       



                                                                                    Michelle and Dana Ceccarelli are divorced. Michelle initially had custody                                                                                                                                                                                                                                                                                                                                                



 of their two children, but Dana took full custody while Michelle spent time in prison.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



Michelle and Dana have had disputes over child and spousal support for over ten years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



Michelle moved for back payment of child support but in October 2005 the superior                                                                                                                                                                                                                                                                                                                                                                                                                        



 court denied her motion, then in November 2005 denied her motion for reconsideration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



                                          A.                                        The June 2007 Superior Court Order                                                                                                                                                                                                                            



                                                                                    In 2007 the superior court decided that it had based its November 2005                                                                                                                                                                                                                                                                                                                                                                   



 order on an incomplete record, omitting an October 2005 Notice of Adjustment from                                                                                                                                                                                                                                                                                                                                                                                                                                             



 CSSD.   The November 2005 order had concluded that Dana was current on his child                                                                                                                                                                                                                                                                                                                                                                                                                                             



 support obligation, but it relied on a CSSD audit that predated the Notice of Adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



 The Notice of Adjustment revealed that Dana was in arrears in the amount of $11,244.02                                                                                                                                                                                                                                                                                                                                                                                                



 at the time he took custody of the children.                                                                                                                                                                                                                                               The court ordered that CSSD take into                                                                                                                                                                                                   



 account these newly determined arrearages in offsetting the parties' CSSD accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



                                                                                                                                                                                                                                                                    - 2 -                                                                                                                                                                                                                                                        7108
  


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                         B.                      The June 2008 Child Support Order                                                                                     



                                                 A June 2008 order required Michelle to pay Dana monthly child support.                                                                                                                                                                                                         



The order erred in its child support calculation, however, and it failed to expressly state                                                                                                                                                                                                                 



that it did not supersede the superior court's 2007 order taking into account the child                                                                                                                                                                                                                  



support arrearages Dana owed Michelle.                                                                                                                Because CSSD failed to credit Michelle with                                                                                                           



the $11,244.02 in arrearages, her child support payments began to accrue immediately                                                                                                                                                                                          



and   for   the   wrong   amount.     These   errors   meant   that   Michelle   incorrectly   accrued  



approximately $18,000 in child support arrearages while she was imprisoned.                                                                                                                                                                                                                    



                         C.                      CSSD's Seizure Of Michelle's Funds                                                                                    



                                                 After Michelle was released from prison, CSSD's accounts continued to                                                                                                                                                                                               



show that she owed Dana approximately $18,000 in unpaid child support.                                                                                                                                                                                                          Dana asked   



for CSSD's help to recover this money after Michelle received a settlement in a personal                                                                                                                                                                                                  



injury case following a bike accident. CSSD apparently served an order to withhold and                                                                                                                                                                                                                         



                                                                                                                                                                        1  

deliver on Michelle's personal injury attorney,                                                                                                                                                                                                                                                                      

                                                                                                                                                                             and in May 2012 CSSD seized a total of  



                                                                                                                                                                                                                                                                                                                 

$18,000 from the settlement funds and from Michelle's bank account.  CSSD used the  



                                                                                                                                                                                                                                                                                                            

seized funds to pay Dana the child support arrearages that Michelle appeared to owe  

him.2  

                     



                                                                                                                                                                                                                                                    

                        D.                       The March 2013 Order Modifying Child Support  



                                                                                                                                                                                                                                                                                                          

                                                 In March 2013 the superior court issued an order modifying the June 2008  



                                                                                                                                                                                                                                                                                                                 

child support order and requiring CSSD to adjust Michelle's and Dana's accounts for  



                                                                                                                                                                                                                                                                                                          

two reasons.  First, the court found that the June 2008 order should have stated "that  



                         1                       CSSD is authorized by statute to "issue to any person . . . an order to                                                                                                                                                                                            



withhold and deliver property," including "[a]ll real or personal property belonging to                                                                                                                                                     

the obligor."                                   AS 25.27.250(a), (b).                                               



                        2                        CSSD  made  two  payments  to  Dana  from  the  seized  funds:                                                                                                                                                                                  one  for  

                                                                                                                                                                                                                                                                                                                

$15,389.51 and one for $2,922.28.  

                                                                                        



                                                                                                                                                       - 3 -                                                                                                                                               7108
  

                                                                                                                                                               


----------------------- Page 4-----------------------

                                                                                                                              

previous orders  issued  by  the court were not intended  to be superseded," and that  



                                                                                                                               

because of this omission CSSD erroneously failed to credit Michelle's account with the  



                                                                                                                                

$11,244.02 in child support arrearages Dana had been ordered to pay her in 2007 - an  



                                                                                                                            

error that persisted in 2012 when CSSD seized Michelle's funds.  The superior court  



                                                                                                                        

expressly reinstated the June 2007 order and required that CSSD audit the parties'  



                                                 

accounts again and adjust them accordingly.  



                                                                           

                    The 2013 order also found that the 2008 order had the wrong amount for  



                                                                                                                               

Michelle's monthly child support obligation.  The court required CSSD to adjust her  



                                                                                                                               

child support account to correct for the error in the 2008 order; it further found that she  



                                                                                                                    

was physically incapacitated because of her bike accident, that because of her incapacity  



                         

she should pay only the minimum child support obligation of $50 per month, and that  



                                                                                                                            

her account should be adjusted to reflect this amount "as of May 2012 until further order  



                       

of the court."  



                    This March 2013 order did not expressly require the parties to repay any  



                                                                                                                    

excess funds to CSSD.   It simply instructed CSSD to "notify the parties' attorneys"  



                                                                                                                 

should the "credit plus the sums seized from [Michelle] in 2012 exceed [Michelle's]  



             

current arrearages."  



                                                                  

          E.        The November 2013 Order  



                                                                                                                        

                    In November 2013 the superior court ordered CSSD to "adjust its account  



                                                                                                                               

for [Dana] to reflect the correction of the arrears." It further ordered CSSD to "offset the  



                                                                                                                          

accounts for child support owed by each parent as ordered in the June 18, 2007 order"  



                                                                                                                             

and gave the agency 30 days to provide the court and the parties with new audits of both  



                                                                                                                              

parties' child support accounts.  When CSSD finished these audits, it concluded that  



                                                                                                                         

Dana owed spousal support but not child support and that it had taken too much money  



                                                                                                                               

from Michelle by garnishment, with the result that Dana owed Michelle a refund for  



                                                                                                                        

overpayment of child support.  On February 7, 2014, Michelle moved "for a hearing  



                                                                     

                                                              - 4 -                                                        7108
  


----------------------- Page 5-----------------------

                                                                                                                         

regarding the distribution . . . of $10,639.88 presently held by . . . Dana."  This amount  



                                                                                                                   

represented the overpayment to Dana that had been revealed by the CSSD audit.  



                                                                                        

          F.        The Attorney's Lien Filed By Michelle's Attorney  



                                                                                                                         

                    Michelle had been represented by attorney Steven D. Smith since CSSD's  



                                                                                                                               

seizure of her settlement funds.  In January 2014 Smith filed a notice of attorney's lien  



                                                                                                                            

on Dana's counsel, Carl Cook, based on legal fees Michelle owed for the services Smith  



                                                                                                                           

had  provided.            On  February  24  Smith  filed  an  Action  to  Foreclose  Lien  under  



                                                                                                                      

AS 34.35.430. In his complaint, Smith alleged that the amount of his lien was $7,742.18  



                                                                                                                             

and that "as the result of a garnishment upon Michelle . . . performed by [CSSD]" Dana  



                                                                                                                          

had been given "[m]ore than $10,000 in excess of what [Michelle] owed." Smith alleged  



                                                                                                                               

that he had served notice of his attorney's lien on Dana's counsel but that Dana had  



                                                                                                                          

stated his "intent not to honor the lien but instead pay the money to CSSD."  Dana's  



                                                                                                                               

answer to the complaint asserted various affirmative defenses and generally denied "all  



                                                                                                                                  

allegations that he is liable for payment of a debt owed by Michelle . . . to [Smith]."  



                                                                                                                               

                    On February 25, 2014, the day after Smith filed his complaint, Dana sent  



                                                                    

two payments to CSSD:  one for the excess funds CSSD had garnished from Michelle  



                                                                                                                                      

and turned over to him and the other for spousal support arrearages he owed Michelle.  



                                                                                                                                   

CSSD passed the money on to Michelle.  Michelle then paid Smith $2,000, leaving a  



                                                            

balance of $5,742.18 due for his legal fees.  



                                                                                                                               

                     Smith  moved  for  summary  judgment  in  his  action  to  foreclose  the  



                                                                                                                              

attorney's lien.  Dana opposed and filed a cross-motion for summary judgment. In June  



                                                                                                                            

2014 the superior court issued an order denying Smith's motion, granting Dana's cross- 



                                                                                                                                

motion, and dismissing Smith's claim without further elaboration.  Smith moved for  



                                                                                                                                 

reconsideration, arguing that the superior court had erred in failing to issue findings of  



                                                                                                                               

fact and conclusions of law. The superior court denied the motion, stating that there was  



                                                                                                                                  

no issue of material fact and that Dana was entitled to summary judgment as a matter of  



                                                                     

                                                               - 5 -                                                        7108
  


----------------------- Page 6-----------------------

 law "for the reasons identified" in Dana's opposition and cross-motion. The court added                                                                                                                                               



 that Smith "was seeking to lien monies . . . which [he] had no right to lien" and that his                                                                                                                                                     



 "complaint is with his client who did not pay him - not with [Dana] who reimbursed                                                                                                                      



 the State as he was obligated to do."                                                      



                                       Smith appeals, contending that the superior court erred by deciding on                                                                                                                                   



 summary judgment that his attorney's lien was invalid and by failing to issue findings                                                                        



 of fact and conclusions of law in support of its decision.                                                                             



 III.               STANDARDS OF REVIEW                                      



                                                                                                                                                                                      3  

                                       "We review                        grants of summary judgment de novo,"                                                                                                                 

                                                                                                                                                                                          determining "whether  



                                                                                                                                                                                                                                                  

 there are any genuine issues of material fact and whether the moving party is entitled to  



                                                                                      4  

                                                                                                                                                                                                         

                                                                                            We interpret statutes de novo, "using our independent  

judgment as a matter of law." 



                                 5  

judgment."     



 IV.                DISCUSSION  



                                                                                                                                                                            

                    A.                 Alaska Law Authorizes Smith's Attorney's Lien.  



                                                                                                                                                                                                                                               

                                       The validity of Smith's attorney's lien depends on whether it meets the  



                                                                                                                                                                                                                                               

 requirements of Alaska's attorney's lien statute, AS 34.35.430.  As relevant here, the  



                                                                                                                                                                                                                                     

 statute provides that "[a]n attorney has a lien for compensation, whether specially agreed  



                                                                                                                                                                                                                                                  

 upon or implied, . . . upon money in the possession of the adverse party in an action or  



                                                                                                                                                                                                                                              

 proceeding in which the attorney is employed, from the giving of notice of the lien to that  



                    3                 Alaska Native Tribal Health Consortium v. Settlement Funds Held for or              



 to be Paid on Behalf of E.R. ex rel. Ridley                                                                             , 84 P.3d 418, 423 (Alaska 2004).                                                                 



                    4                 Prentzel v. State, Dep't of Pub. Safety, 169 P.3d 573, 581 (Alaska 2007)  

                                                                                                                                                                                                                                       

 (quoting In re Estate of Maldonado, 117 P.3d 720, 722 (Alaska 2005)).  

                                                                                                                                                                                                               



                    5                  Theresa L. v. State, Dep't of Health & Soc. Servs., Office of Children's  

                                                                                                                                                                                                                        

 Servs., 353 P.3d 831, 837 (Alaska 2015).  

                                                                                                    



                                                                                                                       - 6 -                                                                                                              7108
  

                                                                                                                              


----------------------- Page 7-----------------------

               6  

party."   This statutory subsection provides Smith with a charging lien if its elements are                                                                                            

met.7  



                             "[A]  charging  lien  is  based  on  equitable  considerations,  and  gives  an  

                                                                                                                                                                                       



attorney the right to have fees and costs due to the attorney for services in a particular  

                                                                                                                                                                        

suit  secured  by  the  judgment  or  recovery  in  such  suit."8                                                                         Unlike  a  retaining  (or  

                                                                                                                                                                                      



possessory) lien, "a charging lien can be enforced in a court proceeding to provide the  

                                                                                                                                                                                       

attorney with payment."9  "In order that a valid charging lien may exist, it is essential that  

                                                                                                                                                                                      

there exist some subject matter to which such lien may attach."10   To protect the adverse  

                                                                                                                                                                             



party in possession of the subject matter, "[t]he lien is not valid until the required notice  

                                                                                                                                                                                

has been given."11  

                                           



                              Smith served the notice of attorney's lien - both its original and amended  

                                                                                                                                                                          



versions  -  on  Cook,  Dana's  counsel,  and  the  parties  do  not  dispute  the  notice's  

                                                                                                                                                                           



               6             AS 34.35.430(a)(3).   



               7             See Phillips v. Jones                        , 355 P.2d 166, 170 (Alaska 1960) ("Paragraph third                                                      



of [AS 34.35.430] gives the attorney a lien for his compensation . . . ."); In re Sea Catch,  

                                                                                                                                                                               

Inc., 36 B.R. 226, 230 (Bankr. D. Alaska 1983) (citing                                                                   In re Winston's Lien                          , 6 Alaska  

482, 485 (1922)) (explaining that subsection (3) "provides for a charging lien upon                                                                                               

money in the hands of an adverse party in an action in which the attorney is employed  

                                                                                                                   

from the giving of notice of the lien to the adverse party").                                                   



               8             Sea Catch, 36 B.R. at 230 (explaining that in contrast, "a retaining lien only  

                                                                                                                                                                                    

gives the attorney the right to retain possession of the client's documents, money or other  

                                                                                                                                                                                  

property which comes into the attorney's hands during the course of employment until  

                                                                                                                                                                                   

the balance due for the attorney's services is paid").  

                                                                                                                   



               9             Id.  

                                     



               10            7A C.J.S. Attorney & Client  540 (2015).  

                                                                                                          



               11            Phillips, 355 P.2d at 170.  

                                                                                       



                                                                                          - 7 -                                                                                   7108
  

                                                                                                 


----------------------- Page 8-----------------------

                        12  

sufficiency.                 The validity of Smith's lien therefore turns on whether the amounts of the                                                                     



child support overpayment and spousal support arrearages that Dana owed Michelle,                                                                             



Smith's client, constituted "money in the possession of the adverse party in an action or                                                                                     

proceeding in which the attorney is employed."                                                    13  



                            1.           The money at issue was in the possession of the adverse party.  

                                                                                                                                                                   



                           Dana argues he "was not an adverse party" under AS 34.35.430(a)(3)  

                                                                                                                                                



"because he did not possess funds that were payable to Mr. Smith's client." He argues  

                                                                                                                                                             



that he was instead required to pay CSSD, citing two authorities: (1) the superior court's  

                                                                                                                                                                    



orders and (2) the overpayment provision of the income withholding statute.  

                                                                                                                                                                



                           In support of the first argument - that court orders required him to make  

                                                                                                                                                                       



payments to CSSD - Dana refers to the 2001 child support order, which stated: "[Y]ou  

                                                                                                                                                                    

                                                                                      [14]   or as directed by CSED.   Do not make  

must make all payments  through CSED                                                                                                                                  

                                                                        



payments directly to the custodian after receipt of this notice and order."  At the time,  

                                                                                                                                                                       



both parties had requested that the agency manage their child support payments.  

                                                                                                                                                                       



                           But the 2001 order refers only to payments of child support, not spousal  

                                                                                                                                                                  



support or the potential reimbursement of overpayments.  And once the superior court  

                                                                                                                                                                       



discovered that Dana owed these funds, its November 2013 order did not require that  

                                                                                                                                                                          



Dana pay the money to CSSD; it simply ordered that CSSD adjust Dana's account to  

                                                                                                                                                                             



reflect the arrears and that the agency "offset the accounts for child support owed by each  

                                                                                                                                                                         



              12           Id.  ("[S]ervice of such notice upon the attorney of record of the adverse                                                             



party is sufficient.").                     



              13           AS 34.35.430(a)(3).  

                                    



              14           TheAgencychangeditsnamefromtheChildSupport Enforcement Agency  

                                                                                                                                                                  

to the Child Support Services Division in 2004.  Overview of Child Support Services,  

                                                                                                                                                               

D E P 'T             O F          R E V E N U E                A L A S K A                C H I L D             SU P P O R T                SE R V S .              DI V . ,  

                                                                                                                                  

http://www.csed.state.ak.us/overview.aspx (last visited June 6, 2016).  



                                                                                           

                                                                                     - 8 -                                                                             7108
  


----------------------- Page 9-----------------------

                                                                                                                                                                15  

parent as ordered in the June . . . 2007 order."                                                                                                                      The record simply does not support                                                                 



Dana's argument that he was required to pay the money to CSSD because of the superior                                                                                                                                                                                   



court's orders.                                    



                                             As for whether Dana was required to pay CSSD by statute, we must first                                                                                                                                                



identify the statute under which Dana was holding the money.                                                                                                                                                                Smith contends that                                      



CSSD collected Michelle's funds through an order to withhold and deliver authorized                                                                                                   



by AS 25.27.250.                                               That statute does not address overpayments.                                                                                                                   From this omission                    



 Smith argues that "[t]here is no overriding state interest to justify [Dana's ignoring of]                                                                                                                                  



the lien."                      On the other hand, Dana argues that CSSD seized the funds under the income                                                                                                                                                                



withholding statute, AS 25.27.062, which does address one kind of overpayment.                                                                                                                                                                                                      The  



statute provides that "if the agency receives money from an obligor under an income                                                                                                                                                                                       



withholding order after the underlying support order has been satisfied and the agency                                                                                                                                                                                     



was   enforcing   the   support   order   at   the   time   it   became   satisfied,  the   agency   shall  

                                                                                                                                                                               16   The statute further provides that  

immediately return the overpayment to the obligor."                                                                                                                                                                                                                                   



if CSSD has already disbursed the money, "the state is liable to the obligor for the  

                                                                                                                                                                                                                                              



amount  of  the  overpayment"  plus  interest,  and  "a  person  to  whom  the  agency  

                                                                                                                                                                                                                                                                        



erroneously disbursed the overpayment is liable to the state for the amount disbursed"  

                                                                                                                                                                                                                       

plus interest.17   Because the person holding the overpayment is liable for it "to the state"  

                                                                                                                                                                                                                                                                                



rather than to the person who made the overpayment, Dana contends that the funds he  

                                                                                                                                                                                                                                                         



                       15                    A CSSD representative testified at her deposition that the superior court                                                                                                                                                           



could   have   ordered  that  "the   payments   .   .   .   go   through   [the   agency]   for   a   correct  

accounting" and that this "happens often."                                                                                                      But the superior court did not make such an                                                                                                

order in this case.                                          



                       16                    AS 25.27.062(l)(1).  

                                                          



                       17                    Id. (emphasis added).  

                                                                                            



                                                                                                                                           - 9 -                                                                                                                                   7108
  

                                                                                                                                                  


----------------------- Page 10-----------------------

held were constructively "in the possession of the" state (CSSD) rather than "the adverse                                                                               



               18  

party,"                                                                                                                                            

                   consequently falling outside the reach of Smith's attorney's lien.  



                                                                                                                                                                         

                            The orders by which CSSD seized Michelle's funds are not in the record,  



                                                                                                                                                                       

but a CSSD employee, Delinda Cain, testified about them at a deposition.  Cain testified  



                                                                                                                                                                        

that CSSD issued an income withholding order to a restaurant where Michelle worked  



                                                                                                                                                                         

and possibly to other employers, and that it also issued an order to withhold and deliver  



                                                                                                                                                                               

to collect funds from Michelle's personal injury settlement, held by her attorney.  But  



                                                                                                                                                                                         

Cain's testimony does not clarify the date or purpose of the income withholding order.  



                                                                                                                                                                             

                            Cain did testify that all of the approximately $18,000 CSSD seized from  



                                                                                                                                                                                         

Michelle in May 2012 came from her personal injury settlement and her bank account.  



                                                                                                                                                                                   

The parties do not appear to dispute that CSSD garnished the settlement proceeds to  



                                                                                                                                                                       

satisfy  Michelle's  child  support  arrearages.                                                    Cain  also  pointed  out  that  an  income  



                                                                                                                                                                                 

withholding order, as the name suggests, is issued only to employers; thus one could not  



                                                                                                                                                                                  

have been used to acquire the settlement funds that ended up in Dana's hands as an  



                                                                                                                                                                              

overpayment of past-due child support.  Nothing in the record suggests that CSSD used  

                              19   We conclude that the statute authorizing income withholding orders -  

                                                                                                                                                                                   

such an order. 



and its provision for the reimbursement of overpayments made in the context of those  

                                                                                            



orders - does not apply to this case.  

                                                                     



              18            See  AS 34.35.430(a)(3).   



              19            In his 2014 affidavit Smith attested that CSSD told him it would not honor                                                                     



                                                                                                                                                                          

his lien because it was not an adverse party and "pursuant to AS 25.27.062(l)(1) CSSD  

must return overpayments directly to the obligor." It is not clear whether CSSD was just                                                                                        

                                                                                                                                                                          

relying on its standard response to questions like Smith's or CSSD meant that the statute  

                                                                                                                                                                      

governing income withholding orders applied.  But Cain, the CSSD deponent, clarified  

that the agency would not in any event consider the excess funds paid to Dana an                                                                                                  

                                                         

"overpayment" under that statute because CSSD accurately followed court orders and  

                                                                                          

any mistake originated with the court, not CSSD.  



                                                                                                

                                                                                      - 10 -                                                                                 7108
  


----------------------- Page 11-----------------------

                                               Further, as noted above, AS 25.27.250 - the statute authorizing orders to                                                                                                                                                                                



withhold and deliver - has no language that would oblige Dana to reimburse CSSD for                                                                                                                                                                                                                  



an overpayment.                                              Dana does not argue otherwise.                                                                                     The money at issue in this case was                                                                              



physically in Dana's hands.                                                                       Because no order or statute required that he pay the money                                                                                                                           



to CSSD directly, the money was not in CSSD's hands, even constructively, and it was                                                                                                                                                                                                             



subject to Smith's attorney's lien.                                                                                     



                                               2.	                    A third party's failure to honor a valid attorney's                                             

                                                                      lien   or   interplead   the   claimed   funds   results   in  

                                                                      liability.   



                                               Dana argues that allowing an attorney's lien under the facts of this case                                                                                                                                                                       



would "wrongfully shift[] the burden of [Smith's] contract with his client upon [Dana]."                                                                                                                                                                                                                          



But the same can be said of any charging lien, since any such lien requires a third party                                                                                                                                                                                                   



to satisfy the debt of another from funds in the third party's hands.                                                                                                                                                                    Because a charging      



lien exists by statute in Alaska, an attorney has a right to use the device for the recovery                                                                                                                                                                                    

                                                                                                                                                            20        And we have concluded that "attorney  

of fees if the statutory requirements are met.                                                                                                                                                                                                                               



lien statutes are to be regarded as remedial and should be liberally construed in aid of the  

                                                                                                                                                                                                                                                                                                    



object sought by the legislature, which is to furnish security to attorneys for their efforts  

                                                                                                                                                                                                                                                                                        

by giving them a lien upon the subject of the action."21                                                                                                                                                  A third party like Dana who  

                                                                                                                                                                                                                                                                                               



questions the validity of a charging lien can avoid the prospect of double liability by  

                                                                                                                                                                                                                                                                                                     

interpleading the funds.22  

                                                                                          



                       20                     Phillips v. Jones                                           , 355 P.2d 166, 172 (Alaska 1960)                                                                                             ; see also In re Sea                                     



 Catch, Inc.                           , 36 B.R. 226, 230 (Bankr. D. Alaska 1983).                                                                                                                  



                       21                     Phillips,355 P.2dat172; see AS34.35.930 ("Theintent of[thelien]chapter  

                                                                                                                                                                                                                                                                                      

is remedial and its provisions shall be liberally construed.").  

                                                                                                                                                                     



                       22                      See, e.g., Noeyv.Bledsoe, 978 P.2d 1264,1272(Alaska1999) (recognizing  

                                                                                                                                                                                                                                                                   

interpleader as the appropriate means of resolving a disputed attorney's lien on funds in  

                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                (continued...)  



                                                                                                                                              - 11 -	                                                                                                                                         7108
  

                                                                                                                                                              


----------------------- Page 12-----------------------

              B.           The Amount Dana Owes Smith Must Be Determined On Remand.                                                                 



                           Smith asserts that Dana made two payments to CSSD in February 2014 by                                                                       



two separate checks:                       one for past due spousal support in the amount of $4,694.04 and                                                           



 one as a refund of Michelle's overpayment of child support in the amount of $6,692.03.                                                                                      



                                                        23  

 Smith seeks only $5,742.18,                                                                                                                                     

                                                            less than the amount of the refunded overpayment.  Dana  



                                                                                                                                                                  

 does not present evidence controverting Smith's numbers, but he does not concede them  



                                                                                                                                                    24  

                                                                                                                                                         

 either, and we do not find them in the record outside of Smith's pleadings. 



                                                                                                                                                         

                           We remand so that the superior court can make factual findings regarding  



                                                                                                                                                                             

the amounts of both the spousal support and the refunded overpayment of child support.  



                                                                                                                                                            

 It may be that these numbers  are not disputed.   We note, however, that if Smith's  



                                                                                                                                                                     

 attorney's lien exceeds the amount of the refunded overpayment and reaches funds that  



                                                                                                                                                                      

were due Michelle for spousal support, statutory exemptions may apply to reduce the  



                                                                 25  

                                                                         

 amount available for attachment. 



              22(...continued)  



                                                                                                                                                    

 co-counsel's possession and stating that in determining the existence of interpleader  

                                                                                                                                                                

jurisdiction, "the relevant inquiry was not whether the lien was actually valid, but rather  

                                                                                                                                                                      

whether the lien was colorably valid so that [the third party] would risk liability by  

                   

 ignoring it").  



              23           Smith originally asserted a lien in the amount of $7,742.18, more than the  

                                                                                                                                                                      

 alleged amount of the refunded  overpayment.                                                     Michelle paid him $2,000  after  she  

                                                                                                                                                                    

received the funds from CSSD.  

                                                                



              24           See Brock v. Rogers & Babler, Inc., 536 P.2d 778, 783 (Alaska 1975)  

                                                                                                                                                                

 ("Assertions of fact in pleadings and memoranda are not admissible evidence and cannot  

                                                                                                                                                               

be relied upon for the purposes of summary judgment.").  

                                                                                         



              25           See AS09.38.030(a) (granting individualdebtorsanexemption on earnings  

                                                                                                                                                           

 subject to execution); AS 09.38.030(e)(2) (providing that "money or property received  

                                                                                                                                                           

 for  alimony  or  separate  maintenance"  constitutes  "earnings"  for  purposes  of  the  

                                                                                                                                                                    

 exemption from execution); see also Bero-Wachs v. Law Office of Logar & Pulver, 157  

                                                                                                                                                                    

                                                                                                                                                 (continued...)  



                                                                                 - 12 -                                                                          7108
  

                                                                                          


----------------------- Page 13-----------------------

            V.          CONCLUSION   



                        We   REVERSE   the   superior   court's   grant   of   summary   judgment   and  



REMAND for further proceedings consistent with this opinion.                                       



            25(...continued)  



                                                                                                                             

P.3d 704, 707-08 (Nev. 2007) (holding "that attorney's liens cannot attach to exempt  

                                                                                                                                

alimony or exempt retirement accounts awarded in a divorce decree").  



                                                                                 

                                                                         - 13 -                                                                   7108
  

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