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HomeMy WebLinkAbout98-871 supportLINDA M. RICH JOHN K. RICH IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 0871 SUPPORT 1998 IN RE: CHILD SUPPORT BEFORE BAYLEY, J. OPINION AND ORDER OF COURT Bayley, J., August 11, 1999:-- Linda M. Rich and John K. Rich were divorced in 1998. The mother lives in Cumberland County and the father in Texas. There are three children, Andrea Marie Rich, born May 20, 1981, Jaime Lin Rich, born August 10, 1983 and John Paul Rich, born May 20, 1986. The mother instituted a child support action against the father on October 14, 1998. An order was entered on December 17, 1998, from which there was an appeal that was heard de novo on August 9, 1999. During their marriage husband operated Streetgard, Inc. in which he and wife owned stock. Their stock was marital property. As part of a marital settlement wife transferred her shares of common stock in Streetgard, Inc. to the corporation which husband controls. In return, Streetgard, Inc., by husband as president, then executed a promissory note to wife on May 30, 1998, for $231,935.65 plus interest at six percent. The principal and interest is payable in 360 equal consecutive monthly installments of $1,391.29. 0871 SUPPORT 1998 Between October 14, 1998 and June 8, 1999, Andrea and John lived with the mother and Jaime lived with the father. On June 9th, Andrea became emancipated. Since then the mother has John and the father has Jaime. On January 1, 1999, the father began paying for medical insurance that covers the three children. The monthly payment to Blue Cross/Blue Shield of Texas which also covers the father and his second wife is $506.23. From October 14, 1998, until January 8, 1999, the father's net earned monthly income was $3,859, and the mother's net earned monthly income was $2,224. From January 9, 1999 to May 15, 1999, the father's net earned monthly income remained at $3,859, while the mother's net earned monthly income was $1,674. From May 15, 1999, to present, the father's net monthly earned income is $3,313, while the mother's net earned monthly income has increased to $3,031. From June, 1998 through April, 1999, Streetgard, Inc. paid Linda Rich monthly payments of $1,391.29 on the promissory note dated May 30, 1998. Each payment consisted of $236 principal and $1,155 interest. Since May, 1999 the corporation, because of financial difficulties, has failed to make any further monthly payments. In this case, the bone of contention between the parties is how to treat the $1,391.29 monthly payments on the note from October 14, 1998, through April, 1999 for the purposes of child support. The father maintains that the entire payments should be treated as income to the mother, or in the alternative at least the interest. The mother maintains that the payments are a distribution of marital property and should not be -2- 0871 SUPPORT 1998 considered as income to her. Pa. Rule of Civil Procedure 1910.16--5(b) provides: Monthly Net Income. The amount of support to be awarded is based in large part upon the parties' monthly net income. Monthly gross income is ordinarily based upon at least a six-month average of all of a party's income. The term 'income' is defined by the support law, 23 Pa.C.S. § 4302, and includes income from any source. The statute lists many types of income including: (1) wages, salaries, 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) social security benefits, temporary and permanent disability benefits, workers' compensation and unemployment compensation; and (7) alimony if, in the discretion of the trier of fact, inclusion of part or all of it is appropriate. (Emphasis added.) The definition of"income" in the Divorce Code at 23 Pa.C.S. Section 4302 is: Includes compensation for services, including, but not limited to, wages, salaries, bonuses, fees, compensation in kind, commissions and similar items; income derived from business; gains derived from dealings in property; interest; rents; royalties; dividends; annuities; income from life insurance and endowment contracts; all forms of retirement; pensions; income from discharge of indebtedness; distributive share of partnership gross income; income in respect of a decedent; income from an interest in an estate or trust; military retirement benefits; railroad employment retirement benefits; social security benefits; temporary and permanent disability benefits; workers' compensation; unemployment compensation; other entitlements to money or lump sum awards, without regard to source, including lottery winnings; income tax refunds; insurance compensation or settlements; awards or verdicts; and any form of payment due to and collectible by an individual regardless of source. (Emphasis added.) The definition of "net income" is: Gross income minus taxes and any other deductions mandated by -3- 0871 SUPPORT 1998 the employer as a condition of employment. In Darby ¥. Darb¥, 686 A.2d 1346 (Pa. Super. 1996), the Superior Court of Pennsylvania, in holding that a tort damage award is income for child support purposes, stated: [t]he types of income listed in 23 Pa.C.S. § 4302 are examples of income available for support; the list plainly is not intended to be all inclusive. In the case sub judice, Section 4302 of the Divorce Code and Pa. Rule of Civil Procedure 1910.16--5(b) mandate that the interest, less taxes, paid to the mother on the promissory note issued by Streetgard, Inc., is income to her for the purpose of child support. While at first blush it might appear that the principal on the note should also be considered income for child support under the definition in Section 4302 of the Divorce Code that income includes "any form of payment due to and collectable by the individual regardless of source," we conclude that the principal on the note is not such income. The $231,935.65 value of wife's stock in Streetgard, Inc., was a marital asset subject to equitable distribution and was distributed to her pursuant to the marital settlement agreement. The method of that distribution of her own marital property, the monthly installments over a thirty-year period, does not change that marital asset into income for child support purposes. The situation is no different than if the mother had been paid $231,935.65 cash on May 30, 1998, rather than having received the promissory note. Under these circumstances, the distribution of marital property to her would not have been income for child support purposes although if she had invested -4- 0871 SUPPORT 1998 the money and earned income on it that income would be income for that purpose. Accordingly, the principal on the note is a distribution to the mother of her own marital assets and not a payment of income to be used in calculating child support. Attached are seven Pennsylvania support guideline forms. Exhibit I is from October 14, 1998 through December 31, 1998, during which period the father is responsible for the support for the two children in the custody of the mother in the amount of $423.94 per month. Exhibit 2 covers January 1, 1999 through January 8, 1999, where an adjustment is made for the medical insurance that father began paying for all of the children on January Ist. The father's support payment for that period is $369.41 per month. For the period January 9, 1999 through March 31, 1999, based upon the change in the mother's income the father's support obligation is $426.27 as shown on Exhibit 3. The new Pennsylvania support guidelines became effective on April 1, 1999. As a result, the father's support obligation as shown on Exhibit 4 for April 1, 1999 through April 30, 1999, is 335.65 per month. From May 1, 1999 through May 15, 1999, as shown on Exhibit 5, the father's support obligation is $580.57 per month because the interest payments to the mother stopped in May. Exhibit 6 covers May 16, 1999 through June 8, 1999. The father's support obligation of $110.75 per month that was occasioned by an increase in the mother's income and a decrease in his income. As shown on Exhibit 7, as of June 9, 1999, the father has no current support obligation to the mother as a result of each parent now having one child, their respective net monthly incomes, and the adjustment made for the children's health insurance that he -5- 0871 SUPPORT 1998 is paying. AND NOW, this ORDER OF COURT day of August, 1999, IT IS ORDERED: (1) The support order entered on December 17, 1998, is vacated and replaced with this order. (2) John K. Rich shall pay child support to Linda M. Rich through the Domestic Relations Office of Cumberland County for the support of Andrea Marie Rich, born May 20, 1981, and John Paul Rich, born May 20, 1986, as follows: (a) At the rate of $423.94 per month from October 14, 1998 until December 31, 1998. (b) At the rate of $369.41 per month for the period between January 1, 1999 and January 8, 1999. (c) At the rate of $426.27 per month for the period between January 9, 1999 and March 31, 1999. (d) At the rate of $335.65 per month for the period between April 1, 1999 and April 30,1999. (e) At the rate of $580.57 per month for the period between May 1, 1999 and May 15, 1999. (f) At the rate of $110.75 per month for the period between May 16, 1999 and June 8, 1999. (3) As of June 9, 1999, as a result of the emancipation of Andrea, and with John -6- 0871 SUPPORT 1998 remaining with his mother and Jaime remaining with her father, the father owes no child support to the mother. (4) Based on the payments made by John K. Rich pursuant to the order of December 17, 1998, which is vacated, the arrearage pursuant to this order is $260.29. John K. Rich shall pay that amount through the Domestic Relations Office not later than fifteen (15) days from this date. In addition, at the same time, John K. Rich shall pay the Domestic Relations Office $206.68 representing $186.68 and a service fee of $20 for a check that has been returned to DRO for insufficient funds. Samuel L. Andes, Esquire For Linda M. Rich By the Court, ,2/' ? Johnna J. Deily, Esquire For John K. Rich Melissa Heckard, DRO :saa -7- SUPPORT GUIDELINE COMPUTATION CHILD SUPPORT Defendant Plaintiff 1. Total Monthly Gross Income 2. Less Deductions 3. Net Income $3,859.00 $3.230.37 4. Combined Total Monthly Net Income $7.089.37 5. Proportionate Expenditure 21.1% 6. Basic Child Support $1,495.86 7. Net Income expressed as a Percentage of the Combined Amount 55% 45% 8. Guideline Citild Support $822.73 $673.13 9. Split Custody CounterClaim $398.79 10. Each Parent's Obligation $423.94 10/14/98 through 12/31/98 EXHIBIT 1 SUPPORT GUIDELINE COMPUTATION 1. Total Monthly Gross Income 2. Less Deductions 3, Net [ncolne 4. Combined Total Monthly Net Income 5. Proportionate Expenditure 6. Basic Child Support 7. Net Income expressed as a Percentage of the Combined Amount 8. Guideline Child Support 9. Split Custody CounterClaim 10. Each Parent's Obligation CHILD SUPPORT Defendant Plaintiff $3.555.25 $6.785.62 21.8% $1.479.27 $3.230.37 53% $784.02 $414.61 $369.41 47% $695.25 1/1/99 through 1/8/99 EXHIBIT 2 SUPPORT GUIDELINE COMPUTATION I. Total Monthly Gross Income 2. Less Deductions 3. Net Income 4. Combined Total Monthly Net Income 5. Proportionate Expenditure 6. Basic Child Support 7. Net Income expressed as a Percentage of the Combined Amount 8. Guideline Child Support 9. Split Custody CounterClaim 10. Each Parent's Obligation CHILD SUPPORT Defendant Plaintiff $3,555.25 $6,235.62 2t.8% $1,359.37 $2.680.37 57% $774.84 $348.57 $426.27 43% $584.53 1/9/99 through 3/31/99 EXHIBIT 3 In the Court of Common Pleas of Phone: (717) 240-6225 CUMBERLAND DOMESTIC RELATIONS SECTION P.O. BOX 320, CARLISLE, PA. 17013 Plaintiff Name: LIN'DA M. RICH Defendant Name: JOHN K. RICH Docket Number: o0871 s 1998 PACSES Case Number: 95]].0o408 Other State ID Number: Please note: All correspondence mu.st include the PACSES Ca~e Number. County, Pennsylvania Fax: (717) 240-6248 Support Guideline Calculation CHILD SUPPORT 1. Number of Dependents in this Case 2. Total Gross Monthly Income 3. Less Monthly Deductions 4. Monthly Net Income 5. Combined Total Monthly Net Income 6. Basic Child Support Obligation 7. Net Income as Percentage of Combined Amount 8. Each Parent's Monthly Share of the Basic Child Support Obligation 9. Adjustment for Shared Custody 10. Adjustment for Child Care Expenses 11. Adjustment for Health Insurance Premium~ 12. Adjustment for Unreimbursed Medical Expenses 13. Adjustment for Additional Expenses 14. Total Obligation with Adjustments 15. Less Split Custody Counterclaim 16. Obligor's Support Obligation Defendant 01 $ 3,859.00 $ o .oo $ 3,859.00 59.01% 968.94 -166.00 802.94 467.29 335.65 Plaintiff 02 $ 2f829.00 $ 148.63 $ 2,680.37 $ 6t539.37 $ 1,642.00 40.99 % $ 673.06 EXHIBIT 4 Service Type M Form OE-019 Worker ID 2110 5 In the Court of Common Pleas of CU~IBERLAND Phone: (717) 240-6225 County, Pennsylvania DOMESTIC RELATIONS SECTION P.O. BOX 320, CARLISLE, PA. 17013 Plaintiff Name: LIN-DA M. RICH Defendant Name: JOHN K. RICH Docket Number: 0087]. s 1998 PACSES Case Number: 95310o408 Other State ID Number: Please note: All correspondence must include the PACSES Case Number. Fa.x: (717) 240-6248 Support Guideline Calculation CHILD SUPPORT 1. Number of Dependents in this Case 2. Total Gross Monthly Income 3. Less Monthly Deductions 4. Monthly Net Income 5. Combined Total Monthly Net Income 6. Basic Child Support Obligation 7. Net Income as Percentage of Combined Amount 8. Each Parent's Monthly Share of the Basic Child Support Obligation 9. Adjustment for Shared Custody 10. Adjustment for Child Care Expenses 11. Adjustment for Health Insurance Premiums 12. Adjustment for Unreimbursed Nledical Expenses 13. Adjustment for Additional Expenses 14. Total Obligation with Adjustments 15. Less Split Custody Counterclaim 16. Obligor's Support Obligation Defendant 01 $ 3,859.00 $ o .oo $ 3,859.00 69.75 % 1,006.49 -122.51 883.98 303.41 580.57 Plaintiff 02 $ lt674.00 $ o.oo $ lt674.00 5e533.00 lt443.00 30.25 % $ 436.51 EXHIBIT 5 Service Type M Form OE-019 Worker ID 21105 In the Court of Common Pleas of CUMBERLAND Phone: (717) 240-6225 County, Pennsylvania DOMESTIC RELATIONS SECTION P.O. BOX 320, CARLISLE, PA. 17013 Plaintiff Name: Lz~r~A M. R~C~ Defendant Name: aOHN K. RZC~ Docket Number: 00871 S 1998 PACSES Case Number: 953100408 Other State ID Number: Please note: All correspondence must include the PACSES Case Number. Fax: (717) 240-6248 Support Guideline Calculation CHILD SUPPORT 1. Number of Dependents in this Case Defendant 01 $ 3,313.00 $ o .oo Plaintiff 02 $ 3,031.00 $ o .oo $ 3,031.00 2. Total Gross Monthly Income 3. Less Monthly Deductions 4. Monthly Net Income 5. Combined Total Monthly Net Income 6. Basic Child Support Obligation 7. Net Income as Percentage of Combined Amount 8. Each Parent's Monthly Share of the Basic Child Support Obligation 9. Adjustment for Shared Custody 10. Adjustment for Child Care Expenses 11. Adjustment for Health Insurance Premiurrm 12. Adjustment for Unreimbursed Medical Expenses 13. Adjustment for Additional Expenses 14. Total Obligation with Adjustments 3,313.00 52.22 % 836.04 -193.50 642.54 531.79 110.75 6e344.00 lt601.00 47.78 % $ 764.96 15. Less Split Custody Counterclaim 16. Obligor's Support Obligation EXHIBIT 6 Service Type M Form OE-019 Worker ID 211o5 In the Court of Common Pleas of CUMBERLAND Phone: (717) 240-6225 County, Pennsylvania DOMESTIC RELATIONS SECTION P.O. BOX 320, CARLISLE, PA. 17013 Plaintiff Name: LIN'DA M. RICH Defendant Name: JOH~ K. RrC~ Docket Number: 00871 S 1998 PACSES Case Number: 953100408 Other State ID Number: Please note: All correapondence must include the PACSES Case Nmnber. Fax: (717) 240-6248 Support Guideline Calculation CHILD SUPPORT 1. Number of Dependents in tiffs Case Defendant 01 3,313.00 o .oo 3,313.00 Plaintiff 01 $ 3r031.00 $ o.oo $ 3,031.00 2. Total Gross Monthly Income 3. Less Monthly Deductions 4. Monthly Net Income 5. Combined Total Monthly Net Income 6. Basic Child Support Obligation 7. Net Income as Percentage of Combined Amount 8. Each Parent's Monthly Share of the Basic Child Support Obligation 9. Adjustment for Shared Custody 10. Adjustment for Child Care Expenses 11. Adjustment for Health Insurance Preminm~ 12. Adjustment for Uareimbursed Medical Expenses 13. Adjustment for Additional Expenses 14. Total Obligation with Adjustments $ 6t344.00 $ 1,113.00 52.22 47.78 % 581.21 -145 436.08 531.79 -95.71 531.79 15. Less Split Custody Counterclaim 16. Obligor's Support Obligation EXHIBIT 7 Service Type M Form OE-019 Worker ID 21105