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State, Dept. of Revenue v. Leitch (4/14/00) sp-5262
State, Dept. of Revenue v. Leitch (4/14/00) sp-5262
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, DEPARTMENT )
OF REVENUE, CHILD SUPPORT ) Supreme Court No. S-8680
ENFORCEMENT DIVISION, )
)
Appellant, )
) Superior Court No.
v. ) 3PA-90-0014 DR
)
SANDA LEITCH, ) O P I N I O N
)
Appellee. ) [No. 5262 - April 14, 2000]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Palmer,
Beverly W. Cutler, Judge.
Appearances: Diane L. Wendlandt, Assistant
Attorney General, Anchorage, Bruce M. Botelho, Attorney General,
Juneau, for Appellant. No appearance by Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
MATTHEWS, Chief Justice.
EASTAUGH, Justice, dissenting.
I. INTRODUCTION
The question in this case is whether the Child Support
Enforcement Division may seek prospective modification of a child
support order where a de facto change of custody has occurred. The
superior court ruled that CSED lacked statutory authority to do so.
We conclude that such authority exists and therefore reverse.
II. FACTS AND PROCEEDINGS
Thomas McKinnon and Sanda Leitch are parents of a minor
child. In March 1993 the superior court found that Sanda had
primary physical custody of the child and ordered Thomas to pay
child support. Notwithstanding the order, Thomas assumed physical
custody of the child for various periods and received public
assistance on behalf of the child during these periods.
The Child Support Enforcement Division (CSED) moved for
interim modification of the child support order in order to
facilitate recovery of future payments from Sanda. CSED did not
seek a change of custody but asked for $50 per month from Sanda
"while the child receives public assistance" with Thomas. The
superior court denied CSED's motion, concluding that CSED lacked
the statutory authority to seek modification against an obligee
under an existing support order. CSED has appealed.
III. DISCUSSION
A. Standard of Review
Because the question of whether the trial court properly
denied CSED's motion for modification turns on statutory interpre-
tation, we review the issue de novo. [Fn. 1] In interpreting a
statute, we will adopt the rule of law "most persuasive in light of
precedent, reason and policy." [Fn. 2]
B. Does AS 25.27.045 Authorize CSED's Motion for
Modification?
The superior court denied CSED's motion to modify the
order on the ground that the agency could only act on its own if
the "obligor" were liable to the state for public assistance
reimbursement. Since under the existing order Thomas -- not Sanda
-- is the obligor, the court concluded that CSED lacked the
statutory authority to seek modification.
Alaska Statute 25.27.045 provides in relevant part:
The agency may appear in an action
seeking an award of support on behalf of a child owed a duty of
support . . . and may also appear in an action seeking modification
of a support order, decree or judgment already entered. Action
under this section may be undertaken upon application of an
obligee, or at the agency's own discretion if the obligor is liable
to the state under AS 25.27.120(a) or (b).
CSED contends that the term "obligor" in AS 25.27.045 includes "any
noncustodial parent potentially liable to the state." CSED argues
that the superior court's ruling leaves CSED powerless to obtain
public assistance reimbursement from a noncustodial parent where
the parents have switched custody without modifying a governing
child support order. This result, argues CSED, conflicts with
CSED's rights as an assignee of a public assistance applicant "to
accrued and continuing child support." [Fn. 3]
We substantially agree with CSED's position. It is
consistent with the statutory definition of "obligor" as "a person
owing a duty of support." [Fn. 4] A "duty of support," in turn,
"includes a duty of support imposed or imposable by law, [or] by a
court order . . . ." [Fn. 5] Thus, the term "obligor" is not
limited to those parents subject to an existing court order but
also includes parents owing a duty imposable by a court order.
Sanda potentially falls within this description. Whether
a duty of support will actually be imposed on her can only be
determined after she has an opportunity to be heard on the merits
of CSED's claim. Since actual imposition can only occur after
proceedings on the merits, potential imposition is all that can be
required when determining CSED's authority to bring a modification
proceeding. Thus, CSED was authorized under section .045 to
initiate this modification proceeding at its "own discretion."
Our conclusion on this point is also consistent with the
statutory system under which CSED operates. CSED has the authority
to collect from noncustodial parents reimbursement of public
assistance paid for children. [Fn. 6] It is the assignee of "all
rights to accrued and continuing child support" [Fn. 7] of public
assistance applicants; it is the subrogee "to the rights of the
obligee" and, as such, may seek and enforce orders of support; [Fn.
8] and it has a direct independent claim against obligors for
reimbursement. [Fn. 9] CSED also has extraordinary powers to
collect public assistance reimbursement, including lien rights
against "all real and personal property" of a debtor, [Fn. 10] the
right to proceed against a debtor's occupational and driver's
licenses, [Fn. 11] and the right to order third parties to withhold
and deliver a debtor's property under their control. [Fn. 12]
In view of this broad authority and power, we do not
believe that the legislature intended to bar CSED from seeking
modifications of child support orders in cases of de facto custody
changes. Unless CSED can seek modification in such cases, there is
a good chance that no one will do so. Without modification, there
can be no collection of public assistance reimbursement. The
obligee under the order (here Sanda) has no incentive to seek
modification, since she will be liable after the modification. The
obligor under the order (here Thomas) may lack the incentive to
seek modification because he is receiving public assistance and
payments received after the modification will be applied first to
reimburse CSED.
We conclude, based both on the statutory definition of
the relevant terms and on inferences drawn from the statutory
structure, that CSED has the authority to seek the modification of
support orders in cases of de facto custodial change.
In its ruling, the trial court understandably relied on
Hendren v. State, Department of Revenue. [Fn. 13] Like the present
case, Hendren involved a de facto change of custody and an order
requiring the original noncustodial parent to pay child support.
[Fn. 14] We held that CSED could not obtain reimbursement from the
obligee under the child support order for public assistance already
paid. [Fn. 15] There were two main reasons for this conclusion.
First, "[t]he term 'obligor' in AS 25.27.120(a) refers to the
parent who is required to pay child support under a court order."
[Fn. 16] Second, what CSED sought "constitutes a[n]
[impermissible] retroactive modification of the original order."
[Fn. 17]
We believe that Hendren was correctly decided based on
the second reason. The first reason was correct as to one usage of
the term "obligor" in subsection .120(a), but we were mistaken in
applying it to all usages of the term.
In Hendren, CSED sought reimbursement under AS
25.27.120(a) which provides in relevant part:
An obligor is liable to the state in the
amount of assistance granted under AS 47.07 and AS 47.27 to a child
to whom the obligor owes a duty of support except that, if a
support order has been entered, the liability of the obligor for
assistance granted under AS 47.25.310-47.25.420 may not exceed the
amount of support provided for in the support order . . . .
CSED argued that the obligee under the order could also be the
"obligor" as that term is used in subsection .120(a) based on the
general definition of "obligor" set out in section .900 ("a person
owing a duty of support"). [Fn. 18] We rejected this argument
based on the language of subsection .120(a), which "limits the
obligor's liability to the amount of support required by the
support order." [Fn. 19] The term "obligor" used in the liability
limiting clause of subsection .120(a) necessarily refers to "the
parent who has been ordered to pay child support." [Fn. 20] Only
an existing order can provide a basis for this limitation. But the
other usages of "obligor" in subsection .120(a) are not tied to an
existing order. We erred in concluding that this narrow meaning
also applies outside the context of the liability limiting clause.
Except where the context requires otherwise, we believe that
"obligor" should be understood in the broader sense of the
statutory definition. Nothing in section .045 requires deviation
from the statutory definition.
Our discussion of the second ground in Hendren supports
our decision in this case. We made it clear that our decision was
limited to efforts of CSED to retroactively modify existing support
orders. [Fn. 21] We encouraged CSED to seek prospective
modification of the support order there in question:
Because the . . . order has never been
modified, requiring [the obligee under the original order] to
reimburse CSED for past assistance constitutes a [prohibited]
retroactive modification of the original order.
Although CSED can seek modification of
existing support orders under AS 25.27.045, the statutory scheme
permits retroactive modification only in limited circumstances.
[No such circumstances were found to exist.][ [Fn. 22]]
In seeking a modification in this case, CSED is doing no more than
what this portion of our discussion in Hendren indicated it could
do.
IV. CONCLUSION
We REVERSE the superior court's ruling and REMAND for
further proceedings consistent with this opinion. EASTAUGH, Justice, dissenting.
Because I believe that the outcome of this case is
governed by AS 25.27.045 and AS 25.27.120(a) and that we correctly
interpreted the latter statute as recently as 1998, [Fn. 1] I
dissent.
The dispositive fact here was the 1993 entry of the
existing support order. That order requires Thomas to pay Sanda
child support and imposes no child support liability on Sanda.
Although Sanda and Thomas periodically and informally changed the
child's primary physical custody, making Thomas the custodian, they
did not modify the 1993 support order.
Thomas, as the child's new custodian, began to receive
public assistance. CSED is charged with recovering from a parent
owing a support duty the public assistance the state pays to
support the child. [Fn. 2] This case would be perfectly
straightforward if no support order had been entered in this case,
or if Thomas had obtained an order making Sanda liable for child
support. CSED would then be entitled to seek reimbursement from
Sanda for the public assistance the state had paid Thomas.
But the entry of the existing support order affects
CSED's authority to seek reimbursement from the parent who no
longer has custody. Under AS 25.27.120(a), the liability of an
obligor to reimburse public assistance "may not exceed the amount
of support provided for in the support order." [Fn. 3] Sanda is
not liable for assistance under the existing support order.
Consequently, unless that order is modified, Sanda has no possible
liability to CSED under subsection .120(a).
Therefore, for CSED to recover from Sanda, the superior
court had to enter an order making Sanda liable for child support.
Thomas, as the new custodial parent, could have readily obtained
such an order, but he did not. Instead, it was CSED which sought
entry of an order modifying support and making Sanda liable for
support. The legislature gave CSED no authority to obtain such an
order. Alaska Statute 25.27.045 only gives CSED authority to seek
modification of a support order "at the agency's own discretion if
the obligor is liable to the state under AS 25.27.120(a) or (b)."
[Fn. 4] Because section .045 gives CSED authority to act only if
the obligor "is liable" under subsections .120(a) or (b), it is
necessary to determine whether the incipient new obligor "is
liable" under those subsections. As we saw above, Sanda "is [not]
liable" under subsection .120(a) because the existing support order
imposes no support liability on her. CSED therefore has no
statutory authority under section .045 to seek modification of the
support order on its own application.
We recently considered the effect of subsection .120(a).
In Hendren v. State, Department of Revenue, [Fn. 5] we read
subsection .120(a) in exactly the manner its words require. The
court chooses to limit Hendren today, but I think the court
correctly interpreted subsection .120(a) when it discussed that
statute in Hendren.
Subsection .120(a) treats the entry of an existing court
support order as a significant event. That treatment is consistent
with our own treatment of such orders. In Turinsky v. Long, [Fn.
6] for example, we recognized that despite an informal change of
custody, it is the custody order and the corresponding support
order which control. [Fn. 7]
The court gives good policy reasons why CSED should be
allowed to seek modification in these circumstances. [Fn. 8] Those
reasons may well justify a statutory amendment, but they do not
justify the result reached today. In my view, the superior court
correctly interpreted the controlling statutes. I would therefore
affirm.
FOOTNOTES
Footnote 1:
See Hendren v. State, Dep't of Revenue, 957 P.2d 1350, 1351
(Alaska 1998).
Footnote 2:
Id.
Footnote 3:
AS 47.27.040.
Footnote 4:
AS 25.27.900(9).
Footnote 5:
AS 25.27.900(5).
Footnote 6:
See AS 25.27.140(a).
Footnote 7:
AS 47.27.040(a).
Footnote 8:
See AS 25.27.130(a).
Footnote 9:
See AS 25.27.120(a); see also State, Dep't of Revenue v.
Green, 983 P.2d 1249, 1253 (Alaska 1999) ("An independent right of
recovery is created by AS 25.27.120(a).").
Footnote 10:
AS 25.27.230.
Footnote 11:
See AS 25.27.244, .246.
Footnote 12:
See AS 25.27.250.
Footnote 13:
957 P.2d 1350 (Alaska 1998).
Footnote 14:
See id. at 1351.
Footnote 15:
See id.
Footnote 16:
Id. at 1353.
Footnote 17:
Id. at 1352.
Footnote 18:
See id. at 1351-52.
Footnote 19:
Id. at 1352.
Footnote 20:
Id. at 1352.
Footnote 21:
See id.
Footnote 22:
Id. (emphasis added).
Concurring / Dissenting Opinion
Footnote 1:
See Hendren v. State, Dep't of Revenue, 957 P.2d 1350, 1351-52
(Alaska 1998).
Footnote 2:
See AS 25.27.120; AS 25.27.130.
Footnote 3:
AS 25.27.120(a).
Footnote 4:
AS 25.27.045 (emphasis added). That statute provides in full:
The agency may appear in an action seeking an
award of support on behalf of a child owed a duty of support, or to
enforce a spousal support order if a spousal support obligation has
been established and if a support obligation, established with
respect to a child of that spouse, is also being administered, and
may also appear in an action seeking modification of a support
order, decree or judgment already entered. Action under this
section may be undertaken upon application of an obligee, or at the
agency's own discretion if the obligor is liable to the state under
AS 25.27.120(a) or (b).
Footnote 5:
957 P.2d 1350 (Alaska 1998).
Footnote 6:
910 P.2d 590 (Alaska 1996).
Footnote 7:
See id. at 595.
Footnote 8:
Slip Op. at 5-6.
