J-S59001-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
SUZANNE M. GILES : IN THE SUPERIOR COURT OF : PENNSYLVANIA Appellant : : : v. : : : DOMINIC H. GILES : No. 1630 EDA 2019
Appeal from the Order Entered May 13, 2019 In the Court of Common Pleas of Northampton County Domestic Relations at No(s): DR-0062818, PACSES #331117121
BEFORE: LAZARUS, J., NICHOLS, J., and McLAUGHLIN, J.
MEMORANDUM BY LAZARUS, J.: FILED DECEMBER 30, 2019
Suzanne M. Giles (“Mother”) appeals the order of the Court of Common
Pleas of Northampton County, which made final the August 17, 2018 order,
directing Dominic H. Giles (“Father”) to pay $3,042.00 per month, which
included $2,293.00 for child support, $473.00 for alimony pendente lite, and
$276.00 for arrears.1 Upon careful review, we affirm. ____________________________________________
1 There is no divorce decree, and not all economic claims have been resolved; therefore, the portion of the order regarding alimony pendente lite is not appealable. See Leister v. Leister, 684 A.2d 192 (Pa. Super. 1996) (difference between spousal support and alimony pendente lite claims is negligible; neither is appealable until all economic issues resolved); see also Fried v. Fried, 501 A.2d 211 (Pa. 1985) (issues reviewable after entry of divorce decree and resolution of all economic issues). This Court filed an order requesting Mother to show cause as to whether the alimony pendente lite portion of the order is appealable. See Order, 6/25/19. Mother filed a response conceding the alimony pendente lite portion is not appealable, and J-S59001-19
For a recitation of the complete factual background and procedural
history of the case, we refer to the Honorable Jennifer R. Sletvold’s
comprehensive opinion of July 24, 2019. See Trial Court Opinion, 7/24/19 at
1–10.
Mother raises the following issues on appeal:
1. Did the [t]rial [c]ourt commit an error of law and/or abuse its discretion in calculating [Father’s] disposable business income though Hire a Husband, Inc. based upon federally taxed income for [f]ederal tax year 2017 rather than actual cash flow.
2. Did the [t]rial [c]ourt commit an error of law and/or abuse its discretion in calculating [Father’s] personal disposable income based upon federally taxed income for [f]ederal tax year 2017 rather than actual cash flow.
Appellant’s Brief, at 4.
In reviewing an appeal regarding child support, the Superior Court’s
scope of review is limited. Kotzbauer v. Kotzbauer, 937 A.2d 487, 489 (Pa.
Super. 2007). We adhere to the following standard:
[T]he amount of a support order is largely within the discretion of the trial court, whose judgment should not be disturbed on appeal absent a clear abuse of discretion. An abuse of discretion is not merely an error of judgment, but rather a misapplication of the law or an unreasonable exercise of judgment. A finding that the trial court abused its discretion must rest upon a showing by clear and convincing evidence, and the trial court will be upheld on any valid ground.
____________________________________________
proceeds in this appeal with that portion of the order pertaining to child support. See Appellant’s Response to Court’s Rule to Show Cause, 7/2/2019, at 2-3.
-2- J-S59001-19
Griffin v. Griffin, 558 A.2d 75, 77-78 (Pa. Super. 1989) (en banc) (citations
omitted) (emphasis added).
Mother’s claims are essentially one and the same: the trial court abused
its discretion in calculating support obligations based on Father’s personal and
corporate tax returns. We focus our analysis on the trial court’s determination
that the tax returns accurately reflect Father’s income and cash flow. Trial
Court Opinion, 7/24/19, at 12.
In determining financial responsibilities in child support cases, the court
must look to the actual disposable income of the parties by considering “all
forms of income.” See Cunningham v. Cunningham, 548 A.2d 611, 612–
13 (Pa. Super. 1988); see also MacKinley v. Messerschmidt, 814 A.2d
680, 681 (Pa. Super. 2002). “Monthly Gross Income” includes, in relevant
part: (1) wages, salaries, bonuses, fees, and commissions; (2) net income
from business or dealings in property; and (3) interest, rents, royalties, and
dividends. Pa.R.C.P. 1910.16-2. The word “net” in the rule implies that there
are acceptable business deductions. See Berry v. Berry, 898 A.2d 1100,
1107 (Pa. Super. 2006). For example,
Depreciation and depletion expenses should be deducted from gross income only where they reflect an actual reduction in the personal income of the party claiming the deductions, such as where, e.g., he or she actually expends funds to replace worn equipment or purchase new reserves.
Cunningham, 548 A.2d at 613 (emphasis added).
-3- J-S59001-19
We have carefully reviewed the record and the briefs filed in this matter.
Mother failed to provide clear and convincing evidence of an abuse of
discretion in calculating Father’s income for child support purposes. See
Griffin, supra at 77. Here, the court appropriately used Father’s corporate
and personal tax returns in determining Father’s disposable income. Each
deduction reflects an actual reduction in his personal income. See
Cunningham, supra at 613. Accordingly, we agree with the trial court’s
determination, and we conclude the trial court did not commit an error of law
or abuse its discretion in calculating Father’s support obligation.
We affirm based on Judge Sletvold’s comprehensive opinion. See Trial
Court Opinion, 7/24/19, at 10–22. We direct the parties to attach a copy of
that opinion in the event of further proceedings.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq. Prothonotary
Date: 12/30/19
-4- Circulated 11/26/201911:0SAM
IN THE COURT OF COMMON PLEAS OF NORTHAMPTON COUNTY COMMONWEALTH OF PENNSYLVANIA DOMESTIC RELATIONS SECTION
SUZANNE M. GILES, ) No: DR-0062818 Plaintiff ) PASCES No.: 331117121 v. ) Sup. Ct. No.: 1630 EDA 2019 ) DOMINIC GILES, ) Defendant )
PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1925(a) STATEMENT
AND NOW, this .5zv1;-day of July, 2019, the Court issues the
following statement pursuant to Pa .R.A.P. No. 1925(a):
Procedural History
This matter is before the Superior Court on Plaintiff's appeal of
our Order of Court dated May 3, 2019. ····� ,·
On May 29, 2018, Plaintiff filed with the Northampton County � '. ..
. . .J .,J ; : . .r.� Court of Common Pleas an Amended Complaint in Divorce which ( :.t:.:,�.1
1 -� L ,: contained counts sounding in divorce, equitable distribution, alimony L::_ 1. ; __
and alimony pendente lite, counsel fees and expenses, and custody of
the parties' 6 chlldren.! On that date, Plaintiff certified her Complaint
for alimony and alimony pendente lite ("APL") to the Northampton
County Domestic Relations Section (herein after "DRS"). See_ Amended
Complaint, Giles v. Giies, DR-0062818 (C.P. Northampton 5/29/2018).
1Plaintiff's divorce action was filed at Northampton County Docket No. C-48-CV-2016-03545 and was initially commenced in 2016. As set forth herein, Plaintiff filed this Amended Complaint on May 29, 2018. 7/24/19 Original to Docketing XC: The Honorable Jennifer R. Sletvold Lisa Yany Veiszlemlein (ORS Director) 34 Jes\§fca Fi];ilbyertlz-SQ, April C Cordts, E'so Office Supervisor Mailed: 7/25/19 On June 21, 2018, the parties were ordered to appear at a support
conference on July 26, 2018. On July 2, 2018, Plaintiff filed an
Amended Complaint with DRS seeking child support for the parties' six
(6) minor children and spousal support. See Amended Complaint for
Support, Giles, supra. (C.P. Northampton 7/2/2018).
On July 26, 2018, the parties and counsel appeared at DRS for
the scheduled support conference. See. Summary of Trier of Fact,
Giles, supra. (C.P. Northampton 7/26/2018). Plaintiff indicated that
she wished to proceed with the APL claim and withdraw the spousal
support claim. Id. at p. 1. Plaintiff reported being self-employed since
January 2017 as a veterinarian, performing in home euthanasia on
pets on an as-needed basis. Id. Prior to that time, she had been a
stay at home mother since 2004. Id. Plaintiff did not have her 2017
federal income tax return available at the time of the conference but
submitted her Schedule C and her local tax return. Id. Plaintiff also
submitted a typed income statement from Walbert Animal Hospital,
where she worked on an as-needed basis. Id. Plaintiff indicated that
she home schools each of the parties' 6 school-age chl!dren.2 Id.
Plaintiff reported expenses for piano lessons for 2 of the children of
$37 .00 per week per child. Id. at p. 2.
Defendant reported that he is self-employed and has been so
2 The parties have 7 children, one of which has attained the age of majority.
35 employed for 17 years. Id. Defendant submitted his 2017 federal
personal and corporate tax returns. Id. Defendant reported that he
owns/operates a handyman company named "Hire-A-Husband", works
as a real estate agent, and also bartends at Blue Mountain during the
winter months. Id. Defendant reported that he pays himself a salary
through his business, and he also receives wages from Blue Mountain.
Id. Defendant's reported wages on the 2017 Federal Tax Return
totaled $42,614.00 of which $6,947 .00 was from Blue Mountain. Id.
at 3. Defendant reported that primarily from December to April, when
business is slow for his handyman business, he bartends
approximately 2 days per week, 12 hours per day, making $8.00 per
hour at Blue Mountain. Id. Defendant's Schedule C for his real estate
business reflected gross receipt sales of $19,782.00. Id. Defendant
reported having three (3) employees at Hire-A-Husband, who are paid
in cash and are not issued 1099 or W-2 forms. Id. at 4. Defendant's
2017 1120-S corporate tax return listed a deduction for day laborers
totaling $55,000.00. Id. The gross receipts for Hire-A-Husband
totaled $243,452.00 for 2017. Id. The cost of goods reflected on the
return was $101,726.00. Id, Counsel for Defendant indicated that he
provided all accurate information to an accountant, and the accountant
completed the return. Id, at 5, Defendant reported having 3 bank
accounts at BB&T for himself and the business, along with a jolnt
36 account with Plaintiff. Id.
The parties reported having rental properties, specifically 5
properties; however, only 3 of the renta! properties were reported on
Defendant's 2017 tax returns. Id. Counsel for Plaintiff requested that
the depreciation listed on the tax returns for the rental properties be
added back when Defendant's tax return is calculated. Id. at 6. While
several of the properties were owned by both parties, Defendant
received al! income/rents from the properties. Id,
Defendant reported paying a variety of expenses for Plaintiff,
including a family cell phone plan in the amount of $350.00, the PP&L
electric bill of $300.00 per month for the home in which Plaintiff and
the children reside, Plaintiff's car payment of $600.00 per month,
insurance for Plaintiff's vehicle and their oldest son's vehicle, taxes of
$350.00 per month, and home owner's insurance of $110.00 per
month for the home in which Plaintiff and the children reside. Id. at 6.
Defendant was ordered to prov1de verification of the various
expenses discussed at the conference by August 6, 2018, and Plaintiff
was directed to submit her 2017 tax returns and supporting
documents, along with her paystubs from Walbert Animal Hospital by
August 6, 2018. Id. at 7. Disposition on the Complaint for Support
was deferred pending receipt of the requested information. Id.
Plaintiff submitted her 2017 Federal tax return and the required
37 pay stubs by August 61 2018. See Summary of Trier of Fact (2nd set),
Giles, supra. (C.P. Northampton 8/17/2018). Defendant did not
submit any documentation of the taxes he alleged he paid for the
marital residence. Id.
The conference officer noted that, while the parties reported
discrepancies with each of their tax returns at the time of the
conference, because the tax returns had been submitted to the IRS,
they would be utllized for the support calculations. Id. Plaintiff's
return was submitted to the DRS staff accountant for review, and it
was determined that Plaintiff had an adjusted monthly net income of
$2,115.00. Id. Defendant's tax return was submitted to the DRS staff
accountant for review, with the conference officer requesting that the
return be reviewed in "multiple ways". Id. at 2. The DRS staff
accountant determined that Defendant's rental income and wages
resulted in an adjusted net monthly income of $4,388.00. Id. Per the
staff accountant's review of Defendant's business income from Hire-A-
Husband, Defendant had an adjusted net monthly income of
$2,583.00. Per review of the rental income only, Defendant had an
adjusted net monthly income of $1,758.00. Id. On review of
Defendant's business income only and the rental income, the DRS
accountant determined that Defendant had an adjusted monthly net
income of $5,204.00. Id. The conference officer noted that "[1]t is
38 unknown to this office what the defendant's actual wages would be
had he paid himself a salary that reflected his actual earnings";
however, the conference officer recommended that Defendant's
income be based on the DRS accountant's findings of Defendant's
wages and rental income totaling $4,388.00 per month plus the
business income of $2,573.00 per month. Id. This resulted in an
adjusted monthly net income for Defendant of $6,961.00. Id. at 2.
Because Defendant failed to provide verification of any of the expenses
or additlona! payments he claimed to have made to or on behalf of
Plaintiff, no cons1deration was given to those items. Id. at 3.
On August 17, 2018, the Honorable Paula A. Roscioli entered an
Order of Court setting Defendant's support obligation at $3,042.00 per
month, allocated $2,766.00 for current support and $276.00 for
arrears. See Order of Court, Giles, supra. (CP. Northampton
8/17/2018). The Order was entered for the support of Plaintiff
(spousal support) and the parties' 6 minor children. Id. Arrears were
set at $7 ,285.90 as of the date of the Order. Id. The Order was
calculated utilizing Plaintiff's adjusted monthly net income of
$2,115.00 and Defendant's adjusted monthly net income of $6,961.00
including his wages, renta! income and buslness income as
recommended by the conference officer. Id. Plaintiff was ordered to
provide medical insurance coverage, and any unreimbursed medical
39 expenses were allocated at 77% to Defendant and 23°/o to Plaintiff.
Judge Roscioli noted that the award was entered solely for Alimony
Pendente Lite ("APL") for the period of May 29, 2018 through July 1,
2018 for the amount of $1,548.00 tor basic support. Id. The ongoing
award was effective July 2, 2018 and was allocated $2,293.00 for the
basic support of 6 children and $473.00 per month basic support for
APL. Id. The APL was set to terminate on May 29, 2020 absent a
request indicating the need for continued support, and APL could
terminate earlier if the parties reached a settlement or if ordered by
the Court. Id.
On September 11, 2018, Plaintiff timely filed a written demand
for hearing de novo before the Court to reconsider the Order of Court
dated August 17, 2018. On September 13, 2018, the parties were
ordered to appear for a de nova hearing on October 15, 2018. On
September 20, 2018, counsel for Plaintiff filed a Praecipe for Separate
Hearing Listing, requesting that an Order be entered permitting the
parties to take depositions and requesting to continue the October 15,
2018 de novo hearing because: 1) there were complex issues involving
Defendant1s income, 2) the hearing would be protracted, and 3)
Plaintiff intended to take discovery.
On October 1, 2018, Judge Roscioli entered an Order denying
Plaintiff's request for a protracted hearing and directing the parties to
40 develop all testimony and evidence in support of offers of poof by
deposition. _$ee Order, Giles, supra. (C.P. Northampton 10/1/2018).
The October 15, 2018 de nova hearing was continued to December 171
2018. Id.
On October 2, 2018, conference officer Nicole Lockhart sent a
Notice of Non-Compliance to Defendant, directing Defendant to submit
payment of $3,042.00 for September support within 10 days and
directing him to comply with the Order of August 17, 2018.
On December 5, 2018, the parties requested that the matter be
continued to allow additional time to take depositions. That request
was granted by the undersigned, and the case was scheduled for a
hearing to occur on February 13, 2019. Also on December 5, 2018,
the undersigned granted Pjaintiff's Motion to Compel Discovery and
directed Defendant to provide full and complete responses to Plaintiff's
Request for Production of Documents within 5 days of the date of the
Order.
On February 13, 2019, counsel for the parties appeared before
the undersigned. On that date, the undersigned entered an Order of
Court in accordance with the discussion at the time of the hearinq,
directing the parties to submit depositions and briefs to the Domestic
Relations Section within 60 days, after which further disposition would
be made by the Court. See Order of Court, Giles, supra. (C.P.
41 Northampton 2/13/2019).
On April 15, 2019, counsel for the parties submitted their
respective briefs. Counsel also submitted the transcript of the
deposition of Plalntiff, taken February 8, 2019, the deposition of
Defendant, taken February 1, 2019, the deposition of the parties' CPA,
C. Jane Bachman, taken on February 8, 2019, and the deposition of
Jennifer Nauman, a paralegal at Plaintiff's counsel's office, taken on
February 1, 2019. After revlew of the file and the parties'
submissions, on May 3, 2019, the undersigned entered the Order of
Court, making the August 17, 2018 Order final. See Order of Court,
Giles, supra. (C.P. Northampton 5/3/2019).
On May 30, 2019, Plaintiff filed her Notice of Appeal of the May
3, 2019 Order. On May 31, 2019, we entered an Order of Court
directing the filing of a Statement of Errors Complained of On Appeal
within 21 days. On June 11, 2019, Plaintiff filed her Concise
Statement of the Errors Complained of on Appeal Pursuant to Pa.R.A.P.
1925(b). In her Statement of Errors, Plaintiff raised two (2) alleged
errors, stating as follows:
1. The Trial Court committed an error of !aw and/or abused its discretion in calculating Defendant's personal disposable income based upon federally taxed income for Federal tax year 2017 rather than actual cash flow.
2. The Trial Court committed an error of law and/or abused its discretion in calculating Defendant's disposable business income through Hire A Husband, Inc. based upon federally
42 taxed income for Federal tax year 2017 rather than actual cash flow.
See Concise Statement of Errors Complained Of On Appeal, Giles,
supra. (C.P. Northampton 6/11/2019).
Discussion
It is respectfully submitted that Plaintiff's appeal is without merit
and should be dismissed. The two errors raised by Plaintiff are
essentially one and the same, specifically, that we erred or abused our
discretion in calculating Defendant's support obligation utilizing the
amounts listed In Defendant's personal and corporate Federal tax
returns as opposed to his alleged "actual cash flow." Based upon the
record in this matter, it was not an error of law or an abuse of
discretion to calculate Defendant's support obligation utilizing the
amounts included on his 2017 personal and corporate tax returns. It
was, therefore, not an error of law or an abuse of discretion to enter
the May 3, 2019 Order making the August 17, 2018 Order final.
Scope and standard of review
It is well established that "[i]n revlewing an order entered in a
support proceeding, an appellate court has a limited scope of review."
Kotzbauer v. Kotzbauer, 937 A.2d 4871 489 (Pa. Super. 2007), quoting
Commonwealth ex rel. Cann v. Cann, 418 A.2d 403, 404-405 (Pa.
Super. 1980), When reviewing an order regarding spousal support,
the Superior Court "may reverse a support order only where the order
43 cannot be sustained on any valid ground. Absent an abuse of
discretion or insufficient evidence to sustain the support order, this
court will not interfere with the broad discretion afforded the trial
court." Strawn v. Strawn, 664 A.2d 129, 131 (Pa. Super. 1995),
quoting McKolanis v. McKolanis, 644 A.2d 1256 (Pa. Super. 1994). It
is also well established that the Superior Court's scope of review is
limited in child support cases. See Haley v. Haley, 549 A.2d 1316,
1317 (Pa. Super. 1988). It is within the trial court's discretion to
determine the amount of a child support Order, and its judgment
should not be disturbed on appeal absent a clear abuse of discretlon.
Id., quoting Ritter v. Ritter, 518 A.2d 319, 322 (Pa. Super. 1986). "On
appeal, a trial court's child support order will not be disturbed unless
there is insufficient evidence to sustain it or the court abused its
discretion in fashioning the award." Id. (internal citations omitted).
The Pennsylvania Supreme Court has stated as follows:
"Abuse of discretion" is synonymous with a failure to exercise a sound, reasonable, and legal discretion. It is a strict legal term indicating that [an] appellate court is of opinion that there was commission of an error of law by the trial court. It does not imply intentional wrong or bad faith, or misconduct, nor any reflection on the judge but means the clearly erroneous conclusion and judgment- one that is clearly against logic and effect of such facts as are presented in support of the application or against the reasonable and probable deductions to be drawn from the facts disclosed upon the hearing; and improvident
44 exercise of discretion; and error of law.
McKofanis, 644 A.2d at 106, citing Commonwealth v. Powell, 590 A.2d
1240, 1244 (Pa. 1991), A finding of abuse of discretion will be made
only upon a showing of clear and convincing evldence. Koller v.
Kofler, 481 A.2d 1218 (Pa. Super. 1984). The role of an appellate
court in support proceedings is llmited, and a finding of abuse of
discretion should not be made lightly. See Haley, 549 A.2d at 1317,
citing Hartley v. Hartley, 528 A.2d 233 (Pa. Super. 1987); see also
Shindel v. Leedom, 504 A.2d 353 (Pa. Super. 1986).
Plaintiff's appeal is without merit.
As set forth above, Plaintiff has essentially raised a single issue
as to our May 3, 2019 Order that made final the August 17, 2018
Order, specifically, that we allegedly committed an error of law and/or
abused our discretion in calculating Defendant's support obligation
utilizing Defendant's federally taxed income as reflected in his 2017
personal and corporate federal income tax returns rather than
Defendant's "actual cash flow." The record in this matter reflects that
it was not an error of Jaw or an abuse of discretion to use the amounts
set forth in Defendant's 201 7 persona I and business tax returns to
calculate his income for child support purposes because the tax returns
accurately reflect Defendant's income and actual cash flow.
Plaintlff argues that the August 17, 2018 Order did not properly
45 calculate Defendant's disposable income. See Brief of Plaintiff at p, 7
et seq., Giles, supra. (C.P. Northampton 4/15/2019). Plaintiff argues
that "[w]hen determining a support obligor's disposable income,
federally taxed income is not the measure; it is the cash flow that
ought to be considered." Id., citing Labar v. Labar, 731 A.2d 1252
(Pa. 1999). Plaintiff further notes that "[d]eductions allowed under
Federal tax \aw which do not represent actual reductions in personal
income of a support obligor will not be allowed in the disposable
income calculation." Id., citing Labar, supra. Plaintiff also avers that
"[i]t is actual available financial resources of the payor that must be
considered not the often fictional financial picture that emerges after
taking into account tax considerations." Id., citing Calabrese v.
Calabrese, 682 A.2d 393 (Pa. Super. 1996). Plaintiff's arguments are
not persuasive based u pan the record in this matter.
As noted above, the partles to the instant matter were both
deposed, as was the parties' CPA. Defendant was deposed on
February 1, 2019. See Notes of Transcript of Deposition of Dominic
Giles (hereinafter "Defendant's Deposition"), Giles, supra. (C.P.
Northampton 4/15/2019). Defendant testified that he operates the
handyman business, "Hire-a-Husband", based in Allentown. See
Defendant's Deposition at 4: 20-25. Defendant engages in handyman
and light construction work including handing drywall, painting,
46 landscaping, and home repair. Id. at 5:3-7. Defendant has been the
owner/operator of the business since 2001. Id. at 5: 8-11. Defendant
identified his personal and corporate federal tax returns for 2017 as
Plaintiff's Exhibits 1 and 2. Id. at 5: 12-20. On the corporate tax
return for Hire-A-Husband, Defendant identified the gross receipts
from sales in the amount of $243,452.00 on line 1 under income, and
the cost of goods sold as $101, 726.00 on line 2. Id. at 8: 10-23.
Defendant testified that he did not have documentation to substantiate
the cost of goods sold for 2017. Id. at 9:24-10:3. Defendant testified
that the calculatlon of the cost of goods was a "guesstimate". Id. at
10: 10-13. Defendant testified that line number 17 on the corporate
return, "compensation of officers", reflected the $35,667.00 income he
received from Hire-A-Husband. Id. at 10: 20-11: 7. The corporate
return reflected $83,105.00 in other deductions. Id. at 11 :8-16. The
itemization of those deductions included $7A15.00 for automobile
expenses (Id. at 11:17-20), $19.106.00 for waste removal/dumpsters
(Id, at 13:16-23), $934.00 for insurance (Id. at 14:8-12), and
$55,000.00 for day laborers (Id. at 14:19-21). All of the laborers for
Hire-A-Husband are pale between $10.00 and $13.00 per hour in cash,
and no 1099 or W-2 forms are provided to them. Id. at 15:2-22.
Defendant indicated that he had 3 bank accounts at BB&T: one
in his name, one in his name doing business as Hire-A-Husband, and
47 one joint account with Plaintiff. Id. at 16:11-17:17. Defendant
testified that the expenses of the business were paid mostly out of the
business bank account but that some of the expenses were paid out of
his personal account. Id. at 17: 18-24. Plaintiff's Exhibit 7, an
accounting of the Hire-A-Husband account, was identified and
discussed, with Defendant identifying the total deposits totaling
$245,728.53 and the total withdrawals totaling $224,352.63. Id. at
18: 13-24. Defendant agreed with Plaintiff's counsel that the total
deposits reflected on the accounting and the gross receipts on the
corporate tax return were approximate1y $2,000.00 different. Id. at
19:10-19. After not being to able identify a variety of checks written
from the various accounts, Defendant testified that $117,000.00 had
been transferred from the Hire-A-Husband Account into the joint
account. Id. at 32:20-23.
Turning to his persona\ return, Defendant testified that line 7 of
his return reflected $42,614.00 in wages, salary, and tips. Id. at
32:24-33:4. That amount included his Hire-A-Husband salary and the
payment from Blue Mountain of wages totaling $6,947.08,: Id. at
33: 5-34: 1. Defendant also reported $9,158.00 of business income
from his work as a real estate agent. Id. at 34:2-7. This consisted of
$19,782.00 in gross receipts/commissions less expenses. Id. at
34: 19-25. Defendant also reported $13,594.00 in rental income. Id,
48 at 39: 3-6. That amount reflected the various properties rental
income, minus taxes, expenses, repairs and other associated costs.
Id. at 39: 7-45: 9.
Defendant also testified that he paid Plaintiff's car payment in
the amount of approximately $600.00 per month. Id. at 50:2-3;24-
25. Defendant testified that Plaintiff does not make any deposits that
he is aware of into the joint account. Id. at 51:7-9. Defendant
indicated that during their marriage, he and Plaintiff would routinely
file joint tax returns using the same accountant. Id. at 54:7-16.
Defendant testified that his method of providing information to the
accountant over those 13 years remained consistent. Id. at 54:17-24.
Defendant stated that he believed both he and his wife would go to the
accountant to sign the joint returns separately. Id. at 55:6-10.
The deposition of the parties' CPA, Ms. C. Jane Bachman, was
taken on February 8, 2019. See Notes of Transcript of Deposition of
c. Jane Bachman, CPA (hereinafter "CPA Deposition"), Giles, supra.
(C.P. Northampton 4/15/2019). Ms. Bachman testified that she has
prepared income taxes as an accountant for 35 years. CPA Deposition
at 4: 16-5:2. Ms. Bachman testified that she has been preparing tax
returns for Plaintiff and Defendant and for Hire-A-Husband since
approximately 2001. Id. at 5: 6-22. Ms. Bachman identified the 2017
tax documents identified as Plaintiff's Exhibit 2. Id. at 7:7-20. Ms.
49 . Bachman identified the sales reported as $243 .452.00 and indicated
that that number was provided to her by Defendant. Id. at 8:12-18.
Ms. Bachman did not prepare any calculations to establish that sales
number. Id. at 8: 19-21. Ms. Bachman indicated that the sales
number had no input in the calculation of the materials/cost of goods
sold amount of $101,726.00 that was listed in the corporate return.
Id. at 9: 11-12. Ms. Bachman said that she did "some work" because
she wants it to make sense and doesn't want Defendant to "go off the
deep end" because "he's probably not the best bookkeeper.'' Id. at
9: 17-20. Ms. Bachman did testify that she had some input into
Defendant's listed wages received from Hire-A-Husband because:
[She was] just trying to get him to have enough wages to be okay with the IRS. They require that S-corp owners take at least a salary. It is supposed to be equal to what their fair market value is. Most of them take as little as possible because they have to pay FICA. So I probably gave those numbers.
Id. at 10: 13�21.
As to the rental property income, Ms. Bachman testified that she
would have to call Defendant to get figures to put in the tax returns,
and he wouid provide her with the numbers to put in the returns. Id.
at 11 :5�12. Ms. Bachman noted that Defendant did not provide her
with documentation to substantiate the numbers he provided her, and
she never asked him to. Id. at 11: 24-12: 2. Ms. Bachman did not
specifically reca!I more than one occasion prior to the 2017 return,
50 when Plaintiff signed the parties' joint tax returns, and she indicated
that Defendant handled the taxes. Id. at 12: 15-13: 7.
Plaintiff's deposition was taken on February 8, 2019. See Notes
of Transcript Deposition of Suzanne Giles (hereinafter "Plaintiff's
Deposition"), Giles, supra. (C.P. Northampton 4/1.5/2019). Plaintiff
testified that, prior to 2017, she was aware of the existence of joint
returns that were being filed on behalf of Plaintiff and Defendant and
that she was aware they were flied by Ms. Bachman. See Plaintiff's
Deposition at 5: 24-6: 8. Plaintiff testified that Defendant was and has
been engaged in the same business throughout their marriage,
including the handyman work, the rental properties and real estate
sales. Id. at 12:8-19. Plalntlff testified that Defendant is a diligent
worker. Id. at 12:20-24.
In Cunningham v, Cunningham, 548 A.2d 611 (Pa. Super.
1988), the Superior Court stated as follows:
It is well established that depreciatlon and depletion expenses, permitted under federal income tax law without proof of actual loss, wlll not automatically be deducted from gross income for purposes of determining awards of alimony and equitable distribution. In determining the financial responsibilities of the parties to a dissolving marriage, the court looks to the actual disposable income of the parties ... Depreciation and depletion expenses should be deducted from gross income only where they reflect an actual reduction in the �sgnal income of the party claiming the deductions, such as where, e.g., he or she actually expends funds to replace worn equipment or purchase new reserves.
51 Cunningham v. Cunningham, 548 A.2d 611, 612-613 (Pa. Super.
1988)(emphasis added). Pa.R.C.P. No. 1910.16-21 titled "Support
Guidellnes. Calculation of Monthly Net Income" provides, in relevant
part, as follows:
Generally, the support amount awarded is based on the parties' monthly net income. (a) Monthly Gross Income. Monthly gross income is ordinarily based on at least a six-month average of a party's income. The support law, 23 Pa.C.S. § 4302, defines the term "income" and includes income from any source. The statute lists many types of income including, but not limited to: (1) wages, salaries, bonuses, fees, and commissions; (2) net income from business or dealings in property: (3) interest, rents, royalties, and dividends; ( 4) pensions and all forms of retirement; (5) income from an interest in an estate or trust; (6) Socia! Security dlsability benefits, Social Security retirement benefits, temporary and permanent disability benefits, workers'- compensation, and unemployment compensation; (7) alimony if, in the trier-of-fact's discretion, inclusion of part or all of it is appropriate; and Note: In determining the appropriateness of including alimony in gross income, the trier-of-fact shall consider whether the party receiving the alimony must include the amount received as gross lncome when filing his or her federal income taxes. If the alimony is not inc!udable in the party's gross income for federal income tax purposes, the trier-of-fact may include in the party's monthly net income the alimony received, as appropriate. See Pa.R.C.P. No. 1910.16-2(c)(2)(ii). Since the reasons for ordering payment of alimony vary, the appropriateness of including it in the recipient's gross income must also vary. For example, if the obligor is paying $1,000 per month in alimony for the express purpose of financing the obligee's college education, it would be inappropriate to consider that alimonv as income from which the obligee could provide child support. However, if alimony is intended to finance the obligee's
52 general living expenses, inclusion of the alimony as income is appropriate. (8) other entitlements to money or lump sum awards, without regard to source, including: (l) lottery winnings; (ii) income tax refunds; (iii) insurance compensation or settlements; (iv) awards and verdicts; and (v) payments due to and collectible by an individual regardless of source.
Pa.R.C.P. No. 1910.16-2(a).
Upon review of the entirety of the file, the parties' briefs in
support of their respective positions, and the depositions taken in this
matter, the August 17, 2018 Order properly took into account each of
the parties' incomes appropriately. Contrary to Plaintiff's assertions,
the August 17, 2018 Order properly calculated Defendant's disposable
income in accordance with Pa.R.R.P. No. 1910-16.2 by utilizing
Defendant's federal personal and corporate tax returns. While we
agree with Ms. Bachman that Defendant may not be the strongest
bookkeeper, the process utilized to produce Defendant's corporate and
personal income tax returns was consistent for 16 years. Each of the
deductions claimed in Defendant's corporate and personal tax returns
appeared to reflect an actual reduction in Defendant's personal
income. Therefore, each of the deductions discussed herein were
appropriately considered in determining Defendant's disposable income
for child support and APL calculation purposes. Thus, it was not an
error of law or abuse of discretion to utilize the tax returns to calculate
53 Defendant's support obligation. S�e_ Cunningham, supra.
As noted above, Plaintiff's 20l7 federal tax return was submitted
to the DRS accountant for review, as were Defendant's federal
individual and corporate returns. After examination by the DRS
accountant, it was determined that Plaintiff had an adjusted monthly
net income of $2,115.00. See Summary of Trier of Fact, Giles, supra.
(C.P. Northampton 7/26/2018). The conference officer requested that
Defendant's returns be reviewed in "multipl-e ways". Id. at 2. The
DRS staff accountant determined that Defendant's rental income and
wages resulted in an adjusted net monthly income of $4,388.00. Id.
Per the staff accountant's review of Defendant's business income from
Hire-A-Husband, Defendant had an adjusted net monthly income of
$2,583.00. Per review of the rental income only, Defendant had an
Defendant's business income only and the rental income, the DRS
accountant determined that Defendant had an adjusted monthly net
income of $5,204.00. Id. The conference officer noted that "[i]t is
unknown to this office what the defendant's actual wages would be
had had paid himself a salary that reflected hls actual earnings";
however, the conference officer recommended that Defendant's
income be based on the DRS accountant's findings of Defendant's
wages and rental income, totaling $4,388.00 per month, plus the
54 business income of $2,573.00 per month. Id. This resulted in an
adjusted monthly net income for Defendant of $6,961.00. Id. at 2.
The above incomes were then properly utilized in calculating
Defendant's support obligation in accordance with the guidelines and
formula set forth in Pa.R.C.P. No. 1910.16-1 through 1910.16-4. In
accordance with that calculation, Defendant was ordered to pay
$3,042.00 per month, allocated $2, 766.00 for current support and
$276.00 for arrears. SE:e Order of Court, Giles, supra. (C.P.
Northampton 8/17 /2018). These calculations were not errors of law,
and we did not abuse our discretion in entering the August 17, 2018
Order. Therefore, it was not an error of law or abuse of discretion to
enter the May 3, 2019 Order making the August 17, 2018 Order final.
Conclusion
It is respectfully suggested that Plaintiff's appeal is without
merit. Defendant's income was properly calculated for support
purposes, utilizing his 2017 federal personal and corporate income tax
returns that reflected his actual, disposable income.
BY THE CO�RT f � 9� JE�ETVOLD, �