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HomeMy WebLinkAbout95-558 supportJANE H. BEST, Plaintiff VS. JAMES H. BEST, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 558 SUPPORT 1995 PACSES NO. 030000022 IN SUPPORT JAMES H. BEST, Plaintiff VS. JANE H. BEST, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 95-1712 CIVIL TERM IN DIVORCE IN RE: OPINION PURSUANT TO RULE 1925 The plaintiff in the above support case and defendant in the above divorce matter, Jane H. Best, has appealed our most recent orders in these matters. One was an order dated July 25, 2000, which determined the monthly net incomes of the parties and set an amount of support for the child of the parties, Michael. The order, in addition, reaffirmed the previous agreement of the parties that the defendant would pay alimony in the amount of $749.00 per month. The order also provided, in accordance with the prior agreement of the parties, that Mr. Best would pay twenty-seven percent of any bonus or stock-option money received by him. The other order appealed from is that of August 18, 2000, in which the court denied a petition for special relief. On August 24, 1998, the court entered an order based upon an agreement of the parties. The agreement provided that the defendant would pay $655.00 per month on account of the support of Michael and that he would pay spousal support in the amount of $749.00. The order further provided that Mr. Best would pay twenty-seven percent of the "net of taxable income . from ... bonus checks and stock options received after June 30, 1998." 558 SUPPORT 1995 95-1712 CIVIL The petition for special relief seeks to vacate the August 1998 order because Mr. Best did not give full and fair disclosure of his income for year 1998. The petitioner contends that Mr. Best had realized capital gain from the sale of stock and had liquidated IRA accounts, both of which had produced "income" which he had not disclosed. In addition to alleging that Mr. Best's income has been underreported, Ms. Best also asserts that he voluntarily left a better paying job. We find no basis upon which to conclude that the August 24, 1998 support order was entered based on a misrepresentation of Mr. Best's income. In August of 1998, the parties agreed that the sum of $3,894.00 was due and owing for bonuses and stock options received prior to June 30, 1998. That agreement was predicated on Mr. Best's representations concerning what he had received from PNC Brokerage. He has since paid twenty-seven percent of amounts received by him as a result of the exercise of stock options. Even the exhibits proffered by Ms. Best's expert do nothing to refute this contention. The situation here is very different from that presented in Albert v. Albert, 707 A.2d 234 (Pa. Super. 1998), cited by Ms. Best in support of her contention that there ought to be a retroactive modification of the support order in this case. In Albert a retroactive modification was allowed for a period of almost twenty-two months prior to the date of filing the petition for modification. That was a case, however, where the defendant concealed from the Domestic Relations Office a $40,000 increase in income. We are satisfied that Mr. Best is guilty of no such subterfuge. It may well be that the brokerage company withheld an excessive amount of tax before making distribution; though the tax withheld of thirty percent would certainly be appropriate given Mr. Best's tax bracket. In any event, Mr. Best made no misrepresentations concerning 558 SUPPORT 1995 95-1712 CIVIL what he had actually received. There is, perhaps, room for an argument that Ms. Best is entitled to twenty-seven percent of the amount of excessive tax withheld, by way of enforcing the August 1998 agreement, but we do not recall that that relief was sought. Instead, Ms. Best asks us to set aside the agreement of the parties based on grossly understated income. Part of that "income" according to Ms. Best consists of withdrawals which Mr. Best made from his IRA account. These withdrawals were made so that Mr. Best could pay attorney's fees and a college loan. The property settlement agreement of the parties as dictated to the divorce master provided, in paragraph 7, that: Husband has an Individual Retirement Account with the Vanguard Fund which has a balance of approximately $199,000 at this time. Husband shall transfer to wife, by a tax-free rollover into her IRA with the Vanguard Fund, the sum of $60,000 and no cents within thirty days of today. Otherwise, wife waives any claim to husband's IRA, which shall be the sole and separate property of the husband, otherwise from and after today. It is true that the support guidelines, reiterating the term "income" as defined by the support law, 23 Pa.C.S. 4302, inClude in that term "pensions and all forms of retirement." Pa.R.C.P. 1910.16-2(a)(4). We agree with the obligor in this case that "all forms of retirement" denotes receipt of normal retirement payments. Mr. Best's IRA, on the other hand, was property which he received as part of equitable distribution from the marital estate. He dissipated part of this asset out of financial necessity. He was not receiving retirement payments. Instead, he withdrew from his retirement account and paid taxes and, presumably, a penalty for early withdrawal. We are satisfied that this sort of liquidation of a previously marital asset is not "income" within the meaning of the support law. 558 SUPPORT 1995 95-1712 CIVIL Finally, Ms. Best complains that our most recent calculation of the earnings of the parties is erroneous. She contends that Mr. Best ought to be assessed with an earning capacity in the year 2000 based upon his earnings in 1999. Mr. Best's reasons for taking new employment are described in the following testimony: Q First, where were you employed prior to your present employment? A PNC Bank. Q What was your position there? A I was first employed by PNC in 1991. And I was head of the Trust Department for the First Bank and Trust Company in Mechanicsburg. And then I subsequently became head of the Trust Department for CCNB Bank when they bought that. And for the last two years I have been employed there as a vice-president and trust administrator. I was no longer head of the Trust Department because of mergers. Q What was your base salary at PNC? A 80,000. Q Did that include moneys for perks? A Yes. Q What type of things were included in that? A Country Club. Q How much was that, do you know? A I think it was like 2,300. Q You have now taken employment where? A Allfirst Trust Company. 558 SUPPORT 1995 95-1712 CIVIL Q What is your base salary? A 85,000. Q Is that a set $85,000.00 salary, or are there perks involved in that? A There is no perks. It is eighty-five flat. Q Did you have any knowledge of any prospective changes that were coming to PNC relative to -- for example, the country club perk of the several thousand dollars? A Yes. They did away with that this year. And although nothing has been said, it is apparent to me as an employee there at the time that the region was going to be merged into other regions of PNC. And for the last year I have been sending accounts to Pittsburgh to be administered, so that my workload was going down. And I did not foresee that they would need as many people in Camp Hill as they have presently. Q The employment you have with Allfirst, do you have any bonuses or rights for stock options right now? A No. Q What have you been made aware of relative to bonuses and stock options for the future? A That they might come along in the future. Q Back to PNC for a moment. Did you have a stock option made available to you for 2,0007 A Yes, I did. Q What kind of figures are we talking about for that? A It was at an amount $10.00 higher than what the stock was actually being sold for at the time. 558 SUPPORT 1995 95-1712 CIVIL Q So if you exercised the option, what would that mean? A I would owe them $10,000.00. N.T. 35-3 7. It is clear from the foregoing testimony that Mr. Best did not voluntarily reduce his income. His base pay is, in fact, higher that in his previous employment. Other benefits which made his previous employment more desirable were or are being abolished. For these reasons, we continue to believe that setting a support order based on the current incomes of the parties is proper. October /! ~' , 2000 Carol J. Lindsay, Esquire For the Plaintiff A. Hess, J. Bradley L. Griffie, Esquire For the Defendant :rlm