Opinion ID: 2518798
Heading Depth: 4
Heading Rank: 1

Heading: Refusal to impute income to Marian based on her new spouse's wealth

Text: Glenn argues that the superior court erred in declining to consider the wealth of Marian's new spouse in calculating her child-support obligation. He relies chiefly on Rule 90.3(a)(4), which allows courts to impute potential income to an unemployed or underemployed parent: The court may calculate child support based on a determination of the potential income of a parent who voluntarily and unreasonably is unemployed or underemployed. A determination of potential income may not be made for a parent who is physically or mentally incapacitated, or who is caring for a child under two years of age to whom the parents owe a joint legal responsibility. Potential income will be based upon the parent's work history, qualifications, and job opportunities. The court also may impute potential income for non-income or low income producing assets.[ [6] ] As previously mentioned, the superior court keyed on the language in this provision that directs courts to base their calculation of potential income upon the parent's work history, qualifications, and job opportunities. [7] Glenn insists that the court interpreted this language too narrowly, contending that the court should have considered the totality of the circumstances in deciding how much potential income should be imputed to Marian. [8] Glenn points out that in 2002, before Marian remarried, the superior court determined that she was voluntarily underemployed and had the ability to earn a potential annual income of $52,700. Glenn further notes that by 2005, when Glenn moved to modify child support, Marian was married to John Clough and continued to be underemployed. In Glenn's view, Marian's situation had changed because her new spouse is a person of significant income and wealth, which, according to Glenn, enables Marian to enjoy an affluent lifestyle. Given these circumstances, Glenn reasons, Clough's wealth must be regarded as a factor enhancing Marian's potential income under Rule 90.3. Glenn bolsters this argument by citing our decision in Beaudoin v. Beaudoin , [9] as well as the commentary to Rule 90.3. [10] In Beaudoin, we noted that both Rule 90.3(a)(4) and our case law specifically require courts to consider the `totality of the circumstances' to decide whether income should be imputed. [11] In making this point, Beaudoin referred to the commentary to Rule 90.3(a)(4), which observes that [t]he court shall consider the totality of the circumstances in deciding whether to impute income. [12] Glenn further points to the commentary to Rule 90.3(c)(1)the unusual circumstances exceptionnoting that the commentary expressly recognizes that [a] parent who does not work because of the income of a new spouse (or other person in the household) may be assigned a potential income. [13] In addition, Glenn cites case law from other states. [14] Glenn claims that, because Marian Clough's imputed annual income of $52,700 is belied by her affluent lifestyle, the superior court abused its discretion in failing to examine how Marian actually lives and her actual expenditures since she remarried. In response, Marian rejects Glenn's claim that the superior court refused to consider her potential income under Rule 90.3(a)(4), insisting that the court properly applied this rule in the original child-support order by imputing annual income to her of $52,700. Marian describes Glenn's proposed totality of the circumstances approach to Rule 90.3(a)(4) as fundamentally inconsistent with Alaska law. Pointing to the plain language of Rule 90.3(a)(4) and case law applying the provision, Marian argues that Alaska courts have uniformly upheld the principle that the earning potential of the parent must be the basis for any child support award. We agree with Marian's understanding of Rule 90.3. The plain language of Rule 90.3(a)(4) unambiguously directs that [p]otential income will be based upon the parent's work history, qualifications, and job opportunities. [15] This language does not recognize any other permissible criteria to be used in calculating the amount of potential income to be imputed to an unemployed or underemployed parent under Rule 90.3(a)(4). Nor does the commentary to Rule 90.3 advance Glenn's totality of the circumstances theory. The commentary to Rule 90.3(a)(4) confirms the rule's express language declaring that work history and other related criteria will be the basis for calculating potential income. [16] The same commentary also observes that courts should consider the totality of the circumstances in deciding whether to impute income. [17] But this observation addresses only the manner in which they should make the threshold decision whether to impute potential income to an underemployed parent, not the manner in which they should determine the amount of potential income to impute once the initial decision to impute has been made. In effect, then, as Judge Collins correctly recognized, this commentary directs courts to the language of Rule 90.3(a)(4) for purposes of deciding how much potential income to impute. Beaudoin v. Beaudoin aligns with this view. There, we were required to decide whether potential income should be imputed to a parent who had previously been her children's primary caregiver and had never held a paying job. [18] We applied the totality of the circumstances approach to decide this threshold issue. [19] We did not suggest that the totality of the circumstances approach could be applied in determining the amount of an underemployed parent's potential income once the decision to impute had been made. Here, the superior court properly determined that Glenn had failed to establish grounds for imputing more potential income to Marian than the court had already found appropriate in 2001. On this point, Glenn essentially claimed that Marian's remarriage to a wealthy person amounted to a prima facie showing that Marian's potential income had increased. But in our judgment, the superior court properly concluded that the language of Rule 90.3(a)(4) bars direct reliance on a new spouse's wealth as evidence of increased earning potential. The court also correctly recognized that Glenn could have  but had not  moved to modify his support on the ground that Clough's wealth resulted in unusual circumstances justifying a variance under Rule 90.3(c)(1). While Glenn's discovery motion belatedly mentioned this theory, it inaccurately claimed that the theory had been raised in his earlier motion for modification. Actually, Glenn had previously disclaimed reliance on the unusual circumstances exception. Indeed, during the March 17, 2005, proceeding in which Judge Collins issued her on-record denial of Glenn's motion for modification, Glenn expressly stated that his motion was based exclusively on the potential income language of Rule 90.3(a)(4). Because the superior court correctly interpreted Rule 90.3(a)(4) to bar direct consideration of a new spouse's wealth as a basis for determining the amount of potential income to impute to a remarried parent and also correctly recognized that Glenn's earlier motion sought modification solely on this basis, we conclude that the court did not err in denying Glenn's motion to modify support in light of Marian's remarriage to Clough.