Com. ex rel. Maier v. Maier

• Decision Date: 25 January 1980
• Citation: 274 Pa.Super. 580,418 A.2d 558
• Parties: COMMONWEALTH of Pennsylvania ex rel. Mary MAIER v. J. Arch MAIER, Appellant.
• Court: Pennsylvania Superior Court

Page 558

418 A.2d 558

274 Pa.Super. 580

COMMONWEALTH of Pennsylvania ex rel. Mary MAIER v. J. Arch MAIER, Appellant.

Superior Court of Pennsylvania.

Argued Sept. 11, 1979.

Filed Jan. 25, 1980.

Henry C. McGrath, Scranton, for appellant.

William F. Bradican, Scranton, for appellee.

Before CERCONE, President Judge, and WATKINS and HOFFMAN, JJ.

HOFFMAN, Judge:

Appellant contends that the lower court abused its discretion in entering a support order because (1) the court failed to properly determine appellant's earning capacity and granted support in an amount in excess of one-third of his earning capacity; and (2) the portion of the order requiring appellant to pay appellee's reasonable medical bills and commuting expenses is too indefinite to enforce. For the reasons which follow, we vacate the lower court's order and remand the case.

The parties were married in 1947 and separated in 1975. Thereafter, appellee instituted an action to obtain support for herself. The record reveals the following: Appellant is president and sole stockholder of Philips & Maier, Inc. (hereinafter P & M) and Spring Service Company (hereinafter Spring Service). Appellant also has an interest in A & M Distributors, a partnership. In 1977 and 1978, P & M paid appellant a gross salary of $340.00 per week. In addition to appellant's salary, which he sets himself, P & M supplies appellant with an automobile for his personal use and pays the automobile operating expenses, appellant's entertainment and traveling expenses, and membership fees and dues in certain organizations. In 1977, appellant received $593.89 from A & M Distributors. He received no salary from Spring Service in 1977. In 1977, the net income (after taxes) of P & M was $7,021.84. On its federal tax return for that year P & M deducted.$9,174.85 as depreciation. The net income of Spring Service in 1977 was $13,359.90. In 1977, Spring Service deducted $8,215.14 as depreciation.

As of April, 1978, appellee was employed by the Pennsylvania Department of Public Welfare and received a weekly gross salary of $155.62 ($117.00 net). Appellee owns a $12,000.00 savings certificate which pays 71/4% interest annually. In addition, P & M provides and maintains an automobile for appellee's use. Appellee submitted an itemized list to the lower court showing that she needed $225.50 per week for her living expenses.

On February 16, 1979, the lower court entered an order directing appellant to pay appellee $175.00 per week for her support and "to pay her reasonable medical bills and commuting expenses." This appeal followed.

It is well-settled that "a support order cannot be confiscatory but must secure a reasonable living allowance, considering the supporting spouse's earning capacity and property and the parties' station in life." Kurpiewski v. Kurpiewski, 254 Pa.Super. 489, 493, 386 A.2d 55, 58 (1978). Additionally, in determining the amount of a support order, the court must consider the nonsupporting spouse's separate earnings as one of the relevant circumstances. Commonwealth ex rel. McNulty v. McNulty, 226 Pa.Super. 247, 251, 311 A.2d 701, 703 (1973); Commonwealth ex rel. Borrow v. Borrow, 199 Pa.Super. 592, 595, 185 A.2d 605, 606 (1962); Commonwealth v. Kauffman, 199 Pa.Super. 375, 379, 185 A.2d 799, 800 (1962). A support order may not exceed one-third of the supporting spouse's earning capacity. See Kurpiewski v. Kurpiewski, supra, 254 Pa.Super. at 493, 386 A.2d at 58, and cases cited therein. In Commonwealth v. Miller, 202 Pa.Super. 573, 198 A.2d 373 (1964), our Court stated:

The net income of a defendant as show on income tax returns is not to be accepted in a support case as the infallible test of his earning capacity. Particularly is this true where the defendant is in business for himself and is allowed substantial business "expenses", items of depreciation and sundry other deductions which enable him to live luxuriously before spending his taxable income.

Id. at 577, 198 A.2d at 375. See also Wechsler v. Wechsler, 242 Pa.Super. 356, 365, 363 A.2d 1307, 1312 (1976). In Commonwealth v. Miller, supra, the Court held that although the defendant husband may properly have deducted on his income tax return expenditures for a boat, two automobiles, club dues, florist's and luncheon bills, "consideration must be given in a support case to those deductible expenditures which improve the defendant's standard of living and have the effect of perquisites." 202 Pa.Super. at 578, 199 A.2d at 375. See also Commonwealth ex rel. Gutzeit v. Gutzeit, 200 Pa.Super. 401, 189 A.2d 324 (1963) (in determining the defendant husband's earning capacity, court should consider his salary from his wholly owned corporation, the corporation's earnings, life insurance paid by the corporation, and perquisites provided by the corporation such as travel and entertainment expenses, a boat, and an automobile). In Commonwealth v. Miller, supra, our Court also stated:

Depreciation involves no cash expenditure at the time it is taken as a deduction. The amount claimed for depreciation represents additional cash available for the defendant's use. . . . In ascertaining the earning capacity of a defendant, the net income ordinarily should not be increased by the entire amount of depreciation claimed in the tax return but by a part of it as determined from all the circumstances including the amount of depreciation claimed and the property depreciated.

202 Pa.Super. at 577, 198 A.2d at 375.

Because appellant is the sole stockholder of P & M and Spring Service and determines his own salary, this is an appropriate case for "piercing the corporate veil" and considering the income of those corporations in determining appellant's earning capacity. See Commonwealth ex rel....