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HomeMy WebLinkAbout207 S 2009 (2) WILLIAM FEUCHTENBERGER : IN THE COURT OF COMMON PLEAS OF APPELLANT : CUMBERLAND COUNTY, PENNSYLVANIA : V. : : : : CARLA A. FEUCHTENBERGER. : PACSES NO. 624110738 APPELLEE : 207 SUPPORT 2009 IN RE: OPINION PURSUANT TO PA. R.A.P. 1925(a) Ebert Jr., J., September 7, 2012 - STATEMENT OF FACTS The parties were married on August 24, 1991, and separated on December 31, 1 2008. The parties have a minor child who lives with the Appellant in the marital 2 home. The Appellant is employed by Carlisle Roofing Systems, Inc. and has a gross 3 monthly salary of $4,763.48. Additionally, in 2011, the Appellant received a bonus of 4 $2,900.00 and earned $350.00 umpiring baseball games. Appellant pays health insurance in the amount of $141.28 a month, a mortgage of $915.73 a month, annual real estate taxes of approximately $2,900.00, and annual homeowners’ insurance of 5 approximately $550.00. Appellee resides with her boyfriend with whom she shares expenses for rent and 6 utilities. On February 24, 2011, when the petition for modification was filed, the 1 Support Master’s Report and Recommendation, filed December 16, 2010 2 Support Master’s Report and Recommendation, filed December 16, 2010; Feuchtenberger v. Feuchtenberger, 207 Support 2009, In Re: Feuchtenberger v. Feuchtenberger December 7, 2011 hereinafter “N.T. __”, N.T. 8 3 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 4, 7; Plaintiff Exhibit #1 4 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 7, 10 5 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 8, 9 6 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 26 7 Appellee was unemployed and collecting $1,564.00 a month. On April 11, 2011, she gained employment at Kuhn Communication, Inc., earning $12.50 an hour working 40 89 hour weeks. Appellee received a raise on July 23, 2011, to $13.00 an hour. In June 2011, Appellee received an inheritance from her grandfather in the form of annuities for 10 $165,078.00 of which $60,681.00 was subject to federal income tax. In July 2011, 11 Appellee received a second inheritance in the amount of $100,000.00. PROCEDURAL STATEMENT OF FACTS In this child support case, Appellant, William Feuchtenberger, filed a complaint 12 for support of two minor children against Appellee, Carla Feuchtenberger. On April 9, 2009, this Court issued an Interim Order whereby Appellee had to pay Appellant 13 $550.00 per month, effective March 16, 2009. On May 20, 2009, a hearing was held in front of the support master. On May 21, 2009, the master issued his report and 14 recommendation. This Court subsequently affirmed the April 9, 2009, interim order as 15 a final order. 7 Support Master’s Report and Recommendation, filed December 16, 2010; N.T 16, 18 8 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 18, 19; Defendant Exhibit #1 9 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 19 10 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 19; Defendant Exhibit #9 11 Support Master’s Report and Recommendation, filed December 16, 2010; N.T. 21 12 Complaint for Support, filed March 16, 2009 13 Interim Order of Court, filed April 9, 2009 14 Feuchtenberger v. Feuchtenberger, 207 Support 2009, Support Master’s Report and Recommendation, filed May 21, 2009 15 Feuchtenberger v. Feuchtenberger, 207 Support 2009, Interim Order of Court, Ebert, Jr., J. filed May 21, 2009 2 On March 4, 2010, Appellee filed a petition for modification of the existing support 16 order based on the allegation that she lost her job. On April 1, 2010, this Court issued an interim order of court reducing Appellee’s payments to $479.25 a month from March 17 4, 2010, through June 3, 2010, and $366.13 a month after June 4, 2010. On February 24, 2011, Appellant filed a petition for modification requesting this Court to increase support based on an allegation that the Appellee has been receiving “annuity 18 payments”. On March 29, 2011, this Court issued an interim order ordering the Appellee to pay the Appellant $1,710.00 a month from February 24, 2011, through February 24, 2012, and $322.00 a month after February 25, 2012, and until the child 19 emancipates. On May 29, 2011, Appellant filed a new complaint for support requesting spousal 20 support. On December 7, 2011, a hearing was held before the support master. Following the hearing, on December 16, 2011, the support master filed his report and recommendation and the Court ordered Appellee to pay $400.00 a month in support of 21 the minor child and dismissed Appellant’s petition for spousal support. th On January 4, 2012, Appellant filed exceptions to the December 16 master 22 report. On May 30, 2012, this Court upheld the master’s report and issued an Opinion 16 Petition for Modification of an Existing Support Order, filed March 4, 2010 17 Interim Order of Court, filed April 1, 2010 18 Petition for Modification of an Existing Support Order, filed February 24, 2011. One of the children reached the age of emancipation. 19 Interim Order of Court, filed March 29, 2011 20 Complaintfor Support, filed May 19, 2011 21 Interim Order of Court, filed December 16, 2011 22 Exceptions on Behalf of Plaintiff, filed January 4, 2012 3 23 and Order of Court. On June 29, 2012, Appellant filed a timely Notice of Appeal. He 24 subsequently filed a concise statement of matters complained of on appeal where he avers: 1. [T]he Court of Common Pleas of Cumberland County erred in failing to consider the annuities of the Appellee as income for the following reasons: A. The specific definition for “income,” pursuant to 23 Pa.C.S.A. §4032, includes “annuities.” The Court erred in failing to include annuities as income of the Defendant. B. The specific definition for “income,” pursuant to 23 Pa.C.S.A. §4032 defines “annuities” as income, and does not require the prerequisite that only “income from annuities” be “income.” C. The Court erred in the interpretation of Humphries [sic] v. DeRoss, 567 Pa. 613, 790 A.2d 1281 (2002), in that Humphries [sic], Supra., did not include an inheritance as income because there was no principled way of fitting an inheritance in the definition of “income,” (See 790 A.2d at 287); whereas an “annuity” is specifically categorized in the statutory definition of “income.” DISCUSSION I. Standard of Review The applicable standard of review with respect to support awards is abuse of discretion. The amount of support awarded is largely within the sound discretion of the trial court. Spahr v. Spahr, 869 A.2d 548, 551 (Pa. Super. 2005) citing Miller v. Miller, 783 A.2d 832, 835 (Pa. Super. 2001). “’A finding that the court abused its discretion requires proof of more than a mere error in judgment, but rather evidence that the law was misapplied or overridden, or that the judgment was manifestly unreasonable or 23 Feuchtenberger v. Feuchtenberger, 207 Support 2009, In Re: Opinion and Order of Court, Ebert, Jr., J., filed June 5, 2012. 24 Appellant raised other issues in his Exceptions on Behalf of Plaintiff, filed January 4, 2012, but he did not raise them in his Concise Matters Complained of on Appeal. Therefore, they are waived. 4 based on bias, ill will, prejudice or partiality.’” Id. at 551 quoting Isralsky v. Isralsky, 824 A.2d 1178, 1186 (Pa. Super. 2003). Thus, the appellate courts may reverse the trial court's determination only if the court's order cannot be sustained on any valid ground. Id. at 551 citing Laws v. Laws, 758 A.2d 1226, 1228 (Pa. Super. 2000). II. Applicable Rules and Statutes The applicable rules and statutes are: Rule 1910.16-2. Support Guidelines. Calculation of Net Income Generally, the amount of support to be awarded is based upon the parties' monthly net income. (a) Monthly Gross 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.A. § 4302, 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) Social Security disability benefits, Social Security retirement benefits, temporary and permanent disability benefits, workers' compensation and unemployment compensation; (7) alimony if, in the discretion of the trier of fact, inclusion of part or all of it is appropriate; and (8) other entitlements to money or lump sum awards, without regard to source, including lottery winnings, income tax refunds, insurance compensation or settlements; awards and verdicts; and any form of payment due to and collectible by an individual regardless of source. 5 Pa.R.C.P. No. 1910.16-2 The definition of income is: “Income.” 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. 23 Pa. R.C.P. § 4302 . III. An inheritance, in the form of an annuity, cannot be considered in calculating a support obligation. The Appellant does not argue that this Court erred in upholding the master’s finding that the Appellee received an inheritance from her grandfather in the form of an annuity. In essence, his argument suggests that this Court ignore the fact that the annuities were gifted to her in compliance with her grandfather’s will. Hence, she inherited them. Appellant wants this Court to say that when the corpus of the 6 inheritance is an annuity then it must be considered “income”, thereby subjecting it to support calculations. The controlling case is Humphreys v. DeRoss, 790 A.2d 281 (Pa. 2002). The issue the Pennsylvania Supreme Court addressed was how the receipt of an inheritance affected child support obligations of a payor. In Humphreys, the minor child lived with her adult sister and father paid support of the minor child. The adult sister filed a petition to modify the support order based on a change in circumstance. This circumstance was that father received an inheritance from his mother. Specifically, after the sale of the decedent’s house, the father realized $83,696.50. Both the trial court and Superior Court determined that the entire amount of the inheritance was income and modified the support order to reflect such finding. The Supreme Court held that the corpus of an inheritance may not be included in the statutory definition of “income”. Id, at 287. In its analysis, the Supreme Court looked at the definition of “income” as defined in Pa.R.C.P. §4302. While the definition includes “income from an interest in an estate or trust”, it does not include “the principal of an inheritance or trust”. Id. at 284-85. “Considering that inheritance is one of the most common means by which wealth is transferred, it defies logic that the legislature would not have clearly provided for inheritance within the statutory definition of income if that were its intent.” Id. at 285. The Court further considered the purpose of the Support Guidelines as found in Pa.C.R.P. 1910.16-2. The stated purpose being to ensure that “persons similarly situated shall be treated similarly.” Id. at 286. The lower courts considered the $82,500 the Appellant received as inheritance and divided it by the number of months remaining 7 until the minor child reached majority presenting the defendant with an additional monthly income of $4,545.00. Appellant’s actual income was $1,041.00 a month. The Supreme Court reasoned that this equation “ignores the economic reality that [Appellant] is not similarly situated to a person with a monthly cash flow of $5,586.00.” Id. Additionally, the support guidelines consider the proportionate needs of a child of separated parents from that of a child if the parents lived together. “Including an inheritance in income available for support does not reflect how families in which parents live together treat inheritances. In an intact family, the receipt of a lump sum is likely to be used for purchases, investments or savings, and not for meeting living expenses. Therefore, considering the entire inheritance as income available for support is contrary to the purpose of the support guidelines.” Id. However, the Court ruled that an inheritance may be considered when adjusting a support obligation pursuant to Pa.R.C.P. 1910.16-5 where the guidelines allow consideration of the parties’ assests. Id. at 287-88. In Maher v. Maher, 835 A.2d 1281 (Pa. 2003), the Supreme Court had the opportunity to revisit the issue of whether an inheritance is income for purposes of calculating child support. In Maher, the trial court determined that Appellee (the payee) received an inheritance totaling $142,773.75 after taxes and almost doubled her monthly income. Id. at 1282-83. Interestingly, the case does not specify how or in what form the Appellee received this inheritance. Regardless, relying on its decision in Humphreys, the Supreme Court found that the corpus of an inheritance may not be considered income for purposes of calculating child support. Id. at 1286. 8 In Maher, the Court characterized the payee’s gift as an “inheritance”. The case does not specify from where the lump sum came; an annuity; the liquidation of stocks; the sale of a house; or distribution from a bank account. In Humphreys, the Appellant was the beneficiary of an estate where the decedent’s home was sold and the money received from the sale of the house was characterized as an “inheritance”. In the present case, the approximate $165,000 and the $100,000 were inheritances distributed 25 in the form of annuities. Appellant’s interpretation of Humphreys would require this Court to treat an inheritance received from the sale of estate assets differently from an inheritance received from payments from an estate annuity. This reading produces illogical results. IV. Conclusion While the support master followed the ruling in Humphreys and did not include the approximate $165,000 and the $100,000 as income in the calculation of child support, he did consider Appellee’s inheritance in increasing her support payments from $365.00 a month to $400.00 a month. This Court and the support master appropriately applied the law as set forth in Humphreys, supra. and Maehr, supra., as established by the Pennsylvania Supreme Court. Therefore, the Appellant’s appeal should be denied. By the Court, M. L. Ebert, Jr., J. 25 Given the fact that the decedent’s will which provided Appellee with the inheritance in question was probated in Cumberland County, this Court took judicial notice of the records in the Register of Wills. Those records clearly reveal how the Appellee obtained the annuities. The annuities were the corpus of the inheritance. 9 P. Richard Wagner, Esquire Attorney for Plaintiff Wayne Shade, Esquire Attorney for Defendant 10