Opinion ID: 2513966
Heading Depth: 3
Heading Rank: 2

Heading: Issues Concerning Fees and Costs

Text: John challenges several of the superior court's orders concerning fees and costs. We review for abuse of discretion a superior court's order to pay another party's attorney's fees, expert fees, and other costs. [27] The trial court's discretion in awarding attorney's fees is broad and its decision will not be disturbed on appeal unless it is `arbitrary, capricious, manifestly unreasonable, or stems from an improper motive.' [28] The determination of which statute or rule applies to an award of attorney's fees is a question of law that we review de novo, adopting the rule of law that is most persuasive in light of policy, reason, and precedent. [29]
Attorney's fees are usually awarded under Civil Rule 82, which grants attorney's fees to the prevailing party in an action. However, divorce cases represent a well-established exception to this general rule. Attorney's fees in divorce cases are based on the relative economic situations and earning powers of the parties, rather than prevailing party status. [30] [T]he divorce exception to Civil Rule 82 `is based on a broad reading of AS 25.24.140(a)(1) [pertaining to an interim award of attorney's fees in divorce cases] ..., and on the reality that there is usually no prevailing party in a divorce case.' [31] Costs in divorce cases are treated like attorney's fees in that they too are exempt from the requirement that they be awarded in favor of the prevailing party.... [32] Although the superior court never explicitly referred to AS 25.24.140(a)(1) in awarding costs and fees, the parties agree that the court clearly utilized the divorce exception. John contends that the applicability of the divorce exception in non-divorce cases turns on how close the couple was to a marital unit. Because he and Kristeen had a one-month relationship, never lived together, and never jointly owned property, John argues that the court erroneously applied the divorce exception to this case. Kristeen counters that since she and John are litigating custody in the first instance, the divorce exception should apply regardless of whether or not the parties resembled a marital unit. We agree with Kristeen. We have held that the divorce exception should only be used in cases that closely resemble a divorce action or ... involve the kinds of issuessuch as the initial determination of custody and child supportthat generally arise in the immediate aftermath of a long-term relationship break-up.... [33] This is because it is of paramount importance that the parties be able to litigate on a fairly equal plane in disputes on these issues. [34] We have also determined that the divorce exception seems applicable when there is a short period of time between the breakup of the parties' relationship and the filing of the action [on] ... property division, child custody, and child support issues.... [35] Although John and Kristeen in no way resembled a marital unit (apart from having a child together), the issues involved in this case and the promptness with which it was filed look just like a divorce case. John filed a custody complaint only a few months after Noah was born, and the initial custody and support issues in dispute are the types of issues that generally arise in the immediate aftermath of a long-term relationship breakup, even though John and Kristeen did not in fact have a long-term relationship. Accordingly, the court did not err in applying the divorce exception to Civil Rule 82. [36]
Under the divorce exception, fees and costs are allocated based on the relative economic situations and earning powers of the parties.... [37] John maintains that the superior court's fee and cost allocations were error because the court used John's imputed income instead of his actual income when assessing the parties' relative economic situations. Again, we need not decide whether the superior court imputed John's income. The court had John's child support guidelines affidavit showing his gross annual income to be $78,396 and his net income to be $59,265.48. It also had Kristeen's income statements showing an annual gross income below $12,000, a net income below $10,000, and another son to care for. Regardless of whether the court used the $84,000 figure or the numbers from John's affidavit, the evidence clearly established that John's income was several times greater than Kristeen's. There was also evidence that John had a sizable bank account and the skills to earn a significantly higher income than Kristeen. The disparate economic situations and earning capacities of the parties justified the court's allocations of attorney's fees and the cost of Kristeen's psychological evaluation. [38] John contends that the superior court erred by allocating the custody investigator's costs to him in violation of Rule 90.6(i), which states that [f]ees and costs for a private custody investigator will be divided equally between the parties unless the court finds good cause to change this allocation. Custody investigators can be considered expert witnesses, [39] and we have concluded that costs for reimbursement of expert witnesses in divorce cases are to be treated the same as attorney's fees in being exempt from the prevailing party requirement of Rule 82. [40] Allocation of such costs can thus also be based on the relative economic situations and earning powers of the parties.... [41] The disparate economic situations and earning capacities of John and Kristeen therefore constitute sufficient good cause to justify the court's allocation of the custody investigator's fees to John.
John argues that the superior court had an obligation to require Kristeen to itemize her legal fees because there was no evidence of her actual fees and because John objected repeatedly to paying them. Kristeen is correct that John did not adequately raise this point below. John complained frequently about having to pay Kristeen's attorney's fees and about how high they were. He requested an itemization in an e-mail to his attorney, [42] and later stated (in his reply to Kristeen's opposition to his motions for reconsideration) that many of her counsel's fees were unreasonable and that I requested an itemization of his billings which I have not yet received. [43] However, John never made a motion in court seeking itemization. The absence of a specific cognizable request for itemization, [44] the superior court's broad discretion in awarding attorney's fees, [45] and the fact that it only awarded Kristeen sixty percent of her fees, combine to defeat John's argument. No itemization was required.
John asserts that the superior court's findings were insufficient because the court did not broach the subject of whether either party acted in bad faith before assessing litigation costs. A showing of bad faith, however, is only necessary in two circumstances. The first is in cases arising under AS 25.20.115, [46] which states that in an action to modify, vacate, or enforce ... an order providing for custody of a child or visitation with a child, the superior court can award fees and costs, though it must consider the relative financial resources of the parties and whether the parties have acted in good faith. This case is not one to modify, vacate, or enforce a custody order, however, and the applicable fees statute is not AS 25.20.115, but rather AS 25.24.140, which contains no similar faith requirement. In the principal case upon which John relies, in fact, we distinguished the requirements of the two statutes, stating that under AS 25.20.115 the parties' relative financial resources do not necessarily take primacy over the presence or absence of good faith, unlike under AS 25.24.140(a)(1). [47] The second circumstance can occur under AS 25.24.140(a)(1) when a court increases a party's attorney's fee obligation as punishment for act[ing] in bad faith or engag[ing] in vexatious conduct. [48] This case, however, does not involve an increased fee award. Because neither of these circumstances applies in this case, the superior court did not err in failing to make any findings concerning John's bad faith.