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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
GAIL F. ELLIOTT IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
MICHAEL P. ELLIOTT
Appellee No. 69 WDA 2016
Appeal from the Order December 14, 2015
In the Court of Common Pleas of Clarion County
Domestic Relations at No(s): 714 CD 2013
BEFORE: FORD ELLIOTT, P.J.E., LAZARUS, J., and JENKINS, J.
MEMORANDUM BY LAZARUS, J.: FILED NOVEMBER 1, 2016
Gail F. Elliott (Wife) appeals from the support order entered in the
Court of Common Pleas of Clarion County. After careful review, we reverse
and remand.
The parties were married on July 14, 1990, and separated on October
20, 2012. Two children were born of the marriage, both of whom are now
adults. On July 3, 2013, Wife filed a complaint for spousal support.1
On August 12, 2013, the court entered a support order determining
Wife’s monthly net income at $1,260.82, Husband’s monthly net income at
$5,260.76, and requiring Husband to pay $1,610.00/month in spousal
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1
Wife had initially filed a complaint for child and spousal support on
December 20, 2012. However, she withdrew that complaint in February
2013.
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support. At that time, Husband owned and operated an electrical
contracting company, A&E Electric, Inc. (A&E). Attached to the August
support order is a legal notice stating, in relevant part:
Parties must within seven days inform the Domestic Relations
Section (DRS) and the other parties, in writing, of any material
change in circumstances relevant to the level of support . . .,
including, but not limited to, loss or change of income[.] A party
who willfully fails to report a material change in circumstances
may be adjudged in contempt of court, and may be fined or
imprisoned.2
Support Order (Important Legal Notice), 8/12/13, at 4. Husband
acknowledged that his attorney provided him with a copy of the support
order, which included this legal notice. N.T. Support Hearing, 5/14/15, at
35.
On March 9, 2015, Wife filed a petition for modification of support
claiming that after a 2015 equitable distribution hearing in the parties’
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2
The language in the parties’ support order is substantially similar to the
Duty to Report statute in the Domestic Relations Code:
(a) Notice of changes affecting support. — An individual
who is a party to a support proceeding shall notify the domestic
relations section, the department and the other parties in writing
or by personal appearance within seven days of any material
change in circumstances relevant to the level of support or the
administration of the support order, including, but not limited to:
(1) change of employment; and
(2) change of personal address or change of address of any
child receiving support.
23 Pa.C.S. § 4353(a).
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pending divorce action, she discovered that Husband inaccurately self-
reported his 2013 monthly net income from A&E at $5,260.76. She asserted
that this amount was approximately $2,500.00 less than his actual monthly
net income for that year. After a Master’s conference held on April 13,
2015, the court entered a support order determining that Husband’s monthly
net income was $7,022.93, and increasing his monthly support payment to
$2,332.00, effective as of the date of the modification petition.
On April 14, 2015, Wife filed a request for a hearing de novo seeking
retroactive support arrears based on Husband’s unreported increase in
income. On the same day, Husband also filed a hearing request objecting to
the court’s calculation of his monthly net income and his legal responsibility
to provide health insurance for Wife.
On May 14, 2015, a support modification hearing was held before a
Master. At the hearing, Husband produced his 2013 and 2014 tax returns
indicating his adjusted gross income from A&E was $117,067.00 in 2013 and
$97,544.00 in 2014. N.T. Master’s Hearing, at 5/14/15, 20. Husband
testified that the substantial increase in income for those years was a result
of “a lot of big contracts with big companies.” Id. at 21. Husband testified,
however, that by the end of 2014 “the [big companies didn’t] have much
work for small contractors [like A&E] and they raised their liability insurance
to 7 million a year which was going to cost [too much for him to pay].” Id.
at 23. As a result, Husband stopped bidding on jobs. Id. Because of the
major loss of jobs for A&E, Husband had to let his employees go and look for
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other work to pay his bills. Id. In March 2015, Husband started working for
a new company, Comprehensive Fire Technology (Com-Tech), and also
began working odd jobs on weekends and evenings. Id. at 14, 23-24. On
June 26, 2015, the Master submitted his Report and Recommendation,
determining that spousal support should be established at $1,170.00, based
on a monthly net income for Husband of $4,142.57, without application of
retroactive arrears. On July 2, 2015, the court entered an interim support
order obligating Husband to pay $1,180.003/month based upon a monthly
net income of $4,142.57, but not applying retroactive arrears.
On August 3, 2015, Wife filed her exceptions to the Master’s Report
and Recommendation. See Pa.R.C.P. 1920.55-2. On October 8, 2015, the
court filed its opinion and order dismissing Wife’s objections, wherein it
refused to order retroactive arrears. On December 14, 2015, the court
entered its final decree in divorce and equitably distributed the parties’ net
marital assets as follows, 55% to Wife and the remaining 45% to Husband.
Wife filed this timely appeal on January 11, 2016,4 in which she raises
the following question for our review:
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3
This amount represents $1,170.00 in support and $10 for arrears.
4
Because Wife filed her appeal of the support order from the final decree in
divorce in these companion actions, we find the appeal is properly before us
and, therefore, deny Husband’s motion to quash. See Leister v. Leister,
684 A.2d 192 (Pa. Super. 1996) (en banc) (spousal support order entered
during pendency of separately filed divorce action is not appealable until all
(Footnote Continued Next Page)
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Whether a spousal support obligor may be excused of payment
of proper spousal support in the form of retroactive arrears when
the obligor failed to report significant increases in income as
required by law, the oblige[e] promptly filed a petition to modify
upon learning of the increase in income and there was no
evidence that supported that the effect of retroactive arrears
would have created a hardship for the obligor.
Appellant’s Brief, at IV.
Our Court's scope of review of a spousal support order is limited; it will
reverse a trial court’s order only where it cannot be sustained on any valid
ground. Diament v. Diament, 816 A.2d 256, 264 (Pa. Super. 2003).5 This
Court will not interfere with the broad discretion afforded the trial court,
absent an abuse of discretion or insufficient evidence to sustain the support
order. Id. An abuse of discretion exists where the trial court has overridden
or misapplied the law. Id. Although the trial court should give great weight
to the conclusions of the master, the Superior Court is limited to a review of
the trial court’s decisions, not those of the master. Id.
_______________________
(Footnote Continued)
claims connected with divorce action resolved); see also Thomas v.
Thomas, 760 A.2d 397 (Pa. Super. 2000) (where record did not reveal
either filing of divorce action or that support order was entered during
pendency of companion divorce action, order is appealable); Asin v. Asin,
690 A.2d 1229 (Pa. Super. 1997) (divorce action filed in different venue is
not “companion” action and has no impact on appealability of support order
entered in different county).
5
The 2005 amendments to Pa.R.C.P. 1910.16-4 “supersedes Diament[,
supra], to the extent that it held that the tax savings from payments for the
benefit of a spouse alone or from an unallocated order for the benefit of a
spouse and child must be considered in determining the obligor's available
net income for support purposes.” See Note, Pa.R.C.P. 1910.16-4.
However, Rule 1910.16-4 (support formula) is not relevant to this appeal.
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Wife claims that the trial court erred in not awarding her retroactive
support based on Husband’s misrepresentation of his 2013-2014 gross
income. Wife claims that Husband continued to enjoy this unreported
income throughout 2013 and 2014 and that it was his statutory duty to
report the increase in income.
Pursuant to Pa.R.C.P. 1910.19:
(a) A petition for modification or termination of an existing
support order shall specifically aver the material and substantial
change in circumstances upon which the petition is based. A
new guideline amount resulting from new or revised support
guidelines may constitute a material and substantial change in
circumstances. The existence of additional income, income
sources or assets identified through automated methods or
otherwise may also constitute a material and substantial change
in circumstances.
* * *
(c) Pursuant to a petition for modification, the trier of fact may
modify or terminate the existing support order in any
appropriate manner based upon the evidence presented without
regard to which party filed the petition for modification. If the
trier of fact finds that there has been a material and substantial
change in circumstances, the order may be increased or
decreased depending upon the respective incomes of the parties,
consistent with the support guidelines and existing law[.]
Pa.R.C.P. 1910.19(a), (c).
In Brickus v. Dent, 5 A.3d 1281 (Pa. Super. 2010), our Court noted
that:
[M]odification of a support order is to be retroactive to the
date when modification initially was sought unless the court
sets forth reasons for failing to do so on the record. In fact,
failure to make an award retroactive is reversible error unless
specific and appropriate justification for such a ruling is shown.
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Id. at 1286-87 (emphasis added). However, where arrears are at issue,
section 43526 of the Domestic Relations Code permits retroactive application
of support to a date earlier than the filing of the modification petition if “the
petitioner was precluded from filing a petition for modification by
reason of a significant physical or mental disability, misrepresentation of
another party or other compelling reason and if the petitioner, when
no longer precluded, promptly filed a petition.”7 23 Pa.C.S. § 4352(e)
(emphasis added).
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6
The entirety of section 4352(e) reads:
(e) Retroactive modification of arrears. — No court shall modify
or remit any support obligation, on or after the date it is due,
except with respect to any period during which there is pending
a petition for modification. If a petition for modification was filed,
modification may be applied to the period beginning on the date
that notice of such petition was given, either directly or through
the appropriate agent, to the obligee or, where the obligee was
the petitioner, to the obligor. However, modification may be
applied to an earlier period if the petitioner was precluded from
filing a petition for modification by reason of a significant
physical or mental disability, misrepresentation of another party
or other compelling reason and if the petitioner, when no longer
precluded, promptly filed a petition. In the case of an
emancipated child, arrears shall not accrue from and after the
date of the emancipation of the child for whose support the
payment is made.
23 Pa.C.S. § 4352(e).
7
Husband does not contest that Wife promptly filed her modification petition
the day after she became aware of Husband’s unreported increase in income
at the parties’ 2015 equitable distribution hearing in their divorce action.
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Instantly, the trial court refused to retroactively modify support due to
the parties’ current financial situation and because Husband neither
intentionally misrepresented his increased income in an attempt to avoid an
increase in his support obligation, nor purposely ran his business into the
ground. Trial Court Opinion, 10/8/15, at 2-3. The court also found that if it
were to order retroactive arrears, Husband would suffer a significant
hardship due to the recent demise of his business and, consequently, the
decrease in his earning potential. Id. at 2.
At the support hearing, Husband testified that he did not become
aware of his actual gross income in a given year until his accountant
provided him the relevant income tax return. N.T. Support Hearing,
5/14/15, at 21-22, 34. While the court concludes that an individual must
intentionally misrepresent his income in order to be subject to retroactive
arrears, we do not read such an intent requirement into the legal notice
attached to the parties’ support orders or the substantially similar language
of section 4353(a)’s duty to report. Compare 23 Pa.C.S. § 4353(a)
(“individual who is a party to a support proceeding shall notify the domestic
relations section, the department and the other parties in writing . . . within
seven days of any material change in circumstances relevant to the level of
support[.]”) with 23 Pa.C.S. 4353(b) (“Willful failure to comply with this
section may be adjudged in contempt of court pursuant to section 4345
(relating to contempt for noncompliance with support order[.]”)).
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The testimony from the support hearing shows that Husband’s gross
income substantially increased from 2012 to 2013, in the amount of roughly
$82,000. Moreover, Husband’s gross income continued to be significantly
greater than his 2012 gross income for the majority of 2014. Therefore,
Husband was required to report his material change in income to the
Domestic Relations Section. See 23 Pa.C.S. § 4352(a) (“petition for
modification of a support order may be filed at any time and shall be granted
if the requesting party demonstrates a substantial change in
circumstances.”); 23 Pa.C.S. § 4353(a) (Duty to Report); Support Order
(Important Legal Notice), 8/12/13, at 4.
In Krebs v. Krebs, 944 A.2d 768 (Pa. Super. 2008), our Court
determined that Husband “had an affirmative duty [under Section 4353(a)]
to notify [Wife] and [the] D[omestic] R[elations’] O[ffice] that his income
increased each year as reflected on his W-2 statements.” Id. at 776. The
court concluded that Husband had knowledge of his duty under section 4253
to report the increased income and that because he failed to inform Wife and
the DRO of the increase, “compelling reasons existed for the retroactive
modification” of support. Id. On appeal, our Court determined that the trial
court should make Husband’s support obligation retroactive to the date
when he first failed to report his significantly increased income.
Likewise, we find that because Husband was on notice that he was
required to report any material change in circumstances to the DRS, and
failed to uphold this legal duty, the trial court had a compelling reason for
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the retroactive modification of support. Krebs, supra. Therefore, we
instruct the trial court, upon remand, to determine when Husband first failed
to report his significantly increased 2013-2014 income from A&E and make
his arrears payments retroactive to that date. Id.; 23 Pa.C.S. § 4352(e).
Because the court misapplied the law regarding the imposition of
retroactive arrears, we must reverse and remand. Diament, supra.
Order reversed. Case remanded. Jurisdiction relinquished.8
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/1/2016
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8
Although the testimony from the support hearing shows that Husband’s
business, A&E, substantially declined at the end of 2014, that has no bearing
on the determination of whether Husband failed to report his 2013-2014
increased income and whether Wife is entitled to retroactive arrears.
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