Humphreys v. DeRoss

• Decision Date: 18 August 1999
• Citation: 737 A.2d 775
• Parties: Beth A. HUMPHREYS, Appellee, v. William DeROSS, Appellant,
• Court: Pennsylvania Superior Court

737 A.2d 775

Beth A. HUMPHREYS, Appellee, v. William DeROSS, Appellant,

Superior Court of Pennsylvania.

Argued April 30, 1999.

Filed August 18, 1999.

Stephen E. Hall, Meadville, for appellant.

Barbara J. Walton, Meadville, for appellee.

Before McEWEN, President Judge, and CAVANAUGH, DEL SOLE, JOHNSON, HUDOCK, EAKIN, JOYCE, MUSMANNO and ORIE MELVIN, JJ.

HUDOCK, J.:

¶ 1 In this appeal, we are asked to determine whether the trial court erred when it held that an inheritance received by William DeRoss (DeRoss) should be considered in the calculation of his income for child support purposes. The trial court's order directed DeRoss to pay $607.45 per month in child support for his minor daughter, Angela. The order also set arrearage payments at $84.55 per month, for a total payment of $692.00 per month. Angela, born March 3, 1981, lives with her adult sister, Beth A. Humphreys (Humphreys), the appellee herein. Because we conclude that the statutory definition of income properly includes DeRoss's inheritance under the circumstances of this case, we affirm.

¶ 2 DeRoss was the sole beneficiary of his mother's estate. Upon her death in August 1997, the estate sold DeRoss's mother's residence, realizing $83,696.65 from the sale, and this sum was subsequently distributed to DeRoss. DeRoss purchased a new home with this money, and also purchased other items for his current family's benefit. Thereafter, Humphreys petitioned the court for a modification of the existing support order based upon DeRoss's changed circumstances, i.e., the inheritance. Following a hearing on the modification petition, the hearing officer imputed to DeRoss an additional $4,525.00 a month in income based upon the money he received as his inheritance. The hearing officer determined this additional amount by amortizing the lump sum received from the sale of the house over the period from the date of the modification petition until Angela's eighteenth birthday. This appeal followed.

¶ 3 DeRoss raises two issues on appeal, namely:

I. Whether the Court below committed error in the holding that the entire amount of an inheritance received by Appellant is "income", as that term is defined under 23 Pa.C.S.A. § 4302, for purposes of determining [the] level of child support.

II. Whether the attachment issued pursuant to the support order entered herein was in excess of the mandatory amounts prescribed by the Consumer Credit Protection Act, 15 U.S.C.A. § 1601, et seq.

Brief for Appellant at 3.

¶ 4 "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." Calabrese v. Calabrese, 452 Pa.Super. 497, 682 A.2d 393, 395 (1996),appeal denied, 547 Pa. 722, 689 A.2d 230 (1997). We will not interfere with the broad discretion afforded the trial court absent an abuse of that discretion or insufficient evidence to sustain the support order. Id. 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. Depp v. Holland, 431 Pa.Super. 209, 636 A.2d 204, 205-06 (1994). See also Funk v. Funk, 376 Pa.Super. 76, 545 A.2d 326, 329 (1988)

. 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. Depp, 636 A.2d at 206.

¶ 5 In Pennsylvania, an award of child support is based upon the Child Support Guidelines promulgated by our Supreme Court. The guidelines were enacted to ensure "that persons similarly situated shall be treated similarly." 23 Pa.C.S.A. § 4322(a). When faced with a request for child support, a trial court utilizes the guidelines to determine the reasonable needs of the child and the ability of the obligor to provide support. Id. "In determining the ... ability of the obligor to provide support, the guideline shall place primary emphasis on the net incomes and earning capacities of the parties, with allowable deviations for unusual needs, extraordinary expenses and other factors, such as the parties' assets, as warrant special attention." Id. (emphasis added).

¶ 6 In considering this matter, we emphasize that our analysis must begin with the relevant statutory language contained in the Pennsylvania Domestic Relations Code. Although the term "income" may have a particularized meaning to an accountant who would treat it as wages or earnings from principal, we are not bound by such meanings. Rather, we must look to the statutory definition of the term; all reasoning must begin with that definition.

¶ 7 In the present case, "income" is defined in support actions as follows:

"Income." Includes compensation for services, including, but not limited to, wages, salaries, bonuses, fees, compensation in kind, commissions and similar items; income derived from business; gains derived from dealings in property; interest; rents; royalties; dividends; annuities; income from life insurance and endowment contracts; all forms of retirement; pensions; income from discharge of indebtedness; distributive share of partnership gross income; income in respect of a decedent; income from an interest in an estate or trust; military retirement benefits; railroad employment retirement benefits; social security benefits; temporary and permanent disability benefits; workers' compensation; unemployment compensation; other entitlements to money or lump sum awards, without regard to source, including lottery winnings; income tax refunds; insurance compensation or settlements; awards or verdicts; and any form of payment due to and collectible by an individual regardless of source.

23 Pa.C.S.A. § 4302.¹

¶ 8 It is thus clear from a cursory reading of the definition that the term includes more than just earnings from principal or wages. This Court has held that the above examples of what constitute income are not intended to be an all-inclusive list. Darby v. Darby, 455 Pa.Super. 63, 686 A.2d 1346, 1348 (1996),appeal denied, 548 Pa. 670, 698 A.2d 594 (1997).² Rather, the list contains examples that may guide a court when determining what constitutes income. Moreover, when determining what is income under this section, we have stated that "actual earnings are not necessarily utilized; courts are required to determine ability to pay from all financial resources" of the parties. Id. See also Calabrese, 682 A.2d at 396

(stating that the definition of income in a support case must "reflect the actual available financial resources of the payor"). A court must consider every aspect of a parent's financial ability to pay child support, including that parent's property interests, stocks, and other investments. Blaisure v. Blaisure, 395 Pa.Super. 473, 577 A.2d 640, 642 (1990). See also Babish v. Babish, 361 Pa.Super. 118, 521 A.2d 955, 957 (1987) (stating that a court should recognize the "full nature and extent" of a parent's property interests and financial resources when determining a support obligation).

¶ 9 Because the money he realized from his inheritance does not come under any of the particularized examples of income enumerated in 23 Pa.C.S.A. section 4302, DeRoss argues that this sum cannot be considered income when computing his child support obligation. DeRoss attacks specific portions of the above definition. First, he maintains that this money, although derived from an inheritance, is not "income from an interest in an estate or trust." DeRoss argues that the plain meaning of these words from the above definition refers merely to the income derived from any interest in an estate, not from the actual corpus of such an estate or trust. Since DeRoss reinvested the money received by his inheritance in a family home, he argues that he did not receive "income" from the interest in the estate he had received. In other words, DeRoss's inheritance does not generate earnings in the way that an annuity or bank account would. We agree with DeRoss's assertion that this clause contained in the definition only pertains to income (whether a monthly payment, a yearly stipend, or however calculated) that a party receives from an estate or trust. Accordingly, we agree that the cited statutory language does not mandate the conclusion that the money received from the sale of DeRoss's inheritance is income for support purposes. However, this determination is not dispositive of the issue.

¶ 10 DeRoss also contends that the statutory phrase "gains derived from dealings in property" does not apply to render his inheritance income. When he inherited his mother's home, DeRoss argues that his basis in the property was equal to its current market value. Thus, when the property was sold, DeRoss's gain would only be whatever he received from the sale over and above his basis in the property. While DeRoss concedes that this gain could be considered to be income, he disputes that the entire portion of the inheritance is income under this part of the definition. ¶ 11 DeRoss also argues that he actually realized no gain from the sale of his mother's residence because he immediately reinvested the money in a new home. Humphreys counters with the assertion that DeRoss sold his previous residence, as well as his mother's residence, and used the money received from both these sales to buy a larger, more expensive home. Thus, Humphreys maintains, DeRoss did receive a gain from the sale of his mother's home. Although Humphreys' argument is initially appealing, there is no evidence in the record before this Court to support Humphreys' factual assertions. Thus, we cannot conclude that the money received from DeRoss's sale of his mother's home is income based upon this fact. Again, however, this does not end our analysis.

¶ 12 We are guided in our determination by recognizing that the ultimate...