2006-329, 2006-334, I/M/O State of NH and Estate of Frank Crabtree, III; I/M/O Katherine Crabtree & a.

In these appeals, the respondent, Estate of Frank S.

for the respondent. Gawryl & MacAllister, of Nashua (Janine Gawryl on the brief and orally),

for the New Hampshire Division of Child Support Services. general, on the brief, and Elyse S. Alkalay, assistant attorney general, orally), Kelly A. Ayotte, attorney general (Karen A. Schlitzer, assistant attorney to press. Errors may be reported by E-mail at the following address:

IN THE MATTER OF KATHERINE CRABTREE AND ESTATE OF FRANK S.

IN THE MATTER OF STATE OF NEW HAMPSHIRE AND ESTATE OF FRANK S.

2006-334 editorial errors in order that corrections may be made before the opinion goes Nos. 2006-329 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Hillsborough-southern judicial district Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

argued that because his children received monthly benefits in excess of the dependency benefits his children were receiving. Among other things, he ongoing and past due child support obligations based upon the Social Security p. 2 2004, the date of service.

Crabtree asserted his right to have the division give him credit toward his not address that arrearage. Both modifications were retroactive to October 5, decision in In the Matter of Angley-Cook & Cook, 151 N.H. p. 2 257 (2004), Crabtree’s disability. arrears on his obligation to Slade, the new order pertaining to Slade’s child did In response to the division’s collection actions, and in reliance upon our month for the support of his child with Slade. Although Crabtree was in agreement” for the support of his children with Katherine and to pay $50 per Bank of America checking account. Crabtree’s own direct Social Security disability benefits; and (2) its lien on his issue here are two collection actions: (1) the division’s garnishment of to collect both his ongoing child support obligations and his arrearages. At support obligations, the division began taking various actions against Crabtree Shortly after the trial court approved the modifications of Crabtree’s child

dependency benefits and began receiving monthly benefit checks due to Crabtree’s children received lump-sum payments of retroactive Social Security a lump-sum payment of retroactive benefits. At the same time, all three of Crabtree to pay $50 per month plus an arrearage “to be determined by June p. 2 2005. He received his first monthly benefit check that month, along with orders modifying Crabtree’s support obligations. Specifically, the court ordered filed for disability.” In May 2005, the trial court approved uniform support that his circumstances had changed because he was “unemployed and [had] 2004, he moved to modify both of his child support orders, informing the court Slade specifically asked the division to enforce her child support order. benefits, he was also seeking to reduce his child support obligations. In July At the same time Crabtree was pursuing Social Security disability

applied for Social Security disability insurance benefits, which were awarded in Crabtree became disabled and unable to work in November p. 2 2003. He

through the New Hampshire Division of Child Support Services (division), and collect child support to the State. Crabtree’s obligation to Slade was payable (Temporary Assistance to Needy Families) benefits, she assigned her right to Katherine and one child with Slade. Because Katherine received TANF Crabtree and $70 per week to Reba Slade. Crabtree had two children with was under court orders to pay child support of $101 per week to Katherine The record supports the following. At the beginning of p. 2 2003, Crabtree

division].” As authority for the order to withhold and deliver, the division cited

withheld property or money that is not exempt from attachment, to [the days, the division would “demand that BANK OF AMERICA, N.A. deliver all make satisfactory arrangements to pay the stated arrearages within twenty

$1,467 per month. hearing on his [motion].” Crabtree’s monthly Social Security benefit was

possession that is due, owing or belonging to [him],” and that if he did not

be able to access $1,500 per month to pay for his own living expenses pending

the notice of lien and an “order to withhold against all money . . . in [its] 2006)). The notices also informed Crabtree that his bank had been served with liens arose under RSA 458:17 (2004) (current version at RSA 461-A:14 (Supp. division served him with two notices of lien. According to those notices, the November 3, 2005 showed the funds being returned to his account.” After the trial court reinstated the lien on Crabtree’s bank account, the 2005 showed the levy of $4,673.62 [and] [a] further transaction posted on

hearing, the trial court reinstated the lien, with the proviso that Crabtree “shall his bank account. In an order dated November 8, 2005, issued following a taking further collection actions against Crabtree and vacated the lien against motion that gave rise to this appeal, the trial court restrained the division from By ex parte order dated November 3, 2005, and issued in response to the

December 12, 2005 account statement, “a transaction posted on October 21, he was subject to a fifty-dollar service charge. According to Crabtree’s was required to charge his account for up to the amount of the levy, and that $6885.36 naming [him] as judgment debtor.” The letter also said that the bank that it had “been served with a tax levy/child support notice in the amount of By letter dated October 21, 2005, the Bank of America informed Crabtree

modify his child support obligations. contested both arrearages and requested administrative review. However, neither Crabtree nor the division ever requested the trial court to collection by administrative offset and/or federal tax refund offset. Crabtree of those obligations, the letters discussed referral to the federal government for $14,006 TANF arrearage and a $3,190 non-TANF arrearage. As to enforcement In two letters dated October 19, 2005, the division informed Crabtree of a

$10,311.24 owed to Katherine. Crabtree with affidavits of arrearages reflecting $6,735.36 owed to Slade and demonstrate that in August 2005, the division’s office of child support provided The relevant facts concerning the lien on Crabtree’s bank account

obligations and arrearages were effectively satisfied by those benefits. amount he was obligated to provide in child support, his ongoing support bank. p. 4 Subsequently, Crabtree also filed an

levy in the sum of $2,873.70. These funds are still on hold at the authority”; and (3) the division’s lien on his bank account was unlawful. a second transaction was posted on November 18, 2005 showing a Security benefits to pay his child support obligations was “without legal those funds on November 3, 2005. The evidence also showed that account of those benefits; (2) the division’s garnishment of his direct Social sum of $4,673.62 on October 21, 2005 and [the division] returned

costs. This appeal followed. The court also denied Crabtree’s request for bank charges, attorney’s fees and

his arrearages. Regarding the lien, the court explained: division has yet served the bank with a demand to deliver the withheld funds. Security dependency benefits toward either his ongoing support obligations or support orders, he was not entitled to any credit for his children’s Social payments of $50 per month and until he sought judicial modification of those

entitlement to a dollar for dollar credit toward his child support obligations on lien, Bank of America forwarded [a] check to [the division] in the were withdrawn at the direction of [the division]. As a result of the the lien on his bank account. no evidence to support the petitioner’s contention that the monies monies in the respondent’s Bank of America account. There was [The division] was within its right to have a lien placed on the

funds that are “on hold,” and it does not appear from the record that the

modification, Crabtree was subject to two support orders, each requiring After a hearing, the trial court ruled that in the absence of any judicial children’s receipt of Social Security dependency benefits coupled with his substantially more than the court-ordered $50 per month per order, due to his arrearages (if any).” In that motion, Crabtree argued that: (1) he was paying the arrearage he owed Slade, the balance of which was more than covered by were sufficient to eliminate all of the arrearage he owed Katherine and some of children’s dependency benefits covered his ongoing obligations to them and child support from his Social Security benefits in which he argued that his

record contains no further information regarding the precise status of the bank, and have not yet been disbursed to the State of [New Hampshire].” The $2,837.70.” As of February 13, 2006, “those funds [were] still on hold at the

“verified motion for ex parte injunction, accounting and to determine The trial court order that gave rise to this appeal resulted from Crabtree’s

indicated “that a transaction posted on November 18, 2005 showed a levy of administrative review. According to the division, Crabtree’s account statement costs and bank charges.

p. 5 exempt from the imposition of a lien; and (6) failing to award attorney’s fees, of his Social Security benefits; (5) ruling that Crabtree’s bank account was not (2002 & Supp. 2006); (4) denying Crabtree’s request to enjoin the garnishment

on his bank account without following the procedures in RSA chapter 161-C

his children’s Social Security dependency benefits. We hold that he was. modification of his child support obligations before he was entitled to credit for obligor parent’s child support obligation under RSA 458-C:2, II. constitute a payment in money for the purposes of satisfying the dependency benefits as if they were first paid directly to the fairest approach for calculating the credit here is to treat the had the authority to garnish Crabtree’s Social Security benefits and place a lien agree with the Massachusetts Supreme Judicial Court that the dependency benefits to his child support arrearages; (3) ruling that the division benefits in the items that are to be included in income. . . . We denying Crabtree’s request to apply his children’s retroactive Social Security as “all income from any source,” and explicitly lists social security child support obligation. RSA 458-C:2, IV defines “gross income” benefits as gross income to the respondent when calculating his Furthermore, the court shall consider the dependency

upon whether the trial court correctly ruled that Crabtree was obligated to seek Therefore, we find that Social Security . . . dependency benefits

is directly relevant to the question now before us: 258-59. Our opinion in Angley-Cook includes the following discussion, which benefits paid to the obligor’s dependent children. Angley-Cook, 151 N.H. at toward a noncustodial parent’s child support obligation for Social Security entitled to credit for his children’s Social Security dependency benefits; (2) New Hampshire, like a majority of states, allows, as a per se rule, credit

Resolution of the estate’s first and second issues on appeal depends

Matter of Hampers & Hampers, 154 N.H. 275, 283 (2006). unless it is unsupported by the evidence or tainted by an error of law. In the obligated to seek modification of his child support obligations before he was We will uphold the trial court’s decision with regard to child support estate argues that the trial court erred by: (1) ruling that Crabtree was because Crabtree’s claims in this case are assets of the estate. On appeal, the

replaced him as a party. According to the estate, the appeal is not moot During the pendency of this appeal, Crabtree died, and his estate p. 6 6

combined amount of the benefits paid to him and his children. Under the Security benefits. When those benefits commenced, his income rose by the

reason for this is obvious. performance of a new calculation under the child support guidelines. The credit. court to be correct under the guidelines minus the amount of the

were based upon his income before he and his children began receiving Social In the case before us, for example, Crabtree’s child support obligations

the dependency benefit credit as being allowed by the trial court after the judicially modified”). Moreover, in both Angley-Cook and Taylor, we described 430 (2003) (explaining that child support “obligation remains in effect until it is is the difference between the support amount determined by the order issued by the court. See In the Matter of Haller & Mills, 150 N.H. 427, lacks the authority to modify, and may only seek to enforce, a child support his child support obligation. That is incorrect. For one thing, the division credit allowed by the division, without his having to move for a modification of dependency benefits entitled Crabtree to some sort of self-executing credit, or a noncustodial parent’s right to dollar for dollar credit for Social Security According to the estate, our establishment of a per se rule regarding a

income into account. income and the court has performed a guideline calculation that takes that the amount of those benefits has been included in the noncustodial parent’s Social Security dependency benefits may only be allowed, by the court, after and the net amount of the noncustodial parent’s support obligation in Taylor allowed a credit equal to the amount of the dependency benefits, to alter the principle, established in Angley-Cook, that credit for Taylor be applied to that amount. The noncustodial parent is then, 153 N.H. 700, 709 (200 p. 6 6) (emphasis added). However, we said nothing Social Security . . . benefits received by the child.” In the Matter of State & the trial court must allow the noncustodial parent a dollar for dollar credit for issue of dollar for dollar credit, explaining that in Angley-Cook, “we held that support guideline calculation: Id. at 260 (quotation, citations and ellipsis omitted). We recently revisited the parent’s credit is to be allowed by the trial court after it has performed a child

income of the noncustodial parent and the guidelines should then [T]he amount of the dependency benefits should be included in the

general principle, we outlined the procedure by which the noncustodial Id. (citation, quotation, brackets and ellipsis omitted). Once we established the

custodial parent to satisfy some part of the support obligation. noncustodial parent, who then pays that same amount to the toward his arrearages] would be to shift the responsibility for payment of the

p. 7 granting [Crabtree’s] request [to have payments received by his children applied trial court was entirely correct when it explained that “[t]he ultimate effect of remain after meeting properly calculated support obligations. Moreover, the court had no way of knowing how much of those dependency benefits would

obligated to do to receive credit for his children’s dependency benefits, the Crabtree never moved to modify his ongoing support obligations, as he was matter, the trial court had no way to exercise that discretion. Because dependency benefits to Crabtree’s child support arrearage. But, as a practical

theoretically had the discretion to apply some portion of Crabtree’s children’s as has been the case since we decided Griffin, the trial court in this case decision had no effect upon the rule we established in Griffin. Consequently, Security dependency benefits to child support arrearages. Therefore, that rule. We disagree. Angley-Cook did not involve the application of Social Angley-Cook transformed the discretionary rule in Griffin into a mandatory the obligor’s children, id. at 787. According to the estate, our decision in toward a child support arrearage based upon dependency benefits received by Avery, 120 N.H. 783 (1980), the trial court has the discretion to allow credit benefits did not diminish Crabtree’s arrearages. Under our holding in Griffin v. In addition, Crabtree’s children’s receipt of Social Security dependency

established by Angley-Cook and Taylor. received did not count toward his ongoing support obligations. That much is takes into account the obligor’s new income, the benefits Crabtree’s children a credit for his children’s dependency benefits. Under our holding in the trial court only after it performs a child support guideline calculation that Crabtree exposed himself to at least one consequence: forfeiture of his right to Because credit for Social Security dependency benefits may be allowed by benefits in June 2005.” That may very well be, but by making that choice, support to a higher amount after his children’s receipt of social security we established in Angley-Cook. modification of his child support obligations before he was entitled to the credit affirm the trial court’s ruling that Crabtree was required to move for a Crabtree’s income rose, it seems obvious that, absent special circumstances, application from either the obligor or the obligee, see RSA 458-C:7, I (2004), we provided by statute for initiating the modification of a child support order is an support obligation that reflects his new income. Because the only mechanism credit for Social Security dependency benefits without also assuming a child Cook, the per se credit is not self-executing, and a parent is not entitled to

risen. The estate explains that “Crabtree did not wish to modify his child see RSA 458-C:5 (Supp. 2006), his child support obligations should also have

a child support obligation based upon his previous, lower income. But, if estate’s theory, Crabtree was entitled to use part of his increased income to pay not raised in the trial court, they have not been preserved for our review.

p. 8 hold” at the Bank of America. entirely lawful. At issue here is the legal status of the $2,873.70 currently “on 8

his child support obligations. Because the estate’s statutory arguments were

division contends that the action it took against Crabtree’s bank account was imposition of a lien under RSA 161-C:11 and RSA 511:2 (Supp. 2006). The chapter 161-C; and (2) Crabtree’s bank account was not exempt from the they had been withheld by the bank but not delivered to the division. the notice, due process, and assertion of lien requirements set forth in RSA probate court. However, the disputed funds were not in Crabtree’s account; would be a question of probate law for resolution, in the first instance, in the account, they, too, would have passed to the estate, and their disposition of law. Cf. RSA 554:1 (2007). Thus, if the disputed funds were a part of that automatically entitles the noncustodial parent to a self-executing credit toward When Crabtree died, his bank account passed to his estate by operation the one we have already rejected: that a child’s receipt of dependency benefits garnishment. But the only argument Crabtree presented to the trial court is estate makes various statutory arguments concerning the legality of the

Crabtree’s bank account and to place a lien on that account without following the legal authority to seize retroactive Social Security benefits paid into the estate argues that the trial court incorrectly ruled that: (1) the division had action taken against Crabtree’s bank account before his death. Specifically, upon his children’s Social Security dependency benefits. A portion of the estate’s third issue and all of its fifth issue pertain to the

authority to garnish Crabtree’s Social Security benefits and that the trial court concerning the garnishment of Crabtree’s Social Security benefits. estate argues that the trial court incorrectly ruled that the division had the trial court committed no error by declining to grant the requested relief the garnishment of Crabtree’s direct Social Security benefits. Specifically, the estate’s only properly preserved argument is without merit, we hold that the Warner v. Clarendon Ins. Co., 154 N.H. 331, 334 (2006). And because the

a credit against his ongoing child support obligations and arrearages based

A portion of the estate’s third issue and all of its fourth issue pertain to

In sum, the trial court committed no error by declining to allow Crabtree

money rightfully includable in gross income for ongoing child support.” arrears upon the obligee [because Crabtree] would be paying his arrears with p. 9 9

by RSA 461-A:14, VII are governed by RSA chapter 161-C. legal order of support, the division’s collection actions upon a lien established

. . . .

RSA 161-C:7 . . . . his real and personal property. When, as here, the division is subrogated to a deliver when a notice of debt has been served in accordance with II. The commissioner may serve an order to withhold and probate court. which is due, owing or belonging to the debtor. believe that there is in the possession of any such person property be served on any person when the commissioner has reason to I. An order to withhold and deliver property of any kind . . . may

Chapter 161-C provides, in pertinent part:

Crabtree fell into arrears on his child support obligations, a lien arose against unpaid child support which may accrue in the future.” Thus, as soon as obligor who resides or owns property in the state and shall incorporate any make as a creditor of the estate and any defenses properly raised in the against real and personal property for child support arrearages owed by an collection pursuant to a lien. According to RSA 461-A:14, VII, “[l]iens shall arise by operation of law action; and (2) that the funds placed on hold by the bank were exempt from most recent withholding of funds from Crabtree’s account. preserved: (1) that the division provided inadequate notice of its collection and shortly thereafter the division issued the notices of lien that presaged the injunction. However, the lien was reinstated by the trial court after a hearing, money from him by means of a lien on his bank account and won an ex parte record indicates, Crabtree challenged the division’s first attempt to collect bank’s withholding the disputed funds from Crabtree’s bank account. As the division we consider is the most recent one: i.e., the one that resulted in the We begin with the issue of notice, and we note that the only action by the funds belong to the estate, subject, of course, to any claims the division might delivery of any of those funds to which it is legally entitled. If not, then those bank account was lawful. If it was, then the division may make a demand for

154 N.H. at 334. Accordingly, we turn to the two arguments that were not raised below and, therefore, was not preserved for our review. See Warner, his bank account because it contained Social Security disability benefits was Crabtree’s argument that the division had no authority to place a lien on

determine whether, at the time of Crabtree’s death, the division’s lien on his Accordingly, to determine the proper disposition of those funds, we must division appears not to have demanded delivery of those funds and the bank

p. 10 remained at least until February 2006, “on hold” at the bank. Because the

its possession. RSA 161-C:12, VI. And that is where the disputed funds deliver, it was required to “withhold immediately” any property of Crabtree’s in by RSA 161-C:7, II. And once the bank received the order to withhold and notices of lien at issue, Crabtree had been provided all the information required

notice of debt has been served. Here, on the day the division sent out the such as the one served upon Crabtree’s bank, may be served anytime after a received notice. Under RSA 161-C:12, II, an order to withhold and deliver,

division undertook collection action less than twenty days after Crabtree

for administrative review. Finally, the estate is incorrect in claiming that the administrative review were followed by court action, which obviated the need him. Moreover, as the division points out, Crabtree’s most recent requests for

administrative review pursuant to the procedures that were communicated to

under Part I, Article 12 of the State Constitution. requirements, it effected an unconstitutional taking of Crabtree’s property because the division failed to comply with the RSA chapter 161-C notice estate is incorrect on all counts. The estate also argues, in passing, that

after Crabtree received notice, provided to Crabtree on three occasions, and each time he sought arrearages had not been determined. Procedures for contesting the lien were Crabtree disagreed with the division’s determination does not mean that his determination of the amount of his arrearages in early August 2005. That As the estate concedes, Crabtree was notified of the division’s

administrative review and before his arrearages were properly determined. The

C:7, II(f); and (3) the division initiated a collection action less than twenty days (2) procedures for contesting the action were not provided to him, see RSA 161- (1) Crabtree was not informed of the amount of his debt, see RSA 161-C:7, II(a); follow, it appears to claim that the division violated RSA 161-C:7, III because: While the estate’s argument on the notice issue is somewhat difficult to

described in this section,” RSA 161-C:7, III. C:4 may commence after 20 days from the date of service of the notice of debt provides that “[a]ctions to collect any debt accrued or accruing under RSA 161information that must be provided in a notice of debt, see RSA 161-C:7, II, and RSA 161-C:12 (emphasis added). RSA 161-C:7, in turn, contains a list of

commissioner. the responsible parent shall be delivered forthwith to the this order and upon demand of the commissioner, the property of the responsible parent. After 20 days from the date of service of shall withhold immediately any property . . . due to or belonging to VI. Any person served with an order to withhold and deliver determined.” p. 11 [debtor’s] property so that the exemption amounts may be properly

court’s ruling and remand the matter for a more complete appraisal of the

remand for development of the facts.” We agree, and therefore “vacate the trial Court determines that Crabtree’s wildcard argument has any merit, it should II. We disagree. We also note the division’s statement that “[t]o the extent this

the RSA 511:2, XVIII exemption is vitiated by the provisions of RSA 161-C:11,

bank account. For its part, the division contends that Crabtree’s entitlement to

RSA 511:2, XVIII “wild card” exemption protected all the money in Crabtree’s statutory exemptions from attachment. On appeal, the estate argues that the and RSA 511:2, XVIII, the trial court’s order included no discussion of the entire bank account was exempt from attachment pursuant to RSA 161-C:11

and are payable to [him].” However, despite Crabtree’s argument that his to NH RSA 161-C are exempt under RSA 161-C:11 and NH RSA 511:2, XVIII, Crabtree’s argument that “[t]hose monies allegedly held by the bank ‘pursuant’

[Crabtree’s bank] account.” And, on reconsideration, the trial court rejected question of the estate’s entitlement to reimbursement of bank charges is not funds in Crabtree’s bank account were exempt from the division’s lien, the

trial court ruled that the division “was within its right to have a lien placed on is addressed by RSA 511:2. In the order from which Crabtree appealed, the attorney’s fees and costs. Because it has yet to be determined whether the and lien and foreclosure.” Exemption from attachment and execution, in turn, Finally, the estate challenges the trial court’s denial of bank charges, necessarily fails. under the State Constitution is not established and so that argument V

Landry v. Landry, 155 N.H. ___, ___, 917 A.2d 1262, 1266 (2006).

from an order to withhold and deliver, administrative seizure and disposition,

requirement of RSA chapter 161-C, the predicate for the estate’s argument

property otherwise exempt from trustee process, attachment and execution . . . to RSA 161-C:11, I, which – subject to certain exceptions – exempts “any of RSA 161-C:7, III. Finally, because the division did not violate the notice is not exempt from attachment.” That language would appear to be a reference to which he was entitled under RSA 161-C:7, II. Thus, there was no violation intended to demand that the bank “deliver all withheld property or money that taken any collection action within twenty days of Crabtree’s receiving the notice The November 2005 notices of lien informed Crabtree that the division

disputed funds are protected by the exemptions in RSA 511:2. requirement of RSA 161-C:7, III, we next turn to the estate’s argument that the Because we conclude that the division did not violate the notice

in the three months after it withheld them, the division cannot be said to have appears not to have delivered them to the division, and certainly did not do so p. 12 12

prevailed, to costs or fees incurred in litigating the two issues upon which it has not

DALIANIS, DUGGAN and GALWAY, JJ., concurred.

plainly incorrect interpretation of our decision in Angley-Cook. case appear to have been generated by the estate’s dogged reliance upon a help but observe that a substantial portion of the estate’s attorney’s fees in this

see Harkeem v. Adams, 117 N.H. 687, 690-91 (1977), and we cannot

attorney’s fees. However, we can say at this point that the estate is not entitled ripe. Such is also the case with regard to the estate’s request for costs and