Humphreys v. DeRoss

• Decision Date: 20 February 2002
• Parties: Beth A. HUMPHREYS, Appellee, v. William DEROSS, Appellant.
• Court: Pennsylvania Supreme Court

790 A.2d 281

567 Pa. 614

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

Supreme Court of Pennsylvania.

Submitted March 6, 2001.

Decided February 20, 2002.

Joanne Ross Wilder, Pittsburgh, Stephen E. Hall, Meadville, for appellant.

Barbara Jean Mountjoy, Meadville, for appellee.

Before ZAPPALA, C.J., and CAPPY, CASTILLE, NIGRO, NEWMAN AND SAYLOR, JJ.

OPINION

NEWMAN, Justice.

We granted allocatur in this case to address the issue of how the receipt of an inheritance affects child support obligations of a payor. For the reasons that follow, we reverse the Order of the Superior Court that affirmed a decision by the Court of Common Pleas of Crawford County (trial court), which held that an inheritance was income available for support.

FACTS AND PROCEDURAL HISTORY

Appellant, William DeRoss (DeRoss), is the father of Angela, born March 3, 1981. Angela lives with her adult sister, Beth A. Humphreys (Humphreys), who is the Appellee in this matter. DeRoss receives $858.00 in Workers' Compensation benefits, twenty percent of which he owes to his attorney. He also receives $355.00 in social security disability payments per month. In 1997, DeRoss' mother died, leaving him as the sole beneficiary of her estate. On August 25, 1999, the estate sold his mother's house, and realized $83,696.50, which it distributed to DeRoss. From the proceeds, DeRoss purchased a home and other items for his current family. On August 28, 1997, Humphreys filed a petition for modification of an existing support order asserting a change in DeRoss' circumstances because of the inheritance.¹

A hearing officer determined that the entire amount of the inheritance was income to DeRoss, and prorated it over the remaining period of Angela's minority. Thus, he imputed to DeRoss an additional $4,525.00 per month in income.² Based on the Support Guidelines, DeRoss' obligation was $723.45 per month minus $108.00, which Social Security paid to Angela on behalf of DeRoss. On November 24, 1997, the trial court adopted the hearing officer's recommendation and set the support obligation at $615.45 per month, retroactive to August 31, 1997. With an adjustment for arrears, the court ordered him to pay $700.00 per month for Angela's support. DeRoss sought a de novo hearing, following which the trial court issued an Order on May 20, 1998, reducing the support obligation of DeRoss to $609.45 per month due to an increase in the amount Angela was receiving from Social Security. Appellant filed an appeal to the Superior Court, which affirmed the Order of the trial court.

DISCUSSION

In reviewing child support matters, appellate courts apply the abuse of discretion standard. Ball v. Minnick, 538 Pa. 441, 648 A.2d 1192 (1994). This Court has defined an abuse of discretion as follows:

Not merely an error of judgment, but if in reaching a conclusion the law is overridden or misapplied, or the judgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias or ill-will, as shown by the evidence of record, discretion is abused.

Blue v. Blue, 532 Pa. 521, 616 A.2d 628, 631 (1992) citing In re Women's Homeopathic Hospital of Philadelphia, 393 Pa. 313, 142 A.2d 292, 294 (1958).

Our analysis begins with the definition of "income" set forth in Section 4302 of the Domestic Relations Code, 23 Pa.C.S. §§ 101—8215:

"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. 4302.³

Citing its decision in Darby v. Darby, 455 Pa.Super. 63, 686 A.2d 1346, 1348 (1996), allocatur denied, 548 Pa. 670, 698 A.2d 594 (1997), the Superior Court noted that the statutory definition of "income" is not intended to be an all-inclusive list because it includes the phrase "including, but not limited to." We disagree. The Section 4302 definition of "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" (emphasis added) and numerous other sources. The plain meaning of the statute provides that including, but not limited to refers solely to types of compensation for services. The statute does not provide that income includes, but is not limited to various types of compensation for services. Accordingly, in order to be included in the statutory definition of income, a resource must reasonably fit within one of the categories enumerated in Section 4302.

The inheritance DeRoss received from his mother's estate does not meet the definition of "income in respect of a decedent" or "income from an interest in an estate or trust."⁴ In light of the fact that the legislature specifically included "income from an interest in an estate or trust" but did not include the principal of an inheritance or trust, it is logical to assume that the legislature did not intend to include the principal. Strunack v. Ecker, 283 Pa.Super. 585, 424 A.2d 1355 (1981),rev'd on other grounds, 496 Pa. 290, 436 A.2d 1187 (1981) (where certain things are specified in a statute, omissions are exclusions); Commonwealth v. Charles, 270 Pa.Super. 280, 411 A.2d 527 (1979). Considering that inheritance is one of the most common means by which wealth is transferred, it defies logic that the legislature would not have clearly provided for inheritance within the statutory definition of income if that were its intent. It is for this reason that we reject the determination by the Superior Court that the inheritance DeRoss received falls within "other entitlements to money or lump sum awards, without regard to source, including lottery winnings,"⁵ and the position espoused by the concurring opinion of the Superior Court, which stated that the monies at issue should be categorized as "any form of payment due to and collectible by an individual regardless of source."⁶

The definition of "income" provided in Section 4302 must be understood in the context of the Support Guidelines. Section 4322(a) of the Domestic Relations Code provides:

Statewide Guideline.—Child and spousal support shall be awarded pursuant to a Statewide guideline as established by general rule by the Supreme Court, so that persons similarly situated shall be treated similarly. The guideline shall be based upon the reasonable needs of the child or spouse seeking support and the ability of the obligor to provide support. In determining the reasonable needs of the child or spouse seeking 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. The guideline so developed shall be reviewed at least once every four years.

23 Pa.C.S.A. § 4322(a). The 1998 Amendment to the Support Guidelines, effective April 1999, specifically provides, "Monthly gross income is ordinarily based upon at least a six-month average of income. The term `income' is defined by the support law, 23 Pa.C.S. § 4302, and includes income from any source." Pa.R.C.P. 1910.16-2 (Support Guidelines. Calculation of Net Income).⁷ Therefore, it is appropriate to consider the purpose of the Support Guidelines, which is to ensure that "persons similarly situated shall be treated similarly." In the instant matter, DeRoss has actual income of $1041.00 per month. He received $82,500 from his mother's estate, which he immediately used to buy a house. Nevertheless, by dividing the amount of the inheritance by the number of months remaining until Angela reached her majority, the hearing officer determined, and the trial court agreed, that DeRoss had additional monthly income of $4545.00 available for support. However, this ignores the economic reality that DeRoss is not similarly situated to a person with a monthly cash flow of $5586.00. As stated in Ball v. Minnick, 538 Pa. 441, 648 A.2d 1192 (1994):

there should be available for the needs of a child of separated parents the same proportion of parental income that would have been available for the needs of that child if the parents lived together. The guidelines assume that similarly situated parties, at least with respect to income levels, will have similar reasonable needs and expenses. The reasonable needs of the child as well as the reasonable expenses of the obligor are factored into the support guidelines. The support guideline amount is presumed to be (1) a payment which the obligor can reasonable afford and (2) a payment that is reasonably necessary to further the child's welfare.

Id. at 1197. Including an inheritance in income available for support does not reflect how families in which parents live together treat inheritances. In an intact family, the receipt of a lump sum is likely to be used for purchases, investments or savings, and not for meeting living expenses. Therefore, considering the entire inheritance as income available for support is contrary to the purposes of the support guidelines.

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