Boni v. Boni
Decision Date | 25 June 1982 |
Citation | 302 Pa.Super. 102,448 A.2d 547 |
Parties | Rose BONI v. John BONI, Appellant. |
Court | Pennsylvania Superior Court |
Argued Dec. 1, 1980.
Sandor Engle, Allentown, for appellant.
James F. Menconi, Tamaqua, for appellee.
Before HESTER, CAVANAUGH and VAN der VOORT, JJ.
In this case the Husband, John Boni, has appealed an order of the Court of Common Pleas of Carbon County, of March 12, 1980, which requires the Husband to pay $475.00 per week for the support of his Wife, Rose Boni, and their four minor children. The order also requires the Husband to continue to pay the mortgage, insurance, taxes, and repairs for the parties' jointly-owned residence, at which the Wife is living.
The parties were married in 1963 and separated in September of 1978. The Wife is unemployed and is a full-time homemaker. She owns an apartment house in New York which was purchased for $80,000 but apparently produces no income.
The Husband is a one-half owner and manager of a sewing contracting business, known as Pam Sportswear. He formerly owned this Company with his brother-in-law (Wife's sister's husband); but, because of the family strains resulting from the separation, Husband bought out his brother-in-law's one-half interest in September of 1979.
The parties each own a one-quarter interest in a horse farm known as Mahoning Valley Stables, which the lower court valued at $175,000.00. The lower court valued the jointly-owned residence at $99,000.00, based upon its initial cost plus the cost of improvements.
In order to buy out his brother-in-law, the Husband borrowed money from other third persons; and, in exchange, issued to those persons 50% of the stock of the Company. The lower court valued the Husband's then present 50% interest in the Company at $138,000.00, which is what Husband paid to buy out his brother-in-law on September 30, 1979. The lower court stated:
"Because this was a bona fide, arms length transaction between equal partners, the money paid out by the [Husband] to [the brother-in-law], in the Court's opinion accurately demonstrate(s) the fair market value of the [Husband's] 50% interest in the corporation and we so found."
Husband owns at least a one-half interest in the property upon which the sewing factory is located, which the lower court valued, including renovations and improvements, at $370,000.00. [1] Accordingly, the lower court valued Husband's interest in this property at $185,000.00.
The lower court concluded that, as of the hearing date, the Husband had a net worth of $433,251.00, itemized as follows:
ASSET VALUE
Pam Sportswear, Inc.-50%
stock ownership $138,000.00
Weissport factory property-1/2
interest 185,000.00
Mahoning Valley Stables at
cost of $175,000.00-1/4
interest 43,750.00
Residence at cost-1/2
interest 49,900.00
Certificates of Deposit in
the name of Husband and his
Mother or Husband alone 16,601.00
___________
TOTAL NET WORTH $433,251.00
[448 A.2d 549]
In 1979, Husband's income tax return reflected total income before taxes in the amount of $34,875.00, including $23,250.00 in wages from the Company and $10,000.00 in management fees. In 1979, Husband also reported $18,397.00 in capital gains resulting from the sale of his 1/2 interest in an apartment building which he formerly owned jointly with the brother-in-law.
The lower court specifically stated that it "... considered his 1979 earnings but we did not base our order on these earnings."
Husband's 1978 tax return, which he filed jointly with his Wife, reflected that his gross income from the Company was $53,382.00. The lower court held that this amount
At the hearing, Wife presented a monthly expense statement for her and the four children totalling $2,590.00. After review, the court reduced the expenses to $2,200.00 per month, which included the mortgage payment in the amount of $256.00 per month.
Prior to the separation, the parties enjoyed a very high standard of living. Wife testified, without contradiction, that the Husband customarily gave her $400.00 per week to run the home and to care for the children. In addition, Husband paid for all car insurances, utility bills, dental and medical bills, gas for the cars, and tuition for the children in private schools. The parties lived in an elaborate all-brick four-bedroom home. Husband had purchased his Wife a 1975 Continental for $14,000 in cash and a Corvette for himself for $7,000 in cash. The children had 3 motor bikes and a snowmobile. Wife also testified that Husband bought her a diamond ring for $6,000 in November of 1977 and two other rings which he had purchased for $1,000 each.
Based on the above facts and figures, the lower court determined "... that a support order of $525.00 per week would be more than fair and reasonable for the support of his Wife and four children." However, the lower court reduced the amount to $475.00 per week, by giving Husband credit for the income-producing trust funds which he had established for his children, whereby each of his children would receive approximately $42.00 a week. Commonwealth ex rel. Goichman v. Goichman, 226 Pa.Super. 311, 316 A.2d 653 (1973); Doelp v. Doelp, 219 Pa.Super. 420, 281 A.2d 721 (1971).
In arriving at the weekly payment of $475.00, the lower court imputed a 10% per annum interest rate of return on Husband's net worth of $433,251.00. The lower court concluded that this rate of return, "... in these times of inflationary interest rates is modest." Therefore, the lower court applied $43,325.00 per year toward the support of the Wife and children, as part of Husband's earning capacity.
The appellant raises three issue on appeal. Although we do not agree with the reasoning of the lower court in arriving at the support order, we, nevertheless, affirm the order, with one modification, because as stated by the lower court, "... this order of support is fair and reasonable based upon the standard of living that the [Husband] established and maintained prior to his separation from the family." Commonwealth ex rel. Roviello v. Roviello, 229 Pa.Super. 428, 323 A.2d 766 (1974); McGavic v. McGavic, 222 Pa.Super. 246, 294 A.2d 795 (1972).
Straub v. Tyahla, 274 Pa.Super. 411, 418 A.2d 472, 473-4 (1980).
Straub, supra, 418 A.2d at 474.
The appellant first questions whether it is an abuse of discretion for the lower court to base a support order on an unsubstantiated annual interest rate of return for less than majority interest in non income-producing assets. We agree with appellant that the assets in question, with the exception of the certificates of deposit, can not be reasonably expected to yield a 10% annual interest rate of return.
Husband's 50% interest in Pam's Sportswear, Inc. and the Weissport factory property, although they are valuable assets, cannot be considered as producing a 10% annual rate of return for the Husband. These fixed assets do not directly result in any cash flow for Husband's business. By including these fixed assets as part of Husband's earning capacity, the lower court, in effect, is requiring Husband to either sell or encumber his interest in order to obtain liquid funds for the payment of support.
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Boni v. Boni
...448 A.2d 547 302 Pa.Super. 102 Rose BONI v. John BONI, Appellant. Superior Court of Pennsylvania. Argued Dec. 1, 1980. Filed June 25, 1982. Page 548 [302 Pa.Super. 104] Sandor Engle, Allentown, for appellant. James F. Menconi, Tamaqua, for appellee. Before HESTER, CAVANAUGH and VAN der VOOR......