J-S36032-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
K.L.S., IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
D.W.C.,
Appellee No. 1691 MDA 2015
Appeal from the Order September 1, 2015
In the Court of Common Pleas of York County
Domestic Relations at No(s): 00862-SA-2010 DRO 100292 PACSES No.
164111616
BEFORE: MUNDY, J., DUBOW, J., and STEVENS, P.J.E.*
MEMORANDUM BY STEVENS, P.J.E.: FILED MAY 17, 2016
Mother appeals from the child support order entered in the Court of
Common Pleas of York County. After a careful review, we affirm.
The relevant facts and procedural history are as follows: D.C., who
was born in March of 2007, is the minor child of Mother and Father.
Pursuant to a stipulated order, the parties equally share legal and physical
custody of D.C. On March 26, 2015, Mother filed a petition for a
modification of the stipulated order and the matter proceeded to a support
conference, following which Father was ordered to pay $501.59 per month in
child support plus arrears through May 8, 2015. Father filed a timely appeal
to the trial court, and on September 1, 2015, a hearing was held before the
Honorable Andrea Marceca Strong.
*Former Justice specially assigned to the Superior Court.
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At the hearing, Debra Swan Sylvester, an employee of PNC Bank
("PNC") testified that Mother established an investment account with PNC in
March of 2014, and the funds deposited into the account consisted solely of
those inherited by Mother upon the death of her grandfather. N.T., 9/1/15,
at 7. She noted that during 2014 the account earned a dividend of
$1,690.00, which Mother reinvested into the account. Id. at 8. She further
noted that during 2014 Mother made no withdrawals from the account, but
that a $601.83 management fee was paid from the account. Id. at 8-9.
Ms. Sylvester testified that Mother had communicated to her that for
2015 she planned to have the interest and dividends earned from the
account, estimated to be $1,560.00 for the year, distributed to her. Id. at
10. Mother also planned to have the management fees for 2015 deducted
from the account. Ms. Sylvester testified that, as of January 1, 2015, the
balance in the account was $122,092.73; however, as of the close of
business on August 31, 2015, the balance in the account was $106,579.56.
Id. at 8, 11.
On cross-examination, Ms. Sylvester acknowledged the beginning
balance of the account, when it was initially opened in 2014, was
$116,523.00. Id. at 13. She further acknowledged that, since the account
consists of a variety of mutual funds, the value of the account fluctuates
with market conditions. Id. She indicated Mother opened the investment
account, and there was no indication it was a condition of her inheritance.
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Id. Ms. Sylvester admitted that during 2015 Mother took distributions from
the account totaling $14,500.00. Id. at 15. Ms. Sylvester noted that
Mother could freely withdraw from the account without a penalty. Id. at 16.
Mother testified that she has a high school diploma and is currently
employed by Durham School Services as a part-time school bus driver. Id.
at 21. She indicated that, in the past, she worked at a hospital as a nurse's
aid earning $9.00 per hour, but ceased this employment when she became
an emergency medical technician earning $12.64 per hour. Id. at 21, 32.
She then worked as a receptionist in a doctor's office earning $15.00 per
hour but ceased this employment. Id. After she gave birth to D.C., she
began driving a school bus and continues to do so, working approximately
20 hours per week. Id. at 22. She earns approximately $800.00 per month
as a school bus driver and her mortgage is $678.00 per month. Id. She
noted she pays $3,000.00 per year in property taxes, as well as various
utility and credit card bills. Id. at 22-23.
Mother testified the monthly mortgage and other bills exceed her
monthly income, thus requiring her to “dip” into her investment account.
Id. at 24-25. Mother agreed that in past hearings she failed to disclose the
existence of the investment account. Id. at 29. Mother admitted that she
works only part-time, but indicated she has done so for almost ten years and
it suits her well. Id. at 22, 30. However, she also indicated that it was the
only work she could “find at this moment.” Id. at 30. She noted that since
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2013 she has applied for medical jobs, veterinarian jobs, “any job,” but has
received “no callbacks.” Id. at 30-31. Mother acknowledged that Father
was ill and during his illness she received no child support. Id. at 31. During
this time, she filled out approximately eight to ten employment applications.
Id.
Mother acknowledged she is permitted to freely withdraw money from
her investment account. Id. at 32. She also acknowledged that in March of
2014 she purchased a new house for $199,000.00; however, she only took
out a $50,000.00 mortgage. Id. at 33. Mother explained that her parents
gifted to her the majority of the money needed to purchase the house. Id.
Father's counsel confronted Mother with her tax return, which
indicated that in 2014 Mother received a “gross foreign source income of
$6,111.00.” Id. at 35. However, Mother denied knowing anything about
the money, despite the fact she signed the tax return form. Id. She also
denied that the tax return was wrong, although she could not explain the
source of the “gross foreign source income,” and she denied having any
other investment or trust accounts. Id. at 35-36.
Mother explained that, if she worked full-time, she would incur
additional child care expenses and she noted that various positions are not
appropriate to accommodate her shared custody arrangement. Id. at 39.
Mother noted that, from September of 2014 until spring of 2015, she
received no child support from Father due to his illness. Id. She took the
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first withdrawal from the investment account in January of 2015 in order to
“make ends meet.” Id. at 40. Since that time, she has taken additional
withdrawals from the account in order to make her mortgage payment and
pay her bills. Id. She denied that her family gifts her money on a regular
basis and she does not anticipate making future withdrawals from the
investment account as long as Father continues to make child support
payments. Id. at 41-42. She indicated that she will continue to look for a
different job. Id. at 42.
Father testified that in June of 2014 he was diagnosed with stage 4
neck and throat cancer, resulting in him being unable to work or make his
child support payments beginning in September of 2014. Id. at 43. Father
testified that he applied for Social Security Disability Income benefits
(“disability benefits”) for himself and Social Security Disability Income
derivative benefits (“derivative benefits”) for D.W. In May of 2015, he
began receiving $2223.00 in disability benefits for himself, and $1,130.00 in
derivative benefits for D.W. Id. at 44. At this time, he started to again
make child support payments to Mother in the amount of $550.00 per
month. Id. at 44. However, he noted that, in approximately June of 2015,
pursuant to a Maryland court order, he began making a child support
payment in the amount of $950.00 per month for his daughter who lives in
Maryland. Id. at 45. This amount is taken directly from his disability
benefits, and thus, he now receives $1,370.00 per month for himself and
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$565.00 per month in derivative benefits for D.W. Id. at 46. Father
testified that he is unable to work and he does not anticipate being able to
work in the near future. Id. at 47. Father testified that, prior to the instant
proceedings, he was unaware that Mother has an investment account and, in
fact, when he asked Mother in the past if she had any other income, she
always indicated negatively. Id. at 47-48.
On cross-examination, Father admitted that Mother began driving a
school bus in 2007, prior to the parties' separation, and the Domestic
Relations Office has historically assigned Mother an earning capacity
consistent with her actual income. Id. at 48. Father admitted that, on
October 11, 2014, he received a letter informing him that he had qualified
for disability benefits; however, he did not so inform Mother until May of
2015. Id. at 50-51. Father noted that he did not receive his first disability
payment until March or April of 2015, and he then informed Mother that his
disability claim had been approved. Id. at 52.
Father acknowledged that during his illness his parents gave him
money; however, he is expected to pay back at least part of it. Id. at 53.
He noted his parents have already asked for repayment of some of the
money but he has been unable to meet their requests. Id. at 53. Father
noted that prior to his illness he was earning $72,000.00 per year; however,
from October of 2014 until May of 2015, the time during which he made no
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child support payments, Father had no income from any source. Id. at 53-
54.
At the conclusion of the hearing, the trial court directed in open court
the following:
The Court has considered the evidence presented today.
We do incorporate the joint stipulation of fact into the record as
well as [the exhibits].
In consideration of the evidence presented today, the
Court finds that no child support is warranted. We find it
unreasonable for [Mother] to rely on the child support and part-
time earnings. Averaging out her earnings at this time would
mean that she earns approximately $5.60 per hour if she were
to work full-time.
She’s been stating since 2013 in court records that she
was seeking full-time employment. It is unrealistic that she has
been unable to secure some form of [full-time] employment
since that time, and therefore, based on her earning capacity, an
amount she could reasonably earn given her age and education
without any noted disability, the Court finds that she has the
ability to make at least $20,000 if she were to earn $10 per
hour. Based on her work history, she has a history of earning
substantially more, however, we believe it’s unreasonable to
hold her to a higher earning capacity based on the
circumstances.
We note that the parties reached an agreement that she
would engage in part-time employment while the parties were
residing together. [D.C.] was not of school age. [D.C.] is now
eight years old and of school age, which would permit her an
opportunity to work during the day. Working 20 hours per week,
particularly in light of the fact that she only has 50 percent
custody, it is is unreasonable to expect [Father] to support
[Mother] in this capacity.
In further support of the finding that no [child] support is
warranted, we do note that [Mother] does receive significant
distributions through an account that she has established last
year. Based on how much she has earned thus far in 2015, she
is on target to earn from distributions $21,000 this year. We
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note that even if she were only taking distributions of $1,500 per
month, she would take distributions in the sum of $18,000 a
year. Again, based on the equalization of income in addition to
those distributions and the income she earns, the Court finds
that her earning capacity is equal to [F]ather’s.
We do find and take into consideration the derivative
benefit that [D.C.] receives. Based on the support guidelines
and the amendments to the support guidelines, the benefit is to
be paid to the obligee to equal the incomes of the parties in
consideration of the equally shared custody. We do make this
decision based on the circumstances involved in this case.
We do not excuse [F]ather’s support obligation for [D.C.]
due to a support obligation in Maryland. That’s on [Father] to
address in the Maryland Courts. We make no finding or
adjustment to that amount. We do take into consideration that
he does have an obligation to another child, however, we do not
take into consideration the amount of the obligation.
***
The effective date of this Order is today. We find that the
arrears balance will be zero. [Father] will receive no credit for
any payments he made this year, and [Mother] will receive no
additional arrears balance. It is to be set at zero effective today.
N.T., 9/1/15, at 55-58. Moreover, the trial court clarified that the derivative
benefit will “continue to go to [Father] at this point.” Id. at 58.
Mother filed a timely notice of appeal, and all Pa.R.A.P. 1925
requirements have been met.
On appeal, Mother contends the following:
1. Did the trial court err as a matter of law and/or abused [sic]
its discretion in determining that Mother’s withdrawals from
her investment account were income to be used for purposes
of calculating the parties’ respective child support obligation?
2. Did the trial court err as a matter of law and/or abused [sic]
its discretion in determining Mother’s earning capacity is
equivalent to that of Father’s earning capacity for child
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support purposes when Mother’s withdrawals from her
investment account were a result of the fact that Mother was
not receiving child support for a period of time?
3. Did the trial court err as a matter of law and/or abuse its
discretion in determining that the order for support docketed
to the above-captioned matter should be terminated?
Mother’s Brief at 1.1
Initially, we note that “[t]he principal goal in child support matters is
to serve the best interests of the children through the provision of
reasonable expenses.” R.K.J. v. S.P.K., 77 A.3d 33, 37 (Pa.Super. 2013). A
support order will not be disturbed on appeal unless the trial court failed to
consider properly the requirements of the Rules of Civil Procedure governing
actions for support or abused its discretion in applying those rules. See
Morgan v. Morgan, 99 A.3d 554, 559 (Pa.Super. 2014).
On appeal, a trial court's child support order will not be
disturbed unless there is insufficient evidence to sustain it or the
court abused its discretion in fashioning the award. An abuse of
discretion is not merely an error of judgment, but if in reaching a
conclusion the law is overridden or misapplied, or the judgment
exercised is manifestly unreasonable, or the result of partiality,
prejudice, bias, or ill-will, as shown by evidence on the record,
discretion is abused.
Thus, a reviewing court does not weigh the evidence or
determine credibility as these are functions of the trial court.
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1
We have renumbered Mother’s issues for the ease of discussion. We note
these precise issues were also presented in Mother’s court-ordered Pa.R.A.P.
1925(b) statement.
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Doherty v. Doherty, 859 A.2d 811, 812 (Pa.Super. 2004) (quotation and
citations omitted).
Under the Support Guidelines, the amounts calculated thereunder are
presumed to be the correct amounts of support. Pa.R.C.P. 1910.16-1(d).
However, this presumption can be rebutted where the fact finder determines
that the award “would be unjust or inappropriate.” Id.
In her first issue, relying upon Humphreys v. DeRoss, 567 Pa. 614,
790 A.2d 281 (2002), Mother contends the trial court erred in concluding
that her withdrawals from her investment account, which she established
after receiving an inheritance from her grandfather, constituted income for
child support purposes. She further contends the trial court improperly
considered the withdrawals she made from the account in deviating from the
support guidelines.
“The starting point for calculation of a parent's child support obligation
is a determination of each party's income available for support.” Mencer v.
Ruch, 928 A.2d 294, 297 (Pa.Super. 2007) (citation omitted). The term
“income” is defined in the Domestic Relations Code, 23 Pa.C.S.A. §§ 101-
8215, as follows:
“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;
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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.C.S.A. § 4302 (bold in original).
In interpreting the meaning of Section 4302, our Supreme Court has
held that “in order to be included in the statutory definition of income, a
resource must reasonably fit within one of the categories enumerated in
Section 4302.” Humphreys, 567 Pa. at 619, 790 A.2d at 284. As it
specifically relates to an inheritance, our Supreme Court has held that the
corpus or principal of an inheritance is not income for purposes of calculating
a monthly child support obligation. See id. However, as this Court has
held, although the corpus of an inheritance may not be considered as income
available for support, to the extent the inheritance makes more income
available, it may be considered when adjusting a support obligation. E.R.L.
v. C.K.L., 126 A.3d 1004 (Pa.Super. 2015).
In explaining the manner in which it considered the investment
account at issue for purposes of calculating Mother’s income, the trial court
explained as follows in its Pa.R.A.P. 1925(a) Opinion:
Evidence was presented that [Mother] inherited [money]
from her grandfather and that it was placed in an account
comprised of a variety of mutual funds. . . The Court considered
that [Mother] is provided with income through capital gains and
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dividends. [Mother] has made withdrawals of the capital gains
and dividends generated by the interest from the account.
There is no limit on how much [Mother] may withdraw in
dividends from the account, nor is there a penalty for
withdrawing dividends.
[Mother] has taken approximately $14,500 in. . .
distributions from the account thus far in 2015 and further
dividends will be distributed for the remainder of the year. While
[Mother] does withdraw some of the capital gains, she also
reinvests many of the distributions back into the account. This
Court followed the well-established law stated in Humphreys v.
DeRoss[, supra] when considering [Mother’s] income for
support purposes. The Court did not consider [Mother’s]
inheritance as income, but instead held her to the distributions
and dividends from mutual funds, which do constitute income as
defined by 23 Pa.C.S.[A.] § 4302.
Trial Court Pa.R.A.P. 1925(a) Opinion, filed 12/4/15, at 2-3 (citation
omitted).
Based on the aforementioned, we conclude the trial court did not
improperly treat the corpus of Mother’s inheritance as income for the
purpose of calculating her income for child support purposes. Rather, as
the evidence revealed, Mother placed the money she inherited into an
investment account consisting of mutual funds, which have been income-
producing. For instance, Ms. Sylvester of PNC acknowledged the beginning
balance of the investment account, when it was established in 2014, was
$116,523.00; however, as of January 1, 2015, the balance had increased to
$122,092.73. Simply put, we find the trial court did not abuse its discretion
in this regard. See Doherty, supra.
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In her next issue, Mother contends the trial court erred in determining
that her earning capacity is equivalent to Father’s earning capacity for child
support purposes. In this regard, Mother asserts that she “has always been
held to essentially the same earning capacity since the parties first
separated and was established at the initial support conference.” Mother’s
Brief at 7 (citation to record omitted). She further asserts the trial court
erred in concluding she was “underemployed,” thus assigning her an earning
capacity rather than relying on her actual earnings.
“Although a person’s actual earnings usually reflect h[er] earning
capacity, where there is a divergence, the obligation is determined more by
earning capacity than actual earnings.” Woskob v. Woskob, 843 A.2d
1247, 1251 (Pa.Super. 2004) (citation omitted).
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.
Generally, the trier of fact should not impute an earning capacity
that is greater than the amount the party would earn from one
full-time position. Determination of what constitutes a
reasonable work regimen depends upon all relevant
circumstances including the choice of jobs available within a
particular occupation, working hours, working conditions and
whether a party has exerted substantial good faith efforts to find
employment.
Pa.R.C.P. 1910.16–2(d)(4).
In its Pa.R.A.P. 1925(a) Opinion, the trial court relevantly indicated the
following:
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The Court. . .considered [Mother’s] income from her
current employment. [Mother] stated that she currently drives a
high school bus, working about 20 hours per week and that she
makes approximately $800 per month. Based on the evidence
presented, the Court considered that [Mother’s] monthly income
from her job and dividends exceeds her monthly expenses.
This Court further considered that [Father] is not currently
working because of his diagnosis of Stage 4 neck and throat
cancer. We noted that [Father’s] derivative benefits from his
disability payments are currently being used to support [D.C.].
The Court considered that [Father] does have an obligation to
another child. Further, the court does note that during the time
period in which [Father] had ceased making child support
payments, he was unable to work and had not yet received
disability payments. Once disability payments began, he
recommenced his support payments. We additionally note that
though [Father] has been paying child support consistently,
[Mother] continues to withdraw dividends from her investments.
This Court finds that it is unreasonable for [Mother] to rely
solely on child support and a part-time job for income, especially
based on her prior work experience without pursuing a position
appropriate with her age, education, training, health, work
experience, earnings history, and child care responsibilities. The
Court also finds it unreasonable for [Mother] to rely on [Father’s]
disability payments alone. [Father’s] current inability to work is
through no fault of his own, while [Mother] has chosen not to
increase her hours at work or seek a higher paying job.
[Mother] further receives significant distributions from her
mutual funds, while assistance [Father] receives from his
parents is intended to be a loan that he is expected to repay.
***
This Court took into account the derivative benefits [D.C.]
is receiving due to [Father’s] disability payments. We did not
relieve Father of that obligation, but based on his current
income, the derivative benefits constitute his proportional share
of the amount required to support [D.C.]. The Court considered
all relevant and competent evidence regarding the income of
both parties. Competent evidence on the record supports the
outcome.
Trial Court Pa.R.A.P. 1925(a) Opinion, filed 12/4/15, at 3-4.
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Moreover, in determining Mother’s earnings capacity to be at least
$20,000 per year based on a full-time job of $10.00 per hour, as indicated
supra, the trial court relevantly indicated in its order the following:
We find it unreasonable for [Mother] to rely on the child
support and part-time earnings. Averaging out her earnings at
this time would mean that she earns approximately $5.60 per
hour if she were to work full-time.
She’s been stating since 2013 in court records that she
was seeking full-time employment. It is unrealistic that she has
been unable to secure some form of [full-time] employment
since that time, and therefore, based on her earning capacity, an
amount she could reasonably earn given her age and education
without any noted disability, the Court finds that she has the
ability to make at least $20,000 if she were to earn $10 per
hour. Based on her work history, she has a history of earning
substantially more, however, we believe it’s unreasonable to
hold her to a higher earning capacity based on the
circumstances.
We note that the parties reached an agreement that she
would engage in part-time employment while the parties were
residing together. The child was not of school age. The child is
now eight years old and of school age, which would permit her
an opportunity to work during the day. Working 20 hours per
week, particularly in light of the fact that she only has 50
percent custody, it is is unreasonable to expect [Father] to
support [Mother] in this capacity.
N.T., 9/1/15, at 55-56.
We find no abuse of discretion in this regard. See Doherty, supra.
To the extent Mother takes issue with the trial court’s factual findings
regarding her search for a full-time, better paying job, see Mother’s brief at
7, we note this Court may not re-weigh the evidence or make credibility
determinations. See Doherty, supra. The trial court’s conclusions regarding
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Mother’s ability to work a full-time job, and her lack of searching for
appropriate employment, are supported by the record. Furthermore, to the
extent Mother contends she has always been held to essentially the same
earning capacity since the parties first separated and was established at the
initial support conference, the trial court explained the change in
circumstances supporting an assignment of an earning capacity to Mother
greater than her actual earnings. Accordingly, we find no merit to Mother’s
second issue.2
In her final issue, Mother contends the trial court erred in terminating
child support for D.C.
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2
Mother contends the trial court directed D.C.’s derivative benefit be paid to
her, and this had the improper effect of designating Mother as the
representative payee of D.C.’s derivative benefit, which is a designation that
may only be made by the Social Security Administration. Mother’s Brief at
8. To support her argument, Mother cites to the portion of the trial court’s
order wherein the trial court stated “the [derivative] benefit is to be paid to
the obligee to equal the incomes of the parties[.]” Id.; N.T., 9/1/15, at 57.
However, Mother fails to recognize that, at the conclusion of its order, the
trial court clarified the derivative benefit will “continue to go to [Father] at
this point.” N.T., 9/1/15, at 58.
In addition, Mother contends the trial court, contrary to Silver v.
Pinskey, 981 A.2d 284 (Pa.Super. 2009) (en banc), eliminated Father’s
support obligation and ordered him to split D.C.’s derivative benefit with
Mother. See Mother’s Brief at 7-10. Mother did not raise this precise issue
in her Pa.R.A.P. 1925(b) statement, thus it is waived. In any event, this
case is distinguishable from Silver. Here, unlike in Silver, the trial court
attributed the derivative benefit to Father as income, and then found it was
equal to Father’s proportional share of the support order given the parties’
equal custody arrangement.
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In addition to the reasons set forth supra in support of its order, the
trial court relevantly stated the following in its Pa.R.A.P. 1925(a) opinion:
Courts may terminate a support order where there has
been a material and substantial change in circumstances. The
prior support order was entered in 2010, since which time
[Mother] began to receive distributions [from her investment
account] and [Father] was diagnosed with cancer. Both of these
changes constitute a material and substantial change in
circumstances from the time of the prior support order.
It is well settled that each parent is required to contribute
a share of the child’s needs proportional to that parent’s share of
the combined net incomes. Pa.R.C.P. 1910.16-1. The Court
considered the income of each parent and the custodial time
allotted to each parent when making our determination to
terminate the support order.
Trial Court Pa.R.A.P. 1925(a) Opinion, filed 12/4/15, at 4-5 (citation
omitted). We agree with the trial court’s reasoning in this regard and find
no abuse of discretion. See Doherty, supra.
For all of the foregoing reasons, we affirm.
Affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/17/2016
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