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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Ferguson v. Ferguson (10/16/2008) sp-6317

Ferguson v. Ferguson (10/16/2008) sp-6317, 195 P3d 127

     Notice:  This  opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.  Readers   are
     suggested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

VICTORIA FERGUSON, )
) Supreme Court No. S- 12837
Appellant, )
) Superior Court No.
v. ) 3AN-01-07834 CI
)
JAMES FERGUSON, ) O P I N I O N
)
Appellee. ) No. 6317 October 16, 2008
)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances:  Allison  E.  Mendel,  Mendel  &
          Associates, Anchorage, for Appellant.  Andrew
          Josephson,  Law  Offices  of  Dan   Allan   &
          Associates, Anchorage, for Appellee.

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

          FABE, Chief Justice.

I.   INTRODUCTION
          Victoria  Ferguson  appeals the superior  courts  order
          denying her motion
to  modify the child support agreement she entered into with  her
former husband, James Ferguson.  She argues that the lower  court
failed to make an adequate inquiry into the facts underlying  her
claim  and  that  it  mistakenly  concluded  that  no  change  of
circumstances  could  justify  a  modification.   Victoria   also
appeals  the  lower courts award of attorneys fees.  Because  the
Fergusons   prior   agreement  contemplated   Victorias   current
circumstances,  Victoria has already received the maximum  amount
of  child  support available under Alaska Rule of Civil Procedure
90.3.   And the trial court properly concluded that Victoria  can
adequately provide for her childrens needs.  Finally,  the  award
of attorneys fees fell within the superior courts discretion.  We
therefore affirm the lower courts decision in all respects.
II.  FACTS AND PROCEEDINGS
          James (Jim) and Victoria Ferguson were married in 1984.
They  had  three  children together, the oldest of  whom  is  now
eighteen.   They  divorced  in  September  2001.   Prior  to  the
divorce,  Jim  and Victoria agreed to a division  of  their  real
estate  and  investment assets, and they formed a parenting  plan
that  addressed custody, visitation schedules, and child support,
among  other issues.  Superior Court Judge Sen K. Tan found  that
the   Fergusons  agreement  represented  a  fair  and   equitable
distribution of the marital assets that served the best interests
of  the children.  Accordingly, the lower court incorporated  the
settlement terms into its divorce decree.
          Jim and Victoria agreed to an unequal property division
under  which Victoria was to receive $233,000 more of the marital
assets  than  Jim  in  lieu  of future  child  support  payments.
Victoria  was also to receive $60,000 worth of assets as  a  lump
sum spousal maintenance payment.  The parenting plan contemplated
shared  physical custody consisting of a minimum time of  30%-50%
of  the  time  with  either parent after a one-year  transitional
visitation  plan.  But the agreement clarified that [t]hough  the
parties  will  have shared physical custody beginning  August  1,
2002,  the  child support calculations are based  on  the  mother
having  primary physical custody of the minor children throughout
their minority.  A table accompanying the plan indicates that the
parties calculated child support on the basis that Jim would earn
an  adjusted  income  of $100,000, an amount  that  exceeded  the
$84,000 cap established by Civil Rule 90.3 at the time.1
          The  superior  court closely scrutinized the  Fergusons
child  support agreement, expressing concern about  the  lump-sum
payment of future support obligations.  Judge Tan noted,  I  dont
know if I can set child support prospectively and essentially  by
agreement,  remove  the right to file a modification.   Victorias
counsel  at  the  time reassured the court,  insisting  that  the
Fergusons arrangement was appropriate in the unusual circumstance
in  which  people can afford to prepay child support.   Victorias
counsel added that both parties understand that theyve agreed  on
a   certain  physical  [custody]  arrangement  today   and   that
arrangement  may change . . . [but] that is not going  to  change
this  child  support arrangement.  Finally, Jims counsel  pointed
out  that  the parties calculated the child support according  to
[Civil  Rule] 90.3 and that the calculation uses an annual salary
of  $100,000 rather than the minimum [$84,000], so if that   even
if  that  amount did increase pursuant to [Civil Rule] 90.3,  its
already taken that into account.
          Following  the  divorce,  the  Fergusons  soon  resumed
litigation  that led to the appointment of a custody investigator
and  a  guardian  ad  litem.  For four years after  the  divorce,
Victoria  did  not  work because she suffered  from  debilitating
depression.   During  this  time,  she  liquidated  many  of  her
          investments and the real estate assets she had received in the
divorce  settlement and withdrew funds from her IRA  to  maintain
her  household.   On  May 6, 2004, the superior  court  issued  a
revised  custody  order that mandated strict application  of  the
week-on week-off schedule.  In February 2005 Victoria resumed her
former career as an engineer and began earning a gross income  of
$102,000.
          On  October 30, 2006, Victoria filed a motion to modify
child  support,  alleging  that over  the  past  year  all  three
children  increasingly . . . spent more time with her.   Victoria
argued that the existing child support arrangement was inadequate
in  light  of this de facto change in the custody schedule.   Her
motion  alleged that none of the property that Victoria  received
as  lump  sum  child  support was actually liquid  and  that  the
parties  took  no  account  of the costs  of  sale  or  taxes  to
liquidate  the property.  Consequently, Victoria reasoned,  [t]he
current arrangement is not meeting the needs of the children  and
needs  to be modified.  Jim filed a cross-motion to retroactively
modify  child support in case the trial court decided  to  reopen
the child support issue.
          Superior   Court  Master  Suzanne  R.  Cole   conducted
hearings  on  February  27 and May 15, 2007.   During  the  first
hearing,  Master Cole identified Victorias assertion  of  changed
circumstances as a threshold issue and indicated that  she  would
like  to rule on that before we get to income calculations.   The
master  then  set  another  hearing  limited  to  the  change  of
circumstances  issue.   After  that second  hearing,  the  master
concluded  that Victoria had failed to demonstrate  a  change  of
circumstances  and  therefore  issued  a  recommendation  without
considering  evidence  on factors that might  have  informed  the
extent of an award modification.
          In  her  recommendation to the superior  court,  Master
Cole  rejected Victorias argument that the parties had overlooked
the  liquidation penalties associated with the settlement assets.
The  master reasoned that Victoria had knowingly entered into the
settlement,  which was carefully crafted with the  assistance  of
counsel, and subjected to close scrutiny by the court.  According
to  the  master, the parties were aware that most of  the  assets
were not liquid and would bear tax consequences.
          The  master also rejected Victorias argument  that  the
childrens increased time in her household represented a  material
change  in  circumstances.   The  master  pointed  out  that  the
Fergusons  agreement anticipated a fluid custody arrangement  and
calculated support based upon primary custody to Ms. Ferguson  to
permit such fluidity.  Because the Fergusons division of property
provided  Victoria  with  the maximum  child  support  under  the
fiction  of primary custody to Ms. Ferguson, Master Cole reasoned
that  it  already gave her what she now argues  for    a  primary
custody  calculation.   Master Cole further  concluded  that  the
finality  of  the property division bestowed benefits  upon  both
sides,  with  Jim  unable  to pursue  his  colorable  claims  for
modification such as his reduced income, imputed income for  her,
or child support when he had primary custody.
          The master distinguished the case law cited by Victoria
in  support  of  modifying  the child support  agreement,  giving
particular  attention  to  State, Department  of  Revenue,  Child
Support  Enforcement Division v. Green.2  That  case  involved  a
parent who exhausted a lump-sum payment of child support and  had
to  rely  on state benefits to adequately meet the needs  of  her
child.3   Master Cole pointed out that no court had approved  the
agreement  at  issue in Green, and that [u]nlike the  obligee  in
Green, Ms. Ferguson is not on the edge of poverty.  Her childrens
needs  are  more  than  adequately  met.   Finally,  Master  Cole
addressed extraordinary expenses, which the Fergusons had  agreed
in  the original parenting agreement to share provided they  were
mutually agree[d] on.  Master Cole recommended that the Fergusons
divide  these  expenses equally for any activities in  which  the
children are currently participating.
          On June 29, 2007, before the superior court had decided
whether  to  adopt  the masters report, Jim filed  a  motion  for
attorneys  fees.   On July 10 Victoria filed  objections  to  the
masters  report, alleging factual and legal errors.  Jim  opposed
the  objections,  and  on July 26 Judge Tan adopted  the  masters
recommendation.  The superior court ordered Victoria to file  any
opposition  to  the motion for attorneys fees  within  ten  days.
Victoria   disputed  several  items  in  the   attorney   billing
statements and in his reply Jim revised his fee request  downward
from $7,329 to $6,834.  Eventually, Judge Tan ordered Victoria to
pay  $2,050.20, or thirty percent of Jims actual reasonable  fees
of $6,834.
          Victoria appeals.
III.      STANDARD OF REVIEW
          We  review  a trial courts decision to modify  or  deny
modification  of a child support order for abuse of  discretion.4
We  will find an abuse of discretion only where the record  as  a
whole  leaves  us  with  a definite and firm  conviction  that  a
mistake has been made.5  The award of attorneys fees in a divorce
action also rests within the broad discretion of the trial  court
and  will  not  be  disturbed on appeal unless it  is  arbitrary,
capricious, or manifestly unreasonable.6
IV.  DISCUSSION
     A.   The  Trial Court Did Not Abuse Its Discretion  when  It
          Determined that Victoria Failed To Demonstrate a Change
          of  Circumstances that Requires Modification  of  Child
          Support.