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HomeMy WebLinkAbout960 S 2006 KAREN J. BRANDT, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : : DOMESTIC RELATIONS SECTION V. : : JAY H. BRANDT, JR., : PACSES NO. 313108738 Defendant : DOCKET NO. 960 SUPPORT 2006 ORDER OF COURT nd AND NOW , this 2 day of October, 2007, upon consideration of Petitioner’s Exceptions to the Support Master’s Report and Recommendations, and for the reasons IT IS ORDERED: stated in the accompanying opinion, DISMISSED (1)The Exceptions of Karen J. Brandt are . IS MADE FINAL (2)The interim order entered on May 3, 2007, . BY THE COURT, M.L. Ebert, Jr. J. Michael R. Rundle, Esquire Support Master Andrew C. Sheely, Esquire 127 South Market Street P.O. Box 95 Mechanicsburg, PA 17055 Michael A. Scherer, Esquire Attorney for Defendant I.D. No. 61974 19 West South Street Carlisle, PA 17013 KAREN J. BRANDT, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : : DOMESTIC RELATIONS SECTION V. : : JAY H. BRANDT, JR., : PACSES NO. 313108738 Defendant : DOCKET NO. 960 SUPPORT 2006 IN RE: EXCEPTIONS TO SUPPORT MASTER’S REPORT AND RECOMMENDATIONS BEFORE EBERT, J. OPINION and ORDER OF COURT Ebert, J., October 2, 2007-- In this child support case, Petitioner Karen J. Brandt filed written exceptions to the May 3, 2007, Interim Order of the Court, Report and Recommendations. A hearing was held before the Support Master and an Interim Order was entered based on the Master’s Report and Recommendations. For the reasons stated in this opinion, Petitioner’s exceptions to the Master’s Report and Recommendations are dismissed. STATEMENT OF FACTS Plaintiff is Karen J. Brandt and Defendant is Jay. H. Brandt. The parties are the parents of two minor children, Samuel C. Brandt, born October 22, 1990, and Olivia L. Brandt, born July 3, 1993. Both of the children currently reside with the Plaintiff. Plaintiff and Defendant were married on September 16, 1989. The parties resided together at 44 Brandt Lane, the marital residence, until March 2006 when the Defendant moved from the home. On October 31, 2006, the Plaintiff filed a complaint for spousal and child support. In early February 2007 the Plaintiff and children moved from the - 2 - marital residence to her present address. Subsequently, the Defendant moved back to the marital home. Support Master’s Report and Recommendation, filed 5/1/2007 at 1. Plaintiff and Defendant are joint owners of the former marital residence located at 44 Brandt Lane, Newville, Pennsylvania. N.T. 4/25/2007 at 13. The marital residence maintains a value of at least $650,000.00 and has a mortgage of $477,500.00 which requires a monthly payment of $3,018.12. N.T. 4/25/2007 at 19. Tax and homeowners’ insurance on the marital residence averages $484.00 per month. Support Master’s Report and Recommendation, filed 5/1/2007 at 3. During the period of November 2006 through January 2007, when the Plaintiff and children occupied the marital residence, the Defendant paid the mortgage payments and the utility bills on the residence. Support Master’s Report and Recommendation filed 5/1/2007 at 1. The Plaintiff is employed part-time as a personal trainer at Gold’s Gym and also performs on-call physical therapy services for Green Ridge Village. For the period of January 1, 2007, through April 15, 2007, the Plaintiff has earned only $1,263.75 at . Gold’s Gym. Id at 2. Plaintiff has received only minimal income from Green Ridge Village in 2007. The Defendant is the president of J.H. Brandt & Associates, Inc.; however, each party owns 50% of the corporate stock. Id. The parties also own real estate located at 657 Forge Road, Carlisle, Pennsylvania, where the corporate office is located. Id. at 3. The corporation pays $4,500.00 per month in rent or $54,000.00 on an annual basis. Beginning in November 2006, the parties leased office space to a local realtor resulting in additional monthly income of $1,290.00 or $15,480.00 on an annual basis. Defendant controls all incomes - 3 - from the jointly owned rental property. Additionally, the Defendant made a $3,000.00 direct payment to the Plaintiff in late November 2006. Id. During the hearing on April 25, 2007, the Support Master made determinations as to the following sources of income in 2006: 1.Plaintiff’s net income earning capacity of $1,306.00 per month (including child tax credit; and 2.Defendant’s gross bi-weekly income of $3,846.16 or $8,333.34 per month; and 3.Net rental income or cash flows derived from 657 Forge Road of $50,736.00 or $4,288.00 monthly Support Master’s Report and Recommendation, filed 5/1/2007. After hearing the testimony of the two parties and evaluating all submitted evidence, the Support Master issued his Report and Recommendation which the Court then accepted in issuing the following order: A.Effective November 1, 2006, the Defendant shall pay to the Pennsylvania State Collection and Disbursement Unit for the support of his children, Samuel C. Brandt, born October 22, 1990, and Olivia L. Brandt, born July 3, 1993, the sum of $1,595.00 per month. B.Effective February 1, 2007, the Defendant shall pay to the Pennsylvania State Collection and Disbursement Unit, in addition to the aforesaid child support, spousal support in the amount of $1,195.00 per month. C.The Defendant shall provide health insurance coverage for the benefit of his wife and children provided through employment or other group coverage at a reasonable cost. D.The monthly support obligation includes cash medical support in the amount of $250.00 annually for unreimbursed medical expenses incurred for each child and spouse. Unreimbursed medical expenses of the obligee for the children that exceed $250.00 annually shall be allocated between the parties. The party seeking allocation of unreimbursed medical expenses must provide documentation of expenses to the other party no later than March 31 of the year following the calendar year in which the final medical bill to be allocated was received. The unreimbursed medical expenses are to be paid as follows: 87% by the Defendant and 13% by the Plaintiff. Only the unreimbursed medical expenses - 4 - incurred by the Plaintiff on and after the date of filing of the complaint shall be allocated. E.The Defendant shall be entitled to claim the older child as a dependent exemption for federal income tax purposes commencing with tax year 2006, and the Plaintiff shall execute and deliver to the Defendant in a timely manner any and all documentation required by the Internal Revenue Code to effectuate said exemption. F.The Defendant is given a credit in the amount of $3,000.00 for a direct payment made to the Plaintiff. Interim Order of Court, filed 5/3/2007. Plaintiff has now timely filed exceptions to the Support Master’s Report and Recommendations. Plaintiff’s claimed exceptions are stated as follows: 1.The Support Master’s Report and Recommendation is not supported by the record and constitutes an error of law in determining the net income of the Defendant. 2.The Interim Order of Court as established by the Support Master’s Report and Recommendation is not supported by the record and constitutes an error of law and abuse of discretion by not placing the parties on similar economic footing by allocating all of the rental income earned on jointly owned real estate to the Defendant. 3.The Interim Order of Court as established by the Support Master’s Report and Recommendation, specifically Paragraph 29 of the Findings of Fact, should be vacated as erroneous finding, abuse of discretion and not supported by the weight of the record. 4.The Interim Order of Court as established by the Support Master’s Report and Recommendation is not supported by the record and constitutes an error of law or abuse of discretion where Defendant failed to submit an income and expense statement and where Defendant failed to provide any further income, tax, depreciation and other financial information for the 2006 tax year. 5.The Interim Order of Court as established by the Support Master’s Report and Recommendation is not supported by the record and constitutes an error of law/abuse of discretion where an amount of $525.00 was deducted from Plaintiff’s spousal support guideline amount to assist Defendant with payments on a substantial and exorbitant mortgage, tax and insurance debt on the jointly owned marital residence for Defendant’s exclusive use and enjoyment. - 5 - Brief in Support of Plaintiff’s Exceptions to Master’s Report, filed 7/2/2007. DISCUSSION As a general rule, although the Master's report is entitled to great weight, the final responsibility for making the equitable distribution of property rests with the Court. Tagnani v. Tagnani, 439 Pa. Super. 596, 600, 654 A.2d 1136, 1138 (1995).This responsibility is vested in the sound discretion of the trial court which must give due consideration to the Master's recommendations. Id. Unless the testimony and evidence provide grounds upon which the Master’s finding of credibility can be impeached, the Court will give his conclusions the fullest consideration. Goodman v. Goodman, 375 Pa. Super. 504, 507, 544 A.2d 1033, 1035 (1988). However, the reviewing Court is not bound to the Master’s Report and Recommendation, Tagnani, 654 A.2d 1136, and has the duty to make complete and independent review of all evidence in establishing whether the Master’s evaluation of the testimony and evidence was credible, Gomez v. Gomez, 11 Phila. Co. Rptr. 22, 226,-27 (1984). “An abuse of discretion is not merely an error of judgment, but rather a misapplication of the law or an unreasonable exercise of judgment.” Isralsky v. Isralsky, 824 A.2d 1178, 1186 (Pa. Super. 2003). An abuse of discretion “is synonymous with a failure to exercise a sound, reasonable, and legal discretion. 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 [the] 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; an improvident exercise of discretion; an error of law.” Myers v. Myers, 405 Pa. Super. 290, - 6 - 293, 592 A.2d 339, 341 (1991), citing Commonwealth v. Powell, 527 Pa. 288 n. 8, 590 A.2d 1240 n. 8 (1991), quoting Black's Law Dictionary, 5th Ed. (1979). We further note that “where there is insufficient evidence to support the [Master’s report], the judgment is manifestly unreasonable and must be reversed.” Myers, 592 A.2d at 341. In this Court’s view, the evidence outlined in the Support Master’s Findings of Fact clearly supports the court's order of distribution in this case. The Master exercised his discretion soundly, reasonably, and legally. The Master’s recommendation is clearly supported by logic, untainted by bad faith or misconduct. While this case involves somewhat more than the average case considering the employment issues and the management of the rental properties, it is not tremendously complicated. The Master has effectively and succinctly outlined each party’s income and fairly determined the amount of child and spousal support to be paid by the Defendant. When examined in light of the entire distribution, considering all the factors set forth by the legislature, this order does not constitute an abuse of discretion. Diament v. Diament, 816 A.2d 256, 263 (Pa. Super. 2003). We now address each of the Petitioner’s contentions. This Court finds that the Support Master’s Report and Recommendation are fully supported by the record. We note that the Defendant runs the corporation and earns a salary of approximately $8,330.00 per month. He had earned that salary prior to the parties’ separation, and he continues to earn that salary now. He has not sought to manipulate his earnings in order to avoid support obligation. The rules clearly anticipate that an obligor will pay income tax on earnings. Absent a showing that Defendant will not pay income tax, the Master was correct in deducting federal, state and local income taxes from the monthly net - 7 - income of the Defendant. See Pa.R.C.P. 1910. The Master also reasonably accounted for the fact that only $2000.00 was received by the Defendant as a net refund because of the 2004 obligation payment to the I.R.S. Secondly, Petitioner’s contention that the failure of the Master to allocate rental income earned or jointly owned real estate to the Defendant was an abuse of discretion is without merit. The Defendant has been responsible for managing the rental real estate. The corporation, which he also runs, operates from that location, and Defendant has taken the responsibility to lease and maintain the rest of the property. The Master was obligated to apportion all of the rental income to the Defendant because that is what, in fact, is taking place. Defendant collects the rents and pays the bills for the rental property. We hold that the Master did not abuse his discretion in attributing the rental income to the Defendant, the person actually receiving it. The Petitioner asserts that the Defendant takes distribution of funds from the corporation beyond his salary. This argument is without merit in that the Master was fully supported by the record and his decision was not an abuse of discretion or an error of law. Although the Defendant acknowledged receipt of cash payment for a job he completed prior to the Petitioner’s filing for child and spousal support, there was no showing that this was anything other than an isolated incident. Additionally, the Defendant received petty cash from the sale of scrap metals and materials; however, his receipt of such payments is nominal. The Defendant also cashed in a life insurance policy that he received through an inheritance, and a second policy which had been paid for by the corporation; however, these actions took place prior to the Petitioner filing the support action and at a time when the Defendant was paying all the bills and expenses for - 8 - both parties. Because of the previous facts, the Master was free to disregard these occurrences because they were not usual occurrences, minimal, or were realized prior to the support action being filed. Next, the Petitioner asserts that Defendant failed to submit an income and expense statement or to provide any further income, tax, depreciation and other financial information for the 2006 tax year. Petitioner contends that this failure amounts to an abuse of discretion in the Interim Order of the Court. This argument is without merit. The Master did not want to hear testimony from the Defendant regarding his expenses, because this was a guideline case. N.T. 4/25/2007 at 86. Since the Defendant did not have any unusual expenses, and since the Master did not want to hear testimony from either party on their expenses, an income and expense statement did not have to be provided. Furthermore, the Defendant submitted a W-2 for his wages from the corporation for 2006 and the rental income known to the Petitioner. Additionally, the Petitioner never objected to the absence of a corporate personal tax return prior to the support hearing, therefore, the Master acted appropriately and did not abuse his discretion or commit an error of law. Finally, the Petitioner contends that the Support Master’s Report and Recommendation is not supported by the record and constitutes an error of law or an abuse of discretion where an amount of $525.00 was deducted from Plaintiff’s spousal support guideline. Initially, the parties obligated themselves to a large, joint mortgage. The monthly mortgage obligation was around $3,500.00. The Petitioner resided in the marital residence at the time of the filing of the support action. Subsequently, the Petitioner was awarded $1,215.73 as a supplement to her child and spousal support case - 9 - to assist in the payment of the mortgage. She then voluntarily moved out of the marital residence. We find that it was within the Master’s discretion to allow a downward adjustment of $525.00 per month which was less than half of that previously awarded to Petitioner. CONCLUSION Having considered the testimony and evidence presented by both parties, this Court finds that the Master’s Findings of Fact and Recommendations are credible and should be awarded the fullest consideration. Petitioner’s exceptions to the Master’s Report and Recommendations will be dismissed and the current Interim Order of the Court shall be made final. Accordingly, the following order will be entered: ORDER OF COURT nd AND NOW , this 2 day of October, 2007, upon consideration of Petitioner’s Exceptions to the Support Master’s Report and Recommendations, and for the reasons IT IS ORDERED: stated in the accompanying opinion, DISMISSED (3)The Exceptions of Karen J. Brandt are . IS MADE FINAL (4)The interim order entered on May 3, 2007, . BY THE COURT, M.L. Ebert, Jr. J. Michael R. Rundle, Esquire Support Master - 10 - Andrew C. Sheely, Esquire 127 South Market Street P.O. Box 95 Mechanicsburg, PA 17055 Michael A. Scherer, Esquire Attorney for Defendant I.D. No. 61974 19 West South Street Carlisle, PA 17013 - 11 -