Berg v. Berg, Supreme Court No. S-15812

CourtSupreme Court of Alaska (US)
PartiesJESSE BERG, Appellant, v. CORINNE BERG (n/k/a Corinne Zehnder), Appellee.
Docket NumberNo. 1705,Supreme Court No. S-15812,1705
Decision Date05 December 2018

JESSE BERG, Appellant,
CORINNE BERG (n/k/a Corinne Zehnder), Appellee.

Supreme Court No. S-15812
No. 1705


December 5, 2018


Memorandum decisions of this court do not create legal precedent. A party wishing to cite a memorandum decision in a brief or at oral argument should review Appellate Rule 214(d).

Superior Court No. 3PA-02-01386 CI


Appeal from the Superior Court of the State of Alaska, Third Judicial District, Palmer, Vanessa White, Judge.

Appearances: Jesse Berg, pro se, Kodiak, Appellant. Maurice N. Ellis, Law Office of Maurice N. Ellis, Anchorage, for Appellee.

Before: Stowers, Chief Justice, Fabe, Maassen, and Bolger, Justices. [Winfree, Justice, not participating.]


An obligor appeals a child support order, arguing that the superior court erred in declining to hold an evidentiary hearing in a child support modification matter to determine how his per diem and "Fringe Add-On" income should be classified for child support purposes. He also claims that the court erred in calculating his income for child support purposes by basing its calculation on an annual rather than seasonal work

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schedule and in calculating his allowable deductions. Finally, the obligor claims that the court abused its discretion in setting the effective date for the child support order based on the date that he was served a motion to suspend visitation, arguing the motion did not provide him notice that child support was at issue. We affirm.


A. Facts

Jesse Berg and Corinne Berg (now known as Corinne Zehnder) were married in October 1998 and have two minor children. They divorced in July 2003 and agreed to joint legal and shared physical custody of their children;1 the terms of their settlement agreement were read into the record. The court discussed Jesse's custody award in terms of visitation.2

B. Proceedings

In August 2013 Corinne moved to suspend Jesse's visitation with their daughters, who were then twelve and thirteen and residing primarily with Corinne in Wasilla. Around the same time Jesse, who was an ironworker primarily employed in construction, relocated to Kodiak for work.

In July 2014 the superior court held a hearing on Corinne's motion to suspend visitation. Six days later the court placed its oral decision on the record: the

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court denied Corinne's motion to suspend visitation but modified the parties' custody and visitation schedule, concluding that "because [Jesse] is no longer living in the [Matanuska] Valley, this is no longer a shared custody arrangement for child support calculation purposes." The court directed Jesse to file a proposed order denying Corinne's motion to suspend visitation; it also ordered him to file a current child support affidavit with calculations, his 2013 tax return, his four most recent pay stubs, and a proposed child support order. In October 2014, the court entered written orders memorializing its oral order denying Corinne's motion to suspend visitation, setting Jesse's child support obligation at $2,700 per month based on an adjusted annual income in excess of $120,000,3 and explaining its findings on Jesse's per diem income, "Fringe Add-On" income,4 the effective support date, and its projection of Jesse's earning capacity.

In response to the court's July 2014 order on the record, Corinne filed a proposed child support calculation. Corinne calculated Jesse's annual gross income to be $179,667.47 plus his Permanent Fund Dividend for a total of $181,548.48. After allowable deductions, Corinne calculated Jesse's adjusted annual net income for child support purposes to be $152,858.81.

Jesse opposed Corinne's calculations and argued that his per diem and "Fringe Add-On" compensation should not be counted as income for the purposes of

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calculating child support. Citing Hammer v. Hammer5 for the proposition that untaxed per diem pay should be excluded from income for purposes of calculating child support, Jesse asserted that his per diem compensation was not taxable income but was intended to offset the high cost of living in Kodiak and therefore was not income for purposes of calculating child support. Jesse further asserted that the "Fringe Add-On" compensation was a mandatory retirement contribution that should be deducted from the calculation of his gross income.

Jesse also argued that the court should calculate his earnings based on a seasonal, ten-month wage rather than an annual employment work schedule because he was "only guaranteed employment on his current job through October of 2014." Finally he argued that the effective date for the child support order should be December 6, 2013, rather than September 1, as his decision to remain in Kodiak during that time was "involuntary" based on financial, employment, and legal obligations that prevented him from fully engaging in the previous custody and visitation schedule. Accounting for his claimed per diem exclusion and retirement deductions, Jesse calculated that his adjusted annual income for child support purposes was $67,635 with a monthly payment of $1,521.79.

In response to Jesse's objections Corinne pointed out that Jesse's pay stubs listed his per diem income as taxed income and that it therefore should be included in his income for child support purposes. Referring to the Commentary to Alaska Civil Rule 90.3, Corinne argued that Jesse's per diem income was a "perquisite[] or in-kind compensation" similar to employer-provided housing and transit benefits, which, according to the Commentary, should be included as income "to the extent that they are

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significant and reduce living expenses."6 Citing Childs v. Childs,7 Corinne contended that Jesse's per diem income was like the non-taxed benefits provided to Alaska military personnel — such as cost-of-living allowances and housing allowances — because the purpose of the per diem was a cost-of-living adjustment.

In addition Corinne challenged Jesse's claim that the "Fringe Add-On" pay itemized on his pay stub was a mandatory retirement contribution eligible for a deduction because nothing indicated the funds were contributions to a retirement plan, whether mandatory or voluntary. She also disputed Jesse's assertion that his income should be calculated on a seasonal, ten-month work schedule because Jesse had been employed full time in Kodiak for a year and because Jesse had admitted during the custody hearing that he would be able to transfer to a new job site in Kodiak when his current project ended.

Finally Corinne asserted that the September 1, 2013 date selected by the superior court as the effective date for the child support order was proper under the requirements of Rule 90.3(h)(2) because Jesse had been served with her motion to suspend visitation in August. She alleged that Jesse had fully relocated to Kodiak by the beginning of September and that the parties' two daughters had been living full time with her since then. Thus she argued that the court's decision to set September 1 as the effective date was appropriate because Jesse no longer exercised shared physical custody of the children after August.

The superior court set the effective date for child support as September 1, 2013, "because that [was] approximately the time when [Jesse] was no

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longer able to fully exercise his previous visitation and custody schedule." The court also awarded Corinne primary physical custody of the children and adopted her proposed child support order setting Jesse's child support obligation at $2,700 per month.

The court later entered another order with findings regarding "the disputed issues for calculating child support." First, the court explained that September 1 was the correct effective modification date for child support because this date reflected the "first full month after [Corinne] filed her [m]otion to [s]uspend [d]efendant's [v]isitation" and "[t]he children [had] been in the primary custody of [Corinne] throughout this period." Next, the court explained that Jesse could not deduct his per diem compensation from his gross annual income because his primary residence was in Kodiak. The superior court distinguished Jesse's case from Hammer v. Hammer,8 pointing out that the employee in Hammer was at sea and "away from [his] primary residence when [he] received per diem pay." The court in this case concluded that "[Jesse's] per diem is more akin to a cost[-]of[-]living adjustment" and therefore counted as income for child support purposes.

The court also explained that Jesse failed to establish that his "Fringe Add-On" pay was "actually a retirement benefit" because his pay stubs listed these add-ons as a type of income and based on the amount of his federal income tax withholding, they appeared to be taxable income. The court noted that Jesse's 2013 W-2 earnings statement did not list any deduction for retirement and that "[Jesse's] [federal] income withholding would be nearly 30% of his wages" if the add-on amounts were not calculated as income. The court further observed that Jesse had provided insufficient support for his contention that the add-ons were not income to be included for calculating

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child support. Finally, the court stated that "while [Jesse] may not be guaranteed employment indefinitely," his pay stubs and 2013 W-2s supported Corinne's calculation of his gross annual earning capacity as set out in her proposed child support order.

Jesse moved for reconsideration of the court's child support order. He reiterated the arguments outlined in his objections to Corinne's proposed child support order. In addition, Jesse requested reconsideration of the court's decision to issue the order without first holding an evidentiary hearing "as a violation of his right to due process," asserting he had "anticipated that with the parties' factual disputes concerning his income and deductions . . . [t]he court would convene an...

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