In re Allen
| Decision Date | 20 December 2016 |
| Docket Number | No. 2 CA–CV 2016–0079,2 CA–CV 2016–0079 |
| Parties | In re the Marriage of Cassandra Allen, Petitioner/Appellee, and Lynn Allen, Respondent/Appellant. |
| Court | Arizona Court of Appeals |
The Powell Law Firm, PLLC, Tucson, By Jay K. Powell, Counsel for Petitioner/Appellee
Susan M. Schauf, PLLC, Tucson, By Susan M. Schauf, Counsel for Respondent/Appellant
OPINION
¶ 1 Lynn Allen appeals the trial court's rulings denying him a credit for the receipt of dependent child social security disability benefits ("DSSD") by his former spouse, Cassandra Quinonez. The DSSD payments duplicated money Lynn had separately paid Cassandra for child support. For the reasons that follow, we reverse and remand for further proceedings.
¶ 2 We view the record in the light most favorable to upholding the trial court's decision. Milinovich v. Womack , 236 Ariz. 612, ¶ 7, 343 P.3d 924, 927 (App. 2015). The parties married in 2011, and had a child in April 2012. Lynn suffered a stroke in December 2012, and subsequently began receiving long term disability ("LTD") insurance benefits through an employer-sponsored plan as well as social security disability income. Cassandra filed for dissolution in May 2013. The court entered a support order in September, and modified it in January 2014. The court entered a consent decree in April 2014.
¶ 3 In January 2015, Lynn petitioned for modification of child support, seeking an order requiring Cassandra, as "the primary custodial parent," to apply for DSSD for the child based on Lynn's disability, and for modification of Lynn's support obligation based on any change to Lynn's income as a result of DSSD.1 In the petition, Lynn also asserted the availability of DSSD reduced the amount of Lynn's LTD benefits and had caused him to be deemed to have received overpayments that he was required to repay to the LTD insurer. He thus requested an order requiring Cassandra to reimburse the insurer for support Lynn paid using his LTD benefits.
¶ 4 Pursuant to the trial court's subsequent order, Cassandra applied for DSSD on behalf of the child, and received a retroactive DSSD payment of $14,200 covering the period of May 2014 to April 2015. She also began receiving $1,195 in DSSD for each month starting with May 2015. Cassandra argued Lynn's duplicate payment was a nonrefundable overpayment under the Arizona Child Support Guidelines,2 and also that federal law3 prohibited transferring DSSD to Lynn or the insurer. Lynn argued the Guidelines entitled him to credits for both DSSD and the support he paid using his own funds, and demanded an immediate transfer of the DSSD to permit him to repay the insurer.
¶ 5 The trial court concluded Cassandra had been "enriched with the overpayments" and that there was "a flaw in the policy," but that it nevertheless had no authority to order Cassandra to transfer the lump sum payment to Lynn. The court denied Lynn judgment or any credit for the $14,200 lump sum payment, but terminated child support nunc pro tunc to October 2015, and entered judgment against Cassandra for five months of duplicate payments Lynn had made after monthly DSSD commenced. Lynn timely appealed. We have jurisdiction pursuant to A.R.S. § 12–2101(A)(2).
¶ 6 On appeal, Lynn argues the trial court erred by: 1) not crediting him for the lump sum payment of derivative benefits pursuant to Guideline 26(B); 2) granting judgment for reimbursement of five monthly support overpayments when he had overpaid a total of six months; and 3) terminating rather than modifying his support obligation.
¶ 7 The Guidelines were adopted by the Arizona Supreme Court, pursuant to statutory requirement, to govern the determination of "the amount of child support" based on "all relevant factors." A.R.S. § 25–320(D) ; see also Milinovich , 236 Ariz. 612, ¶ 8, 343 P.3d at 927. The Guidelines are intended "to establish a standard of support for children consistent with their needs and the ability of parents to pay, and to make child support awards consistent for persons in similar circumstances." Milinovich , 236 Ariz. 612, ¶ 8, 343 P.3d at 927, quoting Engel v. Landman , 221 Ariz. 504, ¶ 38, 212 P.3d 842, 851 (App. 2009). We review the trial court's interpretation of the Guidelines de novo. Clay v. Clay , 208 Ariz. 200, ¶ 5, 92 P.3d 426, 428 (App. 2004). In doing so, we view the "plain language" of the Guidelines "as the most reliable indicator of the supreme court's intent." Milinovich , 236 Ariz. 612, ¶ 10, 343 P.3d at 927.
¶ 8 Guideline 26 provides in relevant part:
A.R.S. § 25–320 app. § 26(B). The text of Guideline 26(B) governs the application of the child's derivative benefit, in this case DSSD, to the obligor's "child support obligation," and in all cases requires the benefit "for a given month" to be applied to the support obligation. The term "child support obligation" is used throughout the Guidelines, and refers to the monthly obligation calculated pursuant to the Guidelines. See § 25–320 app. § 2(F) ().
¶ 9 Accordingly, the monthly child support obligation is satisfied up to the amount of the benefit received for the same month. See § 25–320 app. § 26(B)(1), (3). The Guidelines, however, prohibit application of the benefit to any period other than the "given month" for which it is received. § 25–320 app. § 26(B)(2). This interpretation is consistent with the approach followed in Clay . There, we instructed the trial court to determine "the dates covered by" a lump sum payment of derivative benefits and apply it to the support owed for the same period, which in that case had been "reduced to judgments" for arrears. Clay , 208 Ariz. 200, ¶¶ 2, 9, 92 P.3d at 427, 429.
¶ 10 The language of Guideline 26(B) is mandatory, and nothing in the text suggests it ceases to apply when an obligor pays support using personal funds before the child receives derivative benefits for the same time period, as is the case here. See § 25–320 app. § 26(B). To refuse to apply benefits under such circumstances would require redefining the term "child support obligation" to mean whatever amount is left over after first applying payments from non-benefits funds, an interpretation not supported by the text of the Guidelines. See § 25–320 app. §§ 8–10 (). And, Guideline 26 says nothing about support payments made from an obligor's personal funds. It does not prohibit the application of such payments to arrears or future obligations; nor does it prohibit the reimbursement of such payments.
¶ 11 Further, to the extent Clay suggests that no circumstance exists in which an obligor may receive a refund of an alleged overpayment, see 208 Ariz. 200, ¶ 9, 92 P.3d at 429, it is no longer an accurate statement of Arizona law. Currently, A.R.S. § 25–527 allows an obligor to seek reimbursement of excess support payments.4
¶ 12 It is also unclear whether Clay involved any overpayment as a result of payments from the obligor's personal funds. There, the obligor was the subject of multiple "contempt petitions" and "civil arrest warrants" for nonpayment of child support over a period of many years, though the opinion is silent about the extent of any payments the obligor may ultimately have made towards his arrears. Clay , 208 Ariz. 200, ¶ 2, 92 P.3d at 427. The decision to vacate the trial court's judgment referred explicitly to the fact that derivative benefits belonged to the child and could not be transferred to the obligor. Id. ¶ 8. Clay thus highlights the prohibition on direct transfer of benefits belonging to the child, without confirming whether an overpayment existed; the court did not address the issue of whether a refund is permissible when an overpayment is created by payment of support using non-benefits funds. See id.
¶ 13 Moreover, we agree with Lynn that applying a credit for lump sum derivative benefits only when the obligor owes arrears would create an incentive to incur arrears, and would punish obligors with pending social security applications who keep their support payments current. See In re Marriage of Stephenson & Papineau , 302 Kan. 851, 358 P.3d 86, 93–94 (2015) ; Paulhe v. Riley , 295 Wis.2d 541, 722 N.W.2d 155, ¶¶ 21–23 (Wis.App. 2006). Our interpretation of Guideline 26 is consistent with the public policy considerations behind the Guidelines, which were adopted in part to establish support consistent with children's needs and parents' ability to pay, as well as "[t]o make child support orders consistent for persons in similar circumstances." § 25–320 app. § 1(A), (B); see also Cummings v. Cummings , 182 Ariz. 383, 385, 897 P.2d 685, 687 (App. 1994).
¶ 14 We review the trial court's ruling on Lynn's petition for modification of support for an abuse of discretion. See Little v. Little , 193 Ariz. 518, ¶ 5, 975...
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