BUCKSCOUNTYLAW REPORTER 527

 Chase v. Chase 2012

After the entry of an order modifying an award of alimony and child support, Mother appeals this Court’s Order alleging that Father misrepresented his income and failed to report a change in income, and that a change in the amount of alimony and child support should have been retroactive to the date that Father failed to report a change in income.

Domestic relations – Support – Alimony – Retroactivity – Failure to report change in income – Marital settlement agreement

Held 

Retroactive adjustment of support not appropriate.

1. When evaluating a support order, the reviewing court may only reverse the trial

court’s determination where the order cannot be sustained on any valid ground.

2. The grant of retroactive credit toward a support order is within the sound discretion of

the hearing judge taking into consideration such factors as whether the obligor misrepresented his income over a prolonged period of time and whether his failure to report a change in income is reasonable and credible.

Kelly Marie Chase (Mother) has appealed from the Support Order entered by this Court on July 1, 2011, which directed David C. Chase (Father) to pay $2410.00 per month in alimony and child support. This award was allocated as $1549.00 for child support for one child, A., age 8, and $861.00 for alimony. The Order was retroactive to March 30, 2011, the date of Mother’s filing for modification of support, and further directed that alimony was to be terminated on July 13, 2011.

Mother and Father were married on July 22, 1995 and divorced on June 12, 2007. They are the parents of A., born on April 6, 2003. Mother and Father entered into a “Marital Settlement Agreement” on April 17, 2007, which was incorporated into their Divorce Decree. The Marital Settlement Agreement provided in part that Father shall pay $1,447.00 per month in spousal support/alimony pendente lite, which would convert to alimony for a period of three years following the entry of the Divorce Decree, and $1,711.00 per month in child support of which $532.00 was allocated for daycare expenses. Father was permitted to claim A. as a tax exemption only for the 2006 tax year.

The parties also entered into a Custody Stipulation which provided that they shall have joint legal custody with Mother as the primary physical custodian of the child. Divorce Decree, 6/12/07. On September 20, 2007, the Honorable Susan Devlin Scott of this Court entered an Order which converted Father’s monthly payment of alimony for a period of three years following the entry of the Decree in Divorce. Order, 9/20/07. On September 25, 2008, Father filed a Petition to Modify Child Support/Alimony alleging his involuntary termination from employment.

On January 26, 2009, Judge Scott entered an Order effective October 1, 2008, suspending the alimony Order until Father “receives his first full paycheck from re-employment or 2/1/10.” Petition, 9/25/08; Order, 1/26/09. On August 13, 2009, Father filed a “Petition to Modify Child Support [Reduce]” based upon an alleged decrease in his income and the elimination of his son’s daycare expenses. On October 23, 2009, Judge Scott entered an Order, effective as of August 13, 2009, and docketed on December 17, 2009, modifying Father’s support payments to $1,915.00 per month. This amount was allocated as $1,184.00 for child support, $557.00 for alimony and $174.00 toward arrears. The Order was based upon Father earning $115,000.00 and Mother earning $61,644.00 annually. The Order specified that the “amount of child support includes [Father’s] 63 percent contribution toward the child care expenses,” and that “total child care is $456.00 per month.” In addition, Father was “to pay alimony for 23 months, effective 8/13/09.”

The Order also incorporated the agreement that “both parties shall exchange information every six months, on 12/31/09, 7/1/10 and 12/31/10.” Petition, 8/13/09; Order, 10/23/09. On March 30, 2011, Mother filed a “Petition for Modification of an Existing Support and Alimony Order” alleging that Father’s “income has increased to $236,644.96 a year gross.” She stated that she did “not know how long [Father’s] income has been substantially greater than his income noted in the October 2009 Order,” and that contrary to the requirement of that Order to exchange information every six months, Father had “failed to produce any income information until March 26, 2011.” Petition, 3/30/11. In response, Father filed a “Memorandum on Wife’s Petition to Increase Support and Alimony” objecting to her request and alleging that although his 2010 W2 wages were $235,267.00, “he will not earn near that amount in 2011 because the commission structure was changed” and  his projected 2011 income would only be $140,000.00. He also alleged that “his spending and contributions on A. significantly increased,” and that Mother “failed to provide [him] with her income information, even after [he] provided his in April, 2011.” Memorandum, 5/27/11.

On July 1, 2011, this Court conducted a hearing upon Mother’s Petition for Modification of the Order of October 23, 2009. While it was stipulated at the inception of the hearing that the sole issue for determination was the effective date of the Support Order, Father’s counsel also requested that, due to his “superior income,” Father be able “to take A. as a deduction for all years.” N.T., 7/1/11, pp. 3-5. Mother testified that she is divorced and lives in Newtown, Bucks County, with her eight year-old son, A. Mother has been employed by St. Mary Medical Center as a Registered Respiratory Therapist since January, 2005. N.T., 7/1/11, pp. 5-6

Mother testified that Father is employed by Essilor Corporation as a “sales representative for the transitional glass lenses.” Although her income did not change, Mother stated that Father “had a significant increase in his income” in 2010, of which he did not inform her or the Bucks County Domestic RelationsSection. Mother testified that Father “basically told [her] that he did not have a change in his income,” and she did not learn of the change until the end of February, 2011, when she then contacted her counsel “to modify support.” N.T., 7/1/11, pp. 7-10. Mother testified that she entered into a Marital  Settlement Agreement at the time of her divorce that required Father to pay $1,447.00 per month in support and alimony and $1,711.00 per month in child support. The terms of the agreement required that “the parties … were to exchange true and correct copies of [their] respective federal income tax returns together with all schedules and attachments every year no later than April 30 th,” and that Father was able “to claim [their] son as a dependent exemption for the 2006 tax year only.” N.T., 7/1/11, pp. 10-11.

The parties stipulated to Mother’s income level, that “child care expenses are $602.00 a month,” and that Mother provides medical insurance for herself and their son at a monthly cost of $230.00. They also agreed that Mother “has taken the exemption and the child care credit for every year.” N.T., 7/1/11, pp. 12-13. On cross-examination, Mother acknowledged that Father had provided her with his 2009 W-2 in March, 2010 and his 2010 W-2 in March, 2011, as required by the Marital Settlement Agreement, and that the only information he did not provide was the “mid-year information” for 2010. Mother stated that although she knew Father was paid on a commission basis in 2010, she did not know that “his commission varied month-to-month.” She admitted that she had refused Father’s requests to take the tax deduction for their son and that she did not provide her 2010 mid-year income information either, explaining that they had agreed not to exchange pay stubs because Father had told her his “income has not significantly changed from last year.” N.T., 7/1/11, pp. 13-20, 27-28. Mother acknowledged that Father had been unemployed “for one year from August 2008 through August 2009” and that she had agreed to suspend Father’s alimony payments “until he was back to work.”

She also acknowledged that despite his unemployment, Father continued to pay child support of $1,711.00 per month during that period, but denied knowing that Father had “depleted his savings in order to continue to pay the child support at the same amount when he was on unemployment.” She also denied that Father’s spending on their son had increased during 2010 or that he had told her “he was doing very well in his [new] job.” N.T., 7/1/11, pp. 20-24. Mother testified that under the current custody schedule, Father has partial custody of A. on Tuesday nights and every other weekend, and that there have been minor modifications during the summer to accommodate A.’s various activities. N.T., 7/1/11, pp. 30-31.

Father testified that he resides inMount Laurel,New Jersey. He has been employed by Essilor Incorporated as a sales consultant since June 29, 2009. Father had been employed by Novo Nordisk until August 2008 when he was “let go.” He then collected unemployment compensation of approximately $1,200.00 per month until August, 2009. N.T., 7/1/11, pp. 33-35. Father testified that he continued to pay the $1711.00 per month in child support while he was unemployed because he “felt it was probably the best thing for A.” and “did not want him to be without.”

He testified that he also had a mortgage, a car payment and health insurance, and therefore paid the child support “out of [his]  savings” which he depleted by “approximately $48,000.00” He testified that his child support payments, based upon the amount of his unemployment compensation, would have been $637.00 per month and he therefore “overpaid” by “over $12,000.00” for that year. N.T., 7/1/11, pp. 35-37. Father testified that his “pay structure varies” and he is “currently paid over 60 percent in commission, so it’s about 35 percent in a salary.” Father stated that when he started at Essilor his “salary was about $3800.00 a month” or “about $45,000.00 in a base salary.” He stated that his annualized income for 2009 would therefore have been approximately $115,000.00, but because he did not work a full year, his actual income “was around 80 or $90,000.00.” This information was reflected in the W-2 that he provided to Mother in early 2010. N.T., 7/1/11, pp. 37-40.

Father testified that he did not know in July, 2010 what his actual income was because his commissions varied from month-to-month. He explained that “I will probably make about $8,000.00 in June [2011] for my salary and commissions [whereas] [i]n November of last year [2010] I made probably almost $30,000.00.” He testified that “later in the year … lots of the new business started to occur” and as a result, at the end of 2010 he “made a commission and salary of $236,000.00.” N.T., 7/1/11, pp. 40-41.

Father testified that he recalled talking with Mother about the “President’s Club” which he explained was an award for “being one of the top performers in [his] company.” Father stated that he did not find out that he had achieved this award until January of 2011. N.T., 7/1/11, pp. 41-42. According to Father, the parties had decided not to exchange income information in July 2010. He also stated that he “specifically did tell her that my income has changed” and that it was “much better” than in 2009. Father recalled telling Mother that he “was going to be making more money … and … could pay for a lot more of A.’s extracurricular activities.” He said “she seemed to be happy because … I was actually paying for those things over and above child support.” These additional items included athletic shoes, golf lessons and fees for baseball tournaments. Father stated that it was his understanding, based upon his conversation with Mother, that they would not exchange income information in July, 2010, but would do so only after he obtained his 2010 W-2 “in mid-February.” He testified that he provided his 2010 W-2 to Mother in March, 2011. N.T., 7/1/11, pp. 42-47

Father testified that his estimated income for 2011 will be $138,000.00, “about a hundred thousand less” than he received in 2010. He explained that he will not be able to earn as much as he did in 2010 because, “after a few individuals like myself had years like we did,” his company changed the commission structure and implemented “thresholds” so that “you cannot make that much money.” N.T., 7/1/11, p. 47. Father testified that he has custody of his son A. “almost 41 percent” of the time and he provides most of the transportation. He also pays 66 percent of A.’s daycare expenses but has “never taken him as an exemption [and] never taken the child care credit,” even though he has  repeatedly requested to do so. N.T., 7/1/11, pp. 48-49. Father testified that his average monthly commission from January through May of 2011 has been $6,500.00, which is half of the $11,000.00 in commission he earned in December, 2010. N.T., 7/1/11, pp. 50-52. On cross-examination, Father agreed that his monthly support payments based upon his actual 2010 income would have been $4,093.00, which would result in a difference of $2,353.00 over his actual Support Order payments of $1,741.00. He also agreed that he had only paid “$1,500 extra in expenses” for the year and that he had agreed in the  custody stipulation “to do the driving” for A.’s activities. N.T., 7/1/11, pp. 57-59.

Prior to closing arguments by counsel, this Court ascertained that Mother and Father agreed as to the income and expenses noted in the recommendation by the Domestic Relations Section, and that “the issue becomes one of should it be retroactive, and if so, to what date and why.” We then granted the recommended increase in support with a retroactive effective date of March 30, 2011, and placed our reasons of record for granting this increase. See, N.T., 7/1/11, pp. 61-66. As a result of the new Support Order, Father was directed to pay $2,410.00 per month, which was allocated as $1,549.00 in child support and $861.00 in alimony. The effective date of the Order was retroactive to March 30, 2011. Alimony was to terminate on July 13, 2011. Order, 7/1/11. On July 19, 2011, Mother filed a Notice of Appeal with the Superior Court of Pennsylvania from our Order of July 1, 2011. In her “Statement Pursuant to Pa.R.A.P. 1925(b)(4)” filed on August 5, 2011, Mother asserts verbatim:

1. The Court failed to modify its child support and alimony awards retroactive to January 1, 2010 which date was appropriate because defendant/Appellee did not report for a year or more the 200% plus increase in his income as required by Krebs v. Krebs, 2008 Pa. Super. 29, 994 A.2d 768 (2008) [sic].

2. The Court failed to enforce the support statute, 23 Pa.C.S.A. §4353(a), which requires a child support obligor to report a material change in circumstances relevant to his level of support to the opposing party or to the Domestic Relations Section which, in this case, the Defendant/Appellee did not do.

3. The Court failed to find that the defendant/Appellee was in contempt of the child support and alimony Order of October 23, 2009 when he failed to comply with the “IMPORATNT LEGAL NOTICE” requiring him to inform the Domestic Relations Section and other parties within seven days of any material changes in circumstances relevant to his level of support.

4. The Court ruled that the Plaintiff/Appellant had agreed with Defendant/Appellee not to exchange income information as provided by their prior child support and alimony order. However, there cannot be a valid binding agreement where one party has been intentionally mislead by the other party regarding the essence of the alleged agreement [sic].

5. The Court’s ruling is contrary to Pennsylvania Rule of Civil Procedure 1910.17(a) where Plaintiff/Appellant was precluded from filing a petition to increase child support and alimony due to the Defendant/Appellee’s misrepresentation that his income had not significantly changed.

6. The Court failed to enforce Defendant/Appellee’s absolute duty as a parent to support a child commensurate with his income level which duty cannot be waived.

7. When making its support and alimony ruling, the Court took into consideration circumstances existing before the date of the previous order and which circumstances had been already considered and dealt with in two prior orders and were no longer relevant.

Statement, 8/5/11.

The Superior Court of Pennsylvania has held that: [t]he standard of review of child support orders is well-settled: When evaluating a support order, this Court may only reverse the trial court’s determination where the order cannot be sustained on any valid ground. We will not interfere with the broad discretion afforded the trial court absent an abuse of the discretion or insufficient evidence to sustain the support order. An abuse of discretion is not merely an error of judgment; if, in reaching a conclusion, the court overrides or misapplies the law, or the judgment exercised is shown by the record to

be either manifestly unreasonable or the product of partiality, prejudice, bias or ill will, discretion has been abused .…Krebs v. Krebs, 944 A.2d 768, 772 (Pa. Super., 2008), citing, Mencer v. Ruch, 928 A.2d 294, 297 (Pa. Super., 2007).

The Superior Court has also observed that: Since abuse of discretion allegations call for a review of the record, it is important to remember that this Court “is not free to usurp the trial court’s duty as the finder of fact.” Nemoto v. Nemoto, 423Pa.Super. 269, 620 A.2d 1216, 1219 (Pa. Super., 1993), [citing Edelstein v. Edelstein, 399Pa.Super. 536, 582 A.2d 1074, 1076 (Pa. Super., 1990)]. As this Court stated on prior occasions, “[a]ppellate courts are becoming more reluctant to substitute themselves as super-support courts when they have not had the opportunity to see and hear the witnesses and so determine credibility.” Weiser v. Weiser, 238Pa.Super. 488, 362 A.2d 287, 288 (Pa. Super., 1976).

Simmons v. Simmons, 723 A.2d 221, 223 (Pa. Super., 1998).

In the instant matter, Mother essentially argues that the increase in Father’s support payments, awarded pursuant to our Order of July 31, 2011, should have been made retroactive to January 1, 2010, and not March 30, 2011 when she filed for a modification of support payments. She argues that because she was unaware of Father’s increased earnings she could not file a petition for an increase in support at an earlier time. Mother’s arguments are premised upon her assertion that Father misrepresented his income. She therefore clearly disagrees with this Court’s determinations of credibility.

In support of her position, Mother cites Krebs, supra, which, in quoting the applicable statutory language, states that: The Pennsylvania Domestic Relations Code governs support orders in pertinent part as follows: §4352. Continuing jurisdiction over support orders * * * (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(a), (a.1), (b), (e) and (g). Emphasis added. See also, Pa.R.C.P. 1910.17. Further, §4353. Duty to report (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)(1)-(2). Emphasis added. Thus, parties to a support proceeding are duty bound to report material changes affecting support. Simmons v. Simmons, 723 A.2d 221 (Pa.Super. 1998); 23 Pa.C.S. §4353(a). A party seeking to modify a support order has the burden of proving a modification is warranted and that he/she promptly filed a modification petition. Maddas v. Dehaas, 816 A.2d 234, 239 (Pa. Super. 2003), appeal denied, 573Pa.710, 827 A.2d 1202 (2003); 23 Pa.C.S. §4352(e). “An order modifying a prior support order is ordinarily retroactive to the date of filing of a petition for modification.” Albert v. Albert, 707 A.2d 234, 236 (Pa.Super. 1998). Where a misrepresentation has occurred, however, the court may order a modification of  arrearages retroactive to the date a party first misrepresented income if the other party promptly filed a modification petition upon discovery of the misrepresentation.Id.“There is no bright-line rule for determining if a petition for modification was promptly filed. We look to the facts of each case and ask whether the delay was reasonable.” Maue, supra at 433. Krebs, 944 A.2d at 773 -775.

As noted, Mother’s appeal is premised upon her assertion that Father misrepresented his income, and she relies upon Krebs to support her position. In Krebs, the Superior Court of Pennsylvania remanded the case and directed the trial court “to impose Father’s child support obligation retroactive to January 1, 2001, when Father failed to report his significantly increased income.” As in the instant matter, Father’s income had involved “substantial sales commissions” which “fluctuated monthly.” TheKrebs Courtobserved, however, that “Father admitted he had not reported substantial increases to his income between 2001 and 2005,” and that “Father conceded … that he had received a W-2 form by the end of January for each preceding year.” The Court held that the “affirmative duty to report material changes to his circumstances remained with Father,” and as a result, “the [trial] court unreasonably shifted the burden to Mother to ‘discover’ Father’s misrepresentation, and transformed a statutory entitlement into a duty to seek automatic review of the 2001 support order every three years or risk losing the additional support Father should have been obligated to pay.”Id., at 775-777.

Krebs is easily distinguished from the instant matter because there the Court could easily discern that the father’s conduct involved misrepresentation to the mother of his income over a period of years, and “Father had not at any time notified Mother or the Domestic Relations Office of his increased income.” Moreover, the Court observed that the hearing officer had determined that Father was aware that a change in his income “would have an impact on the amount of support that was owed … otherwise he would not have filed his own petition for reduction in 2000 when his wages decreased.”Id., at 771, 775.

Here, however, this Court determined that Father had disclosed his 2010 income to Mother when he presented her with his 2010 W-2 form in March, 2011 pursuant to their Marital Settlement Agreement, and that the income information he had provided had not been misrepresented in any fashion. We found Father to be credible when he testified that there was a mutual agreement between Mother and Father to avoid the mid-year exchange of 2010 income information, even though he had conveyed to Mother that he was doing “much better” financially in 2010. Mother argues that Father’s failure to provide her with that mid-year income information was an attempt to misrepresent his income and prevented her from filing an earlier support modification petition. Father testified that it was difficult to anticipate what his 2010 income would be because of the fluctuating nature of his sales commissions, and that a significant portion of his 2010 income was actually accrued during the latter part of the year.

We found Father’s explanations to be credible and his conduct reasonable under all of these circumstances. Contrary to the suggestion by Mother that this Court “failed to enforce [Father’s] absolute duty as a parent to support a child commensurate with his income level,” this Court noted that even though Father had been collecting unemployment compensation from August, 2008 to August, 2009, and had received a court-ordered reduction in his child support payments to $1,184.00 per month, he continued to pay the original child support amount of $1,711.00 per month, which he

accomplished through a depletion of his savings. Moreover, there was no evidence to suggest that Father had attempted in any way to shirk or evade his child support obligations during this period. Mother has also alleged that “the Court took into consideration circumstances existing before the date of the previous order and which circumstances had been already considered and dealt with in two prior orders and were no longer relevant” [sic].

She has not explained what the objectionable circumstances were, and because we can only speculate as to what they might be, we cannot properly address this issue. While it is well-established that “a grant of retroactive credit is within the sound discretion of the hearing judge,” Com. ex rel., Hargrave v. Hargrave, 418 A.2d 680, 684 (Pa. Super., 1980), this Court determined that there had been no  misrepresentation by Father concerning his income from 2010 and that his explanation for his failure to report a change in his income at mid-year was reasonable and credible.

This Court stresses again that even after he received a court-ordered reduction in his child support payments because of his unemployment, Father continued to pay the original amount of child support. Father did not attempt to avoid any of his parental obligations or responsibilities, and indeed, there was evidence presented that Father had actually increased his child support expenditures during the period for which Mother is seeking retroactive increased child support. We therefore concluded that a retroactive adjustment of his child support payments to January 1, 2010, as requested by Mother, was not appropriate under the particular circumstances of this case. As a result, we recommend that this appeal be denied. By the Court, /s/Alan M. Rubenstein, J. [Appealed to Superior Court.]