Krebs v. Krebs

• Decision Date: 05 March 2008
• Docket Number: No. 1637 EDA 2007.,1637 EDA 2007.
• Citation: 944 A.2d 768
• Parties: Sheila T. KREBS (Nka: Sheila T. Johnson), Appellant v. William A. KREBS, III, Appellee.
• Court: Pennsylvania Superior Court

944 A.2d 768 Sheila T. KREBS (Nka: Sheila T. Johnson), Appellant
v.
William A. KREBS, III, Appellee. No. 1637 EDA 2007. Superior Court of Pennsylvania. Argued January 8, 2008. Filed March 5, 2008.

[944 A.2d 770]

Kevin Johnson, Conshohocken, for Sheila Krebs.

Holly L. Setzler, West Chester, for William Krebs.

BEFORE: KLEIN, GANTMAN, and KELLY, JJ.

OPINION BY GANTMAN, J.:

¶ 1 Appellant/Cross-Appellee, Sheila T. Krebs n/k/a Sheila T. Johnson ("Mother") and Appellee/Cross-Appellant, William A Krebs, III ("Father"), appeal from the order entered in the Chester County Court of Common Pleas, which granted Mother's 2006 petition to modify the parties' existing child support order, upon finding that Father knowingly misrepresented substantial increases in his income from 2001 to 2005, applied Father's support arrearages retroactively to 2004, and set a payment schedule for arrears of $590.00 per month.

¶ 2 Mother asks us to determine whether the court erred in declining to order Father's support arrearages retroactive to 2001 when Father began to conceal increases in his actual income. Father asks us to determine whether the evidence of record supported the court's decision to impose retroactive child support payments beyond the date Mother filed the modification petition. We hold the trial court properly found compelling reasons warranted child support arrearages retroactive to a date prior to Mother's support modification petition but erred in limiting that retroactivity only to May 21, 2004 rather than extending it to January 1, 2001, when Father first failed to report the substantial increases in his income. Accordingly, we affirm in part, reverse in part, and remand with instructions.

¶ 3 The relevant facts and procedural history of this case are as follows. Mother and Father were married on August 6, 1988. They have three children, born August 28, 1990, August 13, 1993, and March 27, 1995. The parties separated on August 20, 1996 and were subsequently divorced. Father is paid sales commissions for his work as a mortgage banker.

¶ 4 Mother filed a complaint for support on July 23, 1997. The court issued a support order on April 8, 1998, which included Father's child support obligation of $1,474.33 per month plus health care costs based on his net monthly income of $5521.02 and Mother's net monthly income of $591.47. On December 15, 2000, Father filed a petition to reduce his child support obligation due to a reduction in his income. On May 21, 2001, the court entered a stipulated order reducing Father's monthly child support obligation to $1,360.00, plus medical insurance costs and 60% of unreimbursed medical expenses after the first $250.00 per child per year.

¶ 5 On April 24, 2006, Mother filed the current petition to increase the 2001 child support order. On October 25, 2006, the parties entered the following stipulations before a hearing officer: (1) effective January 1, 2006, Father's monthly child support obligation is $1910.00 plus medical insurance coverage and 60% of medical expenses exceeding $250.00 a year per

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child; (2) Father's net monthly income had increased to $6630.00 in 2001, $7625.00 in 2002, $12,750.00 in 2003, $14,437.00 in 2004, and $11,562.00 in 2005; and (3) Mother's net monthly income remained at $2,274.00 from 2001 to 2005. (N.T., 10/25/06, at 3-6). The hearing officer found Father had not at any time notified Mother or the Domestic Relations Office ("DRO") of his increased income. The hearing officer recommended that Father pay retroactive monthly child support payments as follows: $1807.00 from 1/1/01-12/31/01; $2074.00 from 1/1/02-12/31/02; $2955.00 from 1/1/03-12/31/03; $3007.00 from 1/1/04-12/31/04; and $2769.00 from 1/1/05-12/31/05. (Id. at 2-3). The court entered an interim order that included Father's monthly payment of $1400.00 on his child support arrearages (totaling $80,203.49) in addition to his current support obligation of $1910.00 per month.

¶ 6 Father filed exceptions, claiming Mother was not entitled to retroactive modification of support prior to the date of her April 2006 modification petition. The trial court found Father's concealment of substantial increases in income from 2001 to 2005 warranted retroactive modification of Father's support obligation prior to the date of Mother's petition but modified his support arrearages retroactive only to May 21, 2004. On May 8, 2007, the court ordered Father to pay support arrearages of $3007.00 per month from 5/21/04-12/31/04 and $2769.00 per month from 1/1/05-12/31/05, plus health insurance and 86% of unreimbursed medical expenses over $250.00 per child for both years. Mother filed a motion for reconsideration. On May 29, 2007, the court added an arrearages payment schedule of $590.00 per month to Father's current support obligation of $1910.00, and confirmed its May 8, 2007 order in all other respects. The parties timely filed their respective appeals and complied with the court's orders to file concise statements of matters complained of on appeal pursuant to Pa.R.A.P. 1925.

¶ 7 On appeal, Mother raises four issues for our review:

[WHETHER] THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT FAILED TO ORDER THE CHILD SUPPORT AWARD RETROACTIVE TO JANUARY 2001, WHEN [FATHER] FAILED TO REPORT THE INCREASE IN HIS INCOME TO DOMESTIC RELATIONS AND/OR [MOTHER]?

[WHETHER] THE TRIAL COURT ERRED AS A MATTER OF LAW AND ABUSED ITS DISCRETION BY ONLY REQUIRING [FATHER] TO PAY THE SUPPORT ARREARS AT THE RATE OF $590.00 PER MONTH NOTWITHSTANDING [FATHER'S] SUBSTANTIAL INCOME?

[WHETHER] THE TRIAL COURT ERRED IN FAILING TO AWARD ATTORNEY FEES TO [MOTHER], SUA SPONTE, PURSUANT TO 23 PA. C.S.A. § 4351 AFTER DETERMINING THAT [FATHER] CONCEALED SUBSTANTIAL INCREASES TO HIS INCOME BEGINNING IN 2001 IN ORDER TO AVOID PAYING ADDITIONAL CHILD SUPPORT?

[WHETHER] THE SUPERIOR COURT SHOULD REQUIRE [FATHER] TO PAY [MOTHER] LEGAL FEES IN THE EVENT THAT [MOTHER] PREVAILS ON APPEAL?

(Mother's Brief at 6).

¶ 8 In his cross-appeal, Father raises the following issue:

[FATHER] FILED AN EXCEPTION TO THE HEARING OFFICER'S RECOMMENDATION . . . AND INCLUDED IN HIS STATEMENT OF MATTERS COMPLAINED OF ON

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APPEAL ... THAT THIS RECORD DOES NOT CONTAIN ANY FACTS THAT SATISFY THE MANDATE OF 23 Pa.C.S.A. [§] 4352(e).

(Father's Reply Brief at 13).

¶ 9 The 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. In addition, we note that the duty to support one's child is absolute, and the purpose of child support is to promote the child's best interests.

Mencer v. Ruch, 928 A.2d 294, 297 (Pa.Super.2007) (quoting D.H. v. R.H., 900 A.2d 922, 927 (Pa.Super.2006)).

¶ 10 For ease of disposition, we address Mother's first issue and Father's sole issue together. Mother contends Father's failure to disclose his increased income from 2001 through 2005 constituted a misrepresentation which effectively precluded Mother from realizing she should file a modification petition. Mother argues the court properly ordered Father to pay retroactive child support prior to the date Mother filed the modification petition, but should have imposed arrearages retroactive to January 1, 2001, when Father began to conceal his income. Mother directs our attention to Maue v. Gilbert, 839 A.2d 430 (Pa.Super.2003), where this Court held under similar circumstances that the father owed child support retroactive to the date he began actively concealing his income. Mother challenges the court's decision to limit the retroactive modification to 2004, and its reliance on the concept that Mother could have requested an automatic review of the 2001 support order in 2004, without proof of changed circumstances, pursuant to 23 Pa.C.S.A. § 4352(a.1). Mother avers the court's ruling impermissibly shifted the burden to Mother to expend time and resources to discover whether Father was misrepresenting his income, although she had no access to his income information. Mother maintains the burden remained with Father, who has the affirmative duty under 23 Pa.C.S.A. § 4353(a) to report changes in his income.

¶ 11 Mother further maintains the court's decision runs counter to Pennsylvania's strong public policy against allowing parties who have acted in reliance on a misrepresentation to suffer harm. Mother asserts the court's order of retroactive child support only to 2004 deprives the children of three additional years of increased support to which they are entitled. Mother also complains Father benefited from the opportunity to accrue investment earnings on three years of child support that, but for his misrepresentation, he should have owed, and continues to benefit from paying off his arrearages interest free.

¶ 12 Finally, Mother claims the court essentially granted Father equitable relief by assessing arrearages only to 2004, despite Father's "unclean hands" in having fraudulently misrepresented his income to avoid his support obligations beginning in 2001. Mother concludes the court's order limiting child support retroactive to 2004 should be reversed, and Father should be ordered to pay child support arrearages,

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including interest, retroactive to January 1, 2001.

¶ 13 In his cross appeal and reply brief, Father argues the record evidence holds no support for the court's finding that compelling reasons existed to increase...