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    Kimberly FAULKNER, Appellant, v. Steven GOLDFUSS, Appellee.
    No. S-9658.
    Supreme Court of Alaska.
    May 10, 2002.

      Kimberly L. Faulkner, pro se, North Pole.
    Lynn E. Levengood, Downes, MacDonald & Levengood, P.C., Fairbanks, for Appellee.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

EASTAUGH, Justice.

I. INTRODUCTION

Kimberly (Kim) Faulkner raises numerous issues concerning child support, child custody, and property division in her divorce from Steven Goldfuss. We affirm as to most of these issues, including child custody. But because it was error to disallow Kim a deduction for the depreciation of several rental properties, to include as gross income child support Kim received for a child from a previous relationship, and to subtract the amount of that child support from her proposed deduction under Alaska Civil Rule 90.8(a)(1)(C), we vacate the child support award and remand for a recalculation of child support. And because the superior court valued the marital share of Kim's military retirement based on the number of months she was employed during coverture, rather than the number of points she earned during coverture, we remand for additional findings.

II. FACTS AND PROCEEDINGS

Kimberly Faulkner and Steven Goldfuass married in October 1995 in Anchorage. They had two children, Ryan and Adrian. Kim also had two minor children from previous relationships, Dominique (Nick) and Lol-itta. Steven adopted Lolitta soon after he married Kim.

During a 1997 separation Kim and Steven entered into a post-nuptial agreement, which stipulated to the distribution of their separate and marital property upon dissolution or divorce. They also agreed to sell their jointly owned business, Sail N Fun.

In January 1999 Kim filed a complaint for divorce. In December 1999 the parties entered into a written settlement agreement regarding child custody and visitation. Among other things, it provided that the parties would share physical custody of the children; it also specified the percentage of time each child was to spend with each parent.

After a trial in January 2000, the superior court granted the parties a divorce. It awarded Steven sole legal custody of Ryan, Adrian, and Lolitta. Stating that it was attempting "[to effectuate as closely as ... it [could] ... the [December 1999 settlement] agreement between the parties," the court awarded the parties shared physical custody of the children. The superior court quantified the percentage of time each child would reside with each parent under the custody order. It also divided the parties' real and personal property, and ordered Kim to pay child support of $288.39 per month. Kim appeals.

III. DISCUSSION

A. Standard of Review

We review a child support award for abuse of discretion. We will find an abuse of discretion only "when, based on a review of the whole record, 'we are left with a definite and firm conviction that a mistake has been made.' " The proper method of calculating child support is a question of law, which we review de novo, adopting the rule of law that is most persuasive in light of precedent, reason, and policy.

The superior court has broad discretion in child custody matters. We will reverse the superior court's resolution of custody issues only if we are convinced that the record shows an abuse of discretion, or if controlling factual findings are clearly erroneous. An abuse of discretion is established if the superior court has considered improper factors in making its custody determination, has failed to consider statutorily mandated factors, or has assigned disproportionate weight to particular statutory factors while ignoring others. A factual finding is clearly erroneous if "a review of the entire record leaves us with a definite and firm conviction that the trial court has made a mistake."

"The superior court has broad discretion when dividing property in a divorce action." Property division in a divorce action consists of three steps: (1) determining what property is available for distribution; (2) valuing the property; and (8) allocating the property equitably. We review the superior court's determination of the property available for distribution for abuse of disceretion; we review de novo the legal conclusions the superior court reaches while making this determination. The valuation of available property is a factual determination that we review under the clearly erroneous standard. We review the superior court's equitable allocation of property for abuse of discretion, reversing only if the allocation is clearly unjust.

B. Child Support

The superior court ordered Kim to pay child support of $288.39 per month. Kim contends that the superior court erroneously calculated her child support obligation, because the court (1) disallowed a deduction for depreciation; (2) imputed as income to her the rental value of her apartment; (3) included as income child support she receives for a child of a previous marriage; (4) failed to make findings regarding her claimed deduction for net operating losses; and (5) miscalculated the percentage of time each parent has physical custody of the children.

1. It was error to deny Kim a deduction for the depreciation of her rental properties.

Kim's child support guidelines affidavit claimed a $15,000 deduction for the depreciation of several rental properties. Citing Hilderbrand v. Hilderbrand, the superior court disallowed Kim's proposed depreciation deduction. Kim appeals this ruling.

The commentary to Alaska Civil Rule 90.3 states: "Income from self-employment, rent, royalties, or joint ownership of a partnership or closely held corporation includes the gross receipts minus the ordinary and necessary expenses required to produce the income." We have held that the superior court should normally allow a deduction for the straight line depreciation-the difference between the original cost of an asset and its serap value divided by the estimated useful life of the asset-of a child support obligor's business real estate as an ordinary and necessary business expense.

But we held in Hilderbrand that a depreciation deduction is not allowed if it could not be claimed for tax purposes. Citing Hilderbrand, the trial court disallowed Kim's proposed depreciation deduction. The court did not find, however, that the proposed deduction could not be claimed for tax purposes. Indeed, Schedule E of the parties' 1995-97 federal income tax returns, which Kim submitted to the superior court, claimed a depreciation deduction for the same rental properties, and the record contains no evidence that the Internal Revenue Service denied those deductions. We therefore vacate the child support award and remand for recalculation of Kim's child support obligation, allowing Kim a deduction for the straight line depreciation of her rental properties.

2. The fair market rental value of Kim's apartment was not imputed as income to her.'

Kim asserts that the superior court erred by imputing as income to her the fair market rental value of the apartment in which she resides. Kim lives rent-free in one unit of a duplex her brother owns. In return, she manages the property, collects the rent, and pays the mortgage, utilities, and taxes. Steven argued below that the superior court should impute as income to Kim the difference between the fair market rental value of the apartment and Kim's expenses managing the property. Although the superior court's amended child support order disallowed a $4,867.11 deduction for Kim's expenses attributable to managing the duplex, the court imputed no income to Kim. We therefore perceive no error that harmed Kim.

3. It was error to include as gross income and to subtract from Kim's proposed Civil Rule 90.3(a)(1)(C) deduction the child support Kim receives for Nick.

Kim received $1,770 in child support for Nick, a child of a previous marriage. The child support order in the present case included this amount in Kim's gross income. The order also subtracted $1,770 from Kim's proposed deduction under Civil Rule 90.3(a)(1)(C) for "child support for children from prior relationships living with the parent." Kim argues that it was error to include as income child support she received for Nick, and to reduce her Civil Rule 90.3(a)(1)(C) deduction by this amount. We agree.

The commentary to Civil Rule 90.8 states that "[elhild support is not income." "Although we have not adopted or approved the commentary, we often rely upon it 'for guidance in child support matters.' " We conclude here that it was error to include as gross income child support Kim received for Nick.

We also agree that it was error to reduce Kim's Civil Rule 90.8(a)(1)(C) deduction by $1,770-the amount of child support she received from Nick's non-custodial parent. Civil Rule 90.3(a)(1)(C) provides that a child support obligor may deduct from gross income "child support for children from prior relationships living with the parent, calculated by using the formula provided by [Rule 90.3.1" The commentary elaborates:

A deduction ... is allowed for the support of the children of prior relationships even if the party is the custodial parent of the "prior" children and does not make child support payments to the other parent of the children. In this situation support provided directly to the children is calculated by Rule 90.3 as if the children from the prior relationship were the only children.[]

Neither Civil Rule 90.3 nor its commentary provides that the amount of a Rule 90.3(a){1)(C) deduction must be reduced by the amount of child support a custodial parent receives for the child for whom the deduction is claimed. Rather, Rule 90.3(a)(1)(C) provides that a custodial parent's gross income may be reduced by that parent's contribution, as calculated under Rule 90.8, to the support of a child from a previous relationship. The total cost of supporting a child is the sum of both parents' contributions as calculated under Rule 90.8, and the custodial parent's contribution is independent of and in addition to the noncustodial parent's contribution. It was therefore error to reduce Kim's proposed Rule 90.3(a)(1)(C) deduction by the amount of child support she received from Nick's non-custodial parent.

These two errors require remand for the purpose of recalculating Kim's support obligation based on her adjusted annual income.

4. It was not error to fail to make findings regarding the deductibility of net operating losses.

Kim next argues that the superior court erred by failing to make findings regarding whether and to what extent she could deduct previously incurred net operating losses from gross income. Federal taxpayers are permitted by 26 U.S.C. § 172 to carry over and deduct net operating losses for a period of twenty taxable years following the taxable year of the loss. Civil Rule 90.3 and its commentary do not specify whether previously incurred net operating losses may be deducted from an obligor's gross income when calculating child support. But not all deductions that the IRS allows may be deducted from an obligor's income as determined under Rule 90.3. Because previously incurred net operating losses do not reflect upon an obligor's present ability to pay child support, we hold that they may not be deducted from an obligor's income when calculating child support. The superior court did not err.

5. When child support is recalculated on remand, it should be based on the actual physical custody awarded.

Kim also contends that the superior court miscalculated the percentage of time each parent has physical custody of the children under the court's child custody order. Under Civil Rule 90.3(b)(2), when parents are awarded shared physical custody, a parent's child support obligation depends in part on "the percentage of time the other parent will have physical custody of the children." The superior court based its child support award on its physical custody award, and assumed that the two boys would be in Steven's custody sixty-three percent of the year and in Kim's custody thirty-seven percent of the year, and that Lolitta would be in Steven's custody sixty percent of the year and in Kim's custody forty percent of the year. Kim argues that she actually has custody of Lolitta only thirty-six percent of the year and custody of the boys only twenty-nine percent of the year. Steven does not offer different figures, but argues that this issue was raised and resolved after trial and asserts that the court's calculations were based on the time the. children actually -spent with each parent.

Kim's terse appellate arguments simply refer us to the record and contain no meaningful discussion of the issue. Kim bears the burden of demonstrating on appeal that the superior court erred. Aceurately counting the days awarded requires access to the Fairbanks North Star Borough school calendar, and neither party has included it in the record. We therefore cannot definitively count the days. But as far as we can tell, it appears that per the award Lolitta was actually to be in Kim's physical custody about thirty-nine percent of the year. And it appears that per the award the boys were actually to be in Kim's physical custody about thirty-five percent of the year. It therefore appears that Kim's child support obligation may have been based on custody divisions that were slightly inaccurate.

We assume that these minor differences would not justify reversal. But because child support must be recalculated anyway for the reasons discussed above, the recaleu-lated award should be based on the exact physical custody actually awarded the parties.

C. Child Custody

1. The superior court did not err when it deviated from the parties' custody agreement, because it did so after expressly finding that the children's bests interests required that deviation, and because those findings were not clearly erroneous.

Kim argues that it was an abuse of discretion to enter the custody award because it deviated significantly from the terms of the parties' settlement agreement.

"In making any custody determination-whether following a contested trial or upon the parties' agreement-the superior court must base its decision on the best interests of the child." Although a custody agreement does not bind the superior court, the court should deviate from the terms of a custody agreement only upon finding on the record that the child's best interests justify a deviation. The legislature has stated that "it is generally desirable to assure a minor child frequent and continuing contact with both parents after the parents have separated or dissolved their marriage and that it is in the public interest to encourage parents to share the rights and responsibilities of child rearing."

In December 1999 Kim and Steven entered into a settlement agreement regarding child custody and visitation. It provided that the parties would share physical custody of the children: Ryan and Adrian would reside with Steven for approximately sixty percent of the year and with Kim for approximately forty percent of the year; Lolitta would reside with Steven and Kim each for approximately fifty percent of the year.

The superior court's written custody and visitation findings discussed the children's best interests. The court stated that it believed that it was "paramount and in the best interest" of the children to have one household to call "home," and to limit the time of their separation; it nonetheless expressed its interest in attempting to accommodate the parties' intentions in their custody agreement. The court also mentioned the best interests in specifying the visitation.

The superior court's oral findings, which counsel did not fully incorporate into the proposed written findings and conclusions, were more specific The oral findings expressed reservations about the parties' proposed agreement for shared custody and specifically indicated that the court was willing to accept the agreement only insofar as it served the children's best interests. The court's opening remarks about custody described the need for "a hard look at the settlement agreement." Before turning to the settlement agreement, the superior court expressly emphasized its concurrence in two of the recommendations made by child eusto-dy investigator Jeanne Nay:

[BJefore I take a hard look at the settlement agreement, I guess I want to express some agreement and some disagreement with Ms. Nay's report. Her testimony, I think, perhaps was more helpful than her report. But a couple of common threads emerge from both her testimony and from the recommendations in the report. First, and perhaps foremost, she stated the opinion that she thinks it's very important for all three of these kids to have a primary residence, a place that they can regard as home and unambiguously so. That's a concern I very much share, and I think that it is in the interest of all three kids to be able to regard one household as home to establish the level of continuity necessary to their belief that they have a home.
She also expressed significant concern about the kids staying together, and when she said that she was clearly referring-I asked her, she said she meant all three kids. She thinks it's extremely important and serves equally the interests for the boys and Lolitta that they spend as much time together, [and] that they be separated as little as possible I also share that concern, and I'm going to craft an order that addresses those two concerns as serving the kids' interests perhaps above and beyond all other concerns that certainly are important.

These comments confirm that the superior court believed that the children's best interests required it to fashion an award that would keep all three children together as much as possible in a single household-one that they would unambiguously regard as their home-and that this goal would prevail "above and beyond" the parties' interest in their custody agreement.

The superior court then turned to the custody agreement: "What I want to do is go through the stipulation, the settlement agreement, and focus on what I see to be the two overriding concerns as affecting the kids' best interest." Concerning the agreement's two most controversial features-the 60/40 split as to Bryan's and Adrian's custody and the 50/50 split as to Lolitta-the judge expressed reluctance to accept the agreement as written, again stressing his adoption of the custody report's views:

I have some significant hesitation as to the breakdown of 60/40 as to custody, and that hesitation is pretty much identical with the hesitation that Ms. Nay expressed. Nonetheless, I think that her principal concerns can be 'addressed in the context of the stipulation, and I'm not going to reject it. As I say, though, I'm accepting that 60/40 split with a certain degree of hesitation.
The second one, my hesitation is even greater, but, again, I'm willing to accept it, perhaps with some emphasis on the word "approximately." I will do my best to create a 50/50 split with regard to custody, physical custody, of Lolitta, but it's not going to be perfect. Again, I have some real hesitation as to whether that provision is reconcilable with my overriding concern to make sure that the kids have a single home.

These oral comments amount to specific findings that it was in the children's best interests to deviate from the parties' proposed custody arrangement.

It also appears that these findings are supported by the evidence cited by the superior court. The child custody investigator wrote a detailed and thorough custody report. She concluded that the three children desperately needed one parent to serve as their primary parent at a single, stable household to call their home. The investigator also emphasized that all three children were closely bonded, particularly stressing the close bond between Lolitta and the older son, and the older son's emotional reliance on Lolitta. The child custody investigator concluded that a shared custody arrangement could not meet the children's needs and that the award of primary custody to one or the other would be necessary.

The investigation also produced evidence that negatively reflected on Kim's ability to parent Lolitta and perhaps the other children. This evidence caused the investigator to question Kim's ability to meet the children's needs if she were their primary parent. The child custody investigator had reservations about Steven as well, but her exhaustive analysis of the statutory best interests factors led her to conclude that Steven would clearly be the superior primary parent for all three children. The child custody investigator thoroughly discussed the reasons for this opinion.

The child custody investigator testified at length at the evidentiary hearing. She there confirmed and elaborated on the conclusions reached in her report. She explained her reasons for believing that Kim's impulsive and unstable behaviors had often placed her children in physical and emotional danger; she described various ways in which Steven would be the superior parent; she confirmed her belief that all three children should share the same primary household and visitation schedule; and when specifically asked by the superior court if she thought that the court should override the parties' custody agreement, Nay answered "Yes," firmly maintaining her position. that children's best interests would be served only by awardlng primary custody to Steven.

The child custody investigator's custody report and testimony reveal that her conclusions were based on compelling, case-specific evidence, and not abstract notions about good parenting or the needs of typical children.

In short, the superior court had before it evidence amply supporting its findings that the children's best interests warranted some deviation from the parties' proposed custody arrangement. The superior court's findings justified deviation from the agreement, and because there was compelling evidence supporting those findings, the superior court did not clearly err in making those findings. We therefore affirm the custody and visitation award.

2. It was not an abuse of discretion to award Steven legal custody of Lolit-ta even though Steven is not Lolit-ta's biological father.

Kim contends that because Steven is not Lolitta's biological father-Steven adopted Lolitta shortly after he married Kim-it was an abuse of discretion to award Steven legal custody of Lolitta absent a showing that Kim is unfit, has abandoned Lolitta, or that Lolit-ta's welfare requires that Steven receive legal custody of Lolitta. Kim cites Turner v. Pannick, where we held that "[uJuless the superior court determines that a parent is unfit, has abandoned the child, or that the welfare of the child requires that a non-parent receive custody, the parent must be awarded custody."

Because AS 25.23.180(a)(2) prowdes that an adoption creates a relationship between the adoptive parent and child "as if the adopted person were a legitimate blood descendant of the [adoptive parent]," Turner is inapposite. -It was therefore not an abuse of discretion to award Steven legal custody of Lolitta.

We do not mean to imply, however, that the fact of an adoption may not be relevant to custody determinations. For example, AS 25.20.090(6)(A) provides that the court, "[in determining whether to award shared custody of a child ... shall consider . the actual time spent with each parent." A biological parent potentially may have a longer relationship with the child than an adoptive parent. But the fact of adoption, in and of itself, does not disfavor the adoptive parent for purposes of determining the legal custody of an adopted child.

3. It was error not to make findings explaining the decision not to appoint a guardian ad litem.

Kim moved before trial to have a guardian ad litem appointed to represent the interests of the children. The superior court denied Kim's motion without making any findings on the record explaining its decision.,

Alaska Civil Rule 90.7(c) provides that "[ilf the court denies a motion for appointment of a guardian ad litem, the court must make findings to explain the denial." Similarly, AS 25.24.8310 states: "Upon notification, the court shall determine whether the minor, or other child should have legal representation or other services and shall make a finding on the record before trial. We therefore conclude that it was error not to make findings on the record explaining the court's decision not to appoint a guardian ad litem. ' If the superior court concludes on remand that its reasons for denying Kim's motion have changed, the court may, but is not required to, revisit the issue.

D. Property Division

1. Kim's Alaska Air National Guard pension

The superior court found that Steven was "entitled to a marital share of [Kim's] military pension" and that Steven's "marital interest in [the] pension [was] equal to 53 total months of service employment." Kim argues that the court erred (1) by basing the marital share of Kim's pension on the total period of coverture, and not just the duration of the marriage; and (2) by determining the marital share of Kim's pension based on the number of months of employment during coverture rather than the points earned during cover-ture. We address each argument in turn.

We disagree with Kim's assertion that because the parties married in October 1995 and separated in January 1999 the superior court should have based the marital share of her military pension on a maximum of thirty-nine months of employment, the duration of the marriage proper. In Murray v. Murray, we held that "the trial court is free to consider the parties' entire relationship, including any period(s) of premarital cohabitation," in dividing the parties' property. Thus, the basis for calculating the marital share is not necessarily limited to the period of the parties' marriage. It appears from the record that the parties began cohabiting in October 1994, fifty-one months before their eventual separation. If the superior court finds on remand that the parties indeed began cohabiting in October 1994, it should adjust the coverture period accordingly.

We agree with Kim's contention that the superior court should have determined the marital share of Kim's pension based on the number of points earned during the period of coverture rather than the number of months of employment during cover-ture. The marital share of a pension is typically determined by the coverture fraction, whose numerator is the number of months of employment during coverture, and whose denominator is the total number of months of employment at the time of vesting. But where the value of retirement benefits is not directly related to the length of employment-such as when retirement benefits will be determined by the number of points earned as a result of the nature and frequency of the service rendered-the cov-erture fraction should be modified so that the numerator becomes the number of points earned during the period of coverture, and the denominator becomes the total number of points earned. Because Kim's retirement is determined in part by the number of points she will have earned - Kim earns one retirement point for each day of active duty-it was error to determine the marital share of Kim's retirement simply based on the number of months of employment during coverture rather than the number of points earned during coverture. We therefore remand for additional findings.

2. The Oregon Street duplex

The parties' 1997 post-nuptial agreement classified a duplex on Oregon Street as Kim's separate property. Thereafter, Kim and Steven jointly acquired debt which was secured by that property, and Kim concedes that Steven's name was added to the title. The superior court therefore classified the property- as marital. Kim contends that it was an abuse of discretion to classify the property »as marital, because, she argues, there was no intent to transmute the Oregon duplex from separate to marital property.

"Parties to a divorce may stipulate to the characterization of property." And absent a cognizable contract defense, such as fraud, stipulations should be enforced. But Kim's counsel conceded at trial that the Oregon Street duplex should be classified as marital property. And when asked by the court: "Do you think anything that has been done or proposed does violence to [the] post-nuptial agreement," Kim's counsel responded "No." We therefore conclude that it was not an abuse of discretion to classify the Oregon Street duplex as marital property.

3. The superior court's valuation of the van was not clearly erroneous.

Kim next argues that it was error to value the Toyota Sienna jam the court awarded her at $25,000, because the van is encumbered by a $20,000 debt. Kim cites Mack v. Mack, where we stated that "[glenerally, the debt owed on any particular item of property will factor into the trial court's determination of the value of it." But because the court allocated the van debt to Steven, we conclude that it was not clearly erroneous to value the van at $25,000.

4. It was not error to fail to value Sail N Fun at the time of separation.

Kim next argues that the superior court erroneously failed to value the parties' jointly owned business, Sail N Fun,.at the time of separation. Kim admits that she did not seek such a valuation at trial. This argument was not preserved.

IV. CONCLUSION

Because it was error to disallow Kim a deduction for the depreciation of several rental properties, to include as gross income child support Kim receives for a child from a previous relationship, and to subtract the amount of that child support from her proposed deduction _ under Civil Rule 90.3(a)(1)(C), we VACATE the child support award and REMAND for recalculation of Kim's child support obligation. Because the child custody order was based on best interests findings that justified deviation from the parties' custody agreement, we AFFIRM the custody order. And because the value of the marital share of Kim's military retirement should have been based on the number of points earned during the period of coverture, we REMAND for additional findings regarding the military pension benefit.

      . See Gallant v. Gallant, 945 P.2d 795, 798 (Alaska 1997).

      . Schuyler v. Briner, 13 P.3d 738, 741 (Alaska 2000) (quoting State, Dep't of Revenue, CSED v. Pealatere, 996 P.2d 84, 86 (Alaska 2000)).

      . See Spott v. Spott, 17 P.3d 52, 55 (Alaska 2001).

      . See Evans v. Evans, 869 P.2d 478, 479 (Alaska 1994).

      . See Farrell v. Farrell, 819 P.2d 896, 898 (Alaska 1991).

      . See Evans, 869 P.2d at 480.

      . Id. at 479 (citing Money v. Money, 852 P.2d 1158, 1161 (Alaska 1993)).

      . Berry v. Berry, 978 P.2d 93, 95 (Alaska 1999) (citations omitted).

      . See id.

      . See id.

      . See id.

      . See id. (citing Compton v. Compton, 902 P.2d 805, 808 n. 2 (Alaska 1995)). .

      . Kim also argues that the court miscalculated interim child support, and precluded her from presenting relevant evidence at an April 7, 1999 hearing regarding interim child support. But Kim concedes that these alleged errors are "not reversible in many of [their] effects." We therefore do not reach the merits of Kim's arguments regarding interim child support.

      . Kim submitted several child support guidelines affidavits to the superior court. The superi- or court considered the affidavit submitted on January 21, 2000. t

      . 962 P.2d 887 (Alaska 1998).

      . Alaska R. Civ. P. 90.3 cmt. IILB (emphasis added).

      . See, eg., Hilderbrand, 962 P.2d at 889-90; Nass v. Seaton, 904 P.2d 412, 416-17 (Alaska 1995) (holding it was error to disallow straight line depreciation for portion of child support obligor's residence obligor used in his business); Eagley v. Eagley, 849 P.2d 777, 781 (Alaska 1993) (allowing deduction for straight line depreciation of child support obligor's business real estate as ordinary and necessary business expense).

      . See Hilderbrand, 962 P.2d at 890.

      . Steven argues that the superior court erred by failing to. impute as income to Kim the rental value of her apartment, and that this error offsets and renders harmless any error in failing to give Kim a deduction for depreciation of her rental properties. See supra Part IILB.1. But the imputed income question is a separate issue, which only by complete coincidence could offset the error of disallowing the depreciation deduction. We therefore cannot affirm the child support order on this alternative ground. And because Steven did not cross-appeal the imputed income question, we decline to reach its merits.

      . Alaska R. Civ. P. 90.3 cmt. TILA.

      . See State, Child Support Enforcement Div. v. Bromley, 987 P.2d 183, 194 (Alaska 1999) (quoting Bunn v. House, 934 P.2d 753, 755 n. 7 (Alaska 1997)).

      . Alaska R. Civ. P. 90.3 cmt. IILD.

      . See Alaska R. Civ. P. 90.3 erat. IILB ("Ordinary and necessary expenses do not include amounts allowable by the IRS for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the court to be inappropriate.").

      . See Zimin v. Zimin, 837 P.2d 118, 123 (Alaska 1992) ("[The goal of the Rule 90.3 guidelines is to obtain a realistic estimate of an obligor's adjusted annual income. ...").

      . In Part IILC.1 we discuss the deviation between the agreed-upon custody and the awarded custody. We assume there that the award actually achieved what the superior court intended, but allow the court to revisit custody if the award did not achieve the numerical division the court intended.

      . Crane v. Crane, 986 P.2d 881, 887 (Alaska 1999) (citations omitted).

      . See McClain v. McClain, 716 P.2d 381, 385 (Alaska 1986) (holding that custody agreement "has no binding force on the court [and that] [tlhe contractual intent of the parties is irrelevant. The court must independently determine what arrangement will best serve the child's interests."); see also Crane, 986 P.2d at 885 ("'When a stipulation is admitted by both parties or their attorneys in open court and there is no dispute as to the material terms of the settlement, the stipulation is enforceable between the parties absent fraud, duress, or concealment of other facts showing the agreement was not made voluntarily and with full understanding. However, when the subject matter of the agreement is child custody, the agreement must also meet the best interests of the children.") (citations omitted).

      . Ch. 88, § 1(a), SLA 1982.

      . Kim claims that the superior court miscalculated the effect of its award. As noted above in Part III.B.5, the number of days of actual physical custody and visitation awarded to Kim for all three children may have been slightly lower than the superior court intended. This deviation is irrelevant in context of Kim's argument that the court erred by failing to follow the parties' custo- ' dy agreement. The superior court's reasons for choosing not to follow the parties' agreement are unaffected by any slight numerical deviations in the physical custody actually awarded. Because the superior court will have to accurately determine on remand the custody and visitation previously awarded, it may conclude that the award did not in fact achieve what the superior court intended. We leave it to the superior court to adjust visitation if that is necessary to achieve its previously expressed intentions.
      Kim also argues that it was error to award her custody on weekends when she drills with the National Guard. Because we remand for further proceedings, we do not need to consider this argument. But the court on remand should construct to the maximum extent possible a visitation schedule that conforms to the parties' availability; it should avoid scheduled weekend drill and annual training dates or adopt a default schedule for substitute visitation (for example, first weekend after a drill weekend conflict).

      . 540 P.2d 1051, 1055 (Alaska 1975).

      . See also Howlett v. Howlett, 890 P.2d 1125, 1127-28 (Alaska 1995) ("It is error for a trial judge to fail to make findings on the record explaining its decision concerning appointment of a guardian ad litem.") (citation omitted). _

      . 788 P.2d 41, 42 (Alaska 1990).

      . See Wainwright v. Wainwright, 888 P.2d 762, 763 (Alaska 1995).

      . See In re Marriage of Poppe, 97 Cal.App.3d 1, 158 Cal.Rptr. 500, 504 (1979).

      . Kim was not employed full-time during most of her marriage to Steven. But Kim accrued points based on full-time service before she married Steven, and she claims that she "may eventually ... retire as a 'full timer.' " Because Kim accumulated points at a slower rate during her marriage to Steven than she did before she married him, the number of months of employment during coverture is not directly related to the number of points Kim earned during marriage, and hence to the value of Kim's retirement benefit.

      . Thus, Steven's share of Kim's retirement benefit when she eventually retires and stops earning points will be (x)(y)(points earned during cover-ture/total points earned), where x is the percentage of Steven's marital share, and y is the total value of the benefit earned.

      . Brown v. Brown, 947 P.2d 307, 309 (Alaska 1997) (citing Laing v. Laing, 741 P.2d 649, 652 (Alaska 1987)).

      . See id.

      . 816 P.2d 197, 199 (Alaska 1991) (citation omitted).

      . See Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1280 (Alaska 1985).


source: Caselaw Access Project

author: EASTAUGH, Justice.

license: Public Domain

text:
    Donna M. BARR, Appellant, v. GOLDOME REALTY CREDIT CORPORATION, n/k/a Nationsbanc Mortgage Corporation, Appellee.
    No. S-9413.
    Supreme Court of Alaska.
    May 10, 2002.

      Rebecca S. Copeland, Koval & Featherly, P.C., Anchorage, for Appellant.
    Richard Ullstrom, Routh Crabtree, APC, Anchoragé, for Appellee.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

EASTAUGH, Justice.

I. INTRODUCTION

Donna Barr appeals the superior court's grant of partial summary judgment to Nati-onsbane Mortgage Corporation on Nations-bane's claim for possession of real property occupied by Barr and Barr's counterclaim for damages. Barr argues that Nationsbane did not apply surplus escrow funds to Barr's monthly note obligations according to the terms of the deed of trust, resulting in improper foreclosure on the property and damage to Barr. Because we agree with Barr that genuine issues of material fact remain, we reverse the superior court's partial grant of summary judgment to Nationsbane, vacate its findings, and remand for further proceedings.

IL | FACTS AND PROCEEDINGS

Donna Barr assumed ownership of the property at 11840 .Mary Street in Anchorage subject to 'a deed of trust. Nationsbane, as beneficiary, initiated foreclosure proceedings against the property in January 1998 because it believed the underlying note was in default. A notice of default was then recorded and served upon Barr. Barr filed for Chapter 183 bankruptey in February 1998. The foreclosure sale was held in June 1998 after the bankruptcy court lifted the bankruptcy stay; Nationsbane was the buyer at the foreclosure sale.

Nationsbane also filed a complaint against Barr in June 1998 for forcible entry and detainer to evict Barr from the property, and for recovery of fair rental value of the premises and any damages Barr might have caused to the property. In her answer to the complaint, Barr denied that Nationsbane was properly vested with title to the property. Barr alleged that Nationsbane's declaration of default was improper because Nationsbane knowingly failed to credit funds in Barr's note account that would have cured any deficiency. Barr counterclaimed, asserting that these acts caused her to suffer damages exceeding $150,000, and requested that punitive damages be assessed against Nationsbane.

After discovery, Nationsbane moved for partial summary judgment seeking both a judgment in its favor with respect to its right to possess the property and dismissal of Barr's counterclaim. Among other things, the motion was supported by Barr's discovery answers in which she admitted she had not made her monthly note payments in the three months before the foreclosure-November and December 1997, and January 1998.

Barr opposed Nationsbane's motion, arguing that no default occurred because an overpayment on the loan and a surplus in the escrow account should have been credited to some or all of Barr's monthly note obligations for November and December 1997 and January 1998. In support of her opposition, Barr submitted her own affidavit and an affidavit from Sherry Whah. Whah affied that she was an experienced accountant and that based on her review of Barr's payment history, she had determined that Barr had made exeess payments, exceeding $7,465, on the note.

Nationsbane's supplemental reply argued that the records Barr submitted to support Whah's affidavit were inadmissible hearsay, and that they actually supported Nations-bane by showing that the foreclosure was proper. Four days before the hearing on Nationsbane's motion for partial summary judgment, Barr submitted her own supplemental affidavit in which she described her note payment practices and swore that Nati-onsbane had never refunded any excess escrow reserves. Barr supported her affidavit with a package of documents that were intended to demonstrate the inconsistency of Nationsbane's record-keeping practices, the failure of Nationsbane to refund any escrow reserves, and the failure of Nationsbane to credit Barr's account. At an August 1999 hearing Nationsbane objected to the documents because it claimed they were submitted too late to permit a reply, were not produced in discovery, and were unauthenticated and inadmissible hearsay.

In September 1999 the superior court granted partial summary judgment to Nati-onsbane, dismissed Barr's counterclaim with prejudice, and determined that-under Alaska Rule of Civil Procedure 54(b)-there was no need to further consider the issues Nati-onsbane raised at the hearing. The superior court's findings of fact and conclusions of law appear to have been adopted in toto from the proposed findings and conclusions submitted by Nationsbane at the court's direction. The court denied Barr's motion for reconsideration.

Barr appéals.

III. DISCUSSION

A. Standard of Review

This court reviews a grant of summary judgment de novo and affirms only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In making this determination, we draw all reasonable inferences in favor of the non-moving party.

B. Granting Summary Judgment to Nationsbane Was Error Because There Remained Factual Disputes Whether the Loan Was Current and Whether an Overpayment. Was Available to Apply to Barr's Account.

Barr's affirmative defense contends that Nationsbane "failed to properly give credit" on her account and that she "was not in arrears on her payments per the Deed of Trust." On appeal she explains that she had "overpaid her account and excess funds were in the escrow account at the time the foreclosure was commenced, which funds would have satisfied the default." Barr argues that the alleged excess escrow funds, which were in the "possession and control" of Nations-bane, should have been applied to avoid the default.

There is a genuine dispute of material fact whether Barr's loan was current and whether there was a surplus in her escrow account when default was declared. -

Barr affied that "a credit balance in excess of $7,465.00" existed in her account on the date foreclosure was initiated. To support this assertion, and to overcome a motion to strike by Nationsbaric, Barr submitted copies of the documents on which she relied 'in arriving at the $7,465 figure. These doeu-ments recorded monthly payments on the loan and the date through which Barr alleged each payment rendered the loan current. The documents showed that in May 1997 the loan was "paid thru" that month only; no payments were made in June or July 1997; and payments in the amount of the monthly obligation were made in August, September, and October 1997. The documents do not record escrow payments or an escrow balance for any period. Thus, Barr's affidavit is not sufficient on its own to create a material fact dispute. >

However, Barr's claim regarding the alleged surplus is supported by Whah's affidavit, which stated that "[blased on the accounting undertaken by Affiant, it appears that the discrepancy in the numbers between Nationsbane and Affiant relate primarily to late fees, payments and distributions from the eserow account, and uncredited payments over the term of the mortgage."

A genuine issue of fact exists when the evidence, viewed in the light most favorable to the nonmoving party, is such that reasonable jurors could differ in their judgment on that issue. 'Although Nationsbane disputes Barr's claim, the evidence presented-when read in the light most favorable to Barr-could permit a finding that there was an escrow surplus in Barr's account in October 1997. Whah affied that "through January 1998, the month in which the foreclosure was initiated by Nationsbane, ... Barr had made excess payments and overpaid the mortgage with Nationsbane in prior years in excess of $7,465.00," and that "Barr's loan was not in default at the time the foreclosure was initiated by Nationsbane." If there was an account excess three months after Barr last made a payment, a factfinder could permissibly infer that the excess also existed when she made her last payment in October.

Nationsbane questions the admissibility of the documents Whah relies upon in reaching her conclusions. But Barr has not sought to establish that the documents relied upon by Whah are themselves admissible in evidence, only that they are a permissible basis for Whah's expert opinions. Alaska Evidence Rule 708 provides that facts or data relied upon by experts in forming opinions "need not be admissible in evidence, but must be of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject." Nationsbane argues that Barr cannot establish that all of the documents meet this standard because Whah admitted that she only attached to her affidavit "some of the documents upon which she relied in forming her opinion." But Whah affied that many of the records she relied upon were provided to Barr by Nationsbane "and are certainly in [Nationsbane's] possession and control" although they were not attached to Whah's affidavit. Without a more convincing showing by Nationsbane that the documents Whah reviewed were so unreliable as to preclude an expert from forming an opinion in reliance on them, we conclude that for purposes of summary judgment, Whah's affidavit was admissible evidence.

Nationsbane argues that the language of both the deed of trust and regulations of the TU.S. Department of Housing and Urban Development (HUD) prevented it from applying the escrow surplus, even if it existed, to future payments. | Nationsbane argues that by failing to make her payments in at least November 1997 through January 1998, Barr's loan was not current. Nationsbane correctly notes that an escrow surplus may be applied to future payments only if the loan is current. As noted above, however, the Whah affidavit contained evidence both that the loan was current and that Barr had an escrow surplus in January 1998. Barr argues that since the loan was current when the foreclosure was commenced, Nationsbane should have "applied [the surplus] to principal and interest payment{s][as] was the practice of Nationsbane and its predecessors in interest." Barr's assertion in her affidavit that a surplus existed in January 1998, along with Whah's affidavit, creates a genuine issue of material fact as to whether the loan was current in October 1997.

HUD regulations require a refund to the borrower of any surplus greater than $50. When the regulations are read in conjunction with the deed of trust, it would still be permissible for Barr to request that any surplus be applied to principal and interest payments. A HUD regulation stating that the surplus "shall ... [be] refund[ed] ... to the borrower" does not, by itself, forbid the borrower from requesting that the refund be redirected to principal or interest payments. Indeed, paragraph 4 of the deed of trust allows for this possibility. It states that any "excess, if the loan is current, at the option of the Trustor [Barr], shall be credited on subsequent payments to be made by the Trustor, or refunded to the Trustor." Barr argues that it was Nationsbane's prior practice to apply the surplus in this manner. The same factual inferences favorable to Barr that create a genuine issue of material fact as to whether the loan was current in October 1997 also create a genuine issue of material fact as to whether Nationsbane could have applied any escrow surplus to Barr's monthly payments in November and December 1997 and January 1998. Accordingly, we conclude that Nationsbane has failed to meet its burden of disproving Barr's affirmative defense. It was therefore not entitled to summary judgment.

C. Dismissing Barr's Counterclaim Was Error Because There Was a Factual Dispute Whether Nations-bane's Foreclosure Was Proper.

Barr argues that the trial court wrongfully dismissed her counterclaim for damages caused by Nationsbane's purportedly improper foreclosure. Like Barr's affirmative defense, her counterclaim focuses on whether a surplus existed, and if it did, whether it was available to be applied to the balance owed on the property. Because Na-tionsbane did not conclusively show that a surplus did not exist, it has failed to meet its burden in disproving Barr's damage claim. Hence, the genuine factual dispute that requires us to reverse Nationsbane's summary judgment motion also requires us to reverse the dismissal of Barr's counterclaim.

D. We Vacate the Superior Court's Findings of Fact and Conclusions of Law.

Barr argues that the superior court erred by adopting Nationsbane's proposed findings and conclusions in toto without carefully considering their content. Barr also alleges that those findings and conclusions contained multiple errors. Barr is correct to the extent that any of the findings or conclusions go to issues which remain in genuine dispute. On the other hand, we recognize that many of the findings and conclusions may not have been erroneously entered and may stand alone, regardless of the genuine factual dispute discussed in Part IIL.B. But there is no reason to decide which findings and conclusions those might be because the parties have not briefed that proposition and because there is no present dispute about the validity of the individual findings and conclusions beyond the narrow issues we have discussed above. Instead we simply vacate the superi- or court's findings of fact and conclusions of law because we have determined that there are genuine factual disputes that are material to the issues discussed above.

IV. CONCLUSION

Because there are genuine issues of material fact about the extent or existence of a surplus that could be credited to Barr's account, we REVERSE the partial summary judgment entered for Nationsbane, VACATE the findings of fact and conclusions of law, and REMAND for further proceedings consistent with this opinion.

      . The bankruptcy court lifted the stay after determining that Barr had violated the stay's conditions. The court explained that Barr's reasoning for not delivering her payment to local counsel in June 1998, as required by a May 1998 order of the bankruptcy court, was "vague and unsatisfactory.

      . Nationsbanc moved to strike Barr's opposition on grounds that it was not signed by her counsel of record and that it relied upon matters not disclosed in discovery despite specific requests by Nationsbanc. This motion was denied.

      . Moore v. Allstate Ins. Co., 995 P.2d 231, 233 (Alaska 2000) (citations omitted).

      . Id.

      . Bliss v. Bobich, 971 P.2d 141, 145 n. 4 (Alaska 1998) (citation omitted); see also Schneider v. Pay'N Save Corp., 723 P.2d 619, 623 (Alaska 1986) (stating material issue of fact exists where reasonable jurors could disagree in resolving factual issues presented by moving papers) (citation omitted).

      . See also Norris v. Gatts, 738 P.2d 344, 349-50 (Alaska 1987) (stating expert witness entitled to rely upon inadmissable evidence meeting "reasonable reliance" element of Rule 703).

      . Nationsbane notes that Alaska Civil Rule 56(e) requires that "[slworn or certified copies of all papers or parts thereof referred to in an affidavit [opposing summary judgment] shall be attached thereto or served therewith." (Emphasis added.)

      . 24 Code of Federal Regulations (CFR.) § 3500.17()(2)(ii) (2000) states:
      A borrower is current if the servicer receives the borrower's payments within 30 days of the payment due date. If the servicer does not receive the borrower's payment within 30 days of the payment due date, then the servicer may retain the surplus in the escrow account pursuant to the terms of the mortgage loan documents.

      . Paragraph 4 of the deed of trust states:
      ~If the total of the payments made [under the note plus taxes and insurance] exceed the amount of payments actually made by Beneficiary for ground rents, taxes or assessments, of (sic) insurance premiums, as the case may be, such excess, if the loan is current, at the option of the Trustor, shall be credited on subsequent payments to be made by the Trustor, or refunded to the Trustor.

      . Even if the loan was not current, the beneficiary could not simply keep the escrow surplus without accounting for it. |

      . 24 C.F.R. § 3500.17()(2)(i) (2000).

      . Id.

      . Wassink v. Hawkins, 859 P.2d 712, 713-14 (Alaska 1993) (reversing grant of summary judgment where genuine issues of material fact exist regarding affirmative defenses).


text:
    John McCORMICK, Appellant, v. RELIANCE INSURANCE CO., Appellee.
    No. S-9813.
    Supreme Court of Alaska.
    May 10, 2002.

      Mary L. Pate, Eide & Miller, P.C., Anchorage, for Appellant.
    Randall E. Farleigh, Choquette & Far-leigh, LLC, Anchorage, for Appellee.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

EASTAUGH, Justice.

I. INTRODUCTION

Alaska Statute 08.18.151 bars a contractor from suing for compensation unless the contractor either met or was in substantial compliance with the contractor registration requirements when the contract was formed. Because there are genuine, material fact disputes about whether John MeCormick substantially complied with these requirements when he contracted to perform services on a public works project, we reverse the summary judgment that dismissed his Little Miller Act claim against the general contractor's surety. We do not reach MeCormick's alternative argument that he was Alaska Elec-trie's employee.

II. FACTS AND PROCEEDINGS

In May 1999 John MeCormick orally contracted with Alaska Electric Company, an electrical subcontractor on an Anchorage International Airport runway project, to provide end-dump trucking services at the rate of $60 per hour. McCormick worked on the runway project from May 10 through September 8, 1999. Although MeCormick initially provided only end-dump trucking services on the project, Alaska Electric eventually asked McCormick to provide additional services, including excavation, installing electrical vaults, and driving an Alaska Electric truck to purchase fuel and materials for the construction site. MeCormick also furnished a service van, a small semi-tractor, and various tools to the site.

McCormick submitted invoices for completed work to Alaska Electric, which forwarded the invoices to Wilder Construction Company, the general contractor on the project. Wilder then issued checks made out to both Alaska Electric and McCormick for invoices approved by Alaska Electric. McCormick was paid for all work performed through July 17, 1999.

As of October 1, 1999 McCormick 'had received no payment for work he performed after July 17, 1999. On October 1 he gave Wilder written notice, as required by AS 36.25.020(b), of a claim for $48,186.23 for services he claimed he rendered from July 18 through September 8, 1999. The same day Wilder sent McCormick a check for $12,375.96. Wilder claimed that the services McCormick rendered from July 18 through September 8 were outside the scope of the agreement to provide end-dump trucking services at the rate of $60 per hour, and that MeceCormick was entitled only to a labor rate of $27.32 per hour for those services.

On November 12, 1999 McCormick filed a superior court complaint against Alaska Electric and Reliance Insurance Company. The complaint alleged that Alaska Electric breached the contract and the covenant of good faith and fair dealing. It asserted a Little Miller Act claim against Reliance, which had furnished a surety bond for Wilder. In April 2000 Reliance moved for summary judgment, claiming that it was entitled to judgment as a matter of law, because (1) McCormick's registration with the state as a contractor had expired before he contracted with Alaska Electric, and (2) McCormick filed his claim prematurely. McCormick opposed Reliance's motion and cross-moved for summary judgment.

The superior court dismissed MeCormick's Little Miller Act claim against Reliance on summary judgment because John MeCor-mick was not registered "under AS 08.18.011 et seq:" at relevant times. The court denied McCormick's cross-motion for summary judgment.

McCormick moved for reconsideration, claiming that the superior court had failed to consider his alternative argument that he was an employee of Alaska Electric, and that he was therefore not required to register as a contractor in order to sue for unpaid compensation: The superior court denied the reconsideration motion and entered a final judgment in favor of Reliance. McCormick appeals.

IH. DISCUSSION

A. Standard of Review

We review a grant of summary judgment de novo and affirm if the evidence in the record fails to disclose a genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. A We view the facts in the light most favorable to the non-moving party. We apply our independent judgment to any questions of law, adopting the rule of law that is most persuasive in light of precedent, reason, and policy.

B. It Was Error to Dismiss McCormick's . Little Miller Act Claim Against Reliance on Summary Jydgment.

1. There are genuine issues of material fact about whether McCormick substantially complied with AS 08.18's registration requirements.

McCormick's only claim against Reliance was under the Little Miller Act. That statute "requires that the primary contractor . on a public works project post a bond to the state or political subdivision thereof 'for the protection of all persons who supply labor and material in the prosecution of the work provided for in the contract....'" The Little Miller Act further provides:

A person who furnishes labor or material in the prosecution of the work provided for in the contract for which a payment bond is furnished ... and who is not paid in full before the expiration of:-90 days after the last day on which the labor is performed or material is furnished for which the claim is made, may sue on the payment bond for the amount unpaid at the time of suit.[]

A contractor may not sue under the Little Miller Act without alleging and proving that the contractor was a registered contractor at the time of contract formation. "Registration as a construction contractor under AS 08.18 requires: a registration fee, a surety bond, and public liability and property damage insurance." "Registration was intended by the legislature to ensure 'competence and financial responsibility in those who undertake work as contractors.'"

Because "the legislature chose the closing of the doors of the courts as a fundamental tool to enforce its policy of ensuring competence and financial responsibility in those who undertake work as contractors," we have consistently enforced AS 08.18.151's requirement that a contractor must be registered at the time of contract formation in order to maintain an action for compensation. But because "statutes which cause forfeiture are not favored," we have adopted the doctrine of substantial compliance. We have held that AS 08.18.151's statutory bar may be abrogated by a contractor's substantial compliance with the registration requirements.

"[Slubstantial compliance involves conduct which falls short of strict compliance with the statutory registration requirements, but which affords the public the same protection that strict compliance would offer." Substantial compliance generally requires "that the contractor be registered [usually under a different name] and have bonding and insurance coverage, since these are the primary means by which the statute seeks to protect parties dealing with contractors." But when a contractor is not registered at the time of contract formation, a court can still find substantial compliance if (1) the contractor's prior registration or other public information would give the public the same information that current registration would give (i.e., the contractor's insurance information); and (2) the contractor's bond and insurance remained effective during the period his or her registration lapsed.

It is undisputed that McCormick's registration with the state as a general contractor expired on December 31, 1998, and that McCormick was not registered when he contracted with Alaska Electric. McCormick contends that it was nonetheless error to dismiss his Little Miller Act claim on summary judgment based on his lack of registration, because he substantially complied with AS 08.18's registration requirements.

We first address McCormick's argument that information about his bonding and insurance was readily available to the public even after his registration expired. MeCormick asserts that "[all phone call to the Alaska Department of Labor, Division of Occupational Licensing would have revealed all [of] McCormick's information, including his bonding and insurance because the Department keeps these records for several years on their system, even when a contractor is currently unregistered." MeceCormick also notes that when he contracted with Alaska Electric, he had a valid contractor's license issued by the Municipality of Anchorage, and a business license issued by the state.

Drawing all reasonable factual inferences in favor of McCormick, the non-moving party, as we must when reviewing a grant of summary judgment, we conclude that evidence of (1) McCormick's prior registration with the Division of Occupational Licensing, (2) the valid contractor's license issued by the Municipality of Anchorage, and (8) the business license issued by the state was sufficient to raise a genuine factual dispute about the continuing availability of McCormick's bonding and insurance information to the public during the lapse in his registration.

We next consider McCormick's argument that his bond and insurance actually remained in effect after his registration lapsed. We conclude that the evidence in the record does not establish as a matter of law that McCormick was not bonded during the relevant period.

McCormick upgraded his state license from specialty contractor to general contractor in March 1998. At the same time, he increased his surety bond from $5,000 to $10,000 by obtaining a rider to the bond his surety, the Star Insurance Company, had previously issued to him. The rider incorporated the "agreements, limitations and conditions" of the original bond. The original bond provided that liability under the bond "shall be continuous until the certificate of registration is revoked or otherwise terminated by the Department of Commerce and Economic Development or until 30 days after the surety sends written notice of cancellation [to] the Department of Commerce and Economic Development, Division of Occupational Licensing, State of Alaska."

Reliance argues that under the terms of the bond agreement, McCormick's bond was automatically canceled on December 31, 1998, when McCormick's state registration as a general contractor expired, and that McCormick was therefore not bonded when he worked on the runway project beginning in May 1999. But the Star Insurance Company, McCormick's surety, sent a notice of cancellation to the state Department of Commerce and Economic Development on August 10, 1999. That notice stated: "The above bonding Company hereby notifies you that it has elected to cancel said bond in its entirety. This Notice is given to you in accordance with the cancellation provision in above mentioned bond and applicable state insurance statutes." The fact that McCormick's bonding company sent the notice reasonably permits an inference that it considered itself still bound when it sent that notice to the state in August 1999. If the bonding company had thought that the bond had already expired when the registration expired on December 31, 1998, it is arguable that the bonding company would have had no reason to send the August 10, 1999 notice informing the state that Star had "elected to cancel" the bond. This inference in turn raises a genuine factual dispute about whether McCormick was bonded when he worked on the runway project, and thus, whether he was in substantial compliance. We therefore reverse the grant of summary judgment against MeCor-mick and remand for further proceedings.

Citing AS 86.25.020(a), Reliance argues that because McCormick filed suit "before the expiration of 90 days after the last day on which the labor [was] performed ... for which the claim is made," it was not error to dismiss McCormick's Little Miller Act claim. But because there is no evidence in the record that Reliance was prejudiced by McCormick's premature filing, requiring McCormick "to commence a new and separate action in these cireumstances would [be] to insist upon an empty formalism." We therefore reject this argument as a basis for affirming the grant of summary judgment.

2. We do not reach McCormick's alternative argument that he was Alaska Electric's employee.

Alternatively, McCormick argued below, and maintains on appeal, that he was Alaska Electric's employee rather than an independent contractor, and that he was therefore not required to register as a contractor under AS 08.18.171(4).

The superior court's order granting Reliance summary judgment did not address MceCormick's argument that he was Alaska Electric's employee.

Because our ruling on the substantial compliance issue requires remand and because the superior court did not consider MecCor-mick's alternative claim that he was an employee, there is no reason for us to address this alternative claim.

IV, CONCLUSION

For these reasons we REVERSE the grant of summary judgment and REMAND for further proceedings consistent with this opinion.

      . AS 36.25.020(b) provides in relevant part:
      [A] person having direct contractual relationships with a subcontractor but no contractual relationship express or implied with the contractor furnishing the payment bond has a right of action on the payment bond upon giving written notice to the contractor within 90 days from the last date on which the person performed labor or furnished material for which the claim was made.
      (Emphasis added.)

      . According to Reliance's brief, "[plJayment of the last check [for $12,375.96] had nothing to do with the demand by counsel for [McCormick] which was received after Wilder's check was issued."

      . AS 36.25.010-.025.

      . Mathis v. Sauser, 942 P.2d 1117, 1120 (Alaska 1997).

      . Id.

      . Id.

      . State v. Tyonek Timber, Inc., 680 P.2d 1148, 1156 (Alaska 1984) (quoting AS 36.25.010).

      . AS 36.25.020(a).

      . AS 36.25.020(c) ("A suit under this section is subject to AS 08.18.151."); AS 08.18.151 (providing that contractor may not bring action "in a court of this state for the collection of compensation for the performance of work or for breach of a contract for which registration is required ... without alleging and proving that the contractor was a registered contractor at the time of contracting for the performance of the work").

      . Gross v. Bayshore Land Co., 710 P.2d 1007, 1012 (Alaska 1986) (citations omitted).

      . Id. (citations omitted).

      . Tyonek Timber, 680 P.2d at 1157 (emphasis omitted) (quoting Summer Dev. Corp. v. Shivers, 517 P.2d 757, 763 (Alaska 1974)).

      . Id.

      . Gross, 710 P.2d at 1012-13; Jones v. Short, 696 P.2d 665, 667 (Alaska 1985); Alaska Protection Serv. v. Frontier Colorcable, Inc., 680 P.2d 1119, 1122 (Alaska 1984).

      . E.g., Jones, 696 P.2d at 668.

      . Jones, 696 P.2d at 668 n. 10 (quoting Alaska Protection Serv., 680 P.2d at 1122).

      . Alaska Protection Serv., 680 P.2d at 1122.

      . Jones, 696 P.2d at 668.

      . Anchorage Police Dep't Employees Ass'n v. Municipality of Anchorage, 24 P.3d 547, 549 (Alaska 2001).

      . Reliance does not dispute McCormick's assertion that he was insured during the period he worked on the runway project.

      . Although McCormick argues on appeal that he has "established" that he is owed $35,810 for the work he performed between July 18 and September 8, 1999, the only relief he requests on appeal is reversal of the summary judgment granted to Reliance and a remand for further proceedings. We therefore do not decide here whether McCormick is entitled to partial summary judgment on the issue of damages.

      . McCormick filed suit on November 12, 1999. The last day on which he claimed he performed work for Alaska Electric was September 8, 1999.

      . United States v. Reiten, 313 F.2d 673, 675 (9th Cir. 1963).

      . AS 08.18.171(4) defines "contractor" as
      a person who, in the pursuit of an independent business, undertakes or offers to perform, or claims to have the capacity to perform, or submits a bid for a project to construct, alter, repair, move, or demolish a building, highway, road, railroad, or any type of fixed structure, including excavation and site development and erection of scaffolding; "contractor" includes a general contractor, builder, mechanical contractor, specialty contractor, and subcontractor....
      (Emphasis added.) McCormick asserts that employees on a public works project have a Little Miller Act claim under AS 36.25.020(a). Reliance does not dispute this assertion.


text:
    James L. KELLY, Appellant, v. Katherine JOSEPH, f/k/a Katherine Kelly, Appellee.
    No. S-10116.
    Supreme Court of Alaska.
    May 10, 2002.

      Fleur L. Roberts, Law Office of Fleur L. Roberts, Fairbanks, for Appellant.
    Christopher E. Zimmerman, McConahy, Zimmerman & Wallace, Fairbanks, for Ap-pellee.
    Before: FABE, Chief Justice, MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.
   OPINION

EASTAUGH, Justice.

I. INTRODUCTION

This appeal arises out of a dispute between James Kelly and Katherine Joseph ({/k/a Katherine Kelly) over the custody of their three children. The superior court awarded James primary. physical custody of the three children after the divorcee. Katherine later alleged that James breached the visitation provisions of the custody agreement and requested a modification of the agreement so that she could obtain physical custody of the two youngest children; the oldest child was to remain with James. The superior court ruled for Katherine after finding that James's breaches of the custody agreement resulted in a change of circumstances. We affirm the order modifying custody but remand for recalculation of child support.

II. FACTS AND PROCEEDINGS

James and Katherine Kelly (n/k/a Katherine Joseph) were married in July 1989. They had three children:. Shane, born in 1986; James, Jr. (Junior), born in 1988; and Peter, born in 1991. James and Katherine separated in August 1998 and were divorced in October 1999. The couple lived in Fort Yukon while they were married. When they separated, Katherine moved to Fairbanks.

James and Katherine entered into a child custody agreement in October 1999. It provided that James was to have primary physical custody of the three children, who were to continue living in Fort Yukon during the school year. Katherine was to have set visitation privileges, including six weeks with the children during the summer, alternating holidays, and "free, open, liberal, unrestricted [telephone] access." The children were to be able to visit Katherine any time she was in Fort Yukon-her job requires that she travel there frequently-and they were to be able to visit Katherine any time James took the children to Fairbanks.

The problems leading to the present dispute began almost immediately after the divoree was final. Katherine claims that when she called, James frequently hung up on her or instructed the children not to answer the telephone. James testified that he does not recall hanging up on Katherine, although he does not fully dispute her claim. The superi- or court found that James did not fulfill his responsibility under the custody agreement because, in part, "the level of telephone communication from Fort Yukon to Fairbanks [was] woefully inadequate."

Katherine alleged other violations of her visitation rights. The parties dispute the cireumstances surrounding nearly all of these breaches, but the superior court determined that the weight of the evidence supported Katherine's allegations. The first significant incident occurred in December 1999. Per the custody agreement, Katherine was to have visitation with the children for Christmas. Katherine sent a fax to James stating that she had reserved seats for the children to fly to visit her in Fairbanks from December 22 until December 26. James disputed that the tickets were actually purchased and stated that he could not afford to purchase the tickets himself. The superior court determined that, regardless of the financial situation, James "wrongfully" denied Katherine visitation at Christmas 1999.

Shortly after a July 4, 2000 incident involy-ing the police, Katherine moved to modify the child custody and visitation provisions of the parties' agreement.

Another incident occurred in December 2000, while Katherine's motion to modify custody was pending. Katherine planned to have the boys fly to Fairbanks for Christmas. She faxed a message to James on December 6 proposing visitation dates of December 22 through December 26. James did not send the boys to Fairbanks until December 24 because he claimed there was a party that the boys wanted to attend in Fort Yukon. The superior court determined that the custody agreement did not mean "that dad decides that a party on December 28rd is a justification to deny visitation."

The superior court orally entered its findings of fact and conclusions of law in January 2001. Several months later the court modified the original custody agreement and awarded primary physical custody of Junior and Peter to Katherine; James retained primary physical custody of Shane. The court also modified the child support payments.

James appeals the custody modification and child support award.

III. DISCUSSION

A. Standard of Review

The superior court has broad discretion in determining child custody The superior court's custody determination will not be set aside unless the record shows that its controlling findings of fact are clearly erroneous or the court abused its discretion. A finding of fact is clearly erroneous only when a review of the record leaves the court with a definite and firm conviction that the superior court has made a mistake. An abuse of discretion has occurred if the superior court considered improper factors in making its custody determination, failed to consider statutorily mandated factors, or assigned disproportionate weight to particular factors while ignoring others.

"This court will generally not disturb a trial court's decision on a motion for child support unless the trial court abused its discretion. We will set aside a lower court's factual findings only when they are clearly erroneous." Whether the trial court used the correct method of calculating child support is a matter of law that we review de novo.

B. The Superior Court Did Not Err in Modifying the Custody Agreement Giving Katherine Primary Custody of Junior and Peter.

James argues that the superior court erred in modifying the custody agreement solely because he had not been cooperative in carrying out the visitation obligations. He argues that the modification was a sanction against him for his behavior. The superior court "may not modify an existing custody arrangement unless it determines that a change in cireumstances requires the modification of the award and the modification is in the best interests of the child."

1. James's alleged breaches of the visitation provisions of the custody agreement satisfied the "changed circumstances" requirement.

James argues that because the "children were happy, healthy, well-cared for and doing better in school" and because the alleged communication problems with Katherine occurred "in late 1999 immediately following the parties' divorce," Katherine did not demonstrate that a substantial change in cireumstances had taken place. Alaska Statute 25.20.110(a) does not specify what must be shown to demonstrate a change in cireum-stances. We have previously held that "[ale-tions by a custodial parent which substantially interfere with the nonecustodial parent's visitation rights '[are] sufficient to constitute a change [in cireumstances]' " These actions include "a detrimental and well established pattern of behavior on the part of [the custodial parent] to 'erode the bonds of love and affection between the [other parent] and the children.' "

The custody agreement specified Katherine's visitation rights, including telephonic communication and holiday visits. The superior court found that James did not take necessary steps to ensure that Katherine's rights under the agreement were satisfied. After examining telephone records, the superior court found that "the level of telephone communication from Fort Yukon to Fairbanks is woefully inadequate and affirmative[ly demonstrates] Mr. Kelly's unwillingness to heal these children or allow them to share." The superior court also found that James did not honor the spirit of the visitation agreement when "Christmas vacation was denied in [1999], and without just [cause was] shortened in 2000." Our review of the record convinces us that the superior court did not abuse its discretion in determining that James breached the visitation provisions of the custody agreement, thus satisfying the "changed cireumstances" requirement for modifying child custody.

2. The superior court did not err in determining that the change in circumstances requires modification of child custody in the best interests of the children.

Alaska Statute 25.24.150(c) requires that courts determine custody in accordance with the children's best interests, after considering specified factors. James argues that the superior court did not engage in a valid best interests analysis as AS 25,24.150(c) requires because the court mainly based modification on a single factor: James's alleged breaches of the visitation provisions of the custody agreement. He argues that "[the Trial Court ... gave far too much weight to what was found to be [James's] non-cooperation with the parties' agreement and court order on custody." We agree that a superior court may not modify custody solely because the custodial parent does not comply with orders of the court; it must still conduct a best interests analysis. We will find that the trial court abused its discretion if it considered improper factors, failed to consider statutorily mandated factors, or improperly weighed certain factors in making its determination.

Although the superior court focused on James's breach of the custody agreement in determining that modification was in the best interests of the children, it also engaged in a broader best interests analysis. The superi- or court considered how the relocation might affect the children and their educational opportunities. It also found that both parents were capable of raising the children, although it expressed concern that the children were not receiving the professional care needed to "help [them] heal from the emotional wounds they've suffered." We are generally reluctant to separate siblings in custody battles, even where it mollifies tensions such as those between Shane and Katherine. But the superior court carefully considered the children's best interests in constructing the modification order and gave Shane an option to choose at any time to be with his brothers. The superior court's findings were supported by the record and adequately address the required factors set out in AS 25.24.150(c).

The record does not support James's claim that the superior court abused its discretion in modifying custody. The superior court found distressing James's refusal to actively engage the children in communication with Katherine, and the record supports its finding that James's efforts to give the children contact with Katherine were "woefully inadequate." The superior court found particularly egregious James's repeated interference with holiday visits. These instances were not isolated, but formed a pattern of interference. Indeed, James's interference with visitation for Christmas 2000 occurred after Katherine had already moved to modify custody. But the superior court did not limit its focus to James's interference with visitation rights. Instead, it considered the impact of the modification on the children and determined that the evidence supporting modification outweighed evidence of potential disruptions in the children's lives. We will not reweigh the evidence when the record provides clear support for the trial court's ruling.

Because the superior court assessed the children's best interests in relation to the relevant statutory factors of AS 25.24.150(c), we hold that it did not err in modifying custody.

C. James's Child Support Obligation Must Be Recalculated.

James argues that the superior court erred in calculating child support. The superior court calculated child support by applying Alaska Civil Rule 90.3(b), arriving at a total annual award to Katherine of $5,266.98 ($438.92 per month). James argues that the court's determination of how much time each parent would have physical custody of the children does not accurately reflect the actual. time anticipated by the parties. He expects to have physical custody of Shane ninety-five percent of the time and physical custody of the two other children for at least twenty-five percent of the time. James's calculation implies that he will have physical custody of each child for an average of approximately forty-eight percent of the time. This figure varies from the superior court's calculated custody figure of 38.88% for James.

The superior court's calculated figure for James's custody may be incorrect because its March 2001 order appears to suggest a greater average percentage for James's physical custody than the 38.88% the court used in calculating child support. We cannot assess the extent of this possible miscalculation because we cannot determine how many days each parent is to have visitation under the superior court's custody order. It does seem clear that Katherine has primary physical custody of Junior and Peter and that James has primary physical custody of Shane. We hold that it was error to calculate the divided custody award under Rule 90.3(b) without first accurately accounting for each parent's period of physical custody.

James may also be entitled to move for recalculation of the child custody award for changed circumstances under Rule 90.3(h)(1), which provides:

A final child support award may be modified upon a showing of a material change of cireumstances. ... A material change of cireumstances will be presumed if support as calculated under this rule is more than 15 percent greater or less than the outstanding support order.

We have held that "certain changes in the law can constitute material changes of circumstances permitting the modification of child support orders [including] the adoption of: Civil Rule 90.3, itself." The rule change which makes Rule 90.3(a), rather than Rule 90.3(b), the default method for calculating divided custody awards is such a material change. Applying Rule 90.3(a) rather than Rule 90.3(b) would decrease the divided custody support award by about forty-three percent.

IV. CONCLUSION

For these reasons, we AFFIRM the order modifying child custody and REMAND for recalculation of James's child support obligation.

      . Katherine also has an older daughter, Amy. Amy was fifteen at the time of the custody investigator's report. James is not Amy's father, and Amy lives with her paternal grandmother in Chulkytak.

      . Siekawitch v. Siekawitch, 956 P.2d 447, 449 (Alaska 1998) (quoting Borchgrevink v. Borchgrevink, 941 P.2d 132, 134 (Alaska 1997)).

      . Id.

      . Id.

      . Id.

      . Murphy v. Newlynn, 34 P.3d 331, 333 (Alaska 2001) (citations omitted).

      . Id.

      . Pinneo v. Pinneo, 835 P.2d 1233, 1238 (Alaska 1992) (quoting AS 25.20.110) (internal quotations omitted).

      . Hermosillo v. Hermosillo, 797 P.2d 1206, 1209 (Alaska 1990) (citations omitted).

      . Pinneo, 835 P.2d at 1238.

      . AS 25.24.150(c) requires that the court consider:
      (1) the physical, emotional, mental, religious, and social needs of the child;
      (2) the capability and desire of each parent to meet these needs;
      (3) the child's preference if the child is of sufficient age and capacity to form a preference;
      (4) the love and affection existing between the child and each parent;
      (5) the length of time the child has lived in a stable, satisfactory environment and the desirability of maintaining continuity;
      (6) the desire and ability of each parent to allow an open and loving frequent relationship between the child and the other parent;
      (7) any evidence of domestic violence, child abuse, or child neglect in the proposed custodial household or a history of violence between the parents;
      (8) evidence that substance abuse by either parent or other members of the household directly affects the emotional or physical well-being of the child;
      (9) other factors that the court considers pertinent.

      . Plats v. Aramburo, 17 P.3d 65, 71 (Alaska 2001); see also Hakas v. Bergenthal, 843 P.2d 642, 644 (Alaska 1992) ("[Best interests] inquiry is not obviated by [a party's] noncooperation.").

      . Gratrix v. Gratrix, 652 P.2d 76, 80 (Alaska 1982); Deivert v. Oseira, 628 P.2d 575, 577 (Alaska 1981).

      . McQuade v. McQuade, 901 P.2d 421, 425 (Alaska 1995). But see Valentino v. Cote, 3 P.3d 337 (Alaska 2000) (holding superior court's determination that fourteen-year-old was sufficient ly mature to express choice to separate from sibling was not abuse of discretion).

      . D.M. v. State, Div. of Family & Youth Servs., 995 P.2d 205, 214 (Alaska 2000).

      . When the superior court issued its child support order on March 7, 2001, Civil Rule 90.3 permitted, but did not require, use of the method set out in Rule 90.3(b) to calculate divided custody awards. See Rowen v. Rowen, 963 P.2d 249, 254 (Alaska 1998). Subsection (3) of Rule 90.3(b) states, in part:
      The parent with the larger [annual amount owed for child support] is the obligor parent and the annual award is equal to the difference between [the obligor's calculated payment and the other parent's calculated payment] multiplied by 1.5. However, if this figure is higher than the amount of support which would be calculated under paragraph (a) assuming primary custody, ... the annual support is the amount calculated under paragraph (a).
      Rule 90.3, following amendment effective April 15, 2001, now requires that Rule 90.3(a) be used to determine divided custody awards. Alaska R. Civ. P. 90.3(b)(6) (2001-2002). Rule 90.3(b)(6) states in part; "Divided Custody. A child support award in a case in which the parents have divided custody is calculated, first, by determining what each parent would owe the other for children in that parent's primary physical custody under 90.3(a) and offsetting those amounts." (Emphasis added.) See also Alaska R. Civ. P. 90.3, cmt. V.D (2001-2002) (same); cf: Bunn v. House, 934 P.2d 753, 755-58 (Alaska 1997) (applying similar method to that of Rule 90.3(a) for divided custody case).

      . The superior court arrived at this amount as follows:

      The superior court then offset these calculations to determine the total child support owed and ﬂ1é monthly support payment:

      . Because Shane will continue to reside almost entirely with James and because the two younger children may potentially spend much of their summer vacation with James, the 33.33% figure used by the court may significantly deviate from the percentage of time James will have the children.

      . Bunn, 934 P.2d at 758 (citing Charlesworth v. State, Child Support Enforcement Div. ex rel. Charlesworth, 779 P.2d 792, 793-94 (Alaska 1989)).

      . Because Rule 90.3 was amended after the superior court calculated child support, we briefly consider whether the change in the method of calculation may alter James's support obligation by more than fifteen percent. Assuming for sake of discussion no change in the underlying facts concerning custody, it appears the fifteen percent threshold will be met. Under Rule 90.3(a), applying the custody figures the superior court relied on, James's obligation will be $249.66:

      . Compare monthly support payment calculations accompanying notes 17 & 20.