Sutliff v. Sutliff

• Decision Date: 07 October 1987
• Citation: 515 Pa. 393,528 A.2d 1318
• Parties: , 56 USLW 2099 Carlene S. SUTLIFF, Appellant, v. Gregory L. SUTLIFF and Fred K. Collins, Appellees. Carlene S. SUTLIFF, Appellee, v. Gregory L. SUTLIFF and Fred K. Collins, Appellants. COMMONWEALTH ex rel. Carlene S. SUTLIFF, Appellee, v. Gregory L. SUTLIFF, Appellant. (Two Cases) 77 M.D. 1985 78 M.D. 1985 79 M.D. 1985 80 M.D. 1985
• Court: Pennsylvania Supreme Court

Page 1318

528 A.2d 1318

515 Pa. 393, 56 USLW 2099

Carlene S. SUTLIFF, Appellant, v. Gregory L. SUTLIFF and Fred K. Collins, Appellees.

Carlene S. SUTLIFF, Appellee, v. Gregory L. SUTLIFF and Fred K. Collins, Appellants.

COMMONWEALTH ex rel. Carlene S. SUTLIFF, Appellee, v. Gregory L. SUTLIFF, Appellant. (Two Cases)

77 M.D. 1985

78 M.D. 1985

79 M.D. 1985

80 M.D. 1985

Supreme Court of Pennsylvania.

Argued May 16, 1986.

Decided July 9, 1987.

Reargument Denied Oct. 7, 1987.

Bonnie D. Menaker, Harrisburg, for Gregory Sutliff and Fred collins.

Ronald M. Katzman, Arthur L. Goldberg, Harrisburg, for Carlene Sutliff.

Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ.

OPINION ANNOUNCING THE JUDGMENT OF THE COURT

HUTCHINSON, Justice. ^*

These consolidated appeals by allowance arise out of a support action for minors begun in Cumberland County Common Pleas and a subsequent action to remove and surcharge the custodians of the minors' funds after the custodians had applied the minors' funds to discharge the support obligation of one of the custodians.

The issues presented for our review concern the use of property given under the Pennsylvania Uniform Gifts to Minors Act (UGMA), 20 Pa.C.S. §§ 5301-10, specifically, whether such funds should be considered by the court in fashioning a support order and whether they may be used to fulfill a parent's support obligation. A threshold issue here is whether Common Pleas had jurisdiction to modify support orders which were on appeal to allow credit for the custodial distributions. Since the modification involved the issue on appeal, we hold it did not. ¹ On the merits, ² we hold that a parent's obligation to support minor children is independent of the minor's assets. UGMA funds may not be used to fulfill the parent's support obligation where the parent has sufficient means to discharge it himself. Upon determining that the parent has sufficient funds to reasonably support the minor without seriously depriving himself or other persons to whom he has a similar obligation, the court should not thereafter consider the minor's funds in setting the support obligation. This is not to say that a custodian cannot, as a fiduciary, exercise his statutory discretion in certain circumstances to distribute custodial funds for a minor's support in addition to those due from the parent. However, where the parent is also custodian, his dual obligation comes into conflict. In such case, he may not credit his custodial distribution against his support obligation. In the event of a dispute over the extent of his parental obligation, the parent custodian is removable at Common Pleas' discretion on petition by or on behalf of the child.

Gregory L. Sutliff (father) and Carlene S. Sutliff (mother) were married in 1960; they had four children. At the time of the couple's separation in 1981 only the three youngest, Kimberly, Julia and Laura, were minors. The father owns and operates a successful car dealership in the Harrisburg area. His net worth is approximately $3,000,000 and he earns in excess of $130,000 per year. The mother is an emergency room physician. She works part time and earns $26,000 per year. She claims that she cannot work full time because that would prevent her from properly raising the children.

The father and his parents gave substantial assets to the children under the UGMA. The children's aggregate accounts contained cash, stocks and bonds worth over $466,000. These assets were divided equally among the children. Father is the custodian of those assets given by his parents; Fred K. Collins, the father's business associate, is custodian of those assets given by the father.

In November, 1981 the mother filed a petition for support for herself and the three minor children. An interim support order providing $400.00 per week exclusively for the support of the minor children was entered against the father. Collins and he used the UGMA funds to fulfill up to 75% of the support obligation.

The mother then filed a suit alleging misuse of the children's custodial funds by the father and Collins. She sought a full accounting and their removal as custodians. She also sought to surcharge the custodians for any UGMA funds spent to discharge the father's support obligation.

Cumberland County Common Pleas, Orphans' Court Division, held that the custodians could use the children's UGMA funds to fulfill the father's support obligation to the children. The court relied on statutory language which gives the custodian broad discretion in expending UGMA funds.

§ 5305. Duties and powers of custodian

* * *

(b) The custodian shall pay over to the minor for expenditure by him or expend for the minor's benefit so much of or all the custodial property as the custodian deems advisable for the support, maintenance, education and benefit of the minor, in the manner, at the time or times, and to the extent that the custodian, in his discretion, deems suitable and proper, with or without court order, with or without regard to the duty of himself or of any other person to support the minor, or his ability to do so, and with or without regard to any other income or property of the minor, which may be applicable or available for any such purpose.

20 Pa.C.S. § 5305(b). The court did not limit the amount of custodial funds that the father and Collins could use to discharge the father's support obligation. Mother appealed this order.

Subsequently, Common Pleas entered a final support order which required the father to pay $600.00 per week for support of the minor children. ³ In reaching its decision on support, the court considered, among other factors, the assets and income of the father and the mother, housing expense and prior standard of living. The court stated that it had previously resolved the issue of the availability of the children's UGMA assets to fulfill the father's child support obligation. It stated that "[t]here is no doubt that [father] can reasonably pay this support order," but did not restrict or limit the father's use of UGMA funds to fulfill his support obligation.

Both parties appealed the final support order to Superior Court. The mother claimed that Common Pleas improperly permitted father to satisfy his support obligations from custodial funds. In addition, she argued that the father and Collins, his business associate, should be removed as custodians and surcharged for their improper use of the UGMA funds. The father appealed the support order, claiming that he should not be required to support children who have substantial assets of their own.

While the appeal was pending, the father filed a petition to modify the support order with respect to his eldest daughter, Kimberly, who had recently entered college. Common Pleas modified the order to allow him to pay her college expenses from UGMA funds. Child support payable to the mother was also reduced by $200.00 per week during the school year to account for the girl's absence from home. The mother appealed this modification to Superior Court as well. She claimed that Common Pleas lacked jurisdiction to conduct any additional proceedings concerning the order because it had been appealed. All appeals were consolidated.

Superior Court held that a court generally may not consider the UGMA assets of a minor child when fashioning a support order, and a custodian may not use these assets to fulfill a parent's support obligation. The court, however, distinguished between children under eighteen years of age and those over eighteen. ⁴ It held that a court may consider the UGMA funds of college age children when apportioning college expenses. The court refused to remove the custodians, order an accounting or surcharge the father and Collins because the law establishing custodians' duties and responsibilities was not defined prior to this case. Superior Court, relying on Pa.R.A.P. 1701, also held that Common Pleas lacked jurisdiction to entertain a petition to modify the final support order while the case was on appeal to Superior Court.

We will address the jurisdictional question first. Rule 1701 states in relevant part:

Rule 1701. Effect of Appeal Generally

(a) General rule. Except as otherwise prescribed by these rules, after an appeal is taken ..., the trial court ... may no longer proceed further in the matter.

....

(c) Limited to matters in dispute. Where only a particular item, claim or assessment adjudged in the matter is involved in an appeal, ... the appeal ... shall operate to prevent the trial court ... from proceeding further with only such item, claim or assessment, unless otherwise ordered by the trial court ... or by the appellate court or a judge thereof as necessary to preserve the rights of the appellant.

The appeal included the issues of whether UGMA funds should be considered by the court when fashioning a support order, and whether the husband may fulfill his support obligation with them. The modification also dealt with the expenditure of UGMA funds for the support of the children. It was on this issue that Common Pleas entered its modification. This was improper; the court lacked jurisdiction because those questions were pending above. Had the modification dealt merely with a change in support because of changed circumstances arising out of one child's attendance at college and not been related to the expenditure of UGMA funds, Rule 1701 would not have divested the court of jurisdiction. Therefore, we affirm Superior Court on this point and proceed to a consideration of the merits.

The purpose of child support is to promote the best interest of the child; the associated legal obligation of parents is to provide for the reasonable expenses of raising the child. Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984). Indeed, parents have a duty to support their minor children even if it causes them some hardship. Conway v. Dana, 456 Pa. 536, 318 A.2d 324 (1974...