Opinion ID: 1219332
Heading Depth: 2
Heading Rank: 2

Heading: Interim Child Support Arrearages

Text: In its final decree, the trial court ordered Alton to pay Lee Ann $275 per month for interim child support arrearages which had accumulated from April 1, 1986 until the date of trial. The court found that Alton had not made any payments and that an arrearage existed in the amount of $26,100. To this, the court added $3,654 in prejudgment interest (12% per year) pursuant to AS 47.23.025, [2] for a total child support arrearage of $29,754. The court then assessed postjudgment interest at 12% per year pursuant to AS 47.23.025. Alton challenges the interest assessments. In Morris v. Morris, 724 P.2d 527, 530 (Alaska 1986), we held that prejudgment interest may be awarded in divorce proceedings. The recognized purposes of awarding prejudgment interest are to compensate the successful party for lost use of the money and prevent unjust enrichment of the unsuccessful party who had use of the money. Id. at 529-30. The decision whether to award prejudgment interest in a particular divorce action is within the discretion of the trial court. Id. at 530. We find that the trial court did not abuse its discretion by awarding it in this case. The trial court, however, erred with respect to the rate of prejudgment interest. Alaska Statute 47.23.025 allows for 12% interest per year on child support payments. In context, this is limited to payments under a support order for which the statute requires notice that child support payments are 10 or more days overdue... . AS 25.27.020(a)(2)(C). Here the trial court awarded 12% interest on the entire amount, without distinguishing the portion of the award representing Alton's reimbursement for the debt he incurred by not paying his fair share of child support expenses following the separation but before entry of the interim award. See Matthews v. Matthews, 739 P.2d 1298 (Alaska 1987). The award for that period is not a child support payment within the meaning of AS 47.23.025, and 12% interest should not have been added to it. Instead, interest should have been assessed at 10.5% pursuant to AS 09.30.070. [3] The award of postjudgment interest should have been similarly split. Only arrearages accrued after the interim award can be considered child support payments and hence subject to 12% interest through AS 47.23.025. The arrearages based on the retroactive portion of the award should have been treated as a debt and subject to postjudgment interest at a rate of 10.5%.