Opinion ID: 1464562
Heading Depth: 1
Heading Rank: 2

Heading: Support and Alimony Pendente Lite

Text: First, husband complains that during the hearing on child support, spousal support and alimony pendente lite, he was not permitted to testify concerning his income and earning capacity. According to husband, the support and alimony pendente lite orders were based on the master's report, not on the court's separate findings. Pennsylvania Rule of Civil Procedure 1910.11 states that actions for support may begin by an office conference conducted by a hearing officer. Following a review of income tax returns, pay stubs and income and expense statements, the officer may make a recommendation. If an agreement is not reached at the conference, the court may enter an order on the recommendation. Thereafter, if the aggrieved party files a written demand, a hearing de novo shall be held before the court. An office conference was conducted on December 2, 1982. A recommendation was made, an order was entered and both parties demanded a de novo hearing. The hearing was conducted on April 25, 1983. Wife was the only witness, and it is not clear whether husband elected to forgo testifying or was precluded from testifying. The support and alimony pendente lite order under review is dated July 9, 1985. That order was not based solely on the hearing of April 25, 1983. Four hearings concerning reconsideration or modification of support and alimony pendente lite followed the April, 1983 hearing. Moreover, seven hearings concerning equitable distribution had been conducted by a master. During the subsequent hearings, husband had an opportunity to testify, call witnesses, offer documentary evidence and cross-examine witnesses. In fact, husband and other witnesses provided exhaustive information concerning his income and the income and expenses of his professional corporation. Among the corporate expenses examined were pension plan contributions, salaries, insurance premiums, travel and entertainment, seminars, automobiles, equipment, taxes, depreciation and general overhead expenses. This information sufficiently defined husband's income and earning capacity. Husband incorrectly states that the court merely adopted the master's findings and report in establishing support and alimony pendente lite. Transcripts from the seven equitable distribution hearings were part of the record and available for the court's review. The court made its own findings after a review of testimony taken at the support hearings and the hearings before the master. The court did not adopt the master's findings and report. Moreover, the fact that husband had filed exceptions from the master's report, which were pending when the order for support and alimony pendente lite was entered, did not preclude the court from relying on the evidence elicited at the master's hearings. Husband cites Groner v. Groner, 328 Pa.Super. 191, 476 A.2d 957 (1984), and Agosti v. Agosti, 319 Pa.Super. 426, 466 A.2d 233 (1983), to support his argument that he was entitled to present evidence of his income and earning capacity at the hearing de novo. In Agosti, supra, child support was ordered following a hearing on divorce, alimony, custody and equitable distribution. The court had not notified the parties that child support would be considered with these other claims; therefore, the parties did not present evidence relevant to child support. Accordingly, the Agosti court remanded for an evidentiary hearing on child support. In Groner, supra, child support was determined without a hearing even though a de novo hearing had been requested by the father. We held that Pa.R.C.P. 1910.11(i) provided an absolute right to a de novo hearing on child support once properly requested. We also held that a trial court may not rely on the record of other claims in lieu of a hearing de novo on child support. Here, husband requested a hearing de novo on child support and alimony pendente lite, and such a hearing was conducted on April 25, 1983. Husband was present at the hearing with counsel, but he complains that he was precluded from testifying. The record does not indicate that husband moved to provide testimony or that he was denied the opportunity. It appears that husband's strategy was not to testify. Although the trial court relied upon evidence from hearings on claims other than child support, these hearings addressed income and earning capacity. In Agosti, child support issues were not addressed to any extent in the hearings. In Groner, the parties' son was mentally retarded, and there was no evidence regarding the extent of his retardation or the effect it had on the amount of support. The hearing on claims other than child support did not address the child's mental retardation; therefore, a de novo hearing was the last opportunity to do so. Here, all issues relevant to child support were addressed in numerous hearings. The court properly relied on evidence from those other hearings to determine child support because husband already had the opportunity to testify on his income and earning capacity at the de novo hearing on April 25, 1983. Next, husband argues that the trial court failed to follow the guidelines enunciated in Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984), in determining child support. In Melzer, the supreme court summarized guidelines for calculating child support: 1) reasonable needs of the children which reflect the needs, custom and financial status of the parents; 2) respective abilities of the parents to provide support which are identified in part by reasonable living expenses; 3) use of a formula to calculate each parent's total support obligation; and 4) credit for support provided directly to the children. Husband maintains that Melzer was not followed because the court allegedly based the support order on the master's equitable distribution report without conducting a comprehensive support hearing covering the Melzer guidelines. As discussed above, the support and equitable distribution hearings were exhaustive; the needs of the children and the financial abilities of husband and wife were fully addressed. Wife testified concerning utilities, clothing, automobile maintenance, indebtedness, insurance, taxes, medical and dental treatment, food, entertainment, subscriptions and other typical and special living expenses for her and the children. Similarly, husband's expenses were fully covered. Finally, the parties' health, education, skills, actual and prospective incomes, and career plans and opportunities were addressed. This information was gleaned from the record. It was not, as husband maintains, taken from the master's report. Third, husband argues that the trial court erred in not considering wife's income and earning capacity in determining child support and alimony pendente lite. According to husband, wife can earn in excess of $24,000.00 annually as a registered nurse. Both parents are equally responsible for supporting their children, and the extent of their respective support obligations is determined by their capacity and ability. Fee v. Fee, 344 Pa.Super. 276, 496 A.2d 793 (1985). A parent's ability to pay support is determined primarily by financial resources and earning capacity. Hesidenz v. Carbin, 354 Pa.Super. 610, 512 A.2d 707 (1986); Commonwealth ex rel. Cochran v. Cochran, 339 Pa.Super. 602, 489 A.2d 804 (1985). The obligation of support, then, is measured more by earning capacity than by actual earnings. Hesidenz, supra . Wife testified at length concerning her employment history and qualifications. She graduated from Temple University School of Nursing in 1967 as a registered nurse. From September, 1967, to October, 1970, she served several hospitals and one school district as a nurse. In October, 1970, she left the workforce in anticipation of Vincent's birth in December, 1970. From October, 1970, to September, 1982, wife remained in the home to rear the parties' sons and to serve as full-time homemaker. Due to husband's substantial income, the parties had the opportunity to provide their children with fulltime parental care during the nurturing years. Also during this twelve-year period, wife entertained other physicians in her home and served the Women's Medical Auxiliary, Junior League, Young Women's Club and Parent Teacher Organization. Wife explained that she entertained house guests and joined these organizations to create and maintain good public relations for husband. In 1983, her first full year back in the work force, wife earned $15,000.00. On May 1, 1984, she began employment as the director of nursing for a nursing home and rehabilitation center at $22,000.00 annually. Her director's position would continue provided she completed a bachelor's degree in behavioral science. As of June 1, 1984, wife had to complete thirty-five credits to earn this degree. In Ritter v. Ritter, 359 Pa.Super. 12, 518 A.2d 319 (filed December 5, 1986, at 283 Philadelphia 1986), we iterated the scope of review in child support proceedings: a child support order will not be reversed unless the evidence was insufficient or the court abused its discretion in awarding that amount of support. An abuse of discretion is proven only by clear and convincing evidence. Koller v. Koller, 333 Pa.Super. 54, 481 A.2d 1218 (1984). With this standard in mind, we find no abuse of discretion. Wife's earning capacity was thoroughly reviewed. It was established by three years of employment during the early years of marriage and by nearly three years of employment following the separation. She earned a customary salary, and her pursuit of a bachelor's degree indicated a willingness to earn maximum income. She cannot be penalized for having remained in the home for twelve years; the nurturing of young children may supersede the economic benefits of full-time employment. Hesidenz, supra ; Butler v. Butler, 339 Pa.Super. 312, 488 A.2d 1141 (1985). These same factors apply to a review of that portion of the order addressing alimony pendente lite. Earning capacity is relevant whether the proceedings concern child support or alimony pendente lite. Pacella v. Pacella, 342 Pa.Super. 178, 492 A.2d 707 (1985). Fourth, husband argues that the trial court erred in adding the value of certain business perquisites to his actual income. In 1983, husband earned $45,189.00 in net income from his medical practice. The trial court added $15,000.00 to his net income because of the following perquisites provided by Associated Internists, Inc. on behalf of both shareholders: 1) contributions of $37,749.00 to a defined benefit pension plan; 2) $2,347.00 in prepaid rent; 3) $3,726.00 for automobile expenses; 4) $4,329.00 for travel and entertainment; 5) $5,903.00 for telephone expenses; 6) $4,032.00 for dues and subscriptions; and 7) $15,920.54 for premiums on health, disability, life, malpractice, liability, fire and accident insurance. Husband maintains that only those perquisites which raised his standard of living can be attributed to income. He argues that all of these expenses either benefited the corporation solely or did not raise his standard of living. When actual earnings do not reflect earning capacity, the trial court is free to investigate a variety of sources to determine a party's true wealth. In Pacella v. Pacella, supra, 342 Pa.Super. at 187, 492 A.2d at 712, we illustrated some factors in addition to actual earnings which determine income: See e.g., Commonwealth ex rel. Maier v. Maier, 274 Pa.Super. 580, 418 A.2d 558 (1980) (where supporting spouse is sole stockholder of corporation and determines his own salary, court may pierce corporate veil and use corporate income as basis for determining earning capacity); Commonwealth v. Miller, 202 Pa.Super. 573, 198 A.2d 373 (1964) (where supporting spouse is self-employed, net income, as it appears on income tax forms, is not infallible measure of real wealth; court accordingly may add back portion of depreciation deduction in calculating amount of support owed); Commonwealth ex rel. Gutzeit v. Gutzeit, 200 Pa.Super. 401, 189 A.2d 324 (1963) (in determining supporting spouse's earning capacity, court should consider not only salary paid by wholly owned corporation, but all prerequisites [sic] provided by corporation.) In McCurry v. McCurry, 279 Pa.Super. 223, 420 A.2d 1113 (1980), we remanded for a hearing to determine the nature of husband's business ventures and assets. We directed the trial court to consider to what extent [husband's] ability to pay support may be enhanced by corporate perquisites.. . . Id., 279 Pa.Superior Ct. at 232, 420 A.2d at 1118. Similarly, in Commonwealth ex rel. Swank v. Swank, 266 Pa.Super. 94, 403 A.2d 109 (1979), and Commonwealth ex rel. Gitman v. Gitman, 428 Pa. 387, 237 A.2d 181 (1967), it was held that perquisites derived from part ownership in corporations shall be considered income. Husband agrees that perquisites affect ability to pay; however, he maintains that the corporate expenses here were not perquisites which enhanced his income. The benefits were allegedly enjoyed by the corporation alone. We have reviewed the testimony of Leon Butler, a certified public accountant who was employed by wife to value Associated Internists, Inc. Butler testified that several corporate deductions were added to the value of the corporation because they were solely for husband's benefit. Therefore, according to Butler, husband enjoyed the following perquisites which did not directly benefit the corporation: 1) 50% of expenses for maintaining two corporate-owned automobiles; 2) 50% of payments for loans on those automobiles; 3) certain travel and entertainment expenses; 4) dues to a social organization; 5) insurance premiums for a life insurance policy which funded a buy/sell agreement; 6) contributions to the corporate pension plan; and 7) certain dining expenses. The master's findings and Butler's testimony indicate that several corporate expenses reduced corporate profits and husband's take-home income. Three employees participated in the defined benefit pension plan, and husband's one-third share of 1983 corporate contributions was $12,650.00. Husband and his partner, Dr. Lampe, each operated a corporate automobile. The evidence indicated that husband did not use his vehicle for house calls or other medical business; he used it primarily to drive to his place of employment and for personal reasons. Husband's one-half share of the automobile expenses was $1,242.00. Husband's one-half share of corporate expenses for dues and subscriptions was $2,016.00, and his one-half share of insurance premiums was $7,960.27. It is not clear what portion of travel and entertainment expenses of $4,329.00 and telephone expenses of $5,903.00 were attributable to husband's personal use. Nevertheless, there was testimony that husband did indeed charge some personal travel, entertainment and telephone expenses to the corporation. Also, wife testified that household expenses for drugs, laundry, dry cleaning and books were charged to the corporation. Irrespective of the travel, entertainment, telephone and household expenses, husband's share of the aforementioned identifiable expenses for 1983 was $23,868.27. Considering husband's reported income and tax bracket for 1983, assigning another $15,000.00 of net income to his net income of $45,189.00 was not an abuse of discretion. Therefore, we find no error in raising husband's 1983 net income by $15,000.00 in perquisites. Husband's fifth attack on the support and alimony pendente lite order concerns his obligation to pay the mortgage and household expenses. Husband alleges that burdening him with these expenses was inequitable, because wife had moved from the premises, and the master had awarded the house to her. Wife moved from the marital residence in October, 1982; husband lived there until October, 1984. Wife's right to receive the benefit of husband maintaining the marital residence was not affected by her moving. Alimony pendente lite continues pending resolution of all economic issues. Desch v. Desch, 329 Pa.Super. 22, 477 A.2d 883 (1984); Wolk v. Wolk, 318 Pa.Super. 311, 464 A.2d 1359 (1983). Wife was not financially able to maintain the marital residence while she supported two children and defrayed rental and utility expenses on her new residence. Wife needed husband's support to preserve the marital residence pending its equitable distribution. In Gee v. Gee, 314 Pa.Super. 31, 460 A.2d 358 (1983), the wife was entitled to one-half of the fair market rental value of the marital residence while the husband resided there alone. The wife's absence from the home did not affect her right to rental compensation. Similarly, wife's absence from the marital residence here should not affect her right to husband's maintenance of the house until equitable distribution. Husband overlooks the fact that he resided in the home for two years following wife's departure. Therefore, his payment of the mortgage, taxes and insurance was not entirely for wife's benefit; he enjoyed the house for two years as he had shelter and preserved a valuable asset for equitable distribution. Husband's contention that the trial court erred in ordering him to maintain the home after the master had awarded it to wife is equally meritless. Husband had filed exceptions from the master's recommendation which prevented an order awarding the house to wife. As long as husband's exceptions were pending, neither party had sole control over the residence. Therefore, it was appropriate and equitable for husband, earning a higher income, to maintain the residence. Husband's final argument concerning alimony pendente lite involves the order of March 4, 1986. This order was entered after husband had appealed from the child support and alimony pendente lite order and from the equitable distribution order. The March 4, 1986 order responded to husband's petition to reduce or terminate alimony pendente lite. Husband alleges that alimony pendente lite should have been reduced or terminated because wife had been awarded $10,000.00 in attorney fees and had remarried on October 12, 1985. An award of alimony pendente lite is designed to enable the dependent spouse to prosecute or to defend a divorce action. Orr v. Orr, 315 Pa.Super. 168, 461 A.2d 850 (1983). It is also designed to help the dependent spouse maintain the standard of living enjoyed while living with the independent spouse. McNulty v. McNulty, 347 Pa.Super. 363, 500 A.2d 876 (1985). Therefore, a dependent spouse may be entitled to alimony pendente lite and counsel fees because both are necessary to maintain the divorce proceeding and a certain standard of living. This is particularly true when the dependent spouse is employed and attempting to complete an education. Even with awards for counsel fees and alimony pendente lite, wife did not reach the standard of living that she had enjoyed with husband. She purchased a modest home with financial assistance from her parents and grandmother. Her absence from the nursing workforce for twelve years limited her employment opportunities and forced her to accept entry level positions. She could no longer enjoy a large residence with a custom-designed interior, frequent entertainment and an extensive wardrobe. Wife's remarriage similarly did not affect the alimony pendente lite award. This identical issue was addressed in Miller v. Miller, 352 Pa.Super. 432, 508 A.2d 550 (1986). Section 507 of the Divorce Code, 23 P.S. § 101 et seq., provides that cohabitation precludes any award of alimony. . . . We held in Miller that § 507 refers only to alimony; cohabitation or remarriage does not bar an award of alimony pendente lite. Contrary to husband's suggestion, then,  any award does not include alimony pendente lite. [2]