Kimberly Frederick, v. Willard Frederick, Jr.

Kimberly Frederick, v. Willard Frederick, Jr.

 

Civil Action-Family Law-Support-Spousal Support-Failure of Business to Pay Taxes-Governmental Lien-Credibility Findings-Testimony and Evidence Regarding Income

 

The parties married in 1986 and separated in 2017.  Defendant has been an owner and operator of a trucking business for over thirty-five (35) years with a four (4) year period of time during which the business failed to pay any taxes, resulting in over $400,000.00 of delinquent taxes and interest for which a governmental lien has been placed upon the marital residence and business.  Plaintiff filed a Complaint seeking spousal support, which was awarded on August 29, 2019.  Following review proceedings that resulted in entry of an Order of support on June 22, 2022, Defendant filed Exceptions to the Order on the basis that the Domestic Relations Master erred by failing to lower his monthly support obligation due to the volatility of his income.

 

1. In reviewing the report and recommendation of the domestic relations master, the court must give the fullest consideration to the credibility findings of the domestic relations master, who was present to observe the demeanor of the witnesses and their testimony.

 

2. When there is a transcribed record of the proceedings before the domestic relations master to review, the court must consider all the evidence de novo and make an independent determination of the amount of support due and owing.

 

3. In performing the de novo review, the credibility findings of the domestic relations master must be given great weight.

 

4. The Domestic Relations Master did not abuse her discretion by finding the testimony of Defendant’s accountant not to be credible where the Master explained that the accountant did not have direct knowledge of the financial condition of Defendant’s business, did not provide business records at the hearing upon which her testimony was based and based her testimony on information provided by a third party.

 

5. The Domestic Relations Master committed no abuse of discretion by finding that Defendant’s reported income and expenses were not credible where the reported expenses far exceeded the reported income and included large discretionary expenses.

 

6. Defendant is afforded the ability to request modification of the support Order when and if the government attempts to enforce its lien against property.

 

L.C.C.C.P. No. 2017-50222, Opinion by Bradford H. Charles, Judge, January 24, 2023.

 

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY, PENNSYLVANIA

 

DOMESTIC RELATIONS SECTION

 

            KIMBERLY FREDERICK,                       :           NO. 2017-5-0222

Plaintiff                                                           :           PACSES NO. 182117585
:

:

1.                         :

WILLARD FREDERICK, JR.,      :

Defendant                                                         :

:

:

 

 

AND NOW, this 24^th day of January, 2023, upon consideration of the exceptions filed, and in accordance with the attached Opinion, the Order of this Court is as follows:

1. The Defendant’s exceptions to the Domestic Relations Master’s finding and recommendation are DENIED.
2. The Defendant will be permitted to file a Petition for Modification if and when he is affected by the governmental lien placed upon his property.
3. This Order shall be effective April 25, 2019.
4. The amount of support to be paid by Defendant is $00 per month for spousal support for Kimberly Frederick and $150.00 per month on arrears for Kimberly Frederick.

The amount to be paid for each dependent and obligation amount is allocated as follows:

 

AMOUNT/FREQUENCY     OBLIGATION TYPE            BENEFICIARY

_$1500.00 _/_month_      _Spousal support_             _Kimberly Frederick

_$150.00 _/_month_               _arrears _                    _Kimberly Frederick

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.

The monthly support obligation includes cash medical support in the amount of $250 annually for un-reimbursed medical expenses incurred for each child and/or spouse.  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:  _71_% by Defendant and _29_% by Plaintiff.  ____Defendant _X__ Plaintiff ____Neither party is to provide medical coverage __through her employment, including dental and vision.

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 _once__

________/___ __________________            _________PER __________

ADDITIONAL RECOMMENDATIONS:

___XX____All other provisions from the court order dated __9/4/19_, not affected by this order, shall remain in full force and effect.

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:

 

 

 

                                                                        J.

BRADFORD H. CHARLES

BHC/oeh

 

cc:        Domestic Relations

Donna Brightbill, Esq.// 315 S 8^th St. Lebanon, PA 17042

Rebecca A. Smith, Esq.// 1118 West Penn Ave., Wyomissing PA  19610

Kimberly M. Frederick// 647 Monroe Valley Dr., Fredericksburg PA  17026

Willard R. Frederick, Jr.// PO Box 178, Fredericksburg PA 17026

 

 

 

 

 

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY, PENNSYLVANIA

 

DOMESTIC RELATIONS SECTION

 

            KIMBERLY FREDERICK,                       :           NO. 2017-5-0222

Plaintiff                                                           :           PACSES NO. 182117585
:

:

1. :

WILLARD FREDERICK, JR.,      :

Defendant                                                         :

:

:

 

APPEARANCES

 

Donna Long Brightbill, Esquire                              For Kimberly Frederick

 

Rebecca A. Smith, Esq, Esquire                                 For Willard Frederick

 

 

OPINION BY CHARLES, J. January 24, 2023

 

The primary responsibility of a Domestic Relations Master (DRM) is to make credibility determinations of witnesses and submit recommendations about support to the Trial Court. Our Appellate Courts have long held that a DRM is in a far better position to determine the credibility of a witness during a support hearing than that of a Trial Court who is resigned to reading the transcript of the proceeding. As our Superior Court has stated, “The facts of a case only partially appear in the transcript of the testimony.” Smith v. Smith, 43 A.2d 371, 372 (Pa. Super. 1945) citing Commonwealth v. Claney, 173 A. 840,

 

841 (Pa. Super. 1934). Today’s Opinion reinforces this principle by affirming the findings of the Domestic Relations Master.

 

1. FACTS

Kimberly Frederick (hereafter, “WIFE”) and Willard Frederick, Jr. (hereafter, “HUSBAND”) married in 1986 and separated in 2017. On May 1, 2019, WIFE filed a Complaint for Support. A support conference was held on June 26, 2019, and an interim order was issued on June 27, 2019.

HUSBAND has owned and operated a trucking business for over thirty-five (35) years. There was a four (4) year period of time in which the parties and HUSBAND’s business failed to file any tax returns. Notably, HUSBAND’s business failed to pay state and federal income tax for the 2015 through 2018 taxable years. HUSBAND now owes approximately $400,000 in back taxes plus between $150,000 and $200,000 in interest and penalties. HUSBAND began working with an accountant, Tracey Alfano-Douty (hereafter, “ALFANO-DOUTY”) in 2018 to repay his outstanding debt. A governmental lien has been placed on the marital residence as well as HUSBAND’s business. To date, this lien has not been enforced.

A hearing was held before the DRM on August 29, 2019. The DRM issued her findings and recommendation that same day. On December 9, 2021 the Domestic Relations Office (DRO) ordered a review hearing. The review hearing was held before the DRM on May 19, 2022. The DRM issued her findings and recommendation on June 22, 2022.

On July 11, 2022, HUSBAND filed exceptions. In HUSBAND’s exceptions, he argues that the DRM erred in calculating his income and that the DRM should have lowered the amount of support due to the volatility in HUSBAND’s income.  The matter was scheduled for Oral Argument. In preparation for Oral Argument, a transcript of the May 19, 2022 hearing was requested by HUSBAND on July 12, 2022. This transcript has been received by the Court. On September 13, 2022, the parties participated in Oral Argument.

For the reasons stated herein, we will affirm the DRM’s recommendation. That said, HUSBAND will be granted leave for modification if/when he is affected by the lien set by the IRS.

 

1. DISCUSSION

Our standard of review to be employed when a transcript of the DRM hearing has been prepared is well established. When a transcript of the DRM hearing is available, we have stated:

Our Superior Court has provided guidance with respect to the scope of review that we should ordinarily employ. In reviewing a DRM’s report, we must give “fullest consideration” to the credibility findings of the DRM, who was present to observe the demeanor of witnesses and hear their testimony. Schuback v. Schuback, 603 A.2d 194 (Pa. Super. 1992); Dukmen v. Dukmen, 420 A.2d 667 (Pa. Super. 1980). A DRM’s report should not be lightly disregarded. Pasternak v. Pasternak, 204 A.2d 290 (Pa. Super. 1964). However, the DRM’s report is only advisory, and we are not bound by its considerations. When we have a transcribed record to review, we must consider all of the evidence de novo and make an independent determination of the amount of support due and owing. Id. citing Rankin v. Rankin, 124 A.2d 689 (Pa. Super. 1956).

Lippi v. Lippi, C.P.Leb.Co. No. 2007-5-0676 (May 7, 2013). In a de novo review, the DRM’s credibility findings must be given great weight. This Court has frequently cited Smith v. Smith, 43 A.2d 371 (Pa. Super. 1945) with respect to credibility determinations. In Smith, the Superior Court stated:

Although we are not concluded by a master’s findings upon credibility, his judgment upon that vital factor is entitled to the fullest consideration, and especially in a contested case. He possesses an advantage not granted to us. He sees the parties and their witnesses face to face and observes their appearance and demeanor as they testify. We are restricted to the cold type of record from which temperament and personality have been subtracted. Yet the demeanor of witnesses is the very touchstone of credibility; in the absence of reactions produced by other applicable tests, the appearance and demeanor of witnesses are the litmus by which the presence of truth is revealed. They are trifles light as air, imponderables, but for all that they are luminous integrants which ineluctably enter into the calculation by which trustworthiness is appraised. The spontaneous gesture, the lifting of an eyebrow, the shrug of the shoulders, the intonation of the voice, the flash of the eye, the facial expression—these are a few of the vital and influential indicia of credibility which the master observes and by which he is guided. The mental and psychological impact of these inarticulate expressions experienced by a master form the basis for a conclusion which, to borrow the telling phrase of an anonymous master, “will depend upon a judgment or intuition more subtle than can be objectively demonstrated.”  Frequently, they speak more eloquently and possess greater significance than the verbal utterance which they accompany, yet they cannot be reproduced upon the record submitted to the reviewing court.

Smith, supra at 372.

HUSBAND argues that the DRM erred in calculating his income because the DRM failed to consider the income-expense analysis provided during the May 19, 2022 hearing, and thus the amount of support ordered is unsupported by the testimony provided. Additionally, HUSBAND avers that the DRM discounted the testimony of ALFANO-DOUTY in her findings and recommendation. Upon reviewing the DRM’s findings, it is true that she did not place considerable weight on the testimony of HUSBAND and ALFANO-DOUTY. Specifically, the DRM states:

It is clear that Accountant Alfano-Douty does not have any direct[] knowledge of the financial condition of the business. She receives the majority of her information from a third party, Ashely, who did not provide any business records to the Hearing Officer. Accountant Alfano-Douty prepared the returns and statement based on the information that was provided to her. No financial statements or supporting documentation regarding the business were provided to the Hearing Officer. Defendant continues to not act responsibly with respect to documenting his business income and expenses.

Finding of Fact June 22, 2022 at p. 7.

Given the above, it is clear that the DRM did not find the testimony of ALFANO-DOUTY or HUSBAND credible. It is also clear that the DRM consciously discounted their testimony when giving her recommendation to the Court. This type of decision is fully within the discretion of a DRM, who is placed in the position of factfinder in support hearings. Given that the DRM was in a far better position to witness the demeanor of HUSBAND and ALFANO-DOUTY than the Court, we will accept her observations of the witnesses.

Likewise, we find the remainder of HUSBAND’s exceptions unpersuasive for the same reason. The remainder of HUSBAND’s exceptions essentially argue that the support award should be reduced due to the fluctuating nature of HUSBAND’s income. Again, the DRM’s findings reflect her apprehension to consider HUSBAND’s testimony as credible:

Additional expenses are listed on Exhibit 12 and total $8,268.09. Defendant also testified that he is paying $1,100 per month to Hair Club for Men (not listed on his Income and Expense Statement). This is clearly a large discretionary expense. Defendant’s expenses far exceed the amount of income stated by the Defendant…. Based on the foregoing, the Hearing Office[r] will not alter the current Order.

Finding of Fact June 22, 2022 at p. 7.

Despite our conclusion that the DRM did not err in her support calculation, we will permit HUSBAND a right to file a Petition for Modification if and when HUSBAND is affected by the governmental lien placed on his property. HUSBAND neglected his duty to file income taxes both personally and for his business for the tax years of 2015 through 2018. In doing so, HUSBAND realized additional available income of approximately $400,000. But HUSBAND alone did not benefit from this amount. Rather, because WIFE and HUSBAND were married and living together for a significant portion of this time period, both HUSBAND and WIFE benefitted from HUSBAND’s malfeasance. WIFE collaterally benefitted from a substantial amount of unreported monies during the parties’ marriage. To what extent WIFE benefitted is a question for another day. For now, we will affirm the DRM’s findings with the caveat that we will allow HUSBAND to file a Petition for Modification if and when he is affected by the governmental lien.

III.       CONCLUSION

When a hearing is before a DRM, he or she is placed in a position to readily assess the “inarticulable expressions” of credibility which are unavailable to a Trial Court via reading a transcript. While it is the responsibility of a Trial Court to review the record for error, this Court has and will continue to place great weight on the credibility findings of those who were present at the time of the hearing. When the DRM’s findings reveal that specific witnesses were not credible in their testimony, we will not deviate from our obligation to give the “fullest consideration” to these determinations. In the matter before us, the DRM found the credibility of HUSBAND and ALFANO-DOUTY to be suspect, and this credibility determination was accounted for in her findings. We will not disturb this credibility finding. An Order reflecting the above will be entered today’s date.