Miller v. Miller

• Decision Date: 31 December 1999
• Citation: 744 A.2d 778
• Parties: Ruth MILLER, Appellee, v. Randall S. MILLER, Appellant.
• Court: Pennsylvania Superior Court

744 A.2d 778

Ruth MILLER, Appellee, v. Randall S. MILLER, Appellant.

Superior Court of Pennsylvania.

Argued June 22, 1999.

Filed December 31, 1999.

Stephen B. Harris, Warrington, for appellant.

Maureen T. Gatto, Newtown, for appellee.

Before ORIE MELVIN, SCHILLER and LALLY-GREEN, JJ.

LALLY-GREEN, J.:

¶ 1 In this divorce action, Appellant Randall S. Miller appeals from the order dated November 19, 1998, pertaining to equitable distribution, alimony, and counsel fees. We remand for further proceedings.

¶ 2 The background to this case is as follows:

Ruth A. Miller (Wife) and Randall S. Miller (Husband) were married on October 15, 1986. It was a first marriage for both parties. There were two children born of the marriage: Evan, born May 5, 1987 and Kristen, born June 18, 1989. Husband is currently 44 and wife is 39. During the marriage, the responsibilities were divided between the parties in a traditional manner. Husband was employed in an executive capacity by a large corporation. Wife, in general, stayed home and was the primary caretaker of the children. The parties agreed at the time of [the] hearing that their date of separation was December 26, 1996 although physical separation did not occur until February 8, 1997 when husband moved into an apartment.

Trial Court Opinion, 11/19/98, at 1. The court held three days of hearings on April 8, May 28, and July 21, 1998. On November 19, 1998, the court, inter alia: (1) divided the marital property 60% to Wife and 40% to Appellant; (2) awarded alimony to Wife in the amount of $1,400 per month for 30 months; (3) assessed Wife with an earning capacity of $2,000 per month gross, $1,700 per month net; and (4) ordered Appellant to pay $5,000 in counsel fees to Wife. Id. at 2, 4-5; Trial Court Order, 11/19/98, at 1-2. This appeal followed.

¶ 3 Appellant raises seven issues on appeal:

1. Whether it was error for the Court not to award Husband two (2) exemptions for 1997 to remediate the incorrect assumption on which both child support and APL was based, and error for the Court not to award Husband one (1) child dependency exemption for 1998 and thereafter.

2. Whether it was error for the Court to disregard $12,455 rental value, and $2788 mortgage foreclosure expenses as a constructive receipt by Wife and error for the Court to disregard $1216 in home equity payments made by Husband in making an award in equitable distribution where all involved a period of time post-separation where wife exclusively occupied the marital residence and made $0 payments on mortgages or taxes associated with the residence.

3. Whether it was error for the Court to disregard the inappropriate and illegal negotiation by Wife of an insurance check issued in the joint names of the parties for $5949 which check was undisclosed to Husband and for the Court to fail to charge same as a constructive receipt by Wife in equitable distribution.

4. Whether it was error for the Court to not find marital misconduct by Wife in the unilateral termination of this marriage and simultaneous pursuit of a relationship with another man and to totally disregard Wife's conduct and the detrimental effect of Wife's conduct on Husband's health and employment status in fixing the term of alimony and applying the economic justice standard requiring an examination of both parties' circumstances.

5. Whether it was error for the Court to award 60% of the marital estate to Wife where the Court seemed to focus on only one factor in its memorandum opinion, that factor being the current income levels of the parties and refused to permit testimony from Wife on her future plans to remarry.

6. Whether it was error for the Court to fix Wife's earning capacity at $2000 per month, apparently based on a concession by Wife of a potential range of $20,000-$23000 which concession was made for the first time post-trial, unsupported by any evidence of record and not subject to any scrutiny or cross-examination, and error for the Court to disregard Husband's testimony regarding Wife's full-time earning capacity as within a mid-range of $37,000 were Wife to return to her previous type employment in the insurance industry.

7. Whether it was error for the Court to award additional attorney's fees to Wife without any examination of the reasonableness of the fees or the reason for the incurring of same and without adequate consideration of all the circumstances of both parties.

Appellant's Brief at 4-6.

¶ 4 Appellant first argues that the trial court erred by failing to award him two child dependency tax exemptions for tax year 1997 and one child dependency tax exemption for tax year 1998 and thereafter. So far as can be discerned from Appellant's Brief, the exemptions were relevant to calculating child support and alimony pendente lite (APL). Appellant's Brief at 4 (exemptions are necessary "to remediate the incorrect assumption on which both child support and APL were based"); id. at 15, 18-20 (same). Before we address this issue of first impression, we must determine whether the issue has been preserved for our review. For the reasons that follow, we find that the issue has not been preserved as to tax year 1997, but that it has been preserved as to tax year 1998 and thereafter.¹

¶ 5 We begin with tax year 1997. Appellant argues that the 1997 child support and APL orders were based upon the assumption that he would be taking five exemptions for tax year 1997, which was his historical withholding status. Appellant's Brief at 18. Wife, who is the primary custodian of the two minor children, refused to agree to give Appellant these exemptions or to agree to estimate Appellant's net income based on zero exemptions. Id. at 19. As a result, Appellant's projected net income was artificially inflated, and Wife received more support than she would have otherwise received throughout 1997, while Appellant suffered a significant tax liability. Id. Appellant seeks to rectify this alleged error by receiving the right to take both dependency exemptions retroactively for tax year 1997.²

¶ 6 The record reveals that Wife filed for child support and APL on February 11, 1997. The parties entered an agreed child support order of $924 bi-weekly at the time of the Domestic Relations conference on March 11, 1997; however, no agreement was reached on APL. The parties eventually entered an agreed order of $796 bi-weekly as to APL at the time of the court hearing on May 5, 1997. The trial court held that, if in fact these orders were entered on incorrect assumptions as to Appellant's disposable net income, then Appellant should have filed an appeal from that order, or sought to modify the order when the mistake was discovered. Trial Court Opinion, 2/5/99, at 18.

¶ 7 We agree with the trial court. "A party who has acquiesced in an order or judgment will not later be heard to challenge it." Karkaria v. Karkaria, 405 Pa.Super. 176, 592 A.2d 64, 71 (1991). This is not a case where the agreement was specifically conditioned upon Appellant's ability to take the dependency exemptions. Because Appellant acquiesced to the 1997 orders, he cannot now be heard to seek "remediation" with respect to those orders. Id.

¶ 8 In contrast, the record reveals that as to the period beginning January 1998 (during which a petition to modify the child support and APL orders was pending), there was no final adjudication of Appellant's net income, including his right to take a dependency exemption.³ The parties specifically deferred resolution of child support and APL matters pending the court's determination on this issue. Accordingly, Appellant did not abandon his right to seek a dependency exemption for tax year 1998 and thereafter.

¶ 9 We now turn to the merits of the issue. The parties agree that § 152(e)(1) of the federal Tax Code, 26 U.S.C.A. § 152(e)(1), sets forth the general rule that the custodial parent is entitled to the dependency exemption at issue. The parties also agree that Wife is the custodial parent. This case concerns an exception to the general rule, found at § 152(e)(2). Under this paragraph, the non-custodial parent is entitled to the exemption if "(A) the custodial parent signs a written declaration... that such custodial parent will not claim such child as a dependent for any taxable year beginning in such taxable year, and (B) the non-custodial parent attaches such written declaration to the non-custodial parent's return for the taxable year[.]" 26 U.S.C.A. § 152(e)(2).

¶ 10 Appellant argues that the trial court has the authority to order Wife to file the declaration described in § 152(e)(2), and to allocate the dependency exemption to Appellant. Appellant's Brief at 15-20. The trial court declined to do so, reasoning that it had no legal basis on which to take such action. Trial Court Opinion, 11/19/98, at 5; Trial Court Opinion, 2/5/99, at 19. No controlling case law in Pennsylvania addresses this issue. Appellant argues that this Court should adopt the reasoning of sister states that have authorized trial courts to take the action he seeks. Appellant's Brief at 15-20. After reviewing the legislative history of § 152, decisions of other states that have addressed this issue, and the Divorce Code, we hold that the trial court does have the authority to award dependency exemptions to a non-custodial parent where appropriate. Our reasoning follows.

¶ 11 Prior to the Tax Reform Act of 1984, § 152(e) provided that the non-custodial parent was entitled to the exemption if he or she paid more than $1,200 per year in child support and the custodial parent could not prove that she provided more support than the noncustodial parent. Macias v. Macias, 126 N.M. 303, 968 P.2d 814, 816 (1998); Boudreau v. Boudreau, 563 So.2d 1244, 1245 (La.Ct.App.1990). "At that time, it was well-settled that a state court had the authority to allocate a dependency exemption to a noncustodial parent." Boudreau, 563 So.2d at 1245.

¶ 12 Congress amended § 152 in 198...