Opinion ID: 1119568
Heading Depth: 3
Heading Rank: 2

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

Text: 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.
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 liability to CSED by paying Burton directly. By contrast, AS 47.25.345 gives CSED a derivative right to recoup public assistance payments by assigning to the state the public assistance recipient's support rights. [13] Under that statute, an AFDC applicant is considered to have assigned [to CSED] all rights to accrued and continuing support that the applicant and other persons for whom assistance is sought may have from all sources. [14] This statutory assignment terminates when the applicant ceases to receive assistance. [15] Section .345 had the effect of assigning to CSED Burton's and Becky's rights against Green. Courts elsewhere have held that agreements between parents do not defeat the state's right to reimbursement and that the state's assigned rights are not limited by the acts of the AFDC recipient. [16] But we do not need to consider that issue here. Even assuming that Green's direct payments impaired CSED's derivative rights (those derived through Burton under AS 47.25.345) to enforce the 1990 child support order against Green, and ignoring the question whether Burton's acts could impair rights derived through the child, CSED's independent right continues. Because CSED's independent right to recover AFDC payments under AS 25.27.120(a) is separate from CSED's derivative right to recover under AS 47.25.345, Burton's receipt of the lump sum payment did not defeat or diminish CSED's recoupment claim. Green's duty to reimburse the state under AS 25.27.120(a) was not affected by the prepayment. Rather, Green's direct liability simply depended on the existence of the duty to support his child. We need not consider whether circumstances could both defeat CSED's derivative section .345 right and also make it inequitable for CSED to rely on its independent subsection .120(a) right. (Consider, for example, an obligor who makes payments directly to the obligee with CSED's permission, in extremis, or under an arrangement adequately protecting the child's interests.) There was no judicial determination that Green's arrangement was in Becky's best interests. [17] Other courts have reached similar conclusions. In State ex rel. Phipps v. Phipps, [18] the Iowa Supreme Court held that a dissolution decree releasing a father from future support payments did not prevent the state from seeking reimbursement for AFDC payments made by the state to his child. [19] Like Green, the father in Phipps argued against reimbursing the state based on an agreement purporting to relieve him of child support. [20] The court held that the Iowa statute authorizing the state to seek public assistance reimbursement established an independent remedy, and that the state was therefore entitled to recover in its own right without regard to the terms of support orders affecting the parents' rights and obligations. [21] In In re Marriage of Walje, [22] the court required an obligor to reimburse the state for public assistance paid on behalf of his children when the obligor paid support directly to the custodial parent and children, and not through the court trustee as the decree required. [23] The court recognized that this result required the obligor to pay twice. In State ex rel. D.H.S. v. Hartless, [24] the court held that an obligor's payments to the custodial parent did not discharge the obligor's debt to the state for public assistance paid for his children. [25]
Green argues that CSED should have given him credit for his lump sum payment, in accordance with CSED's own policies. CSED Policy No. 8071.4 provides: Direct payments. After the obligor is ordered to make payments through CSED, the agency may not consider direct payments made to the obligee or the obligee's custodian unless the obligor provides clear and convincing evidence of the payment. Upon receipt of such verification, CSED will credit the account. CSED Policy No. 8054.1 provides in pertinent part: The Division will review written statements from the payee which verify receipt of direct payments, either crediting for support paid during specified time, dictating a specific dollar amount received, or providing for a visitation credit. CSED argues that these policies do not apply if the state is paying public assistance. A CSED representative testified that these policies apply to non-AFDC cases, and that she would not expect the Green case to be handled as a normal case. These policies appear to derive from AS 25.27.020(b), which Green's brief does not discuss. This statute provides that in determining the amount an obligor must pay to satisfy the immediate duty of support, the agency shall consider payments made by the obligor directly to the obligee. [26] But if the obligor has been ordered to make payments through CSED, the evidentiary standard changes. In that event, CSED may not consider direct payments unless the obligor provides clear and convincing evidence of the payment. [27] CSED argues that giving credit makes sense when there is no public assistance debt because, in that case, the person to whom the money is owed gets paid. We conclude that AS 25.27.020(b) and the two CSED policies cited by Green do not automatically apply to cases governed by AS 25.27.120(a), where CSED is not collecting support on behalf of a custodial parent, but instead seeks to recoup public assistance. In the AFDC reimbursement context, CSED need not determin[e] the amount of money an obligor must pay to satisfy the immediate duty of support. [28] Rather, it only needs to look at the amount of public assistance paid and the amount of support provided for in the court order. [29] Alaska Statute 25.27.120(a) does not acknowledge a third contingency, i.e., whether the obligor made any direct payments to the obligee parent. At a minimum, an obligor attempting to defeat a CSED claim to recover public assistance cannot claim credit for direct payments made without judicial or CSED approval. Any possible tension between AS 25.27.020(b) and AS 25.27.120(a) can be resolved by reading subsection .020(b) to be inapplicable to a CSED claim to recover public assistance. The words immediate duty of support found in subsection .020(b) support this reading, because they imply that subsection.020(b) addresses amounts to be spent directly and currently for the child's support, rather than amounts to reimburse the state for payments it made to support the child in the past. We think this is the most natural and logical interpretation of the provision. That reading is consistent with the reading CSED gives to subsection .020(b) and the CSED credit policies discussed above. We give serious weight to this interpretation in accordance with the rule that administrative agencies are given wide latitude when they are interpreting statutes they have been charged to administer. [30] That reading is also consistent with the policies that seem to underlie AS 25.27 and the reimbursement requirement: first, that private agreements, unless approved by the agency, do not defeat the right to reimbursement and the state's duty to recover AFDC payments it makes to the obligee parent; [31] second, that a court support order should be enforced per its terms, and not be unilaterally modified by the parents or CSED; and third, that parents support their children. Green also relies on 15 Alaska Administrative Code 125.110(b). [32] He argues that a federal regulation, 45 C.F.R. 302.51(b)(5), mandates the Alaska regulation. [33] He seems to argue that if he had paid the lump sum to CSED, these regulations would have obliged CSED to pay the excess (after satisfying arrearages, the judgment, and his then-current obligation) to Burton. This would have given the same result reached by his direct payment. But neither regulation could apply here, because Green did not pay through CSED, despite the 1990 order requiring him to do so. The regulations provide no basis for defeating CSED's reimbursement claim here. Moreover, they do not state or imply that any part of the excess paid over to the obligee would excuse the obligor from any duty to repay public assistance paid in the future. The dissent reasons that our interpretation of AS 25.27.120(a) would effectively require the obligor to pay twice and that the resulting double payment would violate subsection .120(a)'s mandate that the obligor's liability not exceed the amount of support provided for in the support order. [34] We do not read subsection .120(a) to address double payments; it simply preserves the state's right to a single recovery of AFDC assistance. Nor does this result require the obligor to pay twice. The statute did not require Green to make the unauthorized direct lump sum payment. It requires only one payment, and Green would have satisfied that requirement if he had paid CSED directly, as the court had ordered. The only protection subsection .120(a) offers Green pertains to the extent of his liability to repay public assistance. And it simply limits his reimbursement liability to the amount of support provided for in the support order. [35] It looks to the terms of the order, not to the terms of a side arrangement between the obligor and obligee. That protection does not help Green because his prepayment did not alter the amount of support the court ordered. Green could have asked the court to modify the support order to reflect his prepayment. Whether the court would have done so after considering the child's interests is unknown, given the amount at stake and the danger its premature exhaustion would prejudice Becky. But Green chose not to seek court approval or a reduction of the support order. He will get all the protection the statute requires if his reimbursement duty is based on the support amount the court ordered. There is also no reason to think that Green's prepayment triggered the limitation in subsection .120(a). Green's prepayment did not address any reimbursement duty Green might have for assistance that might be paid in the future. By paying directly, he took the chance Burton might again receive assistance someday, thus exposing Green to additional liability under subsection .120(a). His prepayment to Burton could not discharge a future obligation Green might have to the state. We do not think that Green's statutory liability to CSED leads to an unfair result. He chose a course that risked premature exhaustion of money needed to support his child. He took the chance his child would again require AFDC. He could have, by various measures, guaranteed that the amount he prepaid would be available to support Becky for the full term of the court order. By not doing so, he put her at risk and increased the risk the state might have to pay public assistance in the future. Moreover, even if AFDC were not involved, absent modification of the support order, a parent who prepays arguably continues to owe the child a support duty which the child can enforce if the obligee parent improvidently exhausts the prepayment. The course Green chose inherently exposed him to the danger he might have to pay more than if he had simply paid the support in the manner the court ordered. Finally, there is no reason to decide in this case whether CSED's active involvement in approving or accepting a prepayment might give the obligor other legal or equitable defenses.