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Perry v. Perry

Supreme Court of Alaska

September 27, 2019

KYOKO PERRY, Appellant,
v.
ADAM PERRY, Appellee.

          Appeal from the Superior Court of the State of Alaska, No. 3AN-17-05581 CI Third Judicial District, Anchorage, Herman G. Walker, Jr., Judge.

          Justin R. Eschbacher, Law Offices of G. R. Eschbacher, Anchorage, for Appellant.

          Brian H. Starr, Anchorage, for Appellee.

          Before: Bolger, Chief Justice, Winfree, Stowers, Maassen, and Carney, Justices.

          OPINION

          CARNEY, JUSTICE.

         I. INTRODUCTION

         A wife appeals two issues following her divorce. She argues that the superior court erred when it classified a portion of her student loan debt as non-marital. She also argues that the court improperly calculated the parties' income for child support purposes. Because the superior court applied the wrong legal standards to determine whether the student loan debt was marital and to calculate the parties' incomes for child support purposes, we vacate the superior court's final property distribution and child support orders and remand for the court to conduct the proper legal analysis.

         II. FACTS AND PROCEEDINGS

         A. Facts

         Adam Perry and Kyoko Perry married in November 2005 and have two minor children. For the latter part of their marriage, Kyoko handled the couple's finances.

         Kyoko continued her education while married, obtaining a bachelor's degree and a master's degree and incurring approximately $ 84, 000 in debt. The superior court found that she incurred $30, 500 of the debt for the bachelor's degree and the remaining $53, 500 for her master's degree. Adam was aware that Kyoko was attending school and taking out loans to pay for it; it is less clear whether he knew the type of degree or the amount of loans. Kyoko testified that she obtained a master's degree so she could defer her loan payments while Adam was temporarily unemployed. She stated that she feared they could not afford the loan payments while Adam was out of work. Adam decided to leave his job and was temporarily unemployed for a period of 34 days in early 2015, around the same time that Kyoko's student loan payments began.

         Adam filed for divorce in March 2017. He and Kyoko continued to live together in the marital home until June 2017, when Adam moved to his father's home. He kept possessions at the marital home for another month and continued to "com[e] and go[] as he pleased" until late August. The children were primarily in Kyoko's physical custody between June and August.

         B. Proceedings

         In July 2017 Adam moved for interim child support. In the child support affidavit accompanying his motion, he listed his gross income as $41, 884 and Kyoko's as $86, 543. He based his calculation on the parties' 2016 W-2s and Permanent Fund Dividends. Kyoko opposed the motion, but the superior court took no action before the trial.

         Trial was held in September. At trial Adam testified that his salary was $52, 000 a year. Kyoko testified that she made roughly $4, 400 per month and her trial brief listed her salary as $76, 000, not including bonuses.

         The court issued its initial property division order on January 24, 2018. In it the superior court found that Adam earned approximately $51, 000 per year and Kyoko approximately $76, 000 per year. The court acknowledged that Adam was aware that Kyoko was in school and incurring debt. The court classified the entire $84, 000 student loan debt as a marital debt, but declared Adam responsible only "for half of the $30, 500 debt for the first degree." The court appears to have divided the student loan debt unequally because Kyoko "dissipated marital assets" by pursuing her master's degree, apparently not believing she needed to do so when Adam was unemployed for only 34 days.[1] Finally, the court concluded that there was "no reason to deviate from the 50/50 presumption" to divide the marital estate. The court noted, however, that because it had designated the whole student loan debt as marital, there would be "an impact on the marital distribution." To counteract this impact, it would grant Adam "more of the cash assets" and divide the property equally.

         The next day the superior court issued an interim child support order, using the draft order and income amounts submitted with Adam's earlier motion - $41, 884 for Adam and $86, 543 for Kyoko. Instead of using the income amounts in the property division order issued a day earlier, the superior court relied upon the amounts in the parties' 2016 W-2s, which were roughly $10, 000 less for Adam and roughly $10, 000 more for Kyoko.

         Both parties then filed motions to reconsider. Adam's motion sought reconsideration of the property division based on the court's inconsistent treatment of the student loan debt, stating that the court contradicted itself by declaring the whole debt as marital but only treating $30, 500 as marital. Kyoko also objected to the court's treatment of the student loan debt and argued in addition that it had used incorrect income figures to calculate child support in the interim order. She argued that the court should have used the amounts in its property division order, which were based upon more current evidence from trial. She attached a proposed child support order to her motion, using the income figures in the property division order, and estimating adjusted incomes of $43, 223.60 for Adam and $48, 474.96 for Kyoko.[2]

         The superior court held a status hearing on the motions to reconsider in February 2018. During the hearing the court advised the parties of its intent to rely on the child support calculations in Kyoko's motion to reconsider unless Adam objected. Adam conceded during the hearing that ...


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