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HomeMy WebLinkAbout669 S 2002 KATHERINE M. JOHNSON, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. DOMESTIC RELATIONS SECTION PACSES NO. 639104710 CRAIG SCHILLING, Defendant 02-0669 SUPPORT IN RE: CROSS-EXCEPTIONS TO MASTER'S REPORT AND RECOMMENDED ORDER OPINION AND ORDER Before the court are the cross-exceptions of the parties to the report of the Support Master and interim order dated January 20, 2005. With the exception of certain findings with respect to the incomes of the parties, we agree with the factual findings of the Master. They are summarized as follows. Both parties reside in Carlisle, Cumberland County, Pennsylvania. They are the parents of one minor child, Brittany M. Schilling, born February 23, 1997. The parties have equal shared physical custody of said child. By order dated February 11, 2003, the defendant's support obligation for Brittany was set at $161.00 per month effective January 1, 2003. On July 16, 2003, the defendant filed a petition for modification of this order alleging a decrease in his income, an increase in childcare expenses and extraordinary medical expenses. On September 11, 2003, an interim order was entered following a support conference. The defendant filed exceptions and requested a hearing de novo. Shortly thereafter, on November 21,2003, the plaintiff filed a petition for modification alleging that she had lost her employment. Thereafter, the plaintiff received unemployment compensation for a number of months. In April of2004, she learned that she would not be rehired by her former employer and obtained employment as a waitress. During the remainder of 2004, the plaintiff completed training to 669 SUPPORT 2002 become an emergency medical technician (EMT) and obtained employment as an EMT effective January 3,2005. As of February 2003, the defendant was the sole stockholder of Let's Move It, Inc., a Pennsylvania subchapter S corporation. The net income of this corporation in 2003 was $28,312 from which the defendant paid federal and state income tax. From this income, the defendant also makes loans to the corporation to keep his business afloat. These loans are repaid to the defendant, from time to time, from a so-called 2900 account. The defendant has filed numerous exceptions to the Master's Report. The plaintiff has filed fewer. Because our approach to the incomes of the parties is different than the Master's, the order which we fashion today will to some extent make certain exceptions of the parties moot. Of central importance to an analysis of this case is the treatment of the defendant's withdrawals from his 2900 account. As part of his thorough and thoughtful analysis, the Master has chosen to treat these withdrawals as income for support purposes. We do not reach the same conclusion. The money in the 2900 account is money which has become available to repay the defendant amounts which he has advanced to the corporation to keep his business afloat. The amounts which the defendant has advanced come from income, refinancing of real estate and the sale of assets. Monies obtained from the sale or refinance of assets is not income for the purpose of the support guidelines. See Pa.R.C.P. 1910.16-2. If the defendant lends money to the corporation from his income, repayment of the same money to the defendant cannot constitute additional income. To so consider it would be to count the same money twice. According to the defendant's tax return, the ordinary income which he received from Let's Move It, Inc. was $28,312. From this amount, we must deduct state and federal taxes totaling $2,397, leaving a net 2 669 SUPPORT 2002 income of$25,915 or $2,160, approximately, per month. Up until November 21,2003, the plaintiff had income attributable to employment with Shelly Moving and Storage. After tax income was approximately $1,620 per month. The Master, in this case, denied the defendant's motion for a downward modification of the support order. He did so because the defendant was unable to demonstrate any changed circumstances. We, likewise, will deny the defendant's petition for a downward modification, but for a different reason. Even assuming changed circumstances, where the defendant's income is $2,160 per month and the plaintiff s income is $1,620 per month, the support amount suggested by the guidelines does not support a downward modification from the already modest amount of $161 per month. This is true, even if one makes allowance for matters raised in the defendant's exceptions including the cost of childcare and an extraordinary medical expense and even after an adjustment which must be made because of the shared custody arrangement. This brings us to the plaintiffs request for modification which was lodged in November of2003. In that month, Ms. Johnson was terminated from her employment and began to receive net unemployment compensation in the amount of $282 per week. This continued for some months until she learned that she would not be called back to work by her former employer. The plaintiff then obtained employment as a waitress and began training to become an emergency medical technician. The Master chose to make an order for the time period of November 21, 2003 through March 31,2004, to account for the period of unemployment. We will do the same. As noted above, we attribute a monthly income of $2, 160 to the defendant. During her period of unemployment, the plaintiffs income was $1,222 per month ($282 x 52 --:-- 12). The total monthly income of the parties was $3,382 for a total child support obligation of $697. 3 669 SUPPORT 2002 Reduced so as to allow for the fact that the defendant has equal shared custody, his percentage share of this amount is forty-four percent, or $306.68. We agree with the Master that the support order should be recalculated effective April 1, 2004. The exceptions of the plaintiff notwithstanding, we agree with the Master's analysis of the plaintiff s earning capacity. In April, 2004 the Defendant began paying health insurance premiums for the benefit of his daughter. The Plaintiff learned that she would not be called back by Shelly Moving and Storage. The Plaintiff married her husband in April, 2004, thereby changing her tax filing status. And lastly, the Defendant began paying child care expenses during the summer of2004. All factors taken together clearly justify another modification of the order effective April 1, 2004. The Plaintiff began working part time as a waitress in April while she volunteered and took, classes to be an Emergency Medical Technician. Her actual earnings averaged approximately $1,306.00 per month. In determining a parent's ability to support his or her child, the focus is on earning capacity, not actual earnings. Mooney v. Doutt, 766 A.2d 1271 (Pa.Super. 2001). A party's earning capacity is that amount he or she can realistically be expected to earn under the circumstances considering his or her age, health, physical and mental condition and training. Riley v. Foley, 783 A.2d 807 (Pa.Super. 2001). From her work history in the moving and storage industry, the Plaintiff s earning capacity clearly exceeds the amount she earned as a part time waitress. The Plaintiff made no effort to secure employment with earnings comparable to that which she had received prior to the November layoff. While the Defendant attempted through the testimony of Peter Kon, general manager for Ace Moving and Storage Company, to demonstrate that the Plaintiff had an earning capacity of $40,000.00 per year as a sales representative, the Plaintiff, who had worked in 4 669 SUPPORT 2002 that industry for several years, never had actual earnings approaching that figure. She did, however, demonstrate an ability to earn an average of$I,950.00 per month. The Plaintiff, however, argues that because she has chosen to change her profession, the support order should be based upon her new present earnings of $360.00 per week as an EMT. This would generate annual income of only $18,720.00, significantly less than what she earned in the moving and storage industry. While the Plaintiff s layoff in November, 2003 is controlled by Pa.R.C.P. 1910. 16-2(d)(2) as an involuntary reduction of income, the status of the case in April, 2004 is more appropriately governed by Pa.R.C.P. 1910.16-2(d)( 4) which provides that where a party willfully fails to obtain appropriate employment he or she will be considered to have an income equal to his or her earning capacity. Because the Plaintiff, as stated, made no attempt to earn comparable income, but chose instead to perform part time employment as a waitress and to accept employment as an EMT earning significantly less than what she was capable of earning in the moving and storage industry, an earning capacity of$I,950.00 per month will be imputed to her. Filing her federal income tax for tax year 2004 jointly with her husband, and claiming her child Donovan as a dependency exemption, the Plaintiff would have net monthly income for support purposes of$I,621.00. Support Master's Report and Recommendation, p. 6. Assuming combined total earnings of the parties of $3,780, the total child support amount is $742. Adjusting for substantial or shared physical custody, Mr. Schilling's percentage share of the basic monthly support obligation is thirty-seven percent, or $274.54. We will make an adjustment for the plaintiffs share of the monthly health insurance premium which we determine 5 669 SUPPORT 2002 to be $84.28. Thus, Mr. Schilling's monthly support obligation is reduced to $190.26. We do not believe that further adjustment or deviation is called for. ORDER AND NOW, this day of May, 2005, following consideration of the exceptions filed by the parties, the interim order of January 20, 2005, is modified as follows: 1. For the period of November 1, 2003, through March 31,2004, the defendant shall pay to the Pennsylvania State Collection and Disbursement Unit as support for his daughter, Brittany M. Schilling, born February 23, 1997, the sum of$306.68 per month. 2. Effective April 1, 2004, the defendant shall pay to the SCDU as support for said child the sum of $190.26 per month. 3. The defendant shall pay to the SCDU the additional sum of$30.00 per month on arrearages. 4. The defendant shall continue to pay health insurance coverage for the benefit of said child. In the event that health insurance coverage is available to the plaintiff at a more reasonable cost, nothing herein shall prevent the defendant from requesting a modification of this paragraph. 5. Effective November 23, 2003, the defendant shall pay fifty-seven (57) percent of the unreimbursed medical expenses incurred by said child as that term is defined in Pa.R.C.P. 1910.16-6(c). BY THE COURT, Kevin A. Hess, 1. 6 669 SUPPORT 2002 Michael Rundle, Esquire Support Master Bradley Griffie, Esquire F or the Plaintiff Craig Schilling, Pro Se Defendant :rlm 7 KATHERINE M. JOHNSON, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA vs. DOMESTIC RELATIONS SECTION PACSES NO. 639104710 CRAIG SCHILLING, Defendant 02-0669 SUPPORT IN RE: CROSS-EXCEPTIONS TO MASTER'S REPORT AND RECOMMENDED ORDER ORDER AND NOW, this day of May, 2005, following consideration of the exceptions filed by the parties, the interim order of January 20, 2005, is modified as follows: 1. For the period of November 1, 2003, through March 31,2004, the defendant shall pay to the Pennsylvania State Collection and Disbursement Unit as support for his daughter, Brittany M. Schilling, born February 23, 1997, the sum of$306.68 per month. 2. Effective April 1, 2004, the defendant shall pay to the SCDU as support for said child the sum of $190.26 per month. 3. The defendant shall pay to the SCDU the additional sum of$30.00 per month on arrearages. 4. The defendant shall continue to pay health insurance coverage for the benefit of said child. In the event that health insurance coverage is available to the plaintiff at a more reasonable cost, nothing herein shall prevent the defendant from requesting a modification of this paragraph. 5. Effective November 23, 2003, the defendant shall pay fifty-seven (57) percent of the unreimbursed medical expenses incurred by said child as that term is defined in Pa.R.C.P. 1910.16-6(c). BY THE COURT, Kevin A. Hess, 1. Michael Rundle, Esquire Support Master Bradley Griffie, Esquire F or the Plaintiff Craig Schilling, Pro Se Defendant :rlm