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HomeMy WebLinkAbout94-1268 SUPPORTPATRICIA A. MONTGOMERY, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA DOMESTIC RELATIONS SECTION CHRISTOPHER L. BROCKMAN, Defendant PACSES NO. 497000032 NO. 94-1268 SUPPORT IN RE: DEFENDANT'S EXCEPTIONS TO SUPPORT MASTER'S REPORT BEFORE OLER, J. OPINION and ORDER OF COURT OLER, J., May 20, 2002. In this child support case, Defendant father has filed exceptions to a support master's report recommending a monthly obligation on his part of $848.00 for the support of three minor children. The report followed a master's hearing which Defendant did not attend. For the reasons stated in this opinion, Defendant's exceptions will be denied. STATEMENT OF FACTS On a review of a support master's report, a trial court is to employ the same standard as is applicable to review of a divorce master's report. Goodman v. Goodman, 375 Pa. Super. 504, 507, 544 A.2d 1033, 1035 (1988). "While such a report is to be given the fullest consideration, especially with regard to the credibility of witnesses," the findings and conclusions are advisory rather than binding. Id Subject to this standard, the facts may be summarized as follows: Plaintiff is Patricia A. Montgomery (formerly Brockman), an adult individual residing at 80 Carlisle Road, Dillsburg, York County, Pennsylvania.~ Defendant is Christopher L. Brockman,2 an adult individual residing at 810 West Trindle Road, Mechanicsburg, Cumberland County, Pennsylvania.3 Since November 2001, three of the parties' minor children, Ryan J. Brockman (d.o.b. April 10, 1985), Brent C. Brockman (d.o.b. March 5, 1988), and Lindsay E. Brockman (d.o.b. November 16, 1989), have resided with Plaintiff mother.4 Two other children of the parties had reached the age of majority by November of 2001.5 On November 7, 2001, Plaintiff mother filed a petition for modification of an existing child support order.6 The petition requested a determination of Defendant's support obligation based upon the residence of the three minor children with Plaintiff and the absence of an obligation of either parent for the support of the children who had reached the age of majority.7 Following a Domestic Relations Office conference, the matter was referred at Plaintiff's request to the support master for a hearing pursuant to Pennsylvania Rule of Civil Procedure 1910.12.8 The hearing, which Defendant elected not to ~ See Complaints for Support, filed December 20, 1994 and June 22, 1995; N.T. 3, Support Master's Hearing, March 12, 2002 (hereinafter N.T. ~; Plaintiff's Exhibit 1, Support Master's Hearing, March 12, 2002 (hereinafter Plaintiffs Exhibit ~. : See Plaintiffs Exhibit 4. ~ See Support Master's Report and Recommendation, filed March 20, 2002, paragraph 1 (hereinafter Support Master's Report and Recommendation). This address of Defendant does not appear in the record. However, the master's finding as to the address is not a subject of Defendant's exceptions. 4 X~?e Complaints for Support, filed December 20, 1994 and June 22, 1995; N.T. 21. 5 See Complaints for Support, filed December 20, 1994, and June 22, 1995; N.T. 6-8. 6 Petition for Modification of an Existing Support Order, filed November 7, 2001. 7Id. 8 See C.C.R.P. 1910.10; Defendant's Exceptions to Support Master's Report and Recommendation, filed March 28, 2002, paragraph 2; Plaintiffs Answer to Defendant's Exceptions to Support Master's Report and Recommendation, filed May 8, 2002, paragraph 2. Plaintiffs request for a hearing before the support master does not appear to be of record. 2 postpone or to attend,9 was held by the master on March 12, 2002. Plaintiff presented evidence in the form of testimony and exhibits at the hearing. The evidence at the hearing supported findings of the master that Plaintiff mother was an employee of Holy Spirit Hospital,l° that her gross bi-weekly pay was $1,023.68,il that payments by her for medical/dental/vision insurance covering the three minor children, the two adult children, Plaintiff and her current husband averaged $88.00 bi-weekly,12 and as of April 1, 2002, would increase to $108.00 bi-weekly,13 that Plaintiff's filing status for income tax purposes was married, filing jointly,TM and that she and her husband claimed four children, including the three children sub judice, as dependents on the returns.15 These findings, and the master's assignment of a monthly net income/earning capacity to Plaintiff of $1,957.64,16 do not appear to be challenged by Defendant.17 The evidence at the hearing supported the following findings of the master regarding Defendant father, which similarly do not appear to be challenged by Defendant: la that Defendant was engaged as an independent contractor for FedEx Ground;19 that in this capacity Defendant owned his own truck and purchased his own route;2° that the truck was based at a FedEx Ground facility, where it was 9N.T. 2. l0 N.T. 3. ~ N.T. 3-4; Plaintiff's Exhibit 1. l: N.T. 5. is N.T. 6. 14 N.T. 7-8. 15 N.T. 7-8. 16 See Support Master's Report and Recommendation, Exhibit A (Support Guideline Worksheet). ~7 See Defendant's Exceptions to Support Master's Report and Recommendation, filed March 28, 2002, paragraph 6. ~8 See Defendant's Exceptions to Support Master's Report and Recommendation, filed March 28, 2002, paragraph 6. 19 N.T. 8-9; Plaintiff's Exhibits 4-5. 20 N.T. 10, 18-19; Plaintiff's Exhibit 8. 3 loaded by employees of the company at night for delivery by Defendant;2~ that the only tax return of Defendant available to the master (for tax year 2000) claimed a self-employed pre-tax income of $13,363.0022 (on a gross income of $66,119.0023); that Defendant's filing status for income tax purposes was head of household;24 that he claimed one child (not a subject of this proceeding) as a dependent;25 and that deductions in income taken for tax purposes by Defendant for "depreciation" ($1,200.00), for meals and entertainment ($3,953.00), and for business use of his residence ($1,777.00) should be reintroduced into the calculation for purposes of a determination of his net income for support 26 purposes. The master also found that deductions in income taken for tax purposes by Defendant for labor expenses ($4,326.00),27 for vehicle expenses ($3,754.00),28 and for the "route payment" ($7,857.00)29 should be reintroduced into the calculation for purposes of a determination of his net income for support purposes.3° Exceptions to these findings31 are being pursued by Defendant.32 21 N.T. 17. 22 Plaintiff's Exhibit 4. 23 N.T. 10; Plaintiff's Exhibit 4. 24 N.T. 8. 25 I.e., one of the parties' older children, who are not subjects of this proceeding. N.T. 8. 26 See N.T. 10, 13, 16-17; Plaintiff's Exhibit 5. According to Defendant's brief on his exceptions to the support master's report, "Defendant concedes that adding in the depreciation, meals and entertainment and the deduction for business use of Defendant's house to determine Defendant's income was appropriate .... "Brief in Support of Defendant's Exceptions to Support Master's Report and Recommendation, at 6. 27 See Plaintiff's Exhibit 4. 28 See Plaintiff's Exhibit 4. 29 See Plaintiff's Exhibit 4. 30 Support Master's Report and Recommendation, paragraph 16. ~ See Defendant's Exceptions to Support Master's Report and Recommendation, paragraph 6(A)- (B), (D)-(E). 4 With respect to Defendant's deductions for labor expenses, Plaintiff testified at the master's hearing that the expenses claimed on Defendant's tax return were, essentially, fraudulent.33 According to her testimony (which was informed by her familiarity with Defendant's situation as an independent contractor for FedEx Ground as well as the identical situation of her current husband34), no labor other than Defendant's was involved in his work: They [the independent contractors] own their own truck. Their truck is parked at the [FedEx Ground] shop. Somebody loads it for them. They don't pay somebody to load it. All they do is go to the shop every morning, take their truck out and deliver the packages that are on their truck, and then someone loads it again at night for them.35 She testified that Defendant had admitted at prior support conferences that he utilized a scheme involving family members and a friend to create a false impression that he incurred business expenses for labor, for purposes of"keep[ing] his [taxable] income down.''36 In this regard, she testified as to his admitted scheme as follows: [H]e lists his wife and my five children and pays each of them $590.00, because if you go over that amount you have to provide them with a 1099. And he has another friend that's a mechanic he's done before, so he didn't have to produce a 1099 for the kids. So he makes everyone 590, and he gets the kids to sign. He'll write a check out to my children. He'll get my kids to endorse the check, take the check and cash it, and put the check right back 3~ See Defendant's Brief in Support of Defendant's Exceptions to Support Master's Report and Recommendation. To the extent that exceptions of Defendant are not argued in Defendant's brief, it is assumed that they were felt to be unmeritorious. See C.C.R.P. 210-7. 33 N.T. 10, 12-13. 34 N.T. 9. 3s N.T. 10. 36 N.T. 12. 5 into his account. He does it for IRS reasons to keep his income down.37 With respect to Defendant's aforesaid deduction for vehicle expenses, Plaintiff testified at the master's hearing that the figure represented a mileage deduction arising out of Defendant's use of a non-business vehicle.38 Specifically, her testimony was to the effect that at a prior Domestic Relations Office conference at which she and Defendant were present a question had arisen as to what the figure represented, that Defendant's accountant had been consulted on the question and advised that it represented the standard federal mileage deduction applied to Defendant's use of his private vehicle to commute to and from work at the FedEx Ground facility, and that in view of this explanation Defendant did not object to its inclusion in his income for purposes of child support.39 With respect to Defendant's aforesaid deduction for the route payment, Plaintiff testified at the master's hearing that an independent contractor's right to a FedEx Ground route was in the nature of an asset, purchased from the prior independent contractor who owned it.4° In this regard, she stated as follows: When they sign on as a subcontractor [i.e., as an independent contractor with FedEx Ground], they have to buy their own truck and the physical territory [i.e., the route] from the person who owned it before. We [Plaintiff and her present husband] just bought a route and spent $18,000.00 on the route with a 1995 truck .... 4~ Plaintiff also testified that in the normal course of events the purchase price for Defendant's route, which he had acquired in 1999,42 would have been paid off by Defendant by the end of 2001.43 37 N.T. 12 (emphasis added). 38 N.T. 13. 39 N.T. 13. 40 N.T. 18-19. 41N.T. 18. 42 N.T. 18. 6 Based upon Defendant's reported business income of $13,363.00, and the reintroduction into the calculation of $22,867.00 (in accordance with the foregoing findings as to tax deductions which did not properly qualify as deductions for purposes of support), the support master determined Defendant's gross yearly income to be $36,230.00, or $3,019.17 per month.44 A monthly net income/earning capacity of $2,423.51 resulted.45 With Plaintiff's monthly net income/earning capacity being $1,957.64 and Defendant's monthly net income/earning capacity being $2,423.51, the parties' basic support obligation under the guidelines for three children was $1,423.00 per month, and the respective percentages of net income were 44.68 (Plaintiff) and 55.32 (Defendant).46 Adjusted for health insurance premium payments, Defendant's monthly support obligation, under the guidelines and without deviation therefrom, came to $847.48.47 The recommendation of the support master was that Defendant's obligation be established in accordance with that figure. DISCUSSION To the extent that Defendant's position on his exceptions to the support master's report is that the record herein would not have supported the findings of the master had Defendant participated in the hearing, it is a position which, under the doctrine of waiver, can not be permitted to prevail in terms of altering the result. See Mctzlo v. Kaufman, 793 A.2d 968 (Pa. Super. Ct. 2002) (affirming order dismissing exceptions and adopting recommendation of support hearing 43 N.T. 18. 44 See Support Master's Report and Recommendation, Exhibit A (Support Guideline Worksheet). 45 See Support Master's Report and Recommendation, Exhibit A (Support Guideline Worksheet). 46 See Support Master's Report and Recommendation, Exhibit A (Support Guideline Worksheet). 47 See Support Master's Report and Recommendation, Exhibit A (Support Guideline Worksheet). 7 officer, where appellant failed to participate in master's hearing and raise issue on which exceptions were based at hearing).48 To the extent that Defendant's position is that the findings and conclusions of the master are not correct on the basis of the existing record or the applicable law, the position is not persuasive, in the court's view. With regard to the law, it is clear, as Defendant concedes in his brief,49 that tax definitions are not controlling with respect to defining income for purposes of support. Darby v. Darby, 455 Pa. Super. 63, 68, 686 A.2d 1346, 1348-49 (1996), appeal denied, 548 Pa. 670, 698 A.2d 594 (1997). Nor does Defendant suggest in his brief that commuting expenses would be a proper deduction from Defendant's income for purposes of calculating a support obligation.5° Cf Commissioner of Internal Revenue v. Flowers, 326 U.S. 465, 66 S. Ct. 250, 90 L. Ed. 203 (1946). With regard to the record, it is the court's view that the reintroduction of Defendant's deducted labor expenses, vehicle expenses and route payment into his income for purposes of the support calculation was amply supported by the evidence presented. First, as to the labor expenses, the testimony of Plaintiff, based upon admissions against interest of Defendant, upon Plaintiff's knowledge of the operation of the business in question, and upon the consistency of the scheme as described by Plaintiff with the amount claimed by Defendant,5~ warranted a finding that the deduction for labor was a sham. 48 As noted in the text, Defendant neither attended the master's hearing nor requested a postponement of the hearing. Although Defendant's exceptions suggest that his absence was related to his father's death, Plaintiff's answer to the exceptions notes that the decedent was actually Defendant's stepfather and that the death had occurred about a month prior to the master's hearing. See Plaintiff's Answer to Defendant's Exceptions to Support Master's Report and Recommendation, filed May 8, 2002, paragraph 4. 49 Brief in Support of Defendant's Exceptions to Support Master's Report and Recommendation, at 4-5. 5o See Brief in Support of Defendant's Exceptions to Support Master's Report and Recommendation, at 6. 5~ The disparity between the amount claimed ($4,326.00) and the result of multiplying $590.00 by seven ($4,130.00) in strict accordance with Plaintiff's description of the scheme is not, in the court's view, of any material significance. Second, as to the vehicle expenses, the testimony of Plaintiff, including Defendant's tacit admission as to the nature of the deduction upon information relayed from his accountant, justified a finding that this deduction related to use of a private vehicle for commuting to and from work. Defendant's contention to the contrary, based upon the inferior quality of the evidence,52 is less cognizable than it would otherwise be because of his failure to participate in the hearing and object to the form of the evidence submitted. See Maz/o, 793 A.2d at 969-70. Finally, as to the route payment, the testimony of Plaintiff to the effect that such routes are assets, that they are transferred for consideration from one independent contractor to the next, that she and her current husband had just purchased a route at a substantial cost, and that Defendant had purchased his route in 1999, when considered in conjunction with evidence as to the value Defendant placed upon the route when he bought it,53 justified a finding that this particular item of deduction was more in the nature of an acquisition than a disbursement. Defendant's position that "there is no evidence of record that the asset Defendant had purchased has any present value, that it can be sold or that there is a market for it''54 is not persuasive, in the court's view. CONCLUSION "In attempting to determine the net income and earning capacity of a sole owner of a business, a court is faced with special difficulties." O/afsson v. Olafsson, 44 Cumberland L.J. 252, 259 (1995), aff'd, 451 Pa. Super. 612, 678 A.2d 840 (1996); see Murphy v. Murphy, 410 Pa. Super. 146, 154, 599 A.2d 647, 651 (1991), appeal denied, 530 Pa. 633, 606 A.2d 902 (1992), cert. denied, 506 U.S. 868, 113 S. Ct. 196, 121 L. Ed. 2d 139 (1992); cf Pace/la v. Pace/la, 342 Pa. 52 See Brief in Support of Defendant's Exceptions to Support Master's Report and Recommendation, at 6. s~ See Plaintiff's Exhibit 4. s4 Brief in Support of Defendant's Exceptions to Support Master's Report and Recommendation, at6. 9 Super. 178, 492 A.2d 707 (1985). While acknowledging the special difficulties inherent in a case of this type, where Defendant is self-employed in a business with several unusual features, the court, after a careful review of the support master's able report and the record, finds itself in full agreement with the findings and conclusions of the master's report. Accordingly, the following order will be issued: ORDER OF COURT AND NOW, this 20th day of May, 2002, upon consideration of Defendant's Exceptions to Support Master's Report and Recommendation, and for the reasons stated in the accompanying opinion, the exceptions are dismissed and the attached order in accordance with the recommendations of the master is entered. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. Michael R. Rundle, Esq. Cumberland County Support Master John J. Connelly, Jr., Esq. P.O. Box 650 Hershey, PA 17033 Attorney for Plaintiff Keith O. Brenneman, Esq. 44 West Main Street P.O. Box 318 Mechanicsburg, PA 17055 Attorney for Defendant 10 11 PATRICIA A. MONTGOMERY, Plaintiff IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Vo DOMESTIC RELATIONS SECTION CHRISTOPHER L. BROCKMAN, Defendant PACSES NO. 497000032 NO. 94-1268 SUPPORT IN RE: DEFENDANT'S EXCEPTIONS TO SUPPORT MASTER'S REPORT BEFORE OLER, J. ORDER OF COURT AND NOW, this 20th day of May, 2002, upon consideration of Defendant's Exceptions to Support Master's Report and Recommendation, and for the reasons stated in the accompanying opinion, the exceptions are dismissed and the attached order in accordance with the recommendations of the master is entered. BY THE COURT, Michael R. Rundle, Esq. Cumberland County Support Master John J. Connelly, Jr., Esq. P.O. Box 650 Hershey, PA 17033 Attorney for Plaintiff Keith O. Brenneman, Esq. 44 West Main Street P.O. Box 318 Mechanicsburg, PA 17055 Attorney for Defendant J. Wesley Oler, Jr., J.