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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
LORRAINE McCALL, : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
v. :
:
LANCE A. THORNTON, :
:
Appellant : No. 790 WDA 2014
Appeal from the Order Entered April 15, 2014,
In the Court of Common Pleas of Erie County,
Domestic Relations, at No. NS 201301113-PACSES No. 486114105.
BEFORE: BENDER, P.J.E., SHOGAN, J., and STRASSBURGER, J.*
MEMORANDUM BY SHOGAN, J.: FILED DECEMBER 31, 2014
Appellant, Lance A. Thornton (“Father”), appeals from the order
entered on April 15, 2014, regarding child support for his two minor children
with Appellee, Lorraine McCall (“Mother”). We affirm.
The trial court accurately set forth the procedural history of this
appeal:
On July 23, 2013, [Mother] filed a Complaint for Support
requesting support for two minor children. Pursuant to an
agreement of the parties, the Court entered an August 26, 2013
Order of Court assessing Mother with a monthly net income of
$1,379.70, Father with a monthly net income of $2,515.12[,]
and ordering Father to pay $738.76 monthly for child support
plus arrears. The Order set a review date on the case for
November of 2013.
Following a November 27, 2013 support conference, the
Court issued an Interim Order of Court of the same date
assessing Mother with a monthly net income of $1,379.86,
Father with a monthly net income of $6,871.42[,] and ordering
_____________________
*Retired Senior Judge assigned to the Superior Court.
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Father to pay $1,494.04 monthly for child support, plus arrears.
As detailed in the November 27, 2013 Summary of Trier of Fact,
Father failed to provide his 2012 tax return, resulting in the
parties’ prior agreement and then failed to provide his
information regarding his partnership income at the November
27, 2013 conference. When Father ultimately provided the
information, it indicated that Father reported a loss of
$139,722.00. The conference officer assessed Father with an
earning capacity of $115,000.00 based upon Father’s prior
employment with STNA,1 the same earning capacity set for
Father on January 8, 2013 at PACSES Case 630109800. Father
filed a Demand for Court Hearing. Following an April 11, 2014
de novo hearing, this Court issued its April 15, 2014 Order
making the November 27, 2013 Order a final order.
Trial Court Opinion, 6/24/14, at 1–2.
Father appealed, raising six allegations of error which were condensed
to two basic issues by the trial court in its Pa.R.A.P. 1925(a) opinion. In his
appellate brief, Father identifies those issues as follows:
I. The trial court erred and abused it[s] discretion in assessing
the [A]ppellant’s income at $6871.42 a month and not assessing
his income at a level consistent with income taxes and pay
records.
II. That the trial court erred and abused its discretion in its
income calculation and violated the Consumer Credit Protection
Act.
Appellant’s Brief at unnumbered 4.
The standard of review with respect to the amount of a support award
is largely within the sound discretion of the trial court. Miller v. Miller, 783
A.2d 832, 835 (Pa. Super. 2001). A finding that the court abused its
1
Although never specifically identified, it appears from the record that
STNA is a division of Valvoline.
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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 based on bias, ill will, prejudice or
partiality.” Isralsky v. Isralsky, 824 A.2d 1178, 1186 (Pa. Super. 2003)
(quoting Portugal v. Portugal, 798 A.2d 246, 249 (Pa. Super. 2002)). This
Court may reverse a trial court’s determination concerning support only if
the court’s order cannot be sustained on any valid ground. Spahr v.
Spahr, 869 A.2d 548, 551 (Pa. Super. 2005) (citing Laws v. Laws, 758
A.2d 1226, 1228 (Pa. Super. 2000)).
Additionally, this Court has held that although support obligations are
determined primarily by the parties’ actual earnings, where the evidence
reveals a discrepancy between one’s income and one’s earning capacity, the
obligation is determined by earning capacity rather than actual earnings.
Woskob v. Woskob, 843 A.2d 1247, 1251 (Pa. Super. 2004) (citing
DiMasi v. DiMasi, 597 A.2d 101 (Pa. Super. 1991)). “Earning capacity is
defined as the amount that a person realistically could earn under the
circumstances, considering his age, health, mental and physical condition,
training, and earnings history.” Woskob, 843 A.2d at 1251 (citation
omitted). A party cannot voluntarily reduce his earnings in an attempt to
circumvent a child support obligation. Grigoruk v. Grigoruk, 912 A.2d
311, 313 (Pa. Super. 2006). See also Baehr v. Baehr, 889 A.2d 1240,
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1245 (Pa. Super. 2005) (where party assumes lower paying job or fails to
obtain appropriate employment, support obligation determined by assessed
earning capacity).
At issue in the de novo hearing conducted by the trial court was the
conference officer’s calculation of Father’s annual earning capacity at
$115,000.00, based upon Father’s prior employment with STNA. No oral
testimony was presented at the hearing. The proceeding instead consisted
of submission of documentary evidence relative to the parties’ earnings and
argument of counsel.2 The trial court summarized the evidence of Father’s
income as follows:
Father has a work history which includes working for
NASCAR, where he supervised more than 250 people and had a
six figure salary. See N.T. De Novo Hearing, April 11, 2014, at 7
and 10. Then, Father worked for STNA, Inc., making
approximately $115,000 annually. See N.T. at 9-10. When
Father’s job ended, he started his own business, RainEater LLC.
See N.T. at 7.
2
At the outset of the de novo hearing, Father’s counsel remarked that it
was agreed that the evidence in the case would be submitted through
documents, followed by counsels’ arguments. Father’s counsel then
introduced six documents related to income of the business started by
Father, RainEater, LLC, Father’s income derived from RainEater, and the
construction of Father’s new house. The only evidence admitted on Mother’s
behalf was a pay statement. Although no one challenged the procedural
posture of the hearing, we note it because it appears that, by agreeing to
this format, Mother, as the complainant, was relieved of her burden of proof
as the party seeking modification. See Summers v. Summers, 35 A.3d
786, 789 (Pa. Super. 2012) (burden of demonstrating substantial change
warranting modifying child support rests with moving party).
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Father owns 94.34 % of the profit, loss or capital of
RainEater, LLC. See Exhibit 4. With regard to his income,
Father presented to the Court only a list of checks written by
Raineater, LLC to him or on his behalf to PA SCDU1 totaling
$37,419.61 in income to him between April 19, 2013 and April 4,
2014. See Exhibits 1 and 2. Father also presented the Profit &
Loss Statement of RainEater, LLC from January 1, 2014 through
April 8, 2014 showing a loss of $147,925.26 and his Schedule K-
1 from Partnership’s 2012 Return of Income showing a $116,566
loss. See Exhibits 3 and 4. Father asserts that, although
RainEater, LLC has a bright future, it simply is not producing
income for him at present. See N.T. at 8.
1 The child support payment is a combination of
support owed by Father in this case, as well as
support owed by Father in Thomas-Thornton v.
Thornton, Docket NS200501862, PACSES Case ID
[630109800].
Meanwhile, despite his meager reported earnings and the
apparent struggles of his company, Father, in August of 2013,
entered into an agreement to have an approximately 3,000
square foot home built for $328,105.00. See Exhibit 6.
Furthermore, Father’s reported information shows a substantial
growth in sales. Specifically, in 2012, Father, on his U.S. Return
of Partnership Income reported gross receipts or sales for the
year as $113,448.00. See Exhibit 4. Meanwhile, in just the first
four months of 2014, RainEater, LLC reports $109,980.04 in
sales. See Exhibit 3. Despite the huge growth in sales, Father
reports a much higher loss in just four months at $147,925.26 as
compared to the entire year of 2012 loss of $123,172.00. See
Exhibits 3 and 4.
Trial Court Opinion, 6/24/14, at 3–4.
The trial court determined that the financial information supplied by
Father was vague, and it remained unclear what portion of RainEater’s
income was actually attributable to Father. The court thus found it
appropriate to calculate Father’s income under Pa.R.C.P 1910.16–2(d)(4),
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the Support Guideline related to earning capacity. This guideline is utilized
when “the trier of fact determines that a party to a support action has
willfully failed to obtain or maintain appropriate employment . . . .” Id. In
such instances, the fact-finder:
may impute to that party an income equal to the party’s earning
capacity. Age, education, training, health, work experience,
earnings history and child care responsibilities are factors which
shall be considered in determining earning capacity. In order for
an earning capacity to be assessed, the trier of fact must state
the reasons for the assessment in writing or on the record.
Id.
Citing to the fact that Father was building an expensive house on his
reported income of less than $40,000.00, the trial court surmised that
Father was “concealing his actual income by offsetting it in losses through
RainEater, LLC.” Trial Court Opinion, 6/24/14, at 4. Given this evidentiary
uncertainty, the court characterized its position as “untenable” in that it was
required to “formulat[e] a support award, without actual income
information.” Id. at 5. Accordingly, the trial court mimicked the conference
officer and imputed an earning capacity to Father consistent with the
position he held previously at STNA. The court justified this calculation by
reference to the January 8, 2013 order entered in Father’s separate support
case, wherein Father was ascribed an earning capacity equivalent to his
$115,000.00 annual income at STNA. The court considered that Father did
not challenge this earning capacity figure in the other action and further
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observed that Father’s financial circumstances, other than the construction
of the new house, were basically unchanged since entry of that support
order. Id. at 5–6.
Father argues on appeal that the trial court abused its discretion when
it imputed an income to him from a job he held years ago3 and disregarded
all evidence that RainEater is not currently a profitable enterprise. He
contends that the documentary evidence irrefutably demonstrated that
RainEater is operating at a loss, and the court’s finding to the contrary,
primarily based upon Father’s contract to build a new house, was grounded
on speculation. As such, Father challenges the credibility determination
made by the trial court.
As a reviewing court, we do not weigh the evidence or determine
credibility because these are functions of the trial court. Doherty v.
Doherty, 859 A.2d 811, 812–813 (Pa. Super. 2004). Here, the trial court
did not dispute the technical accuracy of the RainEater financials presented
by Father; rather, it determined that they did not precisely reflect the
income Father received from RainEater.
The trial court was not required to accept that Father presented a
realistic representation of the amount of income he derives from RainEater.
3
We note that the record, the trial court opinion, and the appellate briefs
are silent regarding the date on which Father’s employment with STNA
terminated or when RainEater, LLC was established.
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See McAuliffe v. McAuliffe, 613 A.2d 20, 22 (Pa. Super. 1992) (where
trial court finds that claims of reduced income are not credible, this
determination will generally be upheld on review). See also Isralsky, 824
A.2d at 1188 (trial court free to reject Father’s evidence and to conclude that
Father was hiding income to avoid his financial obligations). While the
strength of the court’s credibility determination would have been enhanced
had oral testimony been received, its rejection of the documentary
evidence’s depiction of Father’s financial situation was not “manifestly
unreasonable or based on bias, ill will, prejudice or partiality.” Id. at 1186.
Accordingly, the trial court’s credibility assessment will not be disturbed on
appeal.
The trial court then proceeded to evaluate Father’s income by
referencing considerations involved when a parent owns his own business.
The trial court acknowledged that Father’s records indicated that RainEater
was operating at a loss, but applied the “well-established law that
‘deductions or losses reflected on corporate books are irrelevant to the
calculation of available income unless they reflect an actual reduction in
available cash.’” Trial Court Opinion, 6/24/14, at 4 (quoting Fennell v.
Fennell, 753 A.2d 866, 868 (Pa. Super. 2000) (citations omitted)). The
court also noted that RainEater’s Profit and Loss Statement included
automobile and cellular telephone expenses, meals, travel, and
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entertainment—items which are deductible for tax purposes but are
attributed to the business owner as income for support purposes. Trial
Court Opinion, 6/24/14, at 5.
As the trial court recognized, we have held that the calculation of
income available for child support purposes must reflect the actual available
financial resources of the obligator “and not the oft-time financial picture
created by application of federal tax laws.” Fennell, 753 A.2d at 868
(quoting Labar v. Labar, 731 A.2d 1252, 1255 (Pa. 1999)). Further, “all
benefits flowing from corporate ownership must be considered in
determining income available to calculate a support obligation.” Fennell,
753 A.2d at 868. For example, entertainment and other personal expenses,
paid by a party’s business must be included in income for purposes of
calculating child support. Mascaro v. Mascaro, 803 A.2d 1186, 1194 (Pa.
2002) (quoting Heisey v. Heisey, 633 A.2d 211, 212 (Pa. Super. 1993)).
“‘[T]herefore . . . the owner of a [business] cannot avoid a support
obligation by sheltering income that should be available for support by
manipulating salary, perquisites, corporate expenditures, and/or corporate
distribution amounts.’” Spahr, 869 A.2d at 552 (quoting Fennell, 753 A.2d
at 868). It is the actual cash flow that should be considered, not the
federally taxed income. McAuliffe, 613 A.2d at 22. Accordingly, in the
case sub judice, the trial court’s decision to look beyond the submitted tax
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documents and income statements to discern Father’s actual income is
sanctioned under the prevailing case law and was a proper exercise of its
discretion.
Having dismissed the trustworthiness of the financial information
submitted by Father, the court’s income calculation was reasoned by the one
substantive piece of evidence before it, namely, the unchallenged January 8,
2013 support order, assessing Father with an annual income of
$115,000.00. As the court pointed out, the only significant change in
Father’s financial situation since that order was entered was the contract to
construct a house valued at $328,105.00. The court’s finding that this
expenditure did not comport with Father’s stated income and its reliance on
the January 8, 2013 support order were supported by the record. Therefore,
the court’s resulting assessment of Father’s earning capacity gleaned from
these findings did not amount to an abuse of discretion.
As a final note on this issue, we observe that absent from the trial
court’s discussion on earning capacity was any consideration of the Rule
1910.16-2(d)(4) factors, i.e., Father’s age, education, health, mental and
physical condition, or child care responsibilities. However, as the crucial
point of dispute was the question of Father’s earning history, the court’s
failure to assess these factors is not fatal to the reliability of its support
calculation and is not tantamount to an abuse of discretion.
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Father’s second claim of error is that the trial court’s income
calculation violated the Consumer Credit Protection Act. Mother asserts that
Father has failed to develop this argument in any meaningful manner. We
agree.
The Rules of Appellate Procedure require that each question an
appellant raises be supported by discussion and analysis of pertinent
authority. Estate of Haiko v. McGinley, 799 A.2d 155, 161 (Pa. Super.
2002); Pa.R.A.P. 2119(b). “Appellate arguments which fail to adhere to
[appellate rules] may be considered waived, and arguments which are not
appropriately developed are waived. Arguments not appropriately
developed include those where the party has failed to cite any authority in
support of a contention.” Lackner v. Glosser, 892 A.2d 21, 29–30 (Pa.
Super. 2006) (citations omitted).
Father’s argument on his second issue is one paragraph in length and
asserts baldly that the trial court’s conclusion that he failed to report his
actual income violated the Consumer Credit Protection Act. Father cites no
legal authority for this position; indeed, he does not even provide a citation
to the statute under which he asserts his claim. Without a reasoned
discussion of the law applicable to Father’s argument, our ability to conduct
effective appellate review is severely hampered. Consequently, we deem
this issue waived. See Commonwealth v. Johnson, 985 A.2d 915, 924
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(Pa. 2009) (stating that where appellate brief fails to provide any discussion
of claim with citation to relevant authority or fails to develop issue in
meaningful fashion capable of review, that claim is waived).
For the reasons stated above, and in light of our stringent review
standard, the trial court’s support order will be upheld.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/31/2014
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