Court Opinion

ID: 9522021
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:16:57.005371+00
Date Added: 2024-06-11T13:02:13.135933
License: Public Domain

Dooley, J.,
¶ 44. concurring in part and dissenting in part. In this case, the majority reverses and remands the prospective child support order for a guideline deviation decision. Although I do not agree with the analysis that reached that conclusion, as discussed below, my first response is that there already was a deviation decision by the magistrate, and father failed to appeal it to the superior court. Thus, there is no valid reason why mother should face another deviation determination. Since this point, fully and clearly demonstrated by the record, should end this appeal without the unnecessary analysis of a complicated legal question, we should dismiss this appeal on that basis. I start with this point.
¶ 45. This child support dispute first went to the magistrate on father’s motion to modify the preexisting order, which was a “zero child support order.” The magistrate made a deviation determination not to change status quo based upon “neither party ha[ving] the current ability to pay child support,” and the record supports the family court’s affirmance of that decision. The magistrate’s decision on whether to modify the on-going child support was stated in ¶ 7 of his order:
Based upon the nominal child support figures produced from the guidelines the court determines the zero child support order should remain in place. While there has been a showing of a change in circumstances neither party has *419the current ability to pay child support to the other. Mother is the sole supporter of her household. Father has limited income but shares household expenses with his spouse.
Thus, the magistrate made his decision not to modify the existing zero-support order based on ability to pay irrespective of the guideline amount, as noted by the family court in upholding the magistrate’s decision. The issue the majority decides today was not the basis for either the magistrate’s or the superior court’s decision12 and thus cannot properly be the grounds for our decision.
¶ 46. The majority insists that the magistrate did not make a deviation decision. This position is belied by the provision in the magistrate’s decision quoted above, particularly in light of the transcript of the proceedings before the magistrate. The magistrate must have reached its decision based either on the guidelines, as possibly modified by our decision in Cantin v. Young, or on a deviation from the guidelines — there is no other choice. The magistrate did two alternative guidelines calculations in response to father’s motion to modify and rejected them both. Neither resulted in zero child support, the order the magistrate issued. Under the calculation that took into consideration the parties’ other dependent children, father would have been obligated to pay mother $26.65 per month. The magistrate decided to deviate from that amount and maintain the zero-support order, however, because “neither party has the current ability to pay child support to the other.”
¶ 47. The intention of the magistrate was fully explained on the record at the hearing on father’s motion to modify. At the conclusion of the March 8, 2011 hearing, the magistrate stated that it could “take a look at the various guidelines” but “this sounds like it’s a request for a deviation from the guideline.” The magistrate further explained as follows:
*420I don’t know that the guidelines fit particularly well with this type of scenario, but I think the best the Court can do is consider the parties’ financial resources and circumstances and the needs of the child, go through the various deviation factors and determine whether or not there should be any child support being paid to one party or the other.
Based on what I’ve heard, my — the Court’s inkling would be no, is that the order at zero probably should remain here. It appears that both parties’ incomes are at a minimal level, and so I don’t see how at this point one party would have the ability to pay support to the other and still maintain the household.
I do not believe it is possible to conclude, based on the oral analysis of the magistrate, that he made a decision based on the guidelines, and not on a deviation from the guidelines. The majority’s statement that it is reviewing “the guidelines analysis upon which the ■ magistrate’s [decision] . . . rested,” ante, ¶ 19, is plainly wrong.13
¶48. In the majority’s view, this was not a deviation decision because the magistrate did not use the word “deviate” in his written order and did not examine the factors contained in 15 V.S.A. § 659. There is no magic in the word “deviate.” The magistrate used the term “deviation” in its oral analysis, and the written rationale for his decision is inconsistent with a guidelines-based determination.
¶ 49. Whether the magistrate specifically itemized the factors for deviation in the statute is beside the point. The issue is not whether the court’s findings were sufficient to support its decision to deviate,14 but rather whether it did deviate. Plainly, it did. If the magistrate’s analysis was procedurally in error, the proper *421remedy was to appeal to the superior court on those grounds. It is undisputed that father never did that.
¶ 50. Finally, the majority states that the magistrate did not make a deviation determination because he promised that he would hold a hearing if he were to consider mother’s request to deviate from the guidelines. Again, the record does not support this interpretation of what occurred at the hearing. After the magistrate made the statement quoted above, mother’s attorney stated that if the magistrate “is considering a deviation whereunder my client is at risk of appearing to earn more than [father]” (emphasis added), then mother would want evidence presented on the income provided by father’s wife. The magistrate responded as follows:
Well, the way the Court will leave it is if the Court decides that there should be some child support obligation at least preliminarily owed by [mother], then the Court will set the matter over for a brief deviation hearing to hear any relevant evidence on that issue. If it does not, then the Court won’t need to hear any additional evidence on the deviation factors.
¶ 51. This statement, in conjunction with previous statements, plainly expresses the magistrate’s intention to deviate from the guidelines and to grant the request of mother’s counsel to take additional evidence on the income of father’s wife only if he preliminarily concludes that mother will have to pay child support to father. The magistrate’s conclusion is hardly surprising since both parents have low incomes of similar amounts and are each supporting two children in addition to the child at issue here.
¶ 52. The majority holds that this Court can still reach the guidelines question even though neither the magistrate nor the superior court made a guidelines determination. The magistrate was concerned that the guidelines do not “fit particularly well with this type of scenario” and found that “both parties’ incomes are at a minimal level” and no “party would have the ability to pay support to the other and still maintain the household.” While the majority may want to address the requirements of the guidelines in shared custody cases involving dependency disability benefits *422only to return the case for another deviation decision, the process is unfair to mother, who already has an unchallenged deviation decision.
¶ 53. In short, the magistrate has already made a deviation determination, the family division upheld that determination, and father did not challenge that decision here. We should not reach the guidelines issue that the majority resolves this appeal on, and we should not order a do-over deviation decision. This is my first ground of dissent.
¶ 54. Nevertheless, because the majority reaches the merits of the guidelines question, I will address it. In Cantin v. Young, 171 Vt. 659, 770 A.2d 449 (2000) (mem.),15 we adopted a general set of rules for determining how to allocate SSDI benefits paid directly to a child for purposes of determining the ongoing child support obligation of a parent. We concluded that the amount of the payment to the child should be considered income to the disabled parent and set off against that parent’s child support obligation. As we noted, other courts have adopted this approach, largely because it best approximates how the amounts would be allocated if they came from employment wages and were expended for child support.
¶ 55. Today’s result, however, is not commanded by our child support statute because the SSDI benefits paid directly to the child would not be considered income to the parent under the statutory definition. See 15 V.S.A. § 653(5). However derived, the benefits are income to the child rather than to either parent. See Hennagin v. Cnty. of Yolo, 481 F. Supp. 923, 924 (E.D. Cal. 1979) (citing 42 U.S.C. § 402(d)(1) for the proposition that “[tjhough the children’s entitlement to benefits is determined in part upon their father’s disabled status, it is the children and not the [disabled parent] who are entitled to the funds”). Our statutes do not specify how income to the child is properly credited.
¶ 56. The general rules in Cantin significantly benefit the parent being credited for the derivative benefit. The financial advantage to the SSDI benefit parent from treating 100% of the amount of the benefit as a child support credit will often far exceed any *423financial disadvantage that may result by treating that amount as income to the benefit parent. In fact, it is entirely possible that the advantage will be so great that it will eliminate any requirement that the benefit parent pay child support out of his or her direct income. This would be the circumstance in this case if there were not shared custody.
¶ 57. As a limit on this potential advantage, courts around the country have held that while the general rule can reduce a parent’s child support obligation to zero, it cannot create an obligation for the other parent to pay child support to the SSDI benefit parent. See Keith v. Purvis, 2007-CA-00495-COA (¶ 12), 982 So. 2d 1033 (Miss. Ct. App. 2008) (collecting cases from other jurisdictions); see also Rosenberg v. Merida, 697 N.E.2d 987, 991 n.7 (Mass. 1998) (holding that noncustodial parent’s support obligation is difference between guidelines support amount and credit for derivative benefits, except that when support obligation is less than amount of benefits, “the total support obligation is simply equal to the amount of the SSDI dependency benefits, and the noncustodial parent would not owe any additional amount”); Diehl v. Diehl, 913 A.2d 803, 807 (N.J. Super. Ct. App. Div. 2006) (noting that derivative benefit exceeding parent’s support obligation is gratuity and may not be credited against past or future support); Mask v. Mask, 620 P.2d 883, 885-86 (N.M. 1980) (reasoning that because federal regulations prevent custodial parents from recovering support arrearages from obligor parents’ Social Security payments, obligor parents should not be able to do same, and thus concluding that obligor spouse may obtain credit for derivative benefit only up to amount of child support obligation); R. Rains, Disability and Family Relationships: Marriage Penalties and Support Anomalies, 22 Ga. St. U. L. Rev. 561, 579 (2006) (noting that courts have “properly rejected” notion that noncustodial parent would get refund or rebate when derivative benefits exceeded child support obligation); T. Kricken, Child Support and Social Security Dependent Benefits: A Comprehensive Analysis and Proposal for Wyoming, 2 Wyo. L. Rev. 39, 79-80 (2002) (noting that courts consider amount by which derivative benefits exceed support obligation to be gratuity under equitable considerations); cf. Keefer v. Keefer, 239 P.3d 756, 759-60 (Ariz. Ct. App. 2010) (citing guideline providing that amount by which derivative benefits exceed child support obligation may not be treated as payment for arrears or future support).
*424¶ 58. In sum, the vast majority of courts around the country hold that the second step in the Cantin analysis does not permit an excess credit. The few cases to the contrary are based on specific statutory or regulatory language requiring a different result. See, e.g., Davis v. Davis, 2010 ND 67, ¶¶ 13-15, 780 N.W.2d 707.
¶ 59. The most common rationale for the majority rule is summarized in Keith, 982 So. 2d at 1037: “Social security benefits, to the extent that they exceed a non-custodial parent’s monthly support obligation, are equitably deemed a gratuity to the child.”. It is not based, as the majority explains, on a rationale that it would be a statutory violation for a custodial parent to pay child support to a noncustodial parent.16 The point of the rationale is to impose a limit on the financial advantage available to the SSDI benefit parent. Thus, it is fully applicable here.
¶ 60. The majority-rule courts have reached their decisions as part of the general rule of how SSDI benefits are used in calculating child support and not as a discretionary case-by-case determination of where the equities lie. See 15 Y.S.A. § 659. As far as I can determine, this decision makes us the first court in the United States to allow the SSDI credit excess to become a child support amount payable to the parent from whom the child’s SSDI allowance is derived without a specific statute or rule requiring this result.
¶ 61. The majority justifies its conclusion by relying on the fact that this is a shared custody case. I agree with the majority on how child support is calculated in a shared custody situation and why, but this case is about the allocation of a credit for a SSDI dependency payment directly to the child. The majority rule limits the financial advantage to the SSDI benefit parent irrespective of the custody arrangement. There is nothing special about shared custody for this purpose.
¶ 62. There is another significant reason why I cannot support the majority’s position. Mother’s obligation to pay child support to *425father derives from the second step in the process — the credit given to father for the dependent SSDI benefit paid directly to the child through mother as representative payee. In essence, mother is receiving the SSDI benefit on behalf of the child and paying it to father rather than to the child. This result undercuts mother’s ability to meet her legal obligations under federal Social Security law.
¶ 63. The SSA provides derivative benefits for dependent children of individuals entitled to Social Security benefits because of, among other things, a parent’s disability. 42 U.S.C. § 402(d)(1). Although the beneficiary is the child, payments on the child’s behalf may be made to a duly certified fiduciary called a representative payee, who is subject to detailed regulations governing use of the derivative benefits. A representative payee has a responsibility to use such funds “in a manner and for the purposes he or she determines” only for the benefit of the child and consistent with the child’s best interests. 20 C.F.R. § 404.2035(a) (2012). Payments certified to a representative payee are used for the benefit of the child if they are applied toward the child’s current maintenance, including expenses for food, shelter, clothing, medical care, and personal comfort items. Id. § 404.2040(a). Any amount remaining after proper expenditures must be conserved or invested on behalf of the child. Id. § 404.2045(a).
¶ 64. A representative payee must account for the use of derivative benefits in written reports submitted at least once a year. 42 U.S.C. § 405(j)(3)(A); 20 C.F.R. §404.2065. The regulations provide that “[a] representative payee who misuses [derivative] benefits is responsible for paying back misused benefits,” 20 C.F.R. § 404.2041(a), thereby “implicitly allowing for a claim by the beneficiary against the payee.” Grace Thru Faith v. Caldwell, 944 S.W.2d 607, 610 (Tenn. Ct. App. 1996). Further, funds misused by the representative payee may be treated as an overpayment to the representative payee. 20 C.F.R. § 404.2041(a), (f). Finally, representative payees who misuse derivative benefits are potentially liable in state tort actions and are subject to criminal liability for conversion. See 42 U.S.C. § 408(a)(5) (stating that representative payees who knowingly and willfully convert derivative Social Security benefits are guilty of felony and may be fined and imprisoned for up to five years).
¶ 65. As itemized above, federal law imposes serious legal obligations on representative payees accepting derivative Social *426Security benefits on behalf of others. Yet, the effect of the majority’s holding is to transfer the bulk of the derivative benefit in this case from mother, the representative payee, to father, who would not assume any of the federally imposed legal obligations placed on representative payees to ensure that the binds are used for the child’s benefit. In this sense, the majority’s holding undercuts mother’s ability to comply with her legal obligations under federal law with respect to the derivative Social Security funds entrusted to her for the benefit of the parties’ child.
¶ 66. In analogous situations, courts in other jurisdictions are divided on whether the doctrine of federal preemption precludes state courts from exercising jurisdiction to direct a representative payee’s disposition of derivative Social Security funds. Compare C.G.A. v. State, 824 P.2d 1364, 1367 (Alaska 1992) (concluding that trial court’s child support order conflicted with federal Social Security law by requiring mother as representative payee to remit monthly sum equaling delinquent son’s derivative Social Security benefit to state to cover youth center costs), Guardianship of Smith, 2011 ME 51, ¶¶ 13-14, 17 A.3d 136 (concluding that trial court’s order requiring father to deposit portion of son’s derivative benefit into joint bank account under control of son, mother, and father’s wife conflicted with federal Social Security statutes and regulations giving father as representative payee discretionary authority and responsibility to allocate derivative benefit to son), and Brevard v. Brevard, 328 S.E.2d 789, 792 (N.C. Ct. App. 1985) (noting that “the children and not the father are entitled to the [derivative] funds” and concluding that trial court had no authority to order those funds to be transferred from representative payee father to mother as child support for minor children), with Jahnke v. Jahnke, 526 N.W.2d 159, 162-63 (Iowa 1994) (concluding that trial court had authority to direct mother as representative payee to pay child’s attorney’s fees with child’s derivative benefit and place remaining funds in trust for parties’ child until he reached eighteen years of age), Catlett v. Catlett, 561 N.E.2d 948, 953-54 (Ohio Ct. App. 1988) (concluding that federal law did not preclude trial court from exercising its jurisdiction to direct representative payee’s use of lump-sum derivative benefit funds and that court did not abuse its discretion by requiring her to place those funds in trust for child), and Grace Thru Faith, 944 S.W.2d at 611 (concluding that federal law did not preclude trial court from adjudicating claims that representative payees misused derivative Social Security benefits).
*427¶ 67. Most of the cases wrestling with whether federal preemption precludes state court jurisdiction in such situations examine the scope and interaction of 42 U.S.C. § 407(a), which prohibits the attachment of Social Security benefits by any legal process, and 42 U.S.C. § 659(b), which excepts situations where legal process is used to enforce a legal obligation of the person receiving the benefits to provide child support. Those courts finding federal preemption have concluded that a child support order is a legal process and that § 659 does not override § 407 with respect to derivative benefits because the child, the owner of the benefits, does not have a legal obligation to provide child support. See, e.g., C.G.A., 824 P.2d at 1367 (holding that child support order was legal process prohibited by § 407 with respect to attachment of derivative Social Security benefits); Brevard, 328 S.E.2d at 792 (stating that § 659 does not apply as exception to § 407 with respect to derivative Social Security benefits because children are not individuals obligated to pay child support under state law). In our case, as in these cases, father is a claimant seeking payment for child support from derivative benefits to which the child is entitled. Cf. In re J.G., 652 S.E.2d 266, 272 n.4 (N.C. Ct. App. 2007) (holding that § 407 does not apply unless legal process results from action brought by creditor or claimant).
¶ 68. Whether or not the doctrine of federal preemption applies here is open to debate, but one thing is certain — once the family court crosses the line from offsetting derivative benefits against a child support obligation to requiring the recipient spouse to pay the obligor spouse the amount by which those benefits exceed the support obligation, it undercuts the recipient spouse’s ability to comply with the legal obligations set forth in federal Social Security law by effectively directing the representative payee’s use of those benefits and transferring the benefits to a spouse who has no legal obligation with respect to the funds under federal law. This is another reason why I do not join the majority’s holding that a credit for derivative benefits may extend beyond the amount of the child support obligation.
¶ 69. I do not find it determinative that the majority’s holding does not require the family court in this case either to direct the SSA to transfer part of the derivative benefit to father or to direct mother’s actual use of the monthly derivative benefit check. Money is fungible. By requiring mother to pay father the exact amount by which the monthly derivative benefit check exceeds father’s *428monthly child support obligation, the majority is effectively directing the use of the derivative funds from the person who has the legal responsibility for their use to another person with no such legal obligation.
¶ 70. Regarding father’s request that mother credit him for his share of the child’s $5780 orthodontic bill out of the $4370 lump-sum derivative benefit she received, I agree with the majority that Louko controls. In Louko, we permitted a credit for child support arrearages accumulated during the time of the disability out of a lump-sum derivative Social Security disability payment. 2011 VT 33, ¶ 16. Here, the $4370 lump sum represents the $190 in monthly derivative Social Security payments over a twenty-three-month period between the time father applied for benefits following his 2008 motorcycle accident and the time his request for benefits was granted in August 2010. The stipulated November 2008 child support order reduced father’s monthly child support obligation to zero during most if not all of that period — and thus he could not be credited for child support not paid during the period. The stipulated order, however, retained mother’s and father’s obligation to split evenly the cost of unreimbursed health expenses, which “are in the nature of child support.” In re Marriage of Casper, 593 N.W.2d 709, 714 (Minn. Ct. App. 1999) (quotation omitted).
¶ 71. Accordingly, I agree that father may obtain a credit for his share of the orthodontic expenses out of the lump-sum derivative benefit payment. I also agree with the majority’s conclusion that the record supports the family court’s decision not to find mother voluntarily underemployed.
¶ 72. For the reasons stated above, however, I do not agree that we should reverse the decision of the family court to uphold a zero child support determination by the magistrate. The magistrate clearly made a deviation determination, and father failed to properly challenge the grounds for that determination. The family court’s decision should be upheld on that basis.
¶ 73. If we reach the merits of father’s challenge, which I would not do, we should affirm the decision of the family court for the reasons I set forth above. Accordingly, I respectfully dissent from the majority decision.

 Neither the magistrate nor the superior court analyzed the issue on which the majority decides this case. At both levels, the court understood father to be arguing that the court should order that part of the dependent Social Security benefits be allocated to father; father’s filings raised the issue in that way. The way that father raised the issue obscured the obvious point that a determination under the guidelines or under Cantin v. Young was irrelevant under the rationale for the magistrate’s decision. I recognize that father was a self-represented litigant and his arguments should be treated with liberality, but I do not believe he properly preserved the issue.

 The majority’s statement is not correct. The magistrate never addressed the issue on which the majority renders its decision because, obviously, he did not believe that the issue was in the case before him. Thus, the Court is not reviewing the decision of the magistrate; it is rendering a decision on a ground that the magistrate never knew about.

 I note that magistrate proceedings are governed by Vermont Rule for Family Proceedings 8(b), which adopts the procedures in Vermont Rule for Family Proceedings 4, unless there is a specific procedure in Rule 8. In turn, Rule 4(a)(1) adopts the procedures in the Vermont Rules of Civil Procedure, absent a specific, conflicting procedure in that rule. There being no conflicting procedure in either *421family rule, Vermont Rule of Civil Procedure 52(a)(1) governs the court’s obligation to make findings. In the absence of a specific, timely request to make findings, the magistrate was under no obligation to do so. Id.

 I fully support the Cantin rule, but differ with the majority on the elements of the rule. As with any doctrine we adopt based on analyses in other jurisdictions, in Cantin we relied on the part of the doctrine applicable to the case before us. This case involves another aspect of the doctrine.

 As the majority notes, we stated in Louko v. McDonald, 2011 VT 33, ¶ 10, 189 Vt. 426, 22 A.3d 433, in a sole custody ease, that “[sjince the children’s benefits amount exceeded the amount of the monthly child support obligation, the payment amount was reduced to $0, and there is no debate about that.” The majority asserts that this statement was based on the rationale that the custodial parent could not owe child support to the noncustodial parent. In fact, because the point was not disputed, there is no rationale for the Louko statement.