J-A07038-17
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
P.J., : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellee :
:
:
v. :
:
E.J., :
:
Appellant :
: No. 1455 WDA 2016
Appeal from the Order Entered August 31, 2016
in the Court of Common Pleas of Erie County,
Domestic Relations at No(s): 201600486/ PACES No. 292115871
BEFORE: OLSON, STABILE, and STRASSBURGER,* JJ.
MEMORANDUM BY STRASSBURGER, J.: FILED JUNE 16, 2017
E.J. (Father) appeals from the trial court’s August 31, 2016 order
establishing child support for his minor child J.J. Upon review, we affirm in
part, vacate in part, and remand for proceedings consistent with this
memorandum.
The trial court summarized the pertinent background as follows:
On April 12, 2016, [P.J. (Mother)] filed a complaint for
support requesting child support and spousal support. Following
a support conference, a May 11, 2016 interim order of court
[was] issued setting Mother’s monthly net income at $2,103.42,
Father’s monthly net income at $2,702.04 and establishing a
monthly child support obligation of $670.11, plus arrears. As
provided in the May 11, 2016 summary of trier of fact, “[Father]
was held at an earning capability as a self-employed roofer at
$44,810.00/year based on the U.S. Bureau of Labor [] Statistics
May 2014 Wage Estimates for Erie.” The summary further
provides: “[Mother] was held at [an earning] capability of
* Retired Senior Judge assigned to the Superior Court.
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$30,893.79/year based on the 2015 income.” Father filed a
demand for [a] court hearing.
T[he trial court], following an August 31, 2016 de novo
hearing, issued its August 31, 2016 order making the May 11,
2016 interim order final.
Trial Court Opinion, 11/18/2016, at 1-2 (unnecessary capitalization
omitted).
Father timely filed a notice of appeal from the August 31 st order, and
both Father and the trial court complied with Pa.R.A.P. 1925. He raises the
following issues on appeal, which we have reordered for ease of disposition.
I. Whether the [trial court] committed an error of law and/or
abused its discretion in assessing [Mother] with an earning
capacity based upon her 2015 income, where she worked
less than the full year in 2015, she was terminated for
cause in 2016, she testified as to the hourly rates she
earned as a licensed nurse, and there was no competent
evidence that [Mother] is unable to be employed in a full–
time capacity.
II. Whether the [trial court] committed an error of law and/or
abused its discretion in assessing an earning capacity to
[Father], as there was insufficient evidence to support the
assessment of an earning capacity under the factors of
Pa.R.C.P. 1910.16-2(d)(4) as well as to support the
earning capacity assessed where [Father] has operated a
roofing business for over fifteen years and provided
evidence of his income for the previous six years.
III. Whether the [trial court] committed an error of law and/or
abused its discretion in failing to state the reasons for the
assessment of an earning capacity to [Father] in writing or
on the record in accordance with Pa.R.C.P. 1910.16-
2(d)(4).
Father’s Brief at 2 (suggested answers omitted).
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We set forth our well-settled standard of review and applicable
principles of law with respect to a support order.
The amount of a support order is largely within the discretion of
the trial court, whose judgment should not be disturbed on
appeal absent a clear abuse of discretion. An abuse of discretion
is not merely an error of judgment, but rather a misapplication
of the law or an unreasonable exercise of judgment. A finding
that the trial court abused its discretion must rest upon a
showing by clear and convincing evidence, and the trial court will
be upheld on any valid ground. For our purposes, an abuse of
discretion requires proof of more than a mere error of 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.
Portugal v. Portugal, 798 A.2d 246, 249-50 (Pa. Super. 2002) (internal
quotation marks and citations omitted).
[A] person’s support obligation is determined primarily by the
parties’ actual financial resources and their earning capacit[ies].
Although a person’s actual earnings usually reflect his earning
capacity, where there is a divergence, the obligation is
determined more by earning capacity than actual earnings.
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 v. Woskob, 843 A.2d 1247, 1251 (Pa. Super. 2004) (internal
citations omitted).
We first address Father’s claim that the trial court erred in assessing
Mother’s earning capacity. Specifically, Father avers that
[t]he [trial court] appears to assess Mother with less than full-
time earnings based on prior medical leaves and resulting lower
earnings over the past three years. ... Mother’s education,
training, and work experience, that of a licensed, registered
nurse for almost 20 years, along with the lack of evidence of any
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current medical issue restricting Mother’s ability to work full
time, support an income assessment of a full-time licensed,
registered nurse.
Father’s Brief at 24. The trial court offered the following explanation to
support its findings that Mother’s earning capacity was assessed accurately
using Mother’s 2015 income.
At the time of the parties’ April 1, 2016 separation,
Mother, who had worked as a licensed registered nurse for
seventeen years, was unemployed. Mother was, on February
26, 2016, terminated from her position with UPMC Lake Erie
Endocrinology. At that point, Mother and Father agreed that
Mother would stay home and that she would not apply for
unemployment compensation.
Prior to her termination, Mother had a series of medical
issues which impeded her ability to work and resulted in multiple
medical leaves. In 2013, Mother sustained a work-related back
injury and broken ankle, which resulted in a leave from work.
When Mother returned to work, she was only able to work in a
light duty capacity. After approximately one year of light duty
work, a functional capacity evaluation revealed that Mother could
no longer perform her job. As a result, Mother was transferred
to a different, lower paying position. In 2015, Mother was off of
work again due to a broken knee and torn ACL. Thereafter, a
November of 2015 incident of domestic violence with Father
resulted in injuries which necessitated an additional medical
leave. The impact of Mother’s continuing medical problems is
reflected in her fluctuating income over the years.
With regard to reduced or fluctuating income, the Support
Guidelines provide:
(1) Voluntary Reduction of Income. When either
party voluntarily assumes a lower paying job, quits a
job, leaves employment, changes occupations or
changes employment status to pursue an education,
or is fired for cause, there generally will be no effect
on the support obligation.
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(2) Involuntary Reduction of and Fluctuations in,
Income. No adjustments in support payments will
be made for normal fluctuations in earnings.
However, appropriate adjustments will be made for
substantial continuing involuntary decreases in
income, including but not limited to the result of
illness, lay-off, termination, job elimination or some
other employment situation over which the party has
no control unless the trier of fact finds that such a
reduction in income was willfully undertaken in an
attempt to avoid or reduce the support obligation.
(4) Earning Capacity. Ordinarily, either party to a
support action who willfully fails to obtain
appropriate employment will be considered to have
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.
Pa.R.C.P. 1910.16-2(d).
Mother was terminated from her employment a short time
after her return from medical leave, but just over a month prior
to the parties’ separation. While Mother disagrees that her
termination was justified, there is documentation supporting that
she was fired for cause. Meanwhile, parents have an obligation
to support their unemancipated children. [See] 23 Pa.C.S.[]
§4321. “Child support is a shared responsibility; both parents
must contribute to the support of their child in accordance with
their relative incomes and ability to pay.” [Depp v. Holland],
636 A.2d 204, 206 (Pa. Super. 1994). The law is clear that,
generally, there will be no effect on a parent’s support obligation
when that parent is fired for cause. [See] Pa.R.C.P. 1910.16-
2(d)(1). In that regard, Mother’s termination does not negate
her support obligation to her child.
Nevertheless, Pennsylvania Courts have long held that “[a]
person’s earning capacity is defined not as an amount which the
person could theoretically earn, but as that amount which the
person could realistically earn under the circumstances,
considering his or her age, health, mental and physical condition
and training.” [Haselrag v. Haselrag, 840 A.2d 338, 340 (Pa.
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Super. 2003) (quoting Strawn v Strawn, 664 A.2d 129, 132
(Pa. Super. 1995))]. In determining Mother’s earning capacity,
the [trial court] is unable to ignore an involuntary aspect of flux
and decrease in her earnings. Specifically, since 2013, Mother’s
medical issues have resulted in leave from work and fluctuations
in her income. During that time, Mother also underwent a
functional capacity evaluation which revealed that she could no
longer perform her job and, accordingly, she was transferred to
a different and lower paying position. In sum, Mother’s medical
issues have precluded her from working a full year during any of
the last three years. In that regard, Mother’s 2015 income,
which is reduced due to medical leave, is realistic. In reality, the
parties have not realized a full-time income from Mother in years
and, had the family remained intact, no income would have been
attributed to Mother due to the parties’ agreement that she
remain at home.
Trial Court Opinion, 11/18/2016, at 5-7 (some citations omitted).
After a thorough review of the record in this matter, we discern no
error in the trial court’s reasoning. As cited supra, Pa.R.C.P. 1910.16-
2(d)(2) provides that “appropriate adjustments will be made for substantial
continuing involuntary decreases in income, including but not limited to the
result of illness[.]” In this case, the trial court considered testimony from
both Father and Mother and determined, for the reasons it cited, that
Mother’s earning capacity had continually decreased due to medical issues
which barred Mother from performing her job. Because the record supports
the trial court’s conclusions, we decline to disturb its finding.
Next, Father avers the trial court erred by relying on wage estimates
published by the United States Bureau of Labor Statistics. By way of further
background, after Mother filed a complaint in support, a conference was held
and soon thereafter, an interim order was entered. Said order
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recommended that Father pay monthly support in the amount of $670.11,
plus arrears. See Conference Summary and Order, 5/11/2016. This
obligation was calculated by computing Mother’s earning capacity based on
her 2015 income, and Father’s earning capacity based on “the U.S. Bureau
of Labor Statistics May 2014 Wage Estimate for Erie.” Id. at 2.
Father avers that
[n]o copy of the U.S. Bureau of Labor Statistics May 2014 Wage
Estimates for Erie was presented as evidence at the support
conference. [] No evidence that Father had the opportunities to
gross business income of $44,810.00 per year was offered at the
conference. No explanation as to why Father was held at an
earning capacity was offered in the conference Summary or May
11, 2016 Interim Order.
Father’s Brief at 5. On May 23, 2016, Father filed a demand for a hearing,
and on August 31, 2016, a de novo hearing was held. At the August 31st
hearing, the Bureau of Labor Statistics document relied upon by the
Conference Officer was not entered into evidence by either party. That
same day, the trial court entered an order affirming the May 11, 2016
interim order.
Father contends that the Bureau of Labor Statistics document, which
was not entered into evidence by either party, should not have been used to
determine his earning capacity. Father’s Brief at 15-16. In making this
argument, Father cites Ney v. Ney, 917 A.2d 863 (Pa. Super. 2007). In
Ney, the father sought a modification of his child support obligation due to a
reduction in his income. In concluding that the father was not entitled to a
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reduction, the trial court “sua sponte considered hearsay evidence not of
record in assessing [the father’s] credibility and determining his earning
capacity.” Id. at 866. Specifically, the trial court conducted an internet
search of jobs in the area in determining the father’s earning capacity. This
Court held that this type of internet search, which led to reliance upon facts
outside the record, constituted reversible error.
In its 1925(b) opinion, the trial court stated the following:
Father, since 2000, has been the sole owner of his own
construction business[.] By utilizing his Income Tax Returns,
Father asserts that his income from his business is only around
$15,000 to $16,000 per year. The [trial court] is not, however,
constrained by Father’s self-reported earnings on tax
documents. [See Labar v. Labar], 731 A2d 1252, 1255 (Pa.
1999)(use of federally taxable income creates an “oft-time
fictional financial picture” as the result of federal income tax
laws); [See also Commonwealth ex rel. Banks v. Banks],
478 A.2d 1387, 1390 (Pa. Super. 1984)(“[I]ncome tax returns
are not infallible devices for measuring earning capacity,
particularly where the income-earner is self-employed.”). When
looking beyond the self-reported earnings, Father is not credible.
Father is living well outside the means of his reported
income, indicating that he has much greater cash flow than his
Income Tax Returns reveal. For example, in 2016, Father took
and paid for a trip to Romania. Father was out of the country for
a month. Mother testified that she and Father used to go on
vacation all of the time and that trips like Father’s to Romania
averaged $10,000 to $15,000. Also this year, Father was able to
make a $4,000 payment to Marquette in order to pay off the
mortgage on the marital residence. Moreover, Father sent
approximately $36,000 through PNC Bank during just two
months in 2016. It is further noteworthy that, during the
marriage, Father acquired at least six parcels of real estate. The
[trial court] fails to see how Father’s actions are feasible
considering the meager earnings that he reports.1
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1
While Father’s demeanor was not the sole basis for
the [trial court’s] credibility assessment, it is
noteworthy that his demeanor changed and he was
hesitant with his “no” response when questioned
whether he performed work for people other than
those for which he attached 1099s to his tax returns.
In sum, the [trial court] believes that Father has much
greater income than he reports. As a result, the [trial court] is
faced with the arduous task of formulating a support award,
without actual income information. Unable to get a clear picture
of Father’s actual income, the [trial court] assessed Father with
an earning capacity based upon the wage estimates for Erie of a
self-employed roofer as published by the U.S. Bureau of Labor []
Statistics Such an assessment is consistent with the occupation
Father has held for the past sixteen years and, considering the
standard of living maintained by Father, is more realistic than his
reported earnings.
Trial Court Opinion, 11/18/2016, at 3-5 (some citations omitted).
While we are cognizant that the trial court is well within its discretion
to determine that Father is disingenuous with reporting his yearly income,
based upon our decision in Ney, the trial court erred in adopting the
Conference Officer’s recommendations which were based upon facts outside
the record. Furthermore, while the trial court is correct that it is not
constrained to determine Father’s earnings based solely on his tax returns,
the court’s determination must be made by utilizing record evidence
introduced by the parties. See Ney, 917 A.2d at 863 (“A trial court may not
consider evidence outside of the record in making its determination. Nor
may this Court uphold a trial court’s order on the basis of off-the-record
facts.”) (citations and quotations omitted).
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Although the earnings set for Father ultimately may be shown to be
appropriate, the trial court abused its discretion in accepting this finding
based upon evidence that was not introduced by either party. Thus, we
vacate the order of the trial court to the extent it relied upon facts outside
the record when determining Father’s income, affirm the trial court’s order
as it pertains to Mother’s income, and remand for a new hearing to address
only, Father’s income and earning capacity.1 At that time both Mother and
Father will have the opportunity to present evidence of Father’s earning
capacity.
Order vacated in part, affirmed in part, and case remanded for
proceedings consistent with this memorandum.2 Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/16/2017
1
In light of our disposition, we need not address Father’s remaining issue
concerning the trial court’s failure “to state the reasons for the assessment
of an earning capacity to [Father] in writing or on the record in accordance
with Pa.R.C.P. 1910.16-2(d)(4).” Father’s Brief at 2.
2
In the interim, Father shall be held to the earning capacity confirmed by
the trial court in its August 31, 2016 order. To the extent that his earning
capacity differs in a future order, the trial court shall credit payments going
forward.
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