State, CSED v. Green, S-7740.

• Decision Date: 30 July 1999
• Docket Number: No. S-7740.,S-7740.
• Citation: 983 P.2d 1249
• Parties: STATE of Alaska, DEPARTMENT OF REVENUE, CHILD SUPPORT ENFORCEMENT DIVISION, Appellant, v. Michael J. GREEN, Appellee.
• Court: Alaska Supreme Court

983 P.2d 1249

STATE of Alaska, DEPARTMENT OF REVENUE, CHILD SUPPORT ENFORCEMENT DIVISION, Appellant, v. Michael J. GREEN, Appellee.

No. S-7740.

Supreme Court of Alaska.

July 30, 1999.

Diane L. Wendlandt, Assistant Attorney General, Anchorage, and Bruce M. Botelho, Attorney General, Juneau, for Appellant.

Edward L. Miner, Ross & Miner, P.C., Anchorage, for Appellee.

Before: MATTHEWS, Chief Justice, COMPTON, EASTAUGH, FABE, and BRYNER, Justices.

OPINION

EASTAUGH, Justice.

I. INTRODUCTION

Without prior judicial approval, Michael Green paid a lump sum to the mother of his minor child, in part for the purpose of discharging his court-ordered past and future child support liability. When the mother began receiving public assistance for the child's benefit eighteen months later, the Child Support Enforcement Division (CSED) sought reimbursement from Green. The superior court credited Green's payment against his future child support obligation. Because Green's payment did not defeat CSED's independent statutory right to recover public assistance paid on behalf of his child, we reverse and remand.

II. FACTS AND PROCEEDINGS

A child, Becky, was born to Michael Green and Lori Burton in 1988.¹ Green and Burton never married.

In 1989 the superior court entered an interim child support order requiring Green to pay child support through CSED. On July 9, 1990, the superior court granted Burton sole legal and physical custody of Becky and increased Green's monthly support obligation to $625, to be paid through CSED. The $625 amount was calculated under Alaska Civil Rule 90.3.

On July 30 Green and Burton entered into a written "Settlement Agreement" in which Green agreed to pay Burton a lump sum of $54,000. Green also agreed to relinquish "all parental rights" to Becky, and to waive "all future claims to custody and visitation, and... the rights to receive notice of and consent to adoption." Burton agreed in exchange that the payment satisfied all amounts awarded for Becky's past and future child support and the award of medical insurance for Becky until she reached majority. The agreement was filed with the court, but it was never noticed for hearing or judicially approved. Burton received the lump sum in late July or early August 1990.

On August 3, 1990, the court entered findings of fact and a judgment of $14,087 against Green for attorney's fees, costs, and back child support. Burton was then receiving Aid for Families with Dependent Children (AFDC), and had been since 1989.

On August 9 Tracy Green, Green's wife, informed CSED of the agreement. CSED informed her that Burton was receiving public assistance. When Tracy Green called CSED on August 14, CSED indicated that it needed a copy of the settlement agreement to adjust Michael Green's account. Later that day CSED informed Tracy Green that Burton could not enter into an agreement with Michael Green if Burton was on public assistance.

When the Greens contacted CSED two weeks later, CSED agreed not to seek enforcement of the child support obligation, but advised that it could not close the case until Burton withdrew from CSED's services and ceased receiving public assistance. CSED contacted the Alaska Division of Public Assistance in late August to confirm that Burton was no longer on public assistance. Her public assistance payments ended in August 1990.

In September Tracy Green called CSED to determine the status of the case. CSED indicated that it could not adjust Green's account until a judge signed the settlement agreement. Green's counsel informed CSED in October that a judge's signature was not required, and sent CSED copies of the agreement.

Burton asked CSED in November what would happen if she reapplied for public assistance. CSED explained that it would normally pursue reimbursement from an obligor parent, but that the settlement agreement complicated her case. It told Burton that it would nonetheless try to collect any future public assistance debt, apparently from Michael Green, should Burton re-apply for public assistance. Burton withdrew from CSED's services soon thereafter.

Burton again began receiving AFDC benefits in January 1992. CSED soon sought reimbursement from Green. The public assistance ($821) paid monthly to Burton exceeded the monthly support obligation ($625) imposed against Green in July 1990. Green argued in response to CSED's collection efforts that his 1990 lump sum payment entitled him to a credit against his child support obligation. He asserted that the $54,000 lump sum payment was intended to satisfy not only future child support but also the $14,087 judgment entered against him on August 3, 1990. Subtracting the 1990 judgment from his 1990 lump sum payment, Green argued for a credit of $39,913. The superior court awarded Green a credit of $57,912 against child support payable after August 1, 1990. The amount of the credit represented the future value of $39,913.

CSED appeals.

III. DISCUSSION

A. Standard of Review

Whether Green is entitled to a credit against his child support obligation is a question of law we review de novo.² "Under this standard, it is our duty to adopt the rule of law that is most persuasive in light of precedent, reason, and policy."³ We also review issues of statutory interpretation de novo.⁴ There is no genuine dispute about whether Green made the lump sum payment, and no party claims that we should apply a clearly erroneous or other deferential standard in reviewing the superior court's decision.

B. Whether Any Part of the 1990 Lump Sum Payment Should Be Credited against CSED's 1992 Reimbursement Claim

CSED contends that Green's agreement with Burton cannot destroy his duty to reimburse the state for public assistance paid on his child's behalf. It argues that the trial court erred in giving effect to an agreement that was invalid and unenforceable under Alaska law.

Green argues that because he has already paid his future child support by making the direct payment to Burton, CSED can collect nothing more from him without violating AS 25.27.120(a), which limits his liability to CSED to "the amount of support provided for in the support order." Green argues that because his direct payment in 1990 exceeded his then-due child support, the excess had to be credited against his future child support obligation, including CSED's reimbursement claim that arose after public assistance payments resumed in 1992. He asserts that his right to a credit turns on the fact of his prepayment, not on the validity of his agreement.

Green's agreement may be illegal in whole or in part and therefore unenforceable because it attempts to avoid or limit parental responsibilities contrary to law. Burton purported to agree that the lump sum payment satisfied awards for all past and future child support for Becky, and any award for Becky's medical insurance, despite the possibility that Becky's needs might change or Green's income might increase. Green purported to agree to relinquish all parental rights, including all future claims to custody and visitation, to waive notice of adoption, and to consent to adoption. CSED correctly observes that this was an attempt to terminate Green's parental rights and obligations, and was therefore void. We have refused to recognize a termination of parental rights except in a statutory proceeding or a child-in-need-of-aid proceeding.⁵ By statute, a court in a separation, dissolution, or divorce proceeding "may not accept" a custodial parent's waiver of child support without proof that the custodial parent can support the child adequately.⁶

But it is not necessary to decide whether the terms of the agreement were enforceable against CSED or the child, because we agree with Green that the issue does not turn on the validity of the agreement. Instead, our inquiry focuses on three statutes: AS 25.27.120(a), which requires the obligor parent to reimburse the state for public assistance paid to the child; AS 47.25.345, which gives CSED an assignment to recoup those payments; and AS 25.27.020(b), which may give the obligor parent a credit for direct payments of child support. For the following reasons, we conclude that Burton's receipt of the direct payment did not defeat CSED's rights to seek reimbursement from Green.

1. AS 25.27.120(a) and AS 47.25.345

CSED enjoys both independent and derivative rights to seek reimbursement for public assistance. CSED's independent right to recover public assistance reimbursement from child support obligors is derived from Alaska case law and Alaska statutes. In Matthews v. Matthews,⁷ we noted that "[a] parent's duty of support encompasses a duty to reimburse other persons who provide the support the parent owes."⁸ In State, CSED v. Gammons,⁹ we noted that "the state is entitled to reimbursement for public assistance just as any other third party would be entitled to reimbursement."¹⁰

An independent right of recovery is created by AS 25.27.120(a). An obligor parent who "owes a duty of support" "is liable to the state" for public assistance paid to the child.¹¹ Green owed Becky a duty of support.¹² That duty existed whether or not Green had paid all support then owing. The duty of support does not end until the parental relationship is terminated. Alaska Statute 25.27.120(a) looks not to whether the obligor owes support, but to whether the obligor owes a duty of support. The statute imposes a duty that runs directly from the obligor to the state; it is not derivative of any rights the custodian or even the child might have to collect support. The statutory liability is for the amount of public assistance paid, or for the amount of child support ordered, whichever is less. The obligor's prepayment of court-ordered support without court approval does not reduce either measure of liability under subsection .120(a). Because CSED's right to recoupment under AS 25.27.120(a) is an independent right, Green could not defeat or diminish his direct...