Jennifer Yancy, v. Jason Koehler

 

Civil Action-Family Law-Child Support-Retroactive Modification-Material Changes in Financial Circumstances-Failure to Disclose-Increased Income

 

Jennifer Yancy (“Mother”) filed a Motion seeking retroactive establishment of support regarding the parties’ two (2) children to 2019, at which time Jason Koehler’s (“Father’s”) income drastically increased when he became president and owner of a family owned business without disclosing such information to her.  Mother indicates that she discovered Father’s increase in income during proceedings to re-calculate support based upon the emancipation of the parties’ oldest child in 2022.

 

1. The Court retains discretion to effectuate economic justice between the parties.

 

2. The law generally does not prefer a support modification that is retroactive to a date preceding the filing of a petition for modification.

 

3. Wrongful intent is relevant, but not always determinative, to the question of whether retroactive modification should be accomplished.

 

4. Both parties failed to follow the boilerplate language of the standard form support order requiring unilateral disclose of any material changes in financial circumstances.

 

5. While Father did not affirmatively misrepresent facts pertaining to his income, he did not disclose the increase in income with knowledge that it would not be in his financial interest to disclose his actual income.

 

6. Although Mother filed her Petition for Modification well after she knew of Father’s change in position at the business, the Petition was filed within a reasonable period of time after she learned that Father had become the president and owner of the business.

 

7. Father’s nondisclosure of the change of income was material to the support obligation, as his income was ten (10) times greater in 2021 than it had been in 2018.

 

8. In light of the fact that Mother had actual knowledge that Father’s position had expanded dramatically in 2018 and/or 2019, Father did not at any time misrepresent his income, Mother did not disclose material changes in her own financial circumstances, Mother did not file a petition seeking retroactive modification of the support obligation until 2022 and Father did not purchase the business until January of 2021 when his income became predicated more upon business profits than salary, the record supports evaluation of Father’s support obligation retroactive to January 1, 2021.

 

L.C.C.C.P. No. 2011-50404, Opinion by Bradford H. Charles, Judge, December 1, 2022.

 

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY, PENNSYLVANIA

 

 

DOMESTIC RELATIONS SECTION

 

            JENNIFER YANCEY,                                :           NO. 2011-5-0404

Plaintiff                                                           :           PACSES NO. 570117253
:

:

1. :

:

JASON KOEHLER,                         :

Defendant                                                         :

:

ORDER OF COURT

 

AND NOW, this 1st day of December, 2022, upon consideration of the exceptions filed by Jason Koehler, and in accordance with the attached Opinion, the Temporary Order of this Court is as follows:

1. The above-referenced matter is remanded to the Domestic Relations Master (DRM) for further evaluation in accordance with the attached Opinion.
2. Leave is granted for the DRM to render a decision retroactive to January 1, 2021.
3. Pending the decision of the DRM on remand, Jason Koehler shall pay Jennifer Yancey the sum of $3,500.00 per month[1] for the support of one child as follows:

Effective June 7, 2022, the amount of support to be paid by the Defendant is $3,500.00 per month for child support for Brianna Leigh Koehler plus $350.00 per month on arrears.

THIS TEMPORARY ORDER IS ALLOCATED AS FOLLOWS:

AMOUNT/FREQUENCY       OBLIGATION TYPE               BENEFICIARY

_$3,500.00 _/_month_                        _ Child support _        Brianna Leigh Koehler

_$350.00_/_month_                _Arrears_                                Brianna Leigh Koehler

 

Arrears are due in full IMMEDIATELY.  All terms of this Order are subject to collection and/or enforcement by contempt proceedings, credit bureau reporting, tax refund offset certification, driver’s license revocation, and the freeze and seizure of financial assets.  These enforcement/collection mechanisms will not be initiated so long as Obligor does not owe overdue support.  Failure to make each payment on time and in full will cause all arrears to become subject to immediate collection by all the means listed above.

Un-reimbursed medical expenses of Obligee or children that exceed $250 annually shall be allocated between the parties.  The party seeking allocation of the un-reimbursed medical expenses must provide documentation of the expenses to the other party no later than March 31^st of the following calendar year in which the final medical bill to be allocated was received.  The un-reimbursed medical expenses are to be paid as follows:  _100_% by Defendant and _0_% by Plaintiff.

_X_Defendant __ Plaintiff ____Neither party is to provide medical, dental and vision coverage for the children.

IT IS ORDERED THAT (ITEMS CHECKED BELOW APPLY):

___The defendant is ordered to cover the dependent(s) with health care coverage whenever it is available at a reasonable cost which shall be defined as a cost that does not exceed 5% of defendant’s net monthly income and does not exceed 50% of defendants net monthly income when added to the basic child support plus additional expenses,.

_____Health care coverage is currently not available at a reasonable cost to defendant.  Therefore, plaintiff is ordered apply for/continue government-sponsored coverage, such as Children’s Health Insurance Program (CHIP).  The cost of said coverage shall not exceed 5% of plaintiff’s net monthly income.

____Health care coverage is currently not available at a reasonable cost to defendant.  Therefore, plaintiff is ordered to cover the dependent(s) with health care coverage if it is available at a reasonable cost which shall be defined as a cost that does not exceed 5% of plaintiff’s net income.

IT IS FURTHER ORDERED:

Within 30 days after the entry of this order, the party ordered to provide health care  coverage shall provide written proof to the Lebanon County Domestic Relations Office and the other party that medical insurance has been obtained, including insurance cards and any other material necessary to utilize the coverage.

If Health Insurance is currently unavailable to the party/parties ordered to provide it, such proof shall be provided to Lebanon County Domestic Relations within 7 days of the date of this order.

If Health Insurance coverage is now available or becomes available to the party/parties ordered to provide it, the party/parties shall provide proof of the cost to Lebanon County Domestic Relations within 7 days of the date of availability.

1. _____DEFENDANT _____PLAINTIFF SHALL PAY THE FOLLOWING FEES:  

FEE TOTAL   FEE DESCRIPTION             PAYMENT FREQUENCY

__$ _/  _                      _   __                                       _$        _PER _one time __

________/___ __________________            _________PER __________

ADDITIONAL RECOMMENDATIONS:

___ ____All other provisions from the court order dated ___, not affected by this order, shall remain in full force and effect.

Unreimbursed medical after spousal support:

Any money collected pursuant to this Order shall be paid by Pennsylvania State Collection & Disbursement Unit to Plaintiff, Plaintiff’s assignee, or as designated, by other Order of Court.  Said money to be turned over by the Pennsylvania State Collection & Disbursement Unit to Plaintiff, Plaintiff’s assignee, or as designated, by other Order of Court.

Within thirty (30) days after the entry of this Order, the party or parties providing insurance shall submit to the person having custody of the child(ren) written proof that medical insurance coverage has been obtained or that application for coverage has been made.  Proof of coverage shall consist, at a minimum, of: 1) the name of the health care coverage provider(s); 2) any applicable identification numbers; 3) any cards evidencing coverage; 4) the address to which claims should be made; 5) a description of any restrictions on usage, such as prior approval for hospital admissions, and the manner of obtaining approval; 6) a copy of the benefit booklet or coverage contract; 7) a description of all deductibles and co-payments; and 8) five copies of any claim forms.

Payments must be made by check or money order.  All checks and money orders must be made payable to Pennsylvania State Collection & Disbursement Unit and mailed to P.O. Box 69110, Harrisburg, PA 17106-9110.  Each payment must bear your social security number and member number in order to be processed.

IMPORTANT LEGAL NOTICE

PARTIES MUST WITHIN SEVEN DAYS INFORM THE DOMESTIC RELATIONS SECTION AND THE OTHER PARTIES, IN WRITING, OF ANY MATERIAL CHANGE IN CIRCUMSTANCES RELEVANT TO THE LEVEL OF SUPPORT OR THE ADMINISTRATION OF THE SUPPORT ORDER, INCLUDING, BUT NOT LIMITED TO, LOSS OR CHANGE OF INCOME OR EMPLOYMENT AND CHANGE OF PERSONAL ADDRESS OR CHANGE OF ADDRESS OF ANY CHILD RECEIVING SUPPORT. 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.

 

PENNSYLVANIA LAW PROVIDES THAT ALL SUPPORT ORDERS SHALL BE REVIEWED AT LEAST ONCE EVERY THREE (3) YEARS IF SUCH REVIEW IS REQUESTED BY ONE OF THE PARTIES. IF YOU WISH TO REQUEST A REVIEW AND ADJUSTMENT OF YOUR ORDER, YOU MUST DO THE FOLLOWING: CALL YOUR ATTORNEY. AN UNREPRESENTED PERSON WHO WANTS TO MODIFY (ADJUST) A SUPPORT ORDER SHOULD CONTACT THE DOMESTIC RELATIONS SECTION.

 

ALL CHARGING ORDERS FOR SPOUSAL SUPPORT AND ALIMONY PENDENTE LITE, INCLUDING UNALLOCATED ORDERS FOR CHILD AND SPOUSAL SUPPORT OR CHILD SUPPORT AND ALIMONY PENDENTE LITE, SHALL TERMINATE UPON DEATH OF THE PAYEE.

 

A MANDATORY INCOME ATTACHMENT WILL ISSUE UNLESS THE DEFENDANT IS NOT IN ARREARS IN PAYMENT IN AN AMOUNT EQUAL TO OR GREATER THAN ONE MONTH’S SUPPORT OBLIGATION AND (1) THE COURT FINDS THAT THERE IS GOOD CAUSE NOT TO REQUIRE IMMEDIATE INCOME WITHHOLDING; OR (2) A WRITTEN AGREEMENT IS REACHED BETWEEN THE PARTIES WHICH PROVIDES FOR AN ALTERNATE ARRANGEMENT.

 

UNPAID ARREARS BALANCES MAY BE REPORTED TO CREDIT AGENCIES. ON AND AFTER THE DATE IT IS DUE, EACH UNPAID SUPPORT PAYMENT SHALL CONSTITUTE, BY OPERATRION OF LAW, A JUDGEMENT AGAINST YOU, AS WELL AS A LIEN AGAINST REAL PROPERTY.

 

IT IS FURTHER ORDERED that, upon payer’s failure to comply with this order, payer may be arrested and brought before the Court for a Contempt hearing; payer’s wages, salary, commissions, and/or income may be attached in accordance with law; this Order will be increased without further hearing by 10 % a month until all arrearages are paid in full.  Defendant is responsible for court costs and fees.

 

 

BY THE COURT:

 

BRADFORD H. CHARLES

BHC/pmd

cc:           Domestic Relations

Michael Bechtold, Esq.// 525 South Eighth Street Lebanon, PA 17042

Colleen Gallo, Esq.// 1601 Cornwall Road Lebanon, PA 17042

Jennifer Yancey// 1 Stone Hedge Drive, Lebanon PA 17042

Jason Koehler// 869 Kimmerlings Road, Lebanon PA 17046

 

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY, PENNSYLVANIA

 

 

DOMESTIC RELATIONS SECTION

 

            JENNIFER YANCEY,                                :           NO. 2011-5-0404

Plaintiff                                                           :           PACSES NO. 570117253
:

:

1. :

:

JASON KOEHLER,                         :

Defendant                                                         :

:

APPEARANCES

 

Michael Bechtold, Esquire                                       For Jennifer Yancey

BUZGON DAVIS

Colleen Gallo, Esquire                                              For Jason Koehler

Reilly Wolfson

 

 

OPINION BY CHARLES, J., December 1, 2022

Support litigants have an affirmative duty to disclose a material change in their financial circumstances, even in the absence of a pending support dispute.  That said, everyone involved in support litigation also has a vested interest in maintaining finality and certainty with respect to the amount of support that is required to be paid.  In this case, Jennifer Yancey (hereafter MOTHER) asks us to re-evaluate child support retroactive to 2018 because Jason Koehler (hereafter FATHER) did not affirmatively advise her of the extent to which his income increased after 2018.  We are deeply conflicted about the issue that the parties have presented.  For reasons that will follow, we will permit some retroactive re-evaluation of support, but not to the extent that is sought by MOTHER.

 

1. FACTS

MOTHER and FATHER are the parents of two children.  Their oldest son is 19 and was removed from the parties’ Support Order last year.  The parties’ younger daughter is 15 and remains the beneficiary of a Support Order.

In 2011, the parties agreed to a Support Order whereby FATHER paid $1,000.00 per month.  This Order was predicated upon FATHER’s income at the time of $6,081.00 per month.  This Order remained in place until 2018.  On October 18, 2018, another Support Order was entered requiring FATHER to pay $1,500.00 per month predicated upon income of $6,840.00 per month.

The Court Order in October of 2018 contained an “Important Legal Notice”.  This notice is five (5) pages long and includes language requiring both parties to report any “material change” in income.  FATHER did not read the entire contents of the boilerplate “Notice” and he claimed that he was unaware of his affirmative duty to report material changes in his financial circumstances.

According to his 2018 Federal Income Tax Return, FATHER was employed as Vice-President of Aerial Communications and earned $111,000.00 in wages.  In addition, FATHER received rent for the property on which the business was located.

Aerial Communications is a family business that had been owned and run by FATHER’s father.  At some point during 2019, FATHER’s father contracted leukemia.  FATHER essentially took over the business.  At the end of 2019, FATHER received a large bonus by virtue of his status as President of the business.  FATHER’s 2019 W-2 Statement revealed wages of $417,000.00.  In addition, FATHER received rent of $30,000.00 during 2019.

According to tax return information, FATHER received $218,000.00 in wages plus $30,000.00 in rent during 2020 and $67,250.00 in wages plus $30,000.00 in rent during 2021.  In addition, as of January 1, 2021, FATHER purchased Aerial Communications.  His tax return revealed total profits for 2021 of $913,000.00.  FATHER states that he retained a considerable portion of this “income” in his business account.

When the parties’ oldest son turned 18, the Domestic Relations Office sent an emancipation notice.  FATHER immediately attempted to resolve the support dispute by offering to pay to MOTHER the same amount – $1,500.00 per month – that he had previously paid for two children.  MOTHER refused this offer.  The parties proceeded to a Support Conference.  At this Support Conference, FATHER disclosed his income.

MOTHER claimed that she was ignorant of FATHER’s financial circumstances until the support litigation resumed in 2022.  FATHER indicated that MOTHER was well aware for years that he would ultimately take over Aerial Communications.  FATHER indicated that MOTHER knew about his own father’s leukemia diagnosis.  Further, because the parties’ eldest son was employed by Aerial Communications, FATHER believed that MOTHER was well aware of his increased responsibilities at the company as of 2018.  Moreover, FATHER pointed out that the website for Aerial Communications listed him as President following his father’s leukemia diagnosis.

As of 2018, when the $1,500.00 per month Support Order was established, MOTHER was self-employed as the owner of a small business that produced and sold opera fudge.  In January of 2022, MOTHER obtained a job in the mortgage department of Fulton Bank that paid her over $21.00 per hour.  MOTHER did not report this change of her financial circumstance to the Domestic Relations Office.

In June of 2022, MOTHER filed a Motion seeking to retroactively re-establish support.  Initially, MOTHER asked to re-evaluate support retroactive to 2018.  She later acknowledged that what she actually seeks is retroactivity back to 2019 when FATHER’s income increased dramatically.  FATHER opposes MOTHER’s request for retroactive modification of support.  Instead, FATHER believes that any new support decision should be prospective and that, at best, MOTHER should receive a new support award retroactive to June of 2022.

We scheduled a Factual Hearing regarding MOTHER’s request for retroactive modification.  That hearing took place on October 20, 2022.  Both parties provided testimony and evidence that has been summarized above.  Following the testimony, we advised both parties that we would like briefs regarding the issue presented.  We also articulated several Findings of Fact so that the parties would not be required to argue factual issues that we had already resolved.  Those Findings of Fact were:

• At no time did FATHER affirmatively misrepresent his employment status or his income to anyone.
• MOTHER was aware before she acknowledged awareness of the fact that FATHER had taken over as Chief Executive Officer of Aerial Communications. We conclude that MOTHER possessed this awareness at some point during mid-2019.
• By virtue of her actual knowledge of FATHER’s increased authority and responsibility for Aerial Communications, MOTHER knew, or should have known, that FATHER’s income would have increased commensurate with his increased responsibilities.
• At no time did FATHER affirmatively report to the Domestic Relations Office or to MOTHER that his income had increased four-fold in 2019 or that he had purchased Aerial Communications in 2021.
• FATHER had actual awareness that his increased income would result in a higher support award because he immediately attempted to resolve the child support issue to his benefit once the Domestic Relations Office mailed an Emancipation Notice to both parties.

We acknowledged at the time of the hearing that we did not know for sure what the law required of us based upon the above facts.  Both parties have submitted briefs regarding this question.  We author today’s Opinion to resolve the difficult question now before us.

 

II.         DISCUSSION

In their briefs, both parties cite four primarily applicable cases.  Our independent research has not revealed others that are uniquely applicable to this case.  Therefore, we will begin our discussion by summarizing each of the four cases that were relied upon by the parties.

• Maue v. Gilbert, 839 A.2d 430 (Pa. Super. 2003)

In 2002, a Child Support Court granted a mother’s motion to   modify support retroactive to 1996.  Apparently, mother learned from a newspaper article that father had paid over $500,000 in restitution as a result of an embezzlement charge.  Mother had no knowledge that father possessed the financial resources to pay $500,000.  In addition, the Court determined that father had “misrepresented” his income by manipulating multiple W-2 Statements.  Ultimately, the Superior Court stated: “Based on these facts, we find it reasonable for the Lower Court to have determined that father actively concealed his income to avoid paying additional child support.” Id  at page 433.

The Superior Court in Maue affirmed the Trial Court’s decision to assess support retroactively.  The Court relied upon 23 Pa.C.S.A. § 4352(e), which permitted a retroactive modification of support if “the Petitioner was precluded from filing a Petition for Modification by reason of a misrepresentation of another party or other compelling reason and if the Petitioner, when no longer precluded, promptly filed a Petition.” 23 Pa.C.S.A. § 4352(e).

• Ewing v. Ewing, 843 A.2d 1282 (Pa. Super. 2004)

This case involved a situation where a parent was terminated from his employment, and the parties disputed whether this termination was for legitimate cause.  The primary holding of the Court was: “where a parent is fired for cause, in order for the Court to consider reducing the parent’s child support obligation…, the parent must establish that he or she attempted to mitigate lost income.”  Id at page 1288.  However, a collateral question arose with respect to the effective date of the Support Order.  Father claimed that the Support Order should be effective in May of 2001 when Mother was terminated from her employment.  The Support Hearing Officer determined instead that the Support Order should only be modified retroactive to the date on which the Petition itself was filed.  The Trial Court concluded that the support should be retroactive only to the date the Petition was filed.  The Superior Court stated:

“We note that since Father is seeking to modify the Order, he has the burden of proof.  Father advances no legitimate reasons for modifying the order prior to the date the Petition was filed.  Although it is clear that Mother was terminated in May 2001, Father never questioned her at the hearing about whether she notified the Domestic Relations Office, nor did he assert that he was unaware Mother left her job until May of 2002.  The lapse of time between the date Mother was terminated and the date Father sought modification is a full year; father offers no explanation for this time lag.

 

Upon review of the record, we conclude that the trial court did not abuse its discretion in setting the date for vacating the child care contribution at May 2002, the date the Petition was filed.”

Id at page 1289-1290.

 

• Krebs v. Krebs, 944 A.2d 768 (Pa. Super. 2008)

This case involved a 2006 Petition to modify support retroactive to 2001.  The mother in this case alleged that the child’s father affirmatively concealed increases in his income.  The Trial Court granted Mother’s request for retroactive modification, but limited the retroactivity to the time commencing in May of 2004.  The Superior Court affirmed the Trial Court’s decision to retroactively modify support, but extended the retroactivity to 2001.

Like the Court in Maue, the Superior Court determined that 23 Pa.C.S.A. § 4352(e), controlled the question before it.  That section permitted retroactive modification beyond the filing of a Petition for  Modification if there was “misrepresentation” or “other compelling reason” and “prompt filing of a Petition after knowledge was gained.”  Applying this standard, the Court noted that father had an “affirmative duty” to report any material change in his financial circumstances.  Moreover, the Court concluded that father had actual knowledge of this duty.  In addition, the Court determined that it would have been impossible for mother to know the amount of father’s sales commissions during the years in question.  Ultimately, the Court determined that father chose not to notify mother of his true income for any of the years between 2001 and 2005.  Because of this, the Superior Court directed the Trial Court “to impose Father’s child support obligation retroactive to January 1, 2001, when Father first failed to report his significantly increased income.”

• Morgan v. Morgan, 193 A.3d 999 (Pa. Super. 2018)

In Morgan, a husband who owed alimony produced false documentation and testimony in court about his income.  He even provided false tax returns.  The wife filed a Petition to Modify Alimony based upon Husband’s fraud.  The Trial Court determined Husband’s conduct to be “despicable”, but it provided retroactive relief only to the date on which Wife discovered the fraud, not back to the date on which he committed it for the first time.

The court in Morgan determined that the issue of Husband’s fraud triggered the court’s panoply of equitable powers.  The Court cited the long-standing principle that “the doctrine of unclean hands requires that one seeking equity act fairly and without fraud or deceit as to the controversy at issue.”  Id at page 1005.  The Court then concluded:

“The facts of this case fall squarely within the doctrine of unclean hands.  Husband’s fraudulent conduct took place from the inception of this alimony modification case in May of 2007…Husband’s fraud included producing to the Court two different sets of false tax returns, false financial documents, and a false mortgage application as well as testifying falsely to the Court regarding his income, assets, and spending…In light of the fraud that husband committed not only on the Court, but also to the parties and the judicial system itself, the trial court should have invoked the doctrine of unclean hands.”

Id at page 1006, 1007.

 

It is worth noting that both Maue and Krebs were decided under a statute that was modified in 2018.  The current version of 23 Pa.C.S.A. § 4352 states:

“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.” 23 Pa.C.S.A. § 4352(e).

Based upon the above, it is clear that this Court retains discretion to effectuate justice between the parties.  It is also clear that wrongful intent is relevant, but not always determinative, to the question of whether retroactive modification should be accomplished.  With these things in mind, we will outline some of the equitable factors that will bear upon our decision:

• The standard “form” Support Order contains language that requires parties to unilaterally disclose any material change in their financial circumstances. But this language is contained within five (5) pages of boilerplate language, most of which is undecipherable to most lay persons.[2]  Moreover, the next time we encounter a support litigant who strictly complies with all of the boilerplate language set forth in the Support Rules will be our first.  People simply do not read, do not completely understand, and do not follow all of the terms set forth in the boilerplate language.  We find FATHER’s statement that he was unaware of his requirement to affirmatively report financial changes to be credible.
• MOTHER did not follow the boilerplate language requiring voluntary disclosure either. When MOTHER closed her business and obtained a new higher-paying job, she did not report this to the Domestic Relations Office.  While it is likely that FATHER was subjectively aware of MOTHER’s change of occupation, such awareness did not occur because MOTHER complied with the standard form order.  It is obvious that MOTHER did not know that the language she now seeks to enforce existed until this dispute was presented to this Court.
• While FATHER did not affirmatively misrepresent facts pertaining to his income, he did not disclose it. Moreover, FATHER possessed clear knowledge that it would not be in his financial interest to disclose his actual income.[3]
• From a very general perspective, the law does not prefer support modifications that are retroactive to a date preceding the filing of a Modification Petition. There are very good public policy reasons for this rule.  First and foremost, people who owe and received child support should be able to budget their own finances with full understanding of what it is that must be paid.  If obligations are imposed retroactively for periods of time measured in years it would be impossible for support litigants to know with certainty what it is they will be required to pay or receive.  There is a quote outside Courtroom #1 of the Lebanon County Courthouse that espouses “the known certainty of the law”.  As it relates to support proceedings, there is value for everyone to establish an amount with “known certainty”.
• MOTHER filed her Petition for Retroactive Modification on July 19, 2022. This was well after MOTHER knew that FATHER’s position at Aerial Communications had been significantly elevated.  However, the request for retroactivity was proffered within a reasonable period of time after MOTHER learned that FATHER had become the exclusive owner of the business.
• The non-disclosure of income by FATHER was significant in its scope. FATHER’s 2018 support obligation was premised upon income of $111,000.00 per year.  FATHER’s income in 2019 was four times that amount, his income in 2020 was double that amount and his income in 2021 was arguably ten times what he earned in 2018.  By any definition, FATHER’s non-disclosure was “material” to his support obligation.
• None of the cases we have quoted above directly control the fact pattern now before this Court. Unlike Krebs and Morgan, FATHER has not affirmatively misrepresented any facts to anyone.  Unlike Krebs, FATHER was not subjectively aware of his duty to affirmatively report a change of income.  Unlike Ewing, the amount of undisclosed income is neither minimal nor even modest; it is significant.  Unlike Maue and Morgan, no criminal behavior has been alleged against FATHER.  Unlike any of the cases cited above, MOTHER herself failed to affirmatively disclose a material change in her own financial situation.  By virtue of the above, none of the outcomes determined by our Superior Court in Maue, Ewing, Krebs or Morgan controls our decision today.

 

As we meld all of the above considerations together, we conclude that FATHER’s support obligation should be evaluated retroactive to January of 2021.  It was in this month that FATHER purchased the business.  It was at this time that FATHER’s income was predicated more on business profits than on salary.  Given the complete transformation of FATHER’s amount of income and the methodology by which it was determined, we conclude even in the absence of affirmative proof of misrepresentation that “other compelling reasons” exist for retroactive modification as of January 2021.  Moreover, there is no evidence that MOTHER knew about FATHER’s exclusive ownership of the business until that information was disclosed late in the spring of 2022.  As it relates to a retroactive analysis back to January of 2021, we conclude that MOTHER’s Petition for Retroactive Support was filed reasonably promptly and in compliance with 23 Pa.C.S.A. § 4352.

We decline MOTHER’s request to retroactively assess support back to 2018/2019.  We do so for the following reasons:

• MOTHER had actual knowledge that FATHER’s authority and responsibility with Aerial Communications expanded dramatically when his father contracted leukemia in 2018/2019. At that point, MOTHER knew, or she should have known, that FATHER’s income would be different that it was then when he was a “mere” Vice-President.
• At no time did FATHER misrepresent his income to anyone. Not within the Court system.  Not outside the Court system during private conversations with MOTHER.
• MOTHER herself did not affirmatively disclose material changes in her own financial circumstances.
• MOTHER did not file a Petition Seeking Retroactive Modification until 2022, more than three (3) years after she had direct knowledge that FATHER’s role in running Aerial Communications had been dramatically elevated.
• At no time did FATHER seek to hide the elevation of his status at Aerial Communications from anyone. In fact, the Aerial Communications website listed FATHER as the “President” and his role as Chief Executive Officer was not hidden from the parties’ son, who lived with MOTHER.
• On July 27, 2020, MOTHER presented this Court with a Stipulated Request for Modification of an existing Custody Order. That Stipulation only pertained to the manner by which support was to be paid by FATHER, but it illustrated the fact that MOTHER was very much aware of her ability to modify support.

III.    CONCLUSION

Based upon everything outlined above, we will grant MOTHER’s Petition for Retroactive Analysis of Support.  However, we will not modify the support retroactive to 2018 as MOTHER has requested.  Rather, based upon the unique facts of this case, we determine that an evaluation retroactive to January of 2021 would comply with Pennsylvania law and would achieve justice for the parties and their children.

We are well aware that FATHER will take the position going forward that the income revealed on his tax returns may not be “income available for support.”[4]  At this point, we do not have anywhere close to sufficient information to assess what percentage of FATHER’s tax return income must be considered when assessing child support.  That is a decision that will be put off until another day when both parties will be able to present evidence – perhaps including expert testimony – about the extent to which FATHER’s near-million-dollar 2021 taxable income can be considered as income available for the payment of child support.

For today, we will be remanding this case to the Domestic Relations Master with instructions that both parties’ economic circumstances should be evaluated retroactive to January 1, 2021.  When a recommendation is rendered, it should be rendered effective January 1, 2021, and it certainly could include multi-tiered amounts based upon different financial circumstances that have existed since January of 2021.  An Order to accomplish this decision will be entered today’s date.

 

[1] This amount is established temporarily and without prejudice to the ability of the parties to seek a different amount and without limitation on the ability of a Domestic Relations Master to determine a different amount.

[2] We have always felt that the volume of information contained in the standard “form order” is unnecessarily voluminous.  We understand that those who drafted the form wanted to be comprehensive.  However, sometimes brevity is a virtue because simple and concise information will be read and internalized while 5 pages of boilerplate language will not.

[3] We reach this conclusion because FATHER immediately offered to pay the same amount for one child that he had been paying for two children almost immediately after it became apparent that an evaluation of child support would be undertaken by the Domestic Relations Office.

[4] FATHER believes that a significant portion of the $900,000.00 “profit” revealed on his tax return actually represents money that FATHER has retained for future business operations.