Grays v. Arkansas Ocse

• Court: Arkansas Supreme Court
• Writing for the Court: Annabelle Clinton Imber
• Citation: Grays v. Arkansas Ocse, 289 S.W.3d 12, 375 Ark. 38 (Ark. 2008)
• Decision Date: 06 November 2008
• Docket Number: No. 07-1202.,07-1202.
• Parties: Edward GRAYS, Appellant, v. ARKANSAS OFFICE OF CHILD SUPPORT ENFORCEMENT, Appellee.

289 S.W.3d 12

375 Ark. 38

Edward GRAYS, Appellant, v. ARKANSAS OFFICE OF CHILD SUPPORT ENFORCEMENT, Appellee.

No. 07-1202.

Supreme Court of Arkansas.

November 6, 2008.

Billy J. Hubbell, Crossett, for appellant.

Donna D. Galloway, Stuttgart, for appellee.

ANNABELLE CLINTON IMBER, Justice.

Appellant Edward Grays appeals from an order of the Drew County Circuit Court granting the motion for declaratory relief filed by Appellee Arkansas Office of Child Support Enforcement ("OCSE"). The circuit court's order granted judgment against Grays in the amount of $13,787.63 for child-support arrears and in the amount of $1,777.72 for related court costs and fees. The circuit court also determined that it would be inequitable for the former custodial parent to be denied the delinquent child support admittedly incurred by Grays, despite the fact that the child at issue had, after reaching the age of majority, received a lump-sum payment for Social Security disability benefits due to his father's disability. Grays argues on appeal that the circuit court erred in concluding that he was not entitled to credit the payment of disability benefits to his son against his child-support arrears. Because this case presents an issue of first impression, of substantial public interest, and in need of clarification or development of the law, our jurisdiction is pursuant to Arkansas Supreme Court Rule 1-2(b)(1), (4), and (5) (2008). We find no error and affirm.

Pursuant to a decree of divorce filed August 10, 1990, Flossie Grays Junior was awarded custody of her two children with Edward Grays. Grays was ordered to pay $108 bi-weekly in support of the children, Shagala and Shane. Grays was also assessed an annual child-support administrative fee in the amount of $24. Grays's child-support obligation was subsequently altered by the following orders:

July 17, 1998: Grays's obligation reduced to $61 per week because Shagala had been emancipated; $55 in costs assessed.

December 22, 1998: Judgment granted against Grays in the amount of $3,057.20 for past-due child support; Grays ordered to pay $61 per week in current support and $6.10 per week toward arrears; $55 in costs assessed; attorney's fee of $305.72 assessed.

December 21, 1999: Judgment granted against Grays in the amount of $3,579.20 for past-due child support; Grays ordered to pay $61 per week in current support and $9 per week toward arrears; $55 in costs assessed.

June 23, 2000: Judgment granted against Grays in the amount of $5,316.20 for past-due child support; Grays ordered to pay $61 per week in current support and $9 per week toward arrears; $410 in costs and attorney's fees assessed.

July 13, 2001: Judgment granted against Grays in the amount of $1,956.20 for past-due child support; Grays ordered to pay $61 per week in current support and $9 per week toward arrears; $380 in costs and attorney's fees assessed.

December 17, 2003 (order amended January 13, 2004): Judgment granted against Grays in the amount of $8,660.20 for past-due child support; Grays ordered to pay $61 per week in current support and $9 per week toward arrears; $320 in costs and attorney's fees assessed.

March 16, 2005: Judgment granted against Grays in the amount of $12,610.63 for past-due child support; Grays ordered to pay $36 per week in current support; order directed that no amount be paid toward arrears because Grays had no income and was pursuing a claim for Social Security disability benefits.

Body attachments with cash bonds were issued against Grays on June 7, 2000; March 12, 2001; and September 2, 2005. An order entered on October 26, 2005, dismissed the September 2, 2005, body attachment and ordered Grays to resume support payments of $36 per week.

On October 27, 2005, a Social Security Administration Administrative Law Judge found that Grays had been disabled since November 21, 2001. The ALJ issued a decision, based on Grays's June 11, 2003, application, finding that Grays was entitled to a period of disability commencing on November 21, 2001, and continuing through the date of the decision. As a result, Grays received a lump-sum payment of $16,615.20 in disability back pay for the period between June 2002 and January 2006. In 2006, he began receiving monthly payments of $1,067.¹ Those payments were increased to $1,102 per month in 2007.

On August 1, 2006, the Social Security Administration issued a check in the amount of $15,835 to Shane, as an auxiliary benefit to Grays's disability status. This amount represented back pay for the period between June 2002 and January 2006. Because he had turned eighteen years old on January 3, 2006, Shane was not entitled to continuing monthly payments from the Social Security Administration. In addition, Grays's ongoing child-support obligation had terminated by operation of law due to Shane's reaching the age of majority. However, as of 2006, Grays owed past-due support in the amount of $13,787.63 and unpaid costs and fees in the amount of $1,753.72.²

Consequently, OCSE issued an income withholding notice to the Social Security Administration, seeking to recover from Grays's disability benefits. In August of 2006, pursuant to the notice, OCSE began receiving payments of $156 per month. This amount was deducted from Grays's monthly benefits payment. The August 2006 deduction was disbursed to Flossie Junior, while subsequent deductions were placed on "distribution hold" by OCSE.

On August 22, 2006, OCSE filed its motion for declaratory relief in the circuit court, responding to Grays's request that the lump-sum payment from the Social Security Administration to his son be credited against his child-support arrears. OCSE requested that the circuit court determine whether Grays was entitled to the offset. Following a hearing and the submission of briefs by the parties, the circuit court issued a letter opinion, dated July 19, 2007, and formal order, dated July 31, 2007. The court found that the payment to Shane by the Social Security Administration did nothing to relieve the inequities resulting from Grays's chronic failure to pay child support. The court specifically noted that, while the support was intended for Shane's benefit, Flossie bore the costs associated with Grays's failure to pay. Accordingly, the court ordered that the income withholding notice would continue until all judgments against Grays were satisfied in full and directed that those payments that had been collected but placed on distribution hold be released to Flossie and credited toward the judgment for child-support arrears. Grays filed a timely notice of appeal.

Our standard of review for an appeal from a child-support order is de novo on the record, and we will not reverse a finding of fact by the circuit court unless it is clearly erroneous. Ward v. Doss, 361 Ark. 153, 158, 205 S.W.3d 767, 770 (2005). In reviewing a circuit court's findings, we give due deference to that court's superior position to determine the credibility of the witnesses and the weight to be accorded to their testimony. Id. However, a circuit court's conclusions of law are given no deference on appeal. Id.

Grays contends that a 2004 decision by the Arkansas Court of Appeals, Arkansas Office of Child Support Enforcement v. Harris, 87 Ark.App. 59, 185 S.W.3d 120 (2004), answers the question at issue. The court of appeals in Harris affirmed a circuit court's ruling permitting Social Security disability payments made to an adult child to discharge the non-custodial parent's child-support arrearage. Id. The decision relied in part upon this court's holding in Cash v. Cash, 234 Ark. 603, 353 S.W.2d 348 (1962), in which a non-custodial father was permitted to displace his court-ordered child-support payments by Social Security retirement benefits paid to his son. Our decision in Cash was premised largely on equitable principles, specifically the father's supposed inability to retire if forced to continue paying child support and his good-faith efforts to meet his "moral obligation" to his son and former wife. Id. at 605-06, 353 S.W.2d at 349-50. The court of appeals in Harris, however, was precluded from addressing equitable factors urged by OCSE, such as the financial impact on the custodial parent, the financial standing of the non-custodial parent, and the length of the non-custodial parent's disability, because such factors were not argued at the trial level and thus not preserved for appellate review. 87 Ark.App. at 62, 185 S.W.3d at 122. OCSE argues in the instant case that the Harris court's inability to consider equitable factors distinguishes it from the case at bar.

OCSE points to another critical distinction in the Harris case. The court of appeals explicitly limited its holding as follows:

There are differing views as to whether social security benefits can be credited toward arrearages in child support. Some courts do not allow it. Others permit it, but allow credit only for arrearages that accrue during the period of disability. Appellant did not argue below that arrearages, per se, were not subject to discharge. For this reason and because the record was not developed on this issue, we leave that question for another day.

Harris, 87 Ark.App. at 62, 185 S.W.3d at 122 n.2 (emphasis in original) (internal citations omitted). Indeed, our review of cases from other jurisdictions addressing this issue shows a variety of approaches. Some jurisdictions have chosen not to permit credits against the non-custodial parent's child-support arrears, noting that to do so would amount to "ordering the children to pay the accrued arrearages for their own support." Fuller v. Fuller, 49 Ohio App.2d 223, 360 N.E.2d 357, 358 (1976); see also Hennagin v. County of Yolo, 481 F.Supp. 923 (E.D.Cal.1979). Others have allowed credits on the basis of Social Security benefits. See, e.g., Binns v. Maddox, 57 Ala.App. 230, 327 So.2d 726 (1976); Perteet v. Sumner, 246 Ga. 182, 269 S.E.2d 453 (1980); Folds v....