DHS Could Be Ordered to Refund Child Support Interest
A class action involving parents overcharged for back child support in Oklahoma is raising as many questions as it is bringing answers. Some Oklahoma parents are asking when they will be paid back, and how much.
For now, the answers to those questions depend on results of the 2011 case. If courts continue to rule in favor of four fathers who filed the lawsuit, millions of dollars in refunds could eventually be paid.
An attorney who worked on the case told an Oklahoma City newspaper total reimbursements could be as much as $130 million. Oklahoma Dept. of Human Services continues to fight the district court decision, currently in the Court of Civil Appeals. If courts decide against DHS on all points, officials say state governmental insurance policies could provide revenue for the refunds.
Relevant Citations:
- Oklahoma County CJ-2011-4162
- 2011 Oklahoma County class action challenged DHS method of computing interest on back child support.
- Oklahoma Supreme Court No. DF-114555
- Oklahoma DHS 2015 appeal of Oklahoma County District Court judgment in CJ-2011-4162
- DHS v. Glasby 1993 OK CIV APP 126 ¶6
- 1993 decision said child-support interest rates do not apply to accrued past support DHS has provided.
- Okla. Stat. tit. 12 §§ 727 and § 727.1
- Civil Procedure sets post-judgment interest at Treasury Bill rate plus 2 percent
- Okla. Stat. tit. 43 § 114 (1994)
- 1994 child support law did not specify 10 percent interest on judgments.
- Okla. Stat. tit. 43 § 114 (2012)
- 2012 law extends 10 percent interest to “judgments for support”
- Okla. Stat. tit. 10 § 83(D) (2006)
- 2006 version of “Liability to Support” law did not specify interest rate on pre-judgment accruals.
- Okla. Stat. tit. 10 § 83(D) (2012)
- 2012 law extends 10 percent interest to accruals prior to determination of paternity.
- Okla. Stat. tit. 56 § 238
- April 29, 2015 ruling cited law for “Payment of Public Assistance Creating Debt”
The case hinges on the way courts interpret Oklahoma law regarding interest in various child support matters. Oklahoma law sets interest rates on delinquent child support at 10 percent. An Oklahoma City district court said that law before 2012 did not extend to lump sum judgments for child support owed prior to the establishment of current child support.
Another law pegs interest on Oklahoma money judgments to U.S. Treasury Bill rates, plus two percent. The court said that law applies to lump sum child support judgments the DHS attempts to collect. The difference can be significant.
A year after the four men filed the class action lawsuit, the legislature changed the law. Current law explicitly sets interest rates on lump sum child support judgments for child support prior to a court order at the same 10 percent rate as delinquent child support.
Who Is Affected by DHS Child Support Interest Error?
Parents who could be affected by the case were ordered to pay lump sum judgments for child support owed before a court established child support obligations. Those lump sum accruals could result from a paternity action for back child support before the action was filed, or from a divorce for where a court ordered lump sum payment of back child support accrued before a child support order was issued.
To DHS, at least in practice, the interest rates on all back child support was always 10 percent. It did not matter if interest was for a lump sum judgment for prior child support or for delinquent payments on monthly child support obligations. The men who filed the case say DHS knew better.
A published 1993 case should have put DHS on notice about the difference, the man allege. That is because DHS filed the appeal that led to the court’s decision. In that case, the Oklahoma Court of Civil Appeals said money DHS collects for accrued back child is covered in Oklahoma’s post-judgment interest law.
Fathers who sued DHS 18 years later allege the agency knowingly overcharged parents for child support accruals. Evidence in the case includes a DHS memo that the court placed under seal.
Based on the agency’s alleged knowledge of the error, the fathers are seeking punitive damages in addition to the actual amounts overpaid. The lawsuit applies to parents who paid money to DHS between 1993, when DHS was first put on notice of the difference, and 2012 when the legislature set the interest rate at 10 percent for all child support delinquencies or arrearages.
How to Calculate Oklahoma Child Support Error
Yearly Post-Judgement Interest Rates in Oklahoma
| 2016 | 5.5% |
| 2015 | 5.25% |
| 2014 | 5.25% |
| 2013 | 5.25% |
| 2012 | 5.25% |
| 2011 | 5.25% |
| 2010 | 5.25% |
| 2009 | 5.25% |
| 2008 | 9.25% |
| 2007 | 10.25% |
| 2006 | 9.25% |
| 2005 | 7.25% |
| 2004 | 5.01% |
| 2003 | 5.63% |
| 2002 | 7.48% |
| 2001 | 9.95% |
| 2000 | 8.73% |
| 1999 | 8.87% |
| 1998 | 9.22% |
| 1997 | 9.15% |
| 1996 | 9.55% |
| 1995 | 8.31% |
| 1994 | 6.99% |
| 1993 | 7.42% |
Parents who anticipate a refund are asking how they can calculate child support errors for which they might be repaid. Good luck to the court that does the math on that.
The computation requires figuring out what portion of child support payments were for lump sum arrearages, what was for delinquency on current child support, what was for current child support paid on time, what was paid as interest on delinquencies and what was paid as interest on arrearages. Revised interest on arrearages would need to be calculated at the correct rate for each particular year.
Finding the corrected interest rate for arrearage judgments is an easier matter. The state Supreme Court Website shows post-judgment interest rates in Oklahoma between 1993 and 2012.
Rates dipped close to 5 percent in 2004 and from 2009 through 2012. Parents who paid settlements to DHS for those years would be due somewhat more than those who paid in 2007, when Oklahoma courts’ interest rates peaked around 10 percent.
The payments would go to potentially thousands of parents now living anywhere in the U.S. or abroad. DHS might or might not have records of how much it collected from parents as long as 23 years ago.
Those parents who paid too much and have detailed records of child support payments to DHS could attempt to calculate a potential reimbursement based on the same five elements – payments for lump sum arrearages, for delinquencies, for monthly child support, for interest in arrearages and for interest on delenquencies. Results are not likely to be precise, but could yield an estimate.
DHS Appeal Claims Immunity
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In its appeal, DHS raises several arguments that could eventually derail the case. The agency claims the relevant portion of the court’s 1993 opinion was merely dicta – commentary beyond the scope of a case – and therefore does not set a precedent.
According to DHS, Oklahoma’s Governmental Tort Claims Act does not allow courts to award punitive damages against a governmental agency and exempts the agency from liability when executing court order.
DHS also argues the class action was filed after the statute of limitations should have stopped any such claims. And DHS argues that federal civil rights law does not create a way for the fathers to sue DHS.
The agency also disputes the underlying premise that it should not have charged 10 percent interest on lump sum child support arrearage judgments.
So far, the district court has only ruled on the legal merits of the fathers’ case. If the civil appeals court affirms the district court, DHS would likely appeal to the Oklahoma Supreme Court. After that, if the Supreme Court does not reverse lower courts, the case goes back to a district court to decide questions about reimbursement and monetary damages.
Because DHS often gets involved in paternity cases, those in line for potential refunds include fathers who might have been assessed five years of child support the first time DHS sent them a bill. Until recently, Oklahoma law allowed courts to assess five years of back child support upon an initial filing to determine paternity. In 2014, the amount of time for retroactive child support collection in a paternity filing was reduced to two years.
As a class action, the court’s eventual decision in this case can affect all class members who did not opt out of the class prior to February, 2013. Because the class action lawsuit only names DHS and employees of DHS as defendants, it does not affect parents who paid child support directly to a custodial parent. Yet the case could set precedent for how courts view other child support cases involving interest on lump sum arrearage judgment.
Strategy Session: Tulsa Child Support Attorney
If you have questions about paying child support in Oklahoma, collecting child support in Oklahoma, calculating Oklahoma child support or errors in Oklahoma child support computations, talk to a Tulsa child support attorney. To schedule an inititial consultation with a child support lawyer, call the Wirth Law Office family lawyer at (918) 879-1681 or send your question using to form at the top of this page.
