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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Farr v. Little (2/23/2018) sp-7225

Farr v. Little (2/23/2018) sp-7225, 411 P3d 630

           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  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                       

JUSTIN  A.  FARR,                                                )  

                                                                 )          Supreme  Court  No.  S-16629  

                                Appellant,                       )  


                                                                 )          Superior Court No. 3AN-16-05573 CI  

                     v.                                          )  


                                                                 )         O P I N I O N  


BRANDI LITTLE,                                                   )  


                                                                 )         No. 7225 - February 23, 2018  

                                Appellee.                        )  




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


                      Judicial District, Anchorage, Patrick J. McKay, Judge.  


                      Appearances:  John C. Pharr, Law Offices of John C. Pharr,  


                      Anchorage, for Appellant.  Notice of nonparticipation filed  


                     by  Cameron  K.  Compton,  Law  Offices  of  Cameron  K.  


                      Compton, Anchorage, for Appellee.  


                      Before:         Stowers,  Chief  Justice,  Winfree,  Maassen,  and  


                      Carney, Justices.  [Bolger, Justice, not participating.]  


                      MAASSEN, Justice.  



                     Unmarried parents separated and asked the superior court for a custody and  


child support order.   The father was receiving military disability payments but was  


otherwise unemployed.   In calculating his child support liability, the superior court  


imputed income to him of $40,000 in addition to his military disability payments.  The  

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

court also apparently rejected the father's request to deduct business losses, including                                                                                                                                                               

depreciation, incurred by his rental properties.                                                                                                                                                The father appeals.                             

                                                       We conclude that several aspects of the superior court's findings of fact are                                                                                                                                                                                                                    

not sufficiently explained for purposes of our review:                                                                                                                                                                                 (1) the basis of the imputed                                                             

income figure; (2) the effect of employment on the father's disability payments; and                                                                                                                                                                                                                                                                

 (3)  whether the father is entitled to deduct claimed business losses from his income. We                                                                                                                                                                                                                                                          

therefore vacate the child support order and remand for the superior court's further                                                                                                                                                                           

consideration of these issues.                                                               

II.                         FACTS AND PROCEEDINGS                                       

                            A.                         Custody  

                                                       Justin Farr and Brandi Little, the parents of two children, separated in                                                                                                                                                                                                                           

November 2015 following an alleged incident of domestic violence.                                                                                                                                                                                                                               In March 2016                                 

Little moved for custody of both children, and there was another alleged incident of                                                                                                                                                                                                                                                                      

domestic violence a few weeks later.                                                                                                                    In November 2016 the custody case went to trial;                                                                                                                                        

the court ultimately concluded that the domestic violence presumption applied against   

Farr, and it therefore awarded physical and legal custody to Little.                                                                                                                                                                                                             1  

                            B.                         Child Support  


                                                       In July 2016 Little filed a motion for child support.  The parties disputed  


 several distinct issues related to Farr's income that are relevant to this appeal:   his  


 earning capacity, his claimed loss of income fromrental properties, and other deductions  


 from his income.  


                                                       The parties first disputed whether Farr could work at all. He had served in  


the Air Force for 16 years in a variety of capacities, including Special Operations and  


                            1                          Under AS 25.24.150(g) there is a rebuttable presumption that a parent with                                                                                                                                                                                                                 

 a history of perpetrating domestic violence should not have sole or joint legal or physical                                                                                                                                                                                                                                      

custody of a child.                             

                                                                                                                                                                             -2-                                                                                                                                                                7225

----------------------- Page 3-----------------------


Pararescue.  He was medically separated from the Air Force in 2012 after injuring his  


back in an explosion near his convoy.  The military considered him 80% disabled, and  


medical separation resulted in disability payments of $21,185.76 per year.  According  


to the superior court's later findings,  Farr "[did] not appear to have held a full-time job  


since his separation" from the Air Force.  


                    Little disputed the extent of Farr's disability.   In her motion for child  


support she asked the court to impute income to him because he was "working as a  


HVAC mechanic for free" and there was "no reason that he should be unemployed."  


Pointing to an average salary for an HVAC mechanic of $61,712, Little asserted that  


Farr's adjusted annual income including his military disability should be $70,134.88.  


Farr's  opposition  stressed  that  he  was  80%  disabled,  making  any  unemployment  


involuntary.  Apparently in response to Little's claim that he was working as an HVAC  


mechanic, Farr submitted an affidavit from the owner of a carpet-cleaning business  


attesting that he "[was] not an employee" and was not being paid for the work he was  


doing to help her keep the business afloat after her former husband "became unable to  


operate the business."  

                    Based on the motion and opposition, the superior court issued an interim  


child support order requiring Farr to pay $466.70 total per month for the two children,  


including a health insurance adjustment.  The court did not impute income to Farr, but  


it noted that its final support calculation could be "higher because of imputation or  


withheld income sources."  


                    Little's trial brief did not reiterate the claim that Farr could be making  


money as an HVAC mechanic, but focused instead on his alleged "opportunity to make  


$225,000 a year" as a defense contractor and his "many job offers"; on the basis of these  


allegations, Little asked the court to impute income at the $120,000 maximum for child  


support purposes.  Farr's trial brief addressed child support only cursorily, saying that  

                                                               -3-                                                         7225

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the issue had already been briefed and that he would "present testimony from his parents                                                                                                                                                      

about his payment of child support to his parents" for a child of his from an earlier                                                                                                                                                           


                                        At the trial, Little did not introduce any evidence that Farr had previously                                                                                                                

worked   or   could   work  as  an  HVAC   mechanic   or   provide   the   estimated   salary  

information.   Instead, Little focused her cross-examination of Farr on custody issues,                                                                                                                                                        

Farr's six-figure job offers, his rental income, and whether he paid child support to his                                                                                                                                                                  

parents for their care of Farr's older child.                                                                                  2  

                                        Farr testified that after his injury he had received offers to work for Boeing  


for $150,000, $225,000, and $255,000 per year. He also testified that he would try to get  


a job but that he did not know whether he could actually get one given his back injury  


and history of concussions.  The court later summarized Farr's testimony as admitting  


that "he was employable and capable of earning a six figure income." But the court saw  


"a bit of a catch 22":  while it "believe[d] that Mr. Farr is capable of making money  


above his current disability pay," it was "less certain" that Farr could transfer his military  


skills to high-paying civilian employment.  The court nevertheless found that "Farr has  


the ability to have an after-tax income for child support purposes of $40,000 annually  


plus his military disability."  


                                        Farr also raised the issue of losses he claimed to have incurred on two rental  


properties he owned in Wasilla.  He had not included these on the DR-305 affidavit  


submitted for child support purposes.  But he had claimed significant deductions for the  


properties  on  his  tax  returns  from 2013  to  2015,  including  depreciation  and  other  


                    2                   Farr testified that he paid over $10,000 annually for the support of two                                                                                                                                        

other children.                               The court ultimately disregarded these alleged payments because they                                                                                                                                    

were not made pursuant to a court order and one of the two other children was over 18                                                                                                                                                                       

and not enrolled in a secondary school.                                                         

                                                                                                                              -4-                                                                                                                    7225

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expenses, ultimately amounting to a loss of approximately $40,000 each year.                                                                                                                                                                                                                                                                                        The  

 superior court appeared skeptical of these losses at trial: "Is he really losing money on                                                                                                                                                                                                                      

his apartments or is he losing money because of depreciation and things of that nature?"                                                                                                                                                                                                                                                                                                    

Ultimately the court made no findings aboutthe Wasilla properties and did not separately                                                                                                                                                                                                                                                      

itemize any business losses in its calculation of income.                                                                                                                                                                                                  Its final child support order                                     

found Farr's total adjusted annual income to be $62,207.76, which required Farr to pay                                                                                                                                                                                                                                                                                    

 $1,646.37 per month, including a health insurance adjustment.                                                                                                                                                                                                                      

                                                           On appeal, Farr challenges                                                                                         thecourt's                                     imputation ofincome,blaming Little                                                                                                    

for the lack of evidentiary support for the $40,000 figure; he claims that Little "did not                                                                                                                                                                                                                                                                                 

address child support other than to state that Mr. Farr was not paying any and that she                                                                                                                                                                                                                                              

was not the source of his financial strain." He asserts that her failure to present evidence                                                                                                                                                                                                                                                       

precluded the court from imputing income to him. He also challenges the court's failure                                                                                                                                                                                                                                                                       

to incorporate into its income calculation his claimed self-employment losses from the                                                                                                                                                                                                                                                                                      

rental properties.                                                           

                                                           Little did not participate in this appeal.                                                                                               

III.                          STANDARD OF REVIEW                                                              

                                                                                                                                                                                                                                                                                                                                        3   But "[w]e  

                                                           "We review an award of child support for abuse of discretion."                                                                                                                                                                                                                                        

review the superior court's factual findings regarding a party's income for purposes of  


calculating  child  support  for  clear  error."4                                                                                                                                                           "The  trial  court's  determination  of  an  


obligor's imputed income is a factual finding that we review for clear error."5   "Whether  


                             3                            Limeres v. Limeres                                                                    , 320 P.3d 291, 295 (Alaska 2014) (citing                                                                                                                                                   Swaney v.   

 Granger, 297 P.3d 132, 136 (Alaska 2013)).                                                                                                                        

                             4                            Id. (citing Koller v. Reft, 71 P.3d 800, 804 (Alaska 2003)).  


                             5                            Sawicki v. Haxby, 186 P.3d 546, 550 (Alaska 2008) (citing Dunn v. Dunn,  


952 P.2d 268, 270 (Alaska 1998)).  


                                                                                                                                                                                        -5-                                                                                                                                                                          7225

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the superior court applied the correct legal standard to its child support determination is                                                                            

a question of law that we review de novo."                                          6  

IV.	         DISCUSSION  


             A.	          The          Imputation                  Of        $40,000             In       Income              To        Farr           Requires  


                          Reconsideration On Remand.  


                          We  have  explained  that  under  Alaska  Civil  Rule  90.3(a)(4),  "[i]t  is  


appropriate to impute income to an obligor if a parent's current situation and earnings  


reflect a (1) voluntary and (2) unreasonable decision to earn less than the parent is  



capable of earning."                         "The court must consider the 'totality of the circumstances' in  



deciding whether an obligor is unreasonably underemployed,"  including "such factors  


as whether the obligor's reduced income is temporary, whether the change is 'the result  


of economic factors or of purely personal choices,' the children's needs, and the parents'  



needs and financial abilities."                             The parent with primary physical custody has the burden  


to make a prima facie case that the obligor parent is voluntarily and unreasonably under- 


or unemployed; after that initial burden is met, "the burden of persuasion shifts to the  



obligor to rebut that claim." 

             6            Limeres,  320  P.3d  at  295  (citing  Koller,  71  P.3d  at  804).   

             7            Sawicki,   186  P.3d  at  550.  

             8            Id.  (quoting  Alaska  R.  Civ.  P.  90.3  cmt.  III.C).  

             9            Id.  (footnotes  omitted)  (quoting  Nunley  v.  State,  Dep't  of  Revenue,  99  P.3d  

7,   11  (Alaska  2004)).  

             10           Id.  at  549.  

                                                                                  -6-	                                                                          7225

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                                 1.	            Little made a prima facie case that Farr was voluntarily and                                                             

                                                 unreasonably unemployed.   

                                Farr argues that it was inappropriate to impute income to him based on                                                                                                     

voluntary and unreasonable unemployment. But the superior court's implied conclusion                                                                                                    


-  that Little made a prima facie case that Farr failed to rebut                                                                                                                                          

                                                                                                                                                       - is consistent with our  



                                In Sawicki v. Haxby, we affirmed a superior court's determination that a  


father  carried his preliminary  burden  to  make a prima facie case when  the  mother  


"concede[d] that she voluntarily left her job" and the father showed she did so "to take  



a job paying approximately half what she earned before."                                                                                            The prima facie case was  


"bolstered by evidence that [the mother's] reduced income may be temporary, that her  


work history and qualifications indicate she could be making substantially more money,  


and that she had significant liquid assets at her disposal from which to satisfy her child  



support obligation." 

                                In another case, Beaudoin v. Beaudoin, we remanded for an evidentiary  


hearing after concluding that the father made a prima facie case by "offer[ing] evidence  


                11               Although the superior court never clearly delineated the parties' respective                                                                             

burdens, it did state that "there has been no significant evidence that would approach the                                                                                                                 

burden of proof to refute a high cap limit on [Farr's] child support," implying that Little                                                                                                          

met her initial burden and the burden had shifted to Farr.                                                                                  

                12              We review de novo whether the primary custodian made a prima facie case.  


See Sawicki, 186 P.3d at 549; Beaudoin v. Beaudoin, 24 P.3d 523, 530 (Alaska 2001)  


("conclu[ding]                           that          [the          father]   made                         a      prima              facie            showing                  of        voluntary  


underemployment and that his claim [seeking imputed income] could not be rejected as  


a matter of law").  


                13               186 P.3d at 549.  


                14	             Id.  


                                                                                                      -7-	                                                                                            7225

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indicating that [the mother] had previously held a job, that she was capable of obtaining                                             


gainful employment, and that she was actually working without pay."                                                                           

                                                                                                                         The mother gave  


up employment to be a "full-time mom" but remained unemployed after her custody  




changed from full-time custody of three children to half-time custody of two. 

                       In Little's motion for child support she asserted that Farr was "working for  


free based on his own admission," apparently referring to his explanation at the trial  


setting conference, the day before, that he was "donat[ing] [his] time" to his neighbor's  


carpet-cleaning business to help her avoid losing it.17                                         This was evidence that he was  


capable of working, at least part time, but was not doing so.  And the superior court  


found after trial that Farr had testified "he was employable and capable of earning a six  


figure income." Although the court had doubts about this testimony, it was sufficient to  


satisfy  Little's  burden  of  making  a  prima  facie  case  that  Farr  was  voluntarily  and  


unreasonably unemployed, shifting the burden of persuasion to him.  


                       2.	         The  superior  court's  findings  are  insufficient  to  support its  


                                   decision to impute income of $40,000 to Farr.  


                       It was Farr's burden to rebut Little's prima facie case18  


                                                                                                                    and "to establish his  

                                19  An obligor parent's potential income should be calculated "based  


earning capacity." 

            15         24  P.3d  at  526-27.  

            16         Id.   

            17         Farr  was  adamant  that  he  was  only  a  "stay  at  home  dad"  and  did  not  receive  

any  income  aside  from  $1,700  per  month  in  disability.  

            18         Sawicki,   186  P.3d  at  549.  

            19         Kowalski  v.  Kowalski,  806  P.2d   1368,   1372  (Alaska   1991).  

                                                                        -8-	                                                                 7225

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on the parent's work history, qualifications, and job opportunities."                                                                           20  "In determining  

a party's earning capacity for purposes of [Alaska Civil Rule 90.3], the trial court has the                                                                                      

discretion to choose the best indicator of future earning capacity based on the evidence                                                                              

                     21    "This discretion is particularly broad where the reason for [an] incomplete  

before it."                                                                                                                                                      

record  is  the  parent's  own  unresponsiveness."22                                                            "The  ultimate  goal  of  a  support  


determination 'is to arrive at an income figure reflective of economic reality.' "23  


                            Here, the superior court questioned whether Farr could "make the kind of  


money that he boast[ed] that he [could] make with many of the skills that he could or  


could not talk about that he acquired during his military career."  The court noted that  


Farr had never had that kind of income in the past and that the skills he learned in the  


military "do not necessarily relate to a high paying civilian job." The court nevertheless  


found that "Farr has the ability to have an after-tax income for child support purposes of  


$40,000 annually plus his military disability."  


                            We conclude that this finding was either clearly erroneous or an abuse of  


discretion, depending on its basis.  The superior court may have made a factual finding  


that Farr could make $40,000 from the opportunities available to him; alternatively, it  


could have made a discretionary decision to impute the number based on the lack of  


              20            Sawicki, 186 P.3d at 551 (citing Alaska R. Civ. P. 90.3(a)(4)).                                                                       

              21            McDonald v. Trihub, 173 P.3d 416, 427 (Alaska 2007) (citing  Coghill v.  

Coghill, 836 P.2d 921, 926 (Alaska 1992)).                                    

              22            Rodvik v. Rodvik, 151 P.3d 338, 350 (Alaska 2006) (quoting Byers v. Ovitt,  


 133 P.3d 676, 682 (Alaska 2006)).  


              23            McDonald, 173 P.3d at 427 (quoting Adrian v. Adrian , 838 P.2d 808, 811  


(Alaska 1992)).  


                                                                                         -9-                                                                                 7225

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


  specific evidence of something different.                                                                                                                                                                                                                 Either way, we do not find support in the                                                                                                                                                                                            

 record for the number the court selected or an explanation of how it was reached.                                                                                                                                                                                                                                                                                                                                                                                                         We  

 therefore vacate the child support order and remand for further findings.                                                                                                                                                                                                                                                                                                     

                                                                                                                     a.	                                   If   the   $40,000   imputed   income   figure   is   based   on   the  

                                                                                                                                                            allegations of six-figure Boeing salaries or work as an                                                                                                                                                                                                                                                                               

                                                                                                                                                            HVAC mechanic, it is clear error.                                                                                                                                         

                                                                               The $40,000 imputed income figure is clearly erroneous if its basis is either                                                                                                                                                                                                                                                                                                                        

 Farr's alleged six-figure job offers or Little's suggestion that Farr could do HVAC work.                                                                                                                                                                                                                                                                                                                                                                                                                             

 First,Farr'stestimonynotwithstanding, thereis insufficient evidencetosupport afinding                                                                                                                                                                                                                                                                                                                                                                               

 that he could earn a six-figure income.                                                                                                                                                                                               He testified that after his injuries he received                                                                                                                                                                           

 three offers to work as a contractor for Boeing for annual salaries of $150,000 or more,                                                                                                                                                                                                                                                                                                                                                                                          

 based on Boeing's knowledge "through word of mouth" of Farr's qualifications as "a                                                                                                                                                                                                                                                                                                                                                                                                                   

  crash investigator where [he had] done just about everything" during his time in the Air                                                                                                                                                                                                                                                                                                                                                                                                       

 Force.   Farr also testified, however, that he was unsure whether he could get a job with                                                                                                                                                                                                                                                                                                                                                                                                

 Boeing currently "because of all the hits" he had taken while in the military, including                                                                                                                                                                                                                                                                                                                                                                    

  "nine concussions."                                                                                                 Although he testified that he "absolutely" wanted to work, he was                                                                                                                                                                                                                                                                                                      

 not sure Boeing would still want him after seeing the results of a required physical                                                                                                                                                                                                                                                                                                                                                                            


                                                                               The court appeared to give little credit to Farr's testimony about lucrative                                                                                                                                                                                                                                                                                                      

job offers, characterizing it as a boast.                                                                                                                                                                                        And the court several times noted its concerns                                                                                                                                                                                 

 with Farr's mental stability and his reliance on and overuse of prescription drugs.                                                                                                                                                                                                                                                                                                                                                                                                    Farr  

 testified that he had not "had a [post-traumatic stress disorder] episode in years" and that                                                                                                                                                                                                                                                                                                                                                                                                  

 he does not "have mental problems," but the court's doubts about the alleged job offers                                                                                                                                                                                                                                                                                                                                                                                          

                                        24                                     The   superior   court   is   entitled   to   estimate   income   if   more   specific  

  information is unavailable and has discretion to select the best evidence on which to                                                                                                                                                                                                                                                                                                                                                                                                                

 rely.   See id.                                                          (citing  Coghill, 836 P.2d at 926).                                                                                                                               

                                                                                                                                                                                                                                                -10-	                                                                                                                                                                                                                                    7225

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

fromBoeing,                                                  combined with questions about Farr'sability to workat                                                                                                                                                                                                  anything other than                                                  

a moderate-income job, made the six-figure offers an inadequate evidentiary basis for                                                                                                                                                                                                                                                                                                         

any imputed income figure.                                                                     

                                                              Second,   the record lacks evidence that Farr                                                                                                                                                                     could earn                                            $60,000   as an   

HVAC mechanic.                                                                          Little made                                                  this suggestion by affidavit in her motion for child                                                                                                                                                                          

 support but did not refer to it again until closing arguments at trial.                                                                                                                                                                                                                                                      At that time her                                              

attorney referred to "the average salary for an HVAC mechanic" and asked that the court                                                                                                                                                                                                                                                                                             

impute that amount at "a minimum."                                                                                 

                                                             But   no  evidence   had   been   adduced   at   trial   about   Farr's   possible  

employment as an HVAC mechanic.  Before trial he had said he was working for free  

at the carpet-cleaning business; also before trial he submitted an affidavit from the owner                                                                                                                                                                                                                                                                                    

of that business,                                                          stating that Farr was "not an employee" and was not being paid for his                                                                                                                                                                                                                                             

help in "keep[ing] the business operational" after her "former husband became unable                                                                                                                                                                  

to operate the business."                                                                                        In fact, as the court acknowledged, there was no evidence that                                                                                                                                                                                                           

Farr did any income-generating work at all; he even hired someone else to do the                                                                                                                                                                                                                                                                                                            


maintenance on his rental properties.                                                                                                                                              

                                                             We conclude that neither the possibility of HVAC work nor the alleged job  


offers from Boeing supported an imputed income figure of $40,000. As a finding of fact,  


it is clearly erroneous.  


                               25                            The superior court found that Farr "[did] not appear to be working on                                                                                                                                                                                                                                                            

anything  other than his fourplexes, but the number of hours of what he is actually                                                                                                                                                                                                                                                                                   

remodeling is less clear to the court."                                                                                                                                   Farr testified that his injuries prevented him from                                                                                                                                                        

doing that work himself.                                                                                           

                                                                                                                                                                                             -11-                                                                                                                                                                                     7225

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

                                                        b.	               If the $40,000 imputed income figure is an estimate, then                                                                                                

                                                                          it is an abuse of discretion.                   

                                     If the superior court was not relying on either the Boeing offers or the                                                                                                                          

HVAC salary for the $40,000 figure, it may have made an estimate based on the lack of                                                                                                                                                     


better evidence in the record, which it had discretion to do.                                                                                                                                                                               

                                                                                                                                                                          The superior court said it  


did "not doubt that [Farr] is capable of working and making a moderate income," and  


that "[t]he $40,000.00 presumed income is a portion of what he swore he is capable of  


making."   This language implies that the court chose the $40,000 figure more as a  


discretionary response to a lack  of solid evidence than as a finding of fact.   If so,  


however, we conclude that it was a abuse of discretion.  


                                     "Although  'courts  have  broad  discretion  to  impute  income  based  on  


realistic estimates of earning potential,' the court's imputed income determination must  


be based  on  the four  factors listed  in  [Civil Rule 90.3]: the parent's work history,  


qualifications, job opportunities, and potential income from non-income or low-income  

                                                    27  "A trial court is required to make specific findings to support a  


producing assets." 

                   26                Beaudoin v. Beaudoin                                            , 24 P.3d 523,                             530 (Alaska 2001) (Rule 90.3(a)                                            

"give[s] courts broad discretion to impute income based on realistic estimates of earning                                                                                                                                   

potential.");  see, e.g.                                  ,  Byers v. Ovitt                       , 133 P.3d 676, 683 (Alaska 2006) (affirming order                                                                             

imputing incomebased                                             on party's estimatedexpenses when                                                                partywasuncooperativeand                                             

gave contradictory testimony);                                                         Benson v. Benson                                    , 977 P.2d 88, 91-95 (Alaska 1999)                                                  

(affirming order imputing income based on party's bank records when testimony was                                                                                                                                                    

non-responsive and contradictory) .                                                               

                   27                Horne v. Touhakis, 356 P.3d 280, 282 (Alaska 2015) (quoting Reilly v.  


Northrop, 314 P.3d 1206, 1217 (Alaska 2013)); see, e.g., Barlow v. Thompson, 221 P.3d  


998, 1003 (Alaska 2009); O'Connell v. Christenson, 75 P.3d 1037, 1041 (Alaska 2003);  


Koller v. Reft, 71 P.3d 800, 805 (Alaska 2003).  


                                                                                                                   -12-	                                                                                                          7225

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


determination of adjusted income under Civil Rule 90.3."                                                                              Because "[f]indings are                      


meaningless unless the calculations upon which they are based are disclosed,"                                                                                                    

                                                                                                                                                                        we have  


"required that the 'actual numbers . . . used to calculate the child support award' be set  

                                                                                                            30   Here the court failed to provide an  



forth in findings supporting child support awards." 

explanation for the figure it chose as Farr's imputed income.  


                             In a number of cases we have remanded for further findings when the  


superior court's income calculations were not sufficiently explained.31                                                                                         In Bailey v.  


Bailey we remanded when "there [wa]s no way to tell how the superior court arrived at  


 [the father's] prospective child support obligation" and "the [c]ourt did not state the  


source of its calculations."32                                  In  Wright v. Gregorio we remanded when the judge had  


"failed to make explicit findings as to the income of each party and how she calculated  


              28             Gallant v. Gallant                      , 882 P.2d 1252, 1255 (Alaska 1994) (citing                                                      Wright v.  

 Gregorio, 855 P.2d 772, 773 (Alaska 1993),                                                   opinion modified on reh'g                               (Sept. 30, 1994);     

 Terry v. Terry                , 851 P.2d 837, 837-38 (Alaska 1993));                                                 see also Adrian v. Adrian                                , 838   

P.2d 808, 811 (Alaska 1992) ("A trial court's findings must be sufficiently detailed and                                                                                           

explicit to give an appellate court a clear understanding of the ground on which the trial                                                                                        

court reached its decision." (quoting                                        Sloan v. Jefferson                    , 758 P.2d 81, 86 (Alaska 1988))).                                       

              29             Terry, 851 P.2d at 838.  


              30             Carstens  v.  Carstens,  867  P.2d  805,  809  (Alaska  1994)  (alteration  in  


original) (quoting Terry, 851 P.2d at 838).  


              31             See Hammer v. Hammer, 991 P.2d 195, 201 (Alaska 1999) (remanding for  


recalculation of child support when "the superior court did not acknowledge the option  


of income averaging in its findings nor did it explain its reasons for relying on [the  


father's] most recent year of earnings"); Gallant, 882 P.2d at 1255 ("The trial court in  

this case simply set the adjusted income without explaining its calculation of gross  


income or the amounts and types of deductions. We remand for specific findings on the  


parties' adjusted income.").  


              32             63 P.3d 259, 264 (Alaska 2003).  


                                                                                         -13-                                                                                  7225

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it" because "[a]dequate findings of fact on such matters are essential" to enable "a                                                                                                        

reviewing court [to] clearly understand the grounds on which the lower court reached its                                                                                                    



decision."                  On the other hand, when we have affirmed the superior court's estimate of  


income, it is because there was evidence of the likely wage in a field in which the parent  



had actual experience. 


                              In  this  case,  there  is  no  evidence  of  Farr's  competence  as  an  HVAC  


mechanic, the number of hours he could work in that field, or his ability to acquire and  


maintain a high-paying civilian job with Boeing.  Nor is there evidence of any other  


paying work on which to base an estimated $40,000 in imputed income. The court found  


that Farr was capable of making a "moderate income" but did not explain how it defined  


"moderate."   In a December 2016 supplemental order, the court clarified that "[t]he  


$40,000.00 presumed income is a portion of what [Farr] is capable of making." But that  


clarification does not state what Farr could be making, or why only a portion of that is  


a reasonable estimate of his income for child support purposes. We therefore remand to  


give the superior court an opportunity to further clarify its decision. The court may take  

               33             855 P.2d at 773;                        see also Carstens                        , 867 P.2d at 809 (remanding when                                     

superior court stated that mother would "earn interest" on cash payout resulting from her                                                                                                 

divorce but failed to estimate interest and concluded without further explanation that she                                                                                                

owed $200 per month);                                Adrian , 838 P.2d at 811-12 (remanding when the superior court                                                                   

based   its   child  support   calculation   on   a   finding   of   the   "parties'   relative   financial  

positions"   without   "provid[ing]   the   raw   numbers   necessary   for   a   Civil   Rule   90.3  


               34             See McDonald v. Trihub, 173 P.3d 416, 426 (Alaska 2007) ("Evidence  


established that the mean wage for automotive service technicians and mechanics in  


Anchorage was $20.51 per hour" and that the father "owned and operated a business  


buying  and  selling  used  motor  homes,  that  he  worked  as  an  automobile  mechanic  


repairing and upgrading the motor homes for resale, and that as recently as 2004 he held  


a business license for 'auto repair and sales.' ").  


                                                                                            -14-                                                                                      7225

----------------------- Page 15-----------------------

any additional evidence it considers necessary to support an estimate of Farr's imputed                                                                                                             


                                                  c.	              On remand the superior court should also make findings                                                                          

                                                                   on whether Farr could earn both wages and disability                                                                        


                                 Farr also challenges the court's conclusion that he may earn $40,000 in                                                                                                           

addition to his disability income; he claims that "he will lose his disability if he works  


a job earning after-tax $40,000."  Farr did not raise this issue until about three weeks  


after trial, and at that point he failed to provide any support aside from his own affidavit,                                                                                                     


which stated simply, "If I work a job, I will lose my disability."                                                                                                                       

                                                                                                                                                                              We nevertheless  


conclude that the issue should be addressed on remand.  


                                 Because disability pay is typically tied to an inability to work, Farr's claim  


has intuitive appeal.   Black's Law Dictionary defines disability as "[a]n objectively  


measurable condition of impairment, physical or mental[;] . . . one that prevents a person  



from engaging in meaningful work."                                                                   As noted above, the superior court's findings  


highlighted its concerns about Farr's disability and his mental health.  


                                 But the military does not consider  Farr  to  be  totally disabled,  so  it is  


possible he could do some work without losing his disability pay.  And the disability  


information Farr received from the Veterans' Administration indicated that he could  


receive assistance "to prepare for, obtain, and maintain suitable employment" without  


indicating that this might result in a loss of benefits.  Without more information on the  


disability requirements, it is not clear whether Farr would be prevented from receiving  

                 35              Little's only response to Farr's claim was to state that "Farr will not lose                                                              

his military disability if he works contrary to his claims."                                                                                     She provided no supporting   


                 36              Disability, BLACK 'S  LAW  DICTIONARY  (10th ed. 2014).                                                                    


                                                                                                       -15-	                                                                                                7225

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any  disability income if he took a paying job.                                                    On remand, the superior court should                                

determine whether Farr will lose his disability pay if he finds other employment; it is                                                                                           

Farr's burden to demonstrate that his disability pay will not continue.                                                                          37  


              B.	           Whether Farr's Claimed Rental Losses And Depreciation Offset His  


                            Income Should Also Be Reconsidered On Remand.  


                            After Farr submitted his child support affidavit, he asked that his overall  


income for child support purposes be reduced by his reported losses on the Wasilla  


fourplexes.  The superior court's findings of fact and conclusions of law were silent  


about these claimed losses, and they were left out of the court's child support calculation  


worksheet.  Farr argues that this was error. Because the superior court's findings do not  


explain whether the rental losses were considered and how they were applied, if at all,  


we remand this issue for clarification.  


                            1.	           Rental income and related business expenses may be included in  


                                          the imputed income calculation.  


                            The starting point for calculating income under Rule 90.3 - a "parent's  


total income from all sources" - includes income from self-employment, such as rental  



                       The Rule 90.3 commentary defines self-employment income as "the gross  



receipts minus the ordinary and necessary expenses required to produce the income."  


We have explained that "necessary expenses" may include straight-line depreciation for  

              37            Cf. Sawicki v. Haxby                         , 186 P.3d 546, 549 (Alaska 2008) (holding that if                                                       

party makes showing that another party is unreasonably underemployed or unemployed,                                                                        

then   burden   shifts   to   other   party   to   make   showing   that   lack   of   employment  is  


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


              39            Alaska R. Civ. P. 90.3 cmt. III.B.  


                                                                                      -16-	                                                                                7225

----------------------- Page 17-----------------------


business real estate.                        But there is no hard and fast rule on whether "net losses from                                  

self-employment income must or must not be deducted from a parent's other sources of                                                                                       



income."                The court may exclude "business expenses determined by the court to be  



inappropriate."                        For  example,  "[t]he  deduction  is  not  available  in  the  case  of  



corporations which effectively serve as tax or income shelter devices." 


                           The court's exclusion of Farr's claimed business losses in this case may be  


supportable. The court may have included rental income, with appropriate offsets, in its  

estimate of $40,000 in after-tax income.  It may have rejected Farr's claimed losses as  


an income shelter.   But without specific findings on the issue we cannot determine  


whether the superior court's treatment of it was an abuse of discretion.  We therefore  


remand for an explanation.  


                           2.	          Straight-line depreciation of Farr's rental properties may be an  


                                        appropriate business expense.  


                           During trial the superior court voiced some skepticism about whether Farr  


could include depreciation as an expense of his rental business. We have held, however,  


that although accelerated depreciation cannot be deducted, "straightline depreciation of  

             40            Eagley v. Eagley                  , 849 P.2d 777, 781 (Alaska 1993) ("[T]he superior court                                                

should allow, as ordinary and necessary business expenses, a deduction for straightline                                                                 

depreciation of the parent's business' real estate.").                                

             41            Faulkner v. Goldfuss, No. S-13018, 2010 WL 1135745, at *6 (Alaska  


Mar. 24, 2010).  


             42            Alaska R. Civ. P. 90.3 cmt. III.B.  


             43            Gallant v. Gallant, 945 P.2d 795, 800 (Alaska 1997).  


                                                                                   -17-	                                                                            7225

----------------------- Page 18-----------------------

                                                                                           44                                                                         45  

business equipment" - including real property                                                  - may be deducted under Rule 90.3.                                          


We explained:  


                          Depreciation is a means of reflecting on an annual basis the  


                          costs of capital equipment. Such costs are real and should not  


                          be disregarded unless it appears that equipment was acquired  


                          in  order  to  avoid  or  reduce  the  obligor's  child  support  


                          obligation.  Unless that is the case here, on remand, the court  



                          should allow a realistic deduction for depreciation. 

Inthecourt's determinationofFarr'sincome, thus,straight-linedepreciation should have  


been allowed as a business expense unless the court determined that it was otherwise  


"inappropriate" under Rule 90.3.47  


                          Farr asserts that to the "unschooled eye" his claimed depreciation is all  


"straight-linedepreciation." But theamountofstraight-linedepreciation, which assumes  


a constant rate of decline in the value of an asset over a fixed period, should be the same  


from year to year.48                       Farr's depreciation calculations vary from year to year.   Some  


             44           See Eagley            , 849 P.2d at 781 ("[T]here is no rational reason for disallowing                                  

straightline depreciation of buildings, fixtures, and other improvements, yet allowing                                                                  

such depreciation costs for business equipment.").                      

             45           Id.  ("Although the committee commentary to Rule 90.3 states that there  


should be no deduction for accelerated depreciation, see Rule 90.3 cmt III.B., there is no  


similar suggestion with respect to straightline depreciation of business equipment."  


(quoting Ogard v. Ogard, 808 P.2d 815, 819 (Alaska 1991))).  


             46           Ogard, 808 P.2d at 819.  


             47           See Eagley, 849 P.2d at 782 ("[T]he relevant inquiry on remand of this case  


to the superior court will be whether Ronald's claimed  depreciation of $54,285.00  


contains any element of accelerated depreciation.").  


             48           Straight-line depreciation method, BLACK 'S  LAW  DICTIONARY  (10th ed.   



                                                                                 -18-                                                                           7225

----------------------- Page 19-----------------------


variation could be explained by additional assets or "improvements"                                                                                   being put into         

service in             different years.                     But on           remand   the burden                        is on        Farr   to   show that any               

depreciation   for   the   improvements   was   calculated   by   the   straight-line   method,50  


regardless of the appearance to the "unschooled eye."  

V.            CONCLUSION  


                            We VACATE the superior court's child support order and REMAND for  


further consideration consistent with this opinion.  We do not retain jurisdiction.  

              48            (...continued)  


2014) ("A depreciation method that writes off the cost or other basis of the asset by  


deducting  the expected  salvage value from the initial cost of the capital asset,  and  

                                                                                                                                          NTERNAL   REVENUE  

dividing  the  difference  by  the  asset's  estimated  useful  life.");  I 

SERVICE,   PUBLICATION                                 946:   HOW                  TO        DEPRECIATE                    PROPERTY                  43-45            (2017),  

                                                                                                                    (example   shows   straight   line   method  has  

constant   value   of   depreciation each                                       year);   Obaidullah   Jan,   Straight-line   Method   of  

Depreciation,                      ACCOUNTINGEXPLAINED,                              

non-current-assets/straight-line-depreciation (last visited Jan. 8, 2018).  


              49            "Improvement means an addition to or partial replacement of property that  


is a betterment to the property, restores the property, or adapts it to a new or different  


use." INTERNAL  REVENUE  SERVICE,  supra  note 48 at 13.                                                                




                            We  note  that  Farr's  2013  tax  documents  indicate  that  he  calculated  


depreciation for 10-year assets placed into service that year using the "200 DB" (or  

200% declining                      balance)   method,   which  is   a   form of                                       accelerated   depreciation   that  

                                                                                                                                            NTERNAL  REVENUE  

"[p]rovides a greater deduction during the earlier recovery years." I 

SERVICE,  supra  note 48, at 38.                                 If Farr's total depreciation in subsequent years included                                          

depreciation for these improvements (calculated with the 200 DB method), his overall                                                                            

deduction may have included accelerated depreciation, which under Rule 90.3 may not                                                                                            

be deducted from income for child support purposes.                                         

                                                                                      -19-                                                                                 7225

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