Court Opinion

ID: 4108985
Source: CourtListenerOpinion
Date Created: 2016-12-20 17:03:10.147319+00
Date Added: 2024-06-11T07:45:43.792207
License: Public Domain

IN THE
              ARIZONA COURT OF APPEALS
                           DIVISION TWO

                       IN RE THE MARRIAGE OF

                        CASSANDRA ALLEN,
                        Petitioner/Appellee,

                                   and

                            LYNN ALLEN,
                        Respondent/Appellant.

                      No. 2 CA-CV 2016-0079
                      Filed December 20, 2016

         Appeal from the Superior Court in Pinal County
                    No. S1100DO201300816
        The Honorable DeLana J. Fuller, Judge Pro Tempore

                 REVERSED AND REMANDED

                             COUNSEL

The Powell Law Firm, PLLC, Tucson
By Jay K. Powell
Counsel for Petitioner/Appellee

Susan M. Schauf, PLLC, Tucson
By Susan M. Schauf
Counsel for Respondent/Appellant
                    IN RE MARRIAGE OF ALLEN
                        Opinion of the Court

                               OPINION

Judge Staring authored the opinion of the Court, in which Presiding
Judge Howard and Judge Espinosa concurred.

S T A R I N G, Judge:

¶1           Lynn Allen appeals the trial court’s rulings denying him
a credit for the receipt of dependent child social security disability
benefits (“DSSD”) by his former spouse, Cassandra Quinonez. The
DSSD payments duplicated money Lynn had separately paid
Cassandra for child support. For the reasons that follow, we reverse
and remand for further proceedings.

                 Factual and Procedural Background

¶2           We view the record in the light most favorable to
upholding the trial court’s decision. Milinovich v. Womack, 236 Ariz.
612, ¶ 7, 343 P.3d 924, 927 (App. 2015). The parties married in 2011,
and had a child in April 2012. Lynn suffered a stroke in December
2012, and subsequently began receiving long term disability (“LTD”)
insurance benefits through an employer-sponsored plan as well as
social security disability income. Cassandra filed for dissolution in
May 2013. The court entered a support order in September, and
modified it in January 2014. The court entered a consent decree in
April 2014.

¶3          In January 2015, Lynn petitioned for modification of
child support, seeking an order requiring Cassandra, as “the
primary custodial parent,” to apply for DSSD for the child based on
Lynn’s disability, and for modification of Lynn’s support obligation
based on any change to Lynn’s income as a result of DSSD.1 In the
petition, Lynn also asserted the availability of DSSD reduced the
amount of Lynn’s LTD benefits and had caused him to be deemed to
have received overpayments that he was required to repay to the

      1The   statutory basis for DSSD benefits is 42 U.S.C. § 402(d).

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                     IN RE MARRIAGE OF ALLEN
                         Opinion of the Court

LTD insurer. He thus requested an order requiring Cassandra to
reimburse the insurer for support Lynn paid using his LTD benefits.

¶4          Pursuant to the trial court’s subsequent order,
Cassandra applied for DSSD on behalf of the child, and received a
retroactive DSSD payment of $14,200 covering the period of May
2014 to April 2015. She also began receiving $1,195 in DSSD for each
month starting with May 2015. Cassandra argued Lynn’s duplicate
payment was a nonrefundable overpayment under the Arizona
Child Support Guidelines, 2 and also that federal law 3 prohibited
transferring DSSD to Lynn or the insurer. Lynn argued the
Guidelines entitled him to credits for both DSSD and the support he
paid using his own funds, and demanded an immediate transfer of
the DSSD to permit him to repay the insurer.

¶5           The trial court concluded Cassandra had been
“enriched with the overpayments” and that there was “a flaw in the
policy,” but that it nevertheless had no authority to order Cassandra
to transfer the lump sum payment to Lynn. The court denied Lynn
judgment or any credit for the $14,200 lump sum payment, but
terminated child support nunc pro tunc to October 2015, and
entered judgment against Cassandra for five months of duplicate
payments Lynn had made after monthly DSSD commenced. Lynn
timely appealed. We have jurisdiction pursuant to A.R.S. § 12-
2101(A)(2).

                               Discussion

¶6          On appeal, Lynn argues the trial court erred by: 1) not
crediting him for the lump sum payment of derivative benefits
pursuant to Guideline 26(B); 2) granting judgment for reimbursement
of five monthly support overpayments when he had overpaid a total

      2See   A.R.S. § 25-320 app. § 26.
      3See 42 U.S.C. §§ 407(a) (exempting benefits from legal process),
1007(j) (prohibiting representative payee’s use of benefits “other
than for the use and benefit of” beneficiary); 20 C.F.R. §§ 404.2035
(responsibilities of representative payee), 404.2040 (acceptable uses
of benefits payments).

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                    IN RE MARRIAGE OF ALLEN
                        Opinion of the Court

of six months; and 3) terminating rather than modifying his support
obligation.

      Derivative Benefits and the Child Support Guidelines

¶7           The Guidelines were adopted by the Arizona Supreme
Court, pursuant to statutory requirement, to govern the
determination of “the amount of child support” based on “all
relevant factors.” A.R.S. § 25-320(D); see also Milinovich, 236 Ariz. 612,
¶ 8, 343 P.3d at 927. The Guidelines are intended “to establish a
standard of support for children consistent with their needs and the
ability of parents to pay, and to make child support awards
consistent for persons in similar circumstances.”             Milinovich,
236 Ariz. 612, ¶ 8, 343 P.3d at 927, quoting Engel v. Landman, 221 Ariz.
504, ¶ 38, 212 P.3d 842, 851 (App. 2009). We review the trial court’s
interpretation of the Guidelines de novo. Clay v. Clay, 208 Ariz. 200,
¶ 5, 92 P.3d 426, 428 (App. 2004). In doing so, we view the “plain
language” of the Guidelines “as the most reliable indicator of the
supreme court’s intent.” Milinovich, 236 Ariz. 612, ¶ 10, 343 P.3d at
927.

¶8           Guideline 26 provides in relevant part:

             Benefits, such as Social Security Disability
             . . . received by a custodial parent on behalf
             of a child, as a result of contributions made
             by the parent paying child support shall be
             credited as follows:

             1. If the amount of the child’s benefit for a
             given month is equal to or greater than the
             paying parent’s child support obligation,
             then that parent’s obligation is satisfied.

             2. Any benefit received by the child for a
             given month in excess of the child support
             obligation shall not be treated as an
             arrearage payment nor as a credit toward
             future child support payments.

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                   IN RE MARRIAGE OF ALLEN
                       Opinion of the Court

             3. If the amount of the child’s benefit for a
             given month is less than the parent’s child
             support obligation, the parent shall pay the
             difference unless the court, in its discretion,
             modifies the child support order to equal
             the benefits being received at that time.

A.R.S. § 25-320 app. § 26(B). The text of Guideline 26(B) governs the
application of the child’s derivative benefit, in this case DSSD, to the
obligor’s “child support obligation,” and in all cases requires the
benefit “for a given month” to be applied to the support obligation.
The term “child support obligation” is used throughout the
Guidelines, and refers to the monthly obligation calculated pursuant
to the Guidelines. See § 25-320 app. § 2(F) (“Monthly figures are
used to calculate the child support obligation.”).

¶9           Accordingly, the monthly child support obligation is
satisfied up to the amount of the benefit received for the same
month. See § 25-320 app. § 26(B)(1), (3). The Guidelines, however,
prohibit application of the benefit to any period other than the
“given month” for which it is received. § 25-320 app. § 26(B)(2).
This interpretation is consistent with the approach followed in Clay.
There, we instructed the trial court to determine “the dates covered
by” a lump sum payment of derivative benefits and apply it to the
support owed for the same period, which in that case had been
“reduced to judgments” for arrears. Clay, 208 Ariz. 200, ¶¶ 2, 9,
92 P.3d at 427, 429.

¶10          The language of Guideline 26(B) is mandatory, and
nothing in the text suggests it ceases to apply when an obligor pays
support using personal funds before the child receives derivative
benefits for the same time period, as is the case here. See § 25-320
app. § 26(B). To refuse to apply benefits under such circumstances
would require redefining the term “child support obligation” to
mean whatever amount is left over after first applying payments
from non-benefits funds, an interpretation not supported by the text
of the Guidelines. See § 25-320 app. §§ 8-10 (general provisions for
calculation of support obligation). And, Guideline 26 says nothing
about support payments made from an obligor’s personal funds. It
does not prohibit the application of such payments to arrears or

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                   IN RE MARRIAGE OF ALLEN
                       Opinion of the Court

future obligations; nor does it prohibit the reimbursement of such
payments.

¶11          Further, to the extent Clay suggests that no circumstance
exists in which an obligor may receive a refund of an alleged
overpayment, see 208 Ariz. 200, ¶ 9, 92 P.3d at 429, it is no longer an
accurate statement of Arizona law. Currently, A.R.S. § 25-527 allows
an obligor to seek reimbursement of excess support payments.4

¶12          It is also unclear whether Clay involved any
overpayment as a result of payments from the obligor’s personal
funds. There, the obligor was the subject of multiple “contempt
petitions” and “civil arrest warrants” for nonpayment of child
support over a period of many years, though the opinion is silent
about the extent of any payments the obligor may ultimately have
made towards his arrears. Clay, 208 Ariz. 200, ¶ 2, 92 P.3d at 427.
The decision to vacate the trial court’s judgment referred explicitly
to the fact that derivative benefits belonged to the child and could
not be transferred to the obligor. Id. ¶ 8. Clay thus highlights the
prohibition on direct transfer of benefits belonging to the child,
without confirming whether an overpayment existed; the court did
not address the issue of whether a refund is permissible when an
overpayment is created by payment of support using non-benefits
funds. See id.

¶13         Moreover, we agree with Lynn that applying a credit
for lump sum derivative benefits only when the obligor owes arrears
would create an incentive to incur arrears, and would punish
obligors with pending social security applications who keep their
support payments current. See In re Marriage of Stephenson & Papineau,
358 P.3d 86, 93-94 (Kan. 2015); Paulhe v. Riley, 722 N.W.2d 155,
¶¶ 21-23 (Wis. 2006). Our interpretation of Guideline 26 is consistent
with the public policy considerations behind the Guidelines, which
were adopted in part to establish support consistent with children’s
needs and parents’ ability to pay, as well as “[t]o make child support

      4Section
             25-527 became effective two months after the decision
in Clay. 2004 Ariz. Sess. Laws, ch. 105, § 1; Clay, 208 Ariz. 200,
92 P.3d 426.

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                   IN RE MARRIAGE OF ALLEN
                       Opinion of the Court

orders consistent for persons in similar circumstances.” § 25-320
app. § 1(A), (B); see also Cummings v. Cummings, 182 Ariz. 383, 385,
897 P.2d 685, 687 (App. 1994).

                Petition for Modification of Support

¶14          We review the trial court’s ruling on Lynn’s petition for
modification of support for an abuse of discretion. See Little v. Little,
193 Ariz. 518, ¶ 5, 975 P.2d 108, 110 (1999). A court abuses its
discretion when it “commits an error of law in the process of
reaching a discretionary conclusion.” In re Marriage of Williams,
219 Ariz. 546, ¶ 8, 200 P.3d 1043, 1045 (App. 2008).

Termination of Support

¶15          The duration of child support is governed by statute
and the Guidelines, which generally require support to continue
until the child is emancipated or reaches majority. A.R.S. §§ 25-320
app. § 4, 25-501(A). Here, Lynn argues support should be continued
so that any DSSD in excess of his recalculated monthly support
obligation can be applied to his share of the child’s medical expenses
for the same month. We agree. See Keefer v. Keefer, 225 Ariz. 437,
¶¶ 11, 14, 239 P.3d 756, 759-60 (App. 2010). Similarly, continuation
of the support order is necessary to govern the parents’ shared
responsibility for payment of medical expenses, and also the
schedule for claiming tax exemptions, consistent with Guidelines
9(A) and 27. § 25-320 app. §§ 9(A), 27. Thus, we conclude the trial
court erred by terminating support altogether, rather than
recalculating the amount.5

      5Cassandra   argues this issue is waived because Lynn failed to
object to termination in the trial court. At the hearing, however, the
court and parties discussed an order that DSSD would cover Lynn’s
monthly support obligation, and that the collection of support
through the clearinghouse should be terminated. On this record,
Lynn has not waived the right to assert this error in a timely appeal
from the court’s signed order, which was the first indication that
Lynn’s support obligation had been terminated entirely. Moreover,
the duty of support is paramount to all other obligations,

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                   IN RE MARRIAGE OF ALLEN
                       Opinion of the Court

Lump Sum Payment

¶16          With respect to application of the lump sum payment,
Lynn’s arguments to the trial court focused heavily on seeking the
immediate transfer of benefits funds that belonged to the child and
are exempt from legal process. See 42 U.S.C. § 407(a). Lynn has
neither argued nor cited authority suggesting repayment of a debt
incurred by a third party for support of a beneficiary is an acceptable
use of DSSD funds. See 20 C.F.R. § 404.2040(d) (use of benefits to
pay creditors allowed only for certain debts of the beneficiary). And
he appears to concede that even the non-Arizona cases he relies on
in seeking a general credit or refund do not support ordering the
direct transfer of the child’s DSSD. We thus agree with the trial
court’s conclusion that it lacked authority to order transfer of the
$14,200 lump sum payment to Lynn or the LTD insurer.

¶17          However, Lynn also argued he was entitled to credit for
both his personal support payments and the DSSD the child
received as a result of Lynn’s disability. The trial court determined
Cassandra had been enriched with the duplicate payments and that
the policy was flawed, but nevertheless concluded it had no choice
but to deny consideration for the lump sum payment that
duplicated Lynn’s personal support payments for May 2014 to April
2015. In so concluding, however, the court misapplied Guideline
26(B), which required each month of DSSD to be applied to Lynn’s
support obligation for the same month. See also Clay, 208 Ariz. 200,
¶ 9, 92 P.3d at 429. Pursuant to Guideline 26(B)(3), Lynn was
responsible for paying the small monthly difference between the
monthly support obligation and DSSD, leaving the bulk of his
personal support payments as a credit available to be applied to
future support obligations or reimbursed. The court’s denial of a
credit for Lynn’s personal support payments was incorrect as a
matter of law, and is therefore reversed.

§ 25-501(C), and we hesitate to consider this duty waived through
the actions of either parent.

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                   IN RE MARRIAGE OF ALLEN
                       Opinion of the Court

Monthly Payments

¶18          The trial court’s conclusion that Lynn was entitled to a
judgment for duplicate monthly payments provided Lynn with a
credit for both his personal support payments and the child’s DSSD
in accordance with Guideline 26. The decision to credit Lynn for
five months of duplicate payments despite finding six were
overpaid was, however, erroneous. The court should have credited
Lynn for six months of duplicate payments.

¶19          Our remand requires the trial court to determine the
appropriate remedy for Lynn. The ability to request reimbursement
of overpaid support pursuant to § 25-527(A) may provide Lynn a
remedy, although his entitlement to make such a request accrues
only after his support obligation is terminated.6 As discussed below,
it might also be permissible for the court to order Cassandra to
reimburse Lynn at this time by deviating from the Guidelines,
including through the entry of judgment.

¶20          Guideline 20(A) requires a court fashioning a support
order to “deviate” from the Guidelines and order a different amount
of child support “after considering all relevant factors” and
concluding certain specific criteria have been met. §§ 25-320(D),
25-320 app. §§ 3, 20. In order to deviate from the Guidelines, a trial
court must make written findings that “[a]pplication of the
guidelines is inappropriate or unjust” and that deviation is
consistent with the child’s best interests. § 25-320 app. § 20(A)(1)-(3).
The court must also indicate what the child support order would
have been both with and without the deviation. § 25-320 app.
§ 20(A)(4)-(5). Notably, “[a] deviation that reduces the amount of
child support paid is not, by itself, contrary to the best interests of
the child.” § 25-320 app. § 20(A)(2).

¶21         In Marriage of Stephenson, the Supreme Court of Kansas,
faced with facts very similar to those present here, and relying on a

      6 In light of the child’s age, Lynn’s support obligation is
unlikely to terminate until many years from now when the child
reaches majority or becomes emancipated. See § 25-501(A).

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                    IN RE MARRIAGE OF ALLEN
                        Opinion of the Court

similar guideline permitting deviation, held a trial court may order
repayment of overpaid support “from funds that are discrete from
[the child’s] benefits.” 358 P.3d at 99-100; see also Hamilton v. Reynolds,
5 N.E.3d 1053, ¶¶ 37-42 (Ohio Ct. App. 2013) (affirming trial court
order to reimburse overpaid support in monthly installments
determined after consideration of parties’ finances). We agree and
conclude that in such circumstances a court “might adjust an
obligor’s support obligations, require reimbursement of the
duplicative payments from funds that are discrete from [the
derivative] benefits, or fashion some other equitable remedy
permitted under applicable federal statutes and regulations.”
Marriage of Stephenson, 358 P.3d at 100.

¶22         We therefore conclude the issuance of a judgment and
order for Lynn’s repayment are permissible provided the trial court
makes requisite findings based on the consideration of “all relevant
factors.” See §§ 25-320, 25-320 app. §§ 3, 20. In addition to
consideration of the parties’ financial resources, relevant factors in
this case may include the fact Cassandra was warned she might
ultimately be required to reimburse Lynn for support payments
duplicated by DSSD. See Hamilton, 5 N.E.3d 1053, ¶¶ 33-34 (affirming
judgment in part because obligee was “clearly on notice that she
may have to allocate resources” to reimburse obligor).7

                             Attorney Fees

¶23           Lynn requests an award of costs and attorney fees on
appeal and in the trial court pursuant to A.R.S. § 25-324 and Rule
21(a), Ariz. R. Civ. App. P. Lynn claims Cassandra has been unjustly
enriched by receiving duplicate payments, and that she acted in bad
faith by failing to immediately disclose her receipt of the lump sum
payment and for allegedly spending it in violation of the trial court’s
orders not to do so. These arguments involve Cassandra’s behavior
before the trial court, and have no bearing on the reasonableness of
her positions on appeal. Moreover, we lack current information

      7This opinion should not be construed as directing the trial
court to fashion any particular remedy on remand. We leave that
determination to the trial court.

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                  IN RE MARRIAGE OF ALLEN
                      Opinion of the Court

sufficient to permit us to consider “the financial resources of both
parties” in order to award fees on appeal pursuant to § 25-324(A).
See Countryman v. Countryman, 135 Ariz. 110, 111, 659 P.2d 663, 664
(App. 1983) (appellate court may award fees under § 25-324 when
record is sufficient to consider parties’ financial resources).
Accordingly, we decline Lynn’s request for fees at this time. We do
not, however, constrain the trial court from considering his request
for appellate attorney fees on remand. Lynn is, however, entitled to
costs on appeal pursuant to A.R.S. § 12-341, subject to compliance
with Rule 21.

                           Disposition

¶24          For the reasons discussed above, we reverse the trial
court’s ruling terminating support and ordering judgment against
Cassandra, and we remand for further proceedings consistent with
this opinion.

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