Crystal L. Oyerly vs. Benjamin Oyerly No. 2013-50721

Civil Action-Law-Family Law-Child and Spousal Support-Support Guidelines-Deviation-Payment of Expenses-Marital Residence-Modification-Retroactivity-Notification-Earning Capacity

A child and spousal support Order was entered on behalf of Plaintiff whereby Defendant was awarded a deviation from the established Guideline support amount based upon his continued residence in the marital residence and payment of the mortgage, taxes and insurance upon the marital residence after the parties’ separation. Plaintiff filed a Petition for Modification seeking removal of the deviation on the basis that Defendant had defaulted upon his payment of the mortgage upon the marital residence. The Court adopted the Report and Recommendation by a Domestic Relations Master removing the deviation retroactively. Defendant filed Exceptions to the Order, asserting that the Domestic Relations Master erred in removing the deviation retroactively and failing to assign Plaintiff with a higher earning capacity.

1. Pa.R.C.P. Rule 1910.17(a) provides that an order of support shall be effective from the date of the filing of the complaint or petition for modification unless the order specifies otherwise. However, Rule 1910.17(a) further provides that a modification of an existing support order may be retroactive to a date preceding the date of filing if the petitioner was precluded from filing the petition 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.

2. The Domestic Relations Master appropriately directed removal of the deviation retroactively to the month after Defendant stopped making mortgage payments on the marital residence when Defendant stopped making the payments necessary to preserve the marital residence, failed to notify the Domestic Relations Office or Plaintiff of this cessation and continued to enjoy the benefit of his reduced support obligation and Plaintiff promptly notified the Domestic Relations Office of the cessation and filed a Petition for Modification.

3. Pa.R.C.P. Rule 1910.16-2(d)(4) provides that if the trier of fact determines that a party willfully has failed to obtain or to maintain appropriate employment, the trier of fact may impute to that party an income equal to the party’s earning capacity taking into consideration the party’s age, education, training, health, work experience, earnings history and child care responsibilities.

4. As a general rule, a party’s actual earnings represent the benchmark upon which that party’s support obligation should be calculated. However, if a party voluntarily reduces his or her income in an effort to lower a support obligation, that individual’s support should be based upon earning capacity as opposed to actual earnings.

5. In order to modify a support obligation based upon reduced income of a party, the record must establish: (1) the voluntary change in employment that resulted in the reduction of income was not made for the purposes of avoiding support; and (2) a reduction in support is warranted based upon the party’s efforts to mitigate any lost income. A party who voluntarily reduces his or her income must explain the reason why the prior employment was terminated and acceptance of a lower paying job was necessary. The needs of the children subject to the order should be considered, including a parent’s ability to devote more time to the children at the lower paying job.

6. The Domestic Relations Master appropriately declined to assign Plaintiff an earning capacity when no evidence was presented that Plaintiff left a higher paying position for the purpose of avoiding or reducing support and the record indicates that Plaintiff left her higher paying position in order to have more flexible hours to devote more time to the children and to avoid the need for additional child care.

L.C.C.C.P. No. 2013-50721, Opinion by John C. Tylwalk, President Judge, November 20, 2015.

Scott Grenoble, Esquire, for Plaintiff

Melissa Montgomery, Esquire, for Defendant

Order omitted

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

PENNSYLVANIA

DOMESTIC RELATIONS SECTION No. 2013-0721

PASCES Case No. 661114362

CRYSTAL L. OYERLY, Plaintiff

v.

Benjamin Oyerly, Defendant

OPINION, TYLWALK, P.J., NOVEMBER 20, 2015.

This is an action involving spousal support for Plaintiff Crystal L. Oyerly (“Mother”) and child support for the parties’ two children, Calista (born September 6, 2005) and Grayson (born January 15, 2008). After a hearing was conducted on March 6, 2014, Father was awarded a deviation due to the fact that he remained in the marital residence post-separation and was responsible for paying the mortgage, taxes and insurances. This deviation resulted in a significant decrease in the amount of his support obligations. On August 15, 2014, Father received another deviation due to his payment of private school tuition for Grayson which was to terminate, effective August 2, 2014. On February 23, 3015, Mother filed a Petition for Modification claiming that Father was nine months behind in the mortgage payment and seeking removal of the mortgage deviation.

A hearing on the Petition for Modification was conducted before the Domestic Relations Master (“DRM”) on June 18, 2015. The DRM issued her Report and Recommendations on July 13, 2015 and it was made an Order of Court that same day. Father has filed Exceptions to those Recommendations, claiming that the DRM erred in removing the mortgage deviation retroactively, and in her failure to assign a higher earning capacity to Mother in determining her income.

Our review of the testimony and evidence presented at the hearing revealed the following facts relevant to our consideration of these exceptions.

The last mortgage payment made by Father was in June 2014. The home has been listed for sale since the time of the parties’ separation and is now in foreclosure due to his default. Despite being in default, Father continued to receive the benefit of the reduction in his support obligations. Mother testified that she learned of Father’s failure to make the payments in September 2014 when she received a letter from the bank regarding the past-due payments. Father claims to have notified Mother of his default via a text message in August 2014. When she learned of the default, Mother immediately contacted the Domestic Relations Office (“DRO”), but was advised that the file did not indicate a mortgage deviation. Mother therefore assumed that Father’s request for such a deviation had been denied. Mother did not take any further action at that time as she believed that Father would catch up on the missed payments. At a later point when Mother was in contact with her counsel regarding another matter, she learned that a mortgage deviation did exist. Upon receiving this information from her attorney, she immediately filed the Petition for Modification. Father admitted that he had not made a payment since June of 2014 and that he had not notified DRO of his failure to make the payments.

The DRM also took testimony at the hearing regarding Mother’s change of employment since the entry of the previous Support Order. Mother had previously been employed with Inter-County Transfer as an Administrative Assistant. She had worked a forty-hour week making fifteen dollars ($15.00) per hour. During the summer of 2014, she accepted another position with the same employer. Her new position was considered salaried, but she made the equivalent of eighteen dollars ($18.00) per hour for a forty-hour week. Although she had been told that she would still be required to work only forty hours per week, the company lost another employee soon after Mother assumed her new job. As a result, she was frequently required to work fifty (50) to sixty (60) hours per week which often involved late nights and weekends. Due to the amount of overtime Mother was required to work, she testified that she was often forced to arrange child care for the parties’ two children.

Due to this employment situation, Mother voluntarily left Inter-County Transfer and began working as the manager of The Bagel Rack on April 13, 2015 where she works a forty-hour week making fifteen dollars ($15.00) per hour. The business belongs to her brother and her mother and offers her flexible hours so that she has more time to spend with the children. She noted that she does not have to arrange for child care with her new job and that if she does, her mother cares for the children. Mother acknowledged that she still is still a notary and has a realtor’s license. She explained that she cannot use her realtor’s license as it is in escrow and that she has had no income in that capacity since April 2013. She also testified that she has had no income as a notary.

The DRM recommended that the mortgage deviation be removed, retroactive to July 1, 2014. The DRM issued new figures for both spousal and child support, effective three different dates: July 1, 2014, the date of the first default in mortgage payments; August 2, 2014 when Father’s deviation for private school tuition terminated; and February 23, 2015, when the Petition for Modification was filed. In making her income calculations, the DRM did not utilize Mother’s income at her higher salary for the time period she worked in that position. In determining Mother’s income for the period as of February 23, 2015, the DRM used Mother’s actual earnings and did not assign her an earning capacity at the amount of the position she left for her new employment.

Father has filed Exceptions to the DRM’s Recommendations which are now before us for resolution. Father first argues that the DRM erred in retroactively adding the amount of the mortgage deviation back to Father’s support obligations. Secondly, he argues that the DRM erred in failing to use Mother’s increased income at her salaried position for that time period. Lastly, Father complains that the DRM did not assign Mother an earning capacity at the higher income she was making when she left her previous employment to assume her new employment at the Bagel Rack.

Retroactivity of Removal of Mortgage Deviation

Father argues that the DRM erred in removing the mortgage deviation retroactive to the date of his first missed payment on July 1, 2014, which was seven months prior to Mother filing her Petition for Modification. With regard to the effective date of modifications, Pa.R.C.P. No. 1910.17 provides:

Rule 1910.17. Support Order. Effective Date. Change of Circumstances. Copies of Order. Priority of Distribution of Payments

Pa.R.C.P. No. 1910.17(a) (emphasis added). Father argues that the DRM should not have removed the deviation retroactively because Mother did not act promptly in filing her Petition for Modification and because she had failed to report her increase in earnings to the DRO when she took the higher-paying position.

We disagree with Father’s argument. Father stopped making the payments necessary to preserve the marital home and failed to notify DRO or Mother of this situation while he continued to enjoy the benefit of the deviation by his reduced support obligations. As soon as Mother had information about his missed payments, she contacted DRO. Due to the mortgage deviation being noted in the decision, but not the Order itself, she was advised that there was no deviation. Later, when she was advised by her counsel that a deviation had been awarded to Father, she promptly petitioned for modification. We believe that the situation here was sufficiently compelling to warrant the DRM’s decision to order the removal of the mortgage deviation retroactive to July 1, 2014. Thus, we will overrule this Exception.

Determination of Mother’s Income with Regard to Salaried Position

Husband argues that if the mortgage deviation is added back to his support obligation retroactive to July 1, 2014, then Mother’s actual income during the relevant time period should have been used in recalculation of his obligations. Mother agrees that using the income from her salaried position is an equitable approach to this situation. However, she argues that her actual income should be divided by the amount of hours per week she actually worked in order to account for her expenditures for child care which were necessitated by the circumstances of her salaried position. However, as the record contains no evidence of any such child care expenses, we cannot take that item into account. Thus, we will use Mother’s actual income from the time she assumed her new position at Inter-County Transfer, at $18.00/hour for a forty-hour week. At the DRM hearing, Mother testified that she had assumed the higher-paying position during the summer of 2014. Exhibit “1” to the DRM’s Report indicates that she earned a biweekly net amount of $1,218.44 until she left that position in April 2015. Based on that figure, Mother had annual net income of $31,679.44 for a net monthly figure of $2,639.95. Therefore, we will grant this Exception and utilize that figure in determining Father’s support obligation from July 1, 2014 through April 13, 2015.

Mother’s Earning Capacity

Father argues that the DRM erred in failing to assign Mother an earning capacity at the higher amount she earned in her salaried position at Inter-County Transfer before she voluntarily left that employment to assume her managerial position at The Bagel Rack. With regard to a party’s earning capacity, Pa.R.C.P. No. 1910.16-2(d)(4) states:

Pa.R.C.P. No. 1910.16-2(d)(4). We disagree.

As a general rule, an individual’s actual earnings represent the benchmark by which that individual’s support obligation should be calculated. Coffey v. Behl, No. 2010-5-0646 (C.C.P. Lebanon Cnty.), Slip Opinion, March 17, 2014, Charles, J. If an individual voluntarily reduces his income in an effort to lower a child support obligation, that individual’s child support should be based upon earning capacity and not actual earnings. Id. In order to modify a support obligation based upon reduced income, it must first be established that the voluntary change in employment which resulted in a reduction of income was not made for the purpose of avoiding a child support obligation and, secondly, that a reduction in support is warranted based on the parties’ efforts to mitigate any income loss. A parent who voluntarily reduces his income must indicate why he left the prior employment and why the acceptance of a lower paying job was necessary. Otherwise, for calculation of a support obligation, the party will be considered to have an income equal to his or her earning capacity as defined in the support guidelines. Grimes v. Grimes, 596 A.2d 240 (Pa. Super. 1991). Under this Rule, only if the trier of fact determines that a party has failed to maintain appropriate employment will earning capacity be analyzed and determined based upon the factors listed in Rule 1910.16-2(d). Coffey v. Behl, supra. However, the needs of the children should be considered, such as a parent’s ability to devote more time to her children at the lower-paying job. See, Grigoruk v. Grigoruk, 912 A.2d 311 (Pa. Super. 2006).

We agree with the DRM that there is no evidence that Mother left her higher-paying position at Inter-county Transfer to assume her managerial position at The Bagel Rack for the purpose of avoiding or reducing her obligation with regard to child support. The DRM obviously found credible Mother’s testimony that she left her prior position only for the purpose of having more flexible hours which allow her to devote more time to the children and to avoid the need for obtaining child care. We believe that this testimony fully explains why the acceptance of her new job was necessary in light of the needs of children of this age. Thus, we find no error in the DRM’s failure to assign Mother an earning capacity at the amount of her salaried position at Inter-County Transfer and we will overrule this Exception.

In designing our Order, we will use four effective dates. The first will be July 1, 2014, the date of Father’s initial default in the mortgage payments. The amount of his support obligation will reflect the removal of the mortgage deviation, but will include the credit he was previously granted for the payment of private school tuition for Grayson. This amount will also be based on the higher salary Mother was receiving in her salaried position with Inter-County Transfer.

The second period will be effective August 2, 2014. The amount of that support obligation will reflect the termination of Father’s credit for private school tuition. The third period will be effective February 23, 2014, when Mother initiated the modification proceeding and will reflect a slight decrease in Father’s income since the previous hearing. The last period will be effective April 13, 2015, when Mother changed her employment and had a decrease in income. All periods will reflect the adjustment for the parties’ shared custody of the children.