Court Opinion

ID: 9351769
Source: CourtListenerOpinion
Date Created: 2023-01-03 17:06:35.361049+00
Date Added: 2024-06-11T17:02:40.680333
License: Public Domain

J-A26035-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    SHARMIL MCKEE                              :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    MICHAEL K. PEARSON                         :   No. 679 EDA 2022

                 Appeal from the Order Entered April 26, 2022
      In the Court of Common Pleas of Philadelphia County Family Court at
                              No(s): 11-05994,
                            PACSES #553112291

BEFORE: BOWES, J., KING, J., and PELLEGRINI, J.*

MEMORANDUM BY PELLEGRINI, J.:                          FILED JANUARY 3, 2023

        Sharmil McKee (Mother) appeals from the April 26, 20221 order of the

Court of Common Pleas of Philadelphia County (trial court) denying her

exceptions and entering a final child support determination. We affirm.

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.

1 The trial court orally denied Mother’s exceptions on December 8, 2021, but
a written order was not immediately docketed. Father filed his notice of appeal
on February 22, 2022, within 30 days of receiving the written order in the
mail. Following orders from this Court, the trial court entered the support
order on the docket on April 26, 2022. We will treat the premature notice of
appeal as timely filed. See Pa. R.A.P. 905(a)(5) (“[A] notice of appeal filed
after the announcement of a determination but before the entry of an
appealable order shall be treated as filed after such entry and on the day
thereof.”).
J-A26035-22

                                               I.

       We glean the following facts from the certified record and the trial

court’s opinion. Mother and Michael K. Pearson (Father) have one child, C.M.,

and Father was previously ordered to pay Mother $1,021.67 per month in

support. On October 23, 2017, Mother filed a petition to modify the support

order alleging Father’s income had increased while her own had decreased.

The matter proceeded to a hearing in front of Support Hearing Officer (SHO)

Wayne Bennett (SHO Bennett) over the course of five days in 2018 and 2019.

       At the hearings, Mother sought to establish that Father’s actual income

was greater than his reported salary as the President and sole shareholder of

Union Packaging, LLC (Union), a registered S-corporation. Father had owned

Union since 1999 and testified that he earned a salary of approximately

$146,000 annually.       He did not receive any additional income from Union.

Union reported taxable income of approximately $665,751 in 2017 but Father

testified that he did not personally take home that amount.      He received

additional miscellaneous income of over $10,000 and made charitable

donations of over $15,000 that year. Finally, Father paid his former spouse

approximately $100,000 per year in distributions from Union under an

equitable distribution order, as Union was a marital asset.2   Based on this

____________________________________________

2Mother and Father were never married and Father’s former spouse is not a
party to this action.

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testimony, SHO Bennett calculated Father’s available income for support

purposes as approximately $175,000.

     On the first day of the hearing, Mother testified that she was

unemployed due to health issues but had previously practiced law as a solo

practitioner earning $38,000. She had earned an MBA in 2014 and was in the

process of completing a Ph.D. in business, but had not been active in school

for over a year due to her health condition. By the final day of the hearing

over a year later, Mother had obtained a job as a compliance officer earning

$85,000 annually.    SHO Bennett concluded that Mother had an earning

capacity of $75,000 annually from the date of the petition until she started

her new job.

     Mother provided healthcare for C.M. initially through Medicaid and later

through her employment.     Under the parties’ custody order, Mother was

responsible for C.M.’s schooling expenses. Mother testified that C.M. would

be attending Miquon School with a partial scholarship and that she would pay

$11,000 per year for his education.

     SHO Bennett additionally reviewed each party’s expenses, assets and

obligations and determined that no deviation from the support guidelines was

appropriate.   He recommended that Father be ordered to pay support of

$1,199.98 per month from the date of the modification petition until the date

Mother obtained employment, at which point the award would be adjusted to

$1,180.06 monthly. He ordered Father to pay $50 per month toward arrears.

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      Mother timely filed exceptions arguing that SHO Bennett had erred in

calculating her earning capacity without sufficient factual support and without

considering her health conditions and disability. She further argued that he

had erred by failing to include all of Union’s taxable income in Father’s income.

Finally, she contended that an upward deviation from the support guidelines

was appropriate based on Union’s total business value, C.M.’s tuition costs

and the difference between the parties’ income.

      Following argument, the trial court remanded the case for the SHO to

determine whether Union’s taxable income was cash flow income to Father

and whether Union’s business valuation was an appropriate basis for an

upward deviation from the support guidelines.       It denied the remainder of

Mother’s exceptions. The trial court asked the parties which SHO the matter

should be remanded to and Mother requested SHO Bennett. Father requested

SHO Michael Pandolfi (SHO Pandolfi), who had handled the case when prior

support orders were entered. The trial court ordered the case be remanded

to either SHO Bennett or SHO Pandolfi depending on scheduling availability.

      Mother and Father then proceeded to a remand hearing in front of SHO

Pandolfi. Mother called certified public accountant John McGovern (McGovern)

as an expert witness to testify regarding Father’s income from Union and the

total value of the business. McGovern’s opinions were based on his review of

Father’s personal 2017 tax return and Union’s 2017 tax return. Union’s tax

return listed compensation to officers totaling $148,336 for that year and

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Father’s personal return listed $143,841 in salary from Union. Union made

$271,821 in distributions that year.      Union’s total reported income was

$654,814, which McGovern explained was subject to taxation regardless of

whether it was distributed. After reviewing the company’s assets, inventories

and receivables, he concluded that it could pay up to $619,731 in additional

distributions based on its bank account balance. He opined that the company

would likely not pay out that much due to upcoming expenses and obligations

and was not aware of any covenants that might impact how much money

Union retained or distributed.

      McGovern also testified that he calculated Union’s value as a company

by looking at its book value, assets and liabilities. He believed that Union had

bought out a prior shareholder for $1,045,000. He estimated Union’s value

at three million dollars but clarified that there had been a recent sale of the

business and he did not know the purchase price. He further stated that he

had not been engaged to provide a valuation of the business.

      Father testified that the reported $665,751 in profit was an “accounting

measure” and he was required to pay tax on that amount. N.T., 12/10/20, at

37. He testified that part of Union’s distributions in 2017 was used to pay his

former spouse in compliance with their equitable distribution order. He said

that Union consistently used an accrual method of accounting and did not alter

its accounting methods in 2017. Finally, he said that various loan covenants

governed how much money could be distributed from the company.

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     SHO Pandolfi issued a report finding that Union’s taxable income was

not distributed in full to Father and should not be included in calculating

support. He also determined that Union’s valuation was not a proper basis for

deviation from the support guidelines because Father could only realize that

financial gain through selling the business.     Accordingly, SHO Pandolfi

recommended that SHO Bennett’s proposed support order be made final.

     Mother timely filed exceptions challenging both findings. Prior to the

hearing on exceptions, she filed a new petition to modify the support order.

The Pennsylvania Automated Child Support Enforcement System (ePACSES)

Intake Unit sent her a letter stating that it could not process the request

because a hearing was scheduled in the case. It advised her to “wait for the

outcome of [the] hearing before any further action [could] be taken.” See

Supplemental Record, 8/16/22, Exhibit 2, Case Status, 4/8/21.

     The trial court denied the exceptions following argument. At that time,

Mother attempted to argue that SHO Pandolfi should have considered the sale

of Union, which occurred in June 2019, when calculating Father’s support

obligation. The trial court responded that SHO Pandolfi was only reviewing

Father’s income as of the date of the October 23, 2017 modification petition,

and that any changes that occurred thereafter would have to be raised in a

separate petition. Mother said that she had attempted to file an additional

modification petition following the sale of Union but the Clerk of Courts had

improperly declined to accept the filing while her exceptions were pending.

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The trial court responded that there was no final order of support so another

modification petition would be premature, but that Mother could move for

modification once the instant petition was resolved.

        At that juncture, Mother inquired as to why the trial court had

rescheduled the exceptions hearing, which occurred approximately one year

after the remand hearing. The trial court responded that it was responsible

for all proceedings in the matter under the consolidated case management

(CCM) order so that the litigation would not proceed piecemeal in front of

different jurists. It had rescheduled the hearing due to various issues in the

courthouse. Mother accepted the explanation without objection.

        Regarding the second exception, Mother argued that SHO Pandolfi

should have taken the sale of Union into account when deciding whether an

upward deviation from the guidelines was appropriate. When the trial court

again stated that only the circumstances as of 2017 were at issue, Mother

argued that the petition to modify had been pending for several years and

that the sale had occurred before the remand hearing.          The trial court

responded that the guideline award was “relatively generous” and asked why

an upward deviation was justified based on the facts available to SHO Pandolfi

at the hearing.3 N.T., 12/8/21, at 66. Mother replied that the standard for

deviation was based on “the entirety of the situation.” Id. at 67. In response,

____________________________________________

3   No evidence regarding the sale was introduced at the remand hearing.

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Father attempted to argue that the trial court should consider Mother’s

bankruptcy proceedings, which discharged Father’s past overpayment of child

support as debt. Mother objected and the trial court stated that it would not

consider the bankruptcy proceedings because SHO Pandolfi had sustained

Mother’s objection to their admission at the remand hearing. Mother made

no further argument on the exceptions.

        The trial court denied the exceptions and made the interim support order

a final order of court.      Mother appealed and she and the trial court have

complied with Pa. R.A.P. 1925.4

                                               II.

        Mother sets forth 14 questions in her brief:

        1. Did the trial court err in failing to allow Mother to file a petition
        for modification after the sale of Father’s multi-million dollar
____________________________________________

4   Our standard and scope of review of a child support order is well-established:

        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. We will not interfere with the broad discretion
        afforded the trial court absent an abuse of the discretion or
        insufficient evidence to sustain the support order. 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. 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.

Sichelstiel v. Sichelstiel, 272 A.3d 530, 534 (Pa. Super. 2022) (citation
omitted).

                                           -8-
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     business that occurred during the five years that this petition was
     pending before the trial court and before the court entered a final
     order on Mother’s 2017 petition?

     2. Should the trial court had refused to address the fact that
     Father sold his half-million home and purchased a $1.8 million
     home during the five years that this petition was pending before
     the trial court and before the court entered a final order on
     Mother’s 2017 petition?

     3. Did the trial court err in failing to allow the 2019 sale of his
     business into the record when the sale was a matter of public
     record, and the trial court failed to take judicial notice of the sale
     of the business?

     4. Did the trial court err when it failed to permit financial
     information about Father’s divorce into this child support case
     when it was relevant?

     5. Should the trial court have deducted the noncustodial parent’s
     business net income of over $600,000 from child support
     calculations?

     6. Should the trial court have applied an upward deviation in a
     case where the noncustodial parent was the sole owner of a multi-
     million-dollar business, but support was calculated based on his
     $158,000 salary that he chose to withdraw from his business?

     7. Should the trial court have applied an upward deviation in a
     case where the custodial parent is paying private school tuition,
     and the noncustodial parent is not contributing to tuition, but the
     noncustodial parent’s multi-million business and $1.8 million
     home were not included in the child support calculations?

     8. Should the trial court have declined an upward deviation under
     231 Pa. Code § 1910.16-5 using a non-factor test not delineated
     in the rules and substituting a subjective test for the delineated
     factors in the statute to determine that child support was generous
     and thus upward deviation was unnecessary?

     9. Did the trial court err when it did not return the matter to the
     original master?

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       10. Did the trial court err by retaining the file in the [c]ourt’s
       chambers for the past decade?

       11. Did the trial court err in maintaining exclusive jurisdiction for
       ten years, prohibiting other judges from ruling on the case, and
       causing several years-long delays?

       12. Did the court err in failing to sanction counsel for using an
       improper bankruptcy discharge argument?

       13. Did the court err in creating an appearance of partiality?

       14. Did the court err in communicating with the prothonotary of
       the Superior Court requesting dismissal of appeal?

Mother’s Brief at 6-8 (suggested answers omitted).5

       Initially, we note that Mother’s brief does not conform to our Rules of

Appellate Procedure. While she sets forth 14 questions in her statement of

questions involved, her argument section is not divided into 14 sections

addressing each question with reference to pertinent authority. Pa. R.A.P.

2116, 2119(a). Instead, her argument generally attempts to target the issues

raised in her statement of questions involved but presents them out of order,

raises new issues or combines issues while only obliquely referring to others.

____________________________________________

5 Mother raises an additional issue in the argument section of her brief: “The
testimony during the 12/10/2020 hearing was stale and required a new
hearing.” Mother’s Brief at 32. She does not cite to a point in the record
where she requested an entirely new support hearing, nor does our review of
the record reveal one. Further, she did not raise this issue in her concise
statement pursuant to Pa. R.A.P. 1925(b). Accordingly, it is waived. See Pa.
R.A.P. 302(a); Pa. R.A.P. 1925(b)(4)(vii). Sutliff v. Sutliff, 543 A.2d 534
(Pa. 1988), which Mother cites in support, does not compel a different
conclusion. Nothing in Sutliff suggests that the trial court had an obligation
to order a new hearing without a request by either party. See id. at 537.

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She does not consistently cite to the record or identify where certain issues

were raised in the trial court. Pa. R.A.P. 2119(c), (e). Father urges us to

dismiss the appeal based on these deficiencies. Father’s Brief at 12-13.

      As a general matter, “[a]ppellate briefs must conform materially to the

requirements of the Pennsylvania Rules of Appellate Procedure, and this Court

may quash or dismiss an appeal if the defect in the brief is substantial.”

Commonwealth v. Tchirkow, 160 A.3d 798, 804 (Pa. Super. 2017); see

also Pa. R.A.P. 2101. “However, as a practical matter, this Court quashes

appeals for failure to conform to the Rules of Appellate Procedure only where

the failure to conform to the Rules results in the inability of this Court to

discern the issues argued on appeal.” Kern v. Kern, 892 A.2d 1, 6 (Pa. Super.

2005).   Here, Mother’s failure to conform her brief to the Rules has not

hampered our review and we will consider the merits of her claims.

                                      A.

      Mother first challenges the Clerk of Court’s refusal to accept her 2021

petition to modify the support order that she filed while the exceptions to the

remand hearing in front of SHO Pandolfi were still pending.      As discussed

supra, after a final support order was entered on October 13, 2017, Mother

initially sought modification of the support order on October 23, 2017.

Following hearings before SHO Bennett, an interim modified support order was

entered on December 10, 2019. While Mother’s second set of exceptions to

the interim order was pending, she attempted to file a second modification

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petition requesting modification of the October 13, 2017 final support order.

The ePACSES Intake Unit rejected the petition because the hearing on her

second set of exceptions was pending.

       The trial court did not abuse its discretion by denying relief on this claim.

Mother’s petition sought to modify the prior final support order which had

already been superseded by the interim support order entered in December

2019.6 See Pa. R. Civ. P. 1910.12(e) (following a hearing in front of SHO, the

trial court “shall enter an interim order consistent with the proposed order of

the hearing officer”), (h) (interim order remains in effect while exceptions are

pending). Mother cannot seek to modify an order that was no longer in effect.

Her first claim is meritless.

                                               B.

       We consider Mother’s next two claims together. Mother argues that the

trial court abused its discretion by failing to consider the sale of Father’s house

and business that took place while her modification petition was pending.

However, while she identifies the sale of Father’s home in her statement of

____________________________________________

6  We disagree with the trial court’s assertion that a litigant cannot petition to
modify an interim support order. Trial Court Opinion, 6/30/22, at 6-7; see
23 Pa.C.S. § 4352(a) (“A petition for modification of a support order may be
filed at any time and shall be granted if the requesting party demonstrates a
substantial change in circumstances.” (emphasis added)); Summers v.
Summers, 35 A.3d 786, 789 (Pa. Super. 2012) (citations omitted).
Nevertheless, we may affirm the trial court’s order on any basis. Prieto Corp.
v. Gambone Const. Co., 100 A.3d 602, 606 (Pa. Super. 2014).

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questions involved as a basis for increasing his support obligation, she does

not present any argument related to this claim in her brief other than a passing

reference to the sale in her argument in favor of an upward deviation from

the guidelines. See Mother’s Brief at 40. Accordingly, it has been abandoned

and we do not address it further. Green v. Green, 69 A.3d 282, 285 n.3 (Pa.

Super. 2013) (finding claim waived for failure to develop it in argument section

of brief). Regarding the sale of Union, Mother addresses this issue in her brief

only in the context of her claim that the trial court relied on a stale record

when evaluating the support order and should have ordered a new hearing.

Mother’s Brief at 32-36. As explained supra, this claim is also waived. Note

5, supra. Finally, after a review of the record, we agree with the trial court

that Mother did not present or develop these claims at the support hearings

or in her exceptions. Trial Court Opinion, 6/30/22, at 7-8; see also Pa. R.C.P.

1910.12(f) (“Matters not covered by exceptions are deemed waived unless,

prior to entry of the final order, leave is granted to file exceptions raising those

matters.”). They are waived on that basis as well.

                                        C.

      Next, Mother argues that the trial court abused its discretion by failing

to allow discovery into Father’s divorce and equitable distribution action. At

the support hearings, Father introduced his equitable distribution order to

show that Union made a $100,000 distribution in 2017 in accordance with that

order. In her abbreviated argument on this issue, Mother contends only that

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the equitable distribution matter was relevant to impeach Father under

Pennsylvania Rule of Evidence 401, which sets forth the test for relevant

evidence. See Mother’s Brief at 43. At the second exceptions hearing, Mother

argued that she should have been permitted full discovery of Father’s

equitable distribution action to verify whether payments were made for those

purposes.7 N.T., 10/8/21, at 24-27. Because Mother did not articulate any

specific basis to justify discovery into Father’s entire equitable distribution

action, particularly when the relevant order was submitted into evidence

already, the trial court determined that the request was entirely speculative.

See Trial Court Opinion, 6/30/22, at 9-10.          Mother similarly presents no

argument on appeal to support her assertion that anything in the file would

contradict the final order. Accordingly, we discern no abuse of discretion in

the trial court’s reasoning.

                                               D.

       In her next issue, Mother contends that the trial court abused its

discretion by failing to consider Union’s total reported profits as Father’s

income for the purposes of calculating his support obligation under the

____________________________________________

7  Mother and the trial court reference an order issued earlier in the case’s
history that denied Mother discovery into this file. The order and any related
filings are not contained in the certified record so we may not consider them.
See Commonwealth v. Rush, 959 A.2d 945, 949 (Pa. Super. 2008) (“This
Court does not rely on items dehors the record, such as assertions in an
appellate brief or a trial court opinion reviewing a case on appeal.”).

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guidelines.8     Father testified consistently and his personal tax return

corroborated that he received approximately $150,000 in compensation from

Union for his position as an officer. SHO Bennett adjusted his income upward

based on additional miscellaneous income and charitable donations for a total

income of $175,258.           Mother argues that because Father is the sole

shareholder of Union, its 2017 retained earnings of $654,814 should be

included in the calculation of Father’s income.9

____________________________________________

8 The trial court first concluded that this issue was barred by the doctrine of
collateral estoppel because in Mother’s prior appeal, this Court concluded that
Father was not sheltering income through Union’s depreciation tax deductions.
See Trial Court Opinion, 6/30/22, at 10-11 (citing S.M. v. M.K.P., 1497 EDA
2014, at *8-10 (Pa. Super. Nov. 24, 2015) (unpublished memorandum)). In
Mackay v. Mackay, 984 A.2d 529 (Pa. Super. 2009), this Court rejected a
similar argument that the trial court was bound by its former order under the
law of the case doctrine when determining a party’s income for child support
purposes. We held that in support cases, the trial court retains jurisdiction to
alter a support order at any time based on a material and substantial change
in circumstances, and that a party’s income is a factual finding that can change
based on those circumstances. Id. at 538 n.3, 541. Here, the related doctrine
of collateral estoppel requires that “the issue decided in the prior case is
identical to one presented in the later case.” Weissberger v. Myers, 90 A.3d
730, 733 (Pa. Super. 2014) (internal quotations & citation omitted). The issue
presented here and in Mother’s prior appeal are fact-specific inquiries into
whether Father’s income should be increased based on Union’s profits. A prior
factual determination regarding Union’s income or assets may change based
on changes in accounting methods or profit in intervening years. Because
these questions require credibility determinations and new factual findings
based on an alleged change in circumstances, they are not identical to the
issues in the prior appeal and collateral estoppel does not apply. See
Mackay, supra.

9 Mother also argues that Union’s business deductions exceeding one million
dollars in 2017 should have been considered when calculating Father’s
income. Moreover, she argues that Father’s income includes the $271,821 in
(Footnote Continued Next Page)

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        Initially, we note that Mother’s exceptions challenged the SHO’s failure

to include Union’s 2017 income of $665,751, which was passed through to

Father’s personal tax return, in its calculation of his income.10 On appeal, she

now argues that retained earnings of $654,814 should have been included in

Father’s income.11      Father contends that this discrepancy requires waiver.

Father’s Brief at 22. However, our review of the record and her argument on

appeal reveals that she has maintained the same position throughout these

proceedings: that Father declined to distribute a substantial portion of Union’s

total earnings in order to shelter that money from being counted as his income

for support purposes. Thus, while the precise figure she cites in her argument

has changed, we decline to find waiver on that basis.

        Union is an S-corporation that avoids corporate tax liability through a

flow-through income scheme requiring Father, the sole shareholder, to report

the business income on his personal tax return. Sichelstiel v. Sichelstiel,

272 A.3d 530, 532 (Pa. Super. 2022). An S-corporation is not required to

____________________________________________

distributions made by Union in 2017, and that the equitable distribution
payment of $100,000 should not have been deducted from his net income.
She did not raise these arguments in her exceptions to the interim order and
they are waived. Pa. R.C.P. 1910.12(f); Pa. R.A.P. 302(a).

10   This figure is taken from Schedule E of Father’s personal 2017 tax return.

11   This figure is taken from Schedule M-1 of Union’s 2017 business tax return.

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distribute profits to shareholders for them to pay taxes on those earnings; it

may choose to retain those earnings in the company. See id. at 535.

     Our law is clear that income from a business is included in the calculation

of an obligor’s support obligation. 23 Pa.C.S. 4302; Pa. R.C.P. 1910.16-2(a).

However, “[t]hat income must reflect actual available financial resources and

not the oft-time fictional financial picture which develops as the result of

depreciation deductions taken against . . . income as permitted by the federal

income tax laws. Otherwise put, ‘cash flow’ ought to be considered and not

federally taxed income.” Cunningham v. Cunningham, 548 A.2d 611, 612-

13 (Pa. Super. 1988) (quoting Commonwealth ex rel. Hagerty v. Eyster,

429 A.2d 665, 668-69 (Pa. Super. 1981). In Sichelstiel, we set forth the law

regarding business income as follows:

     “[T]he owner of a closely-held corporation cannot avoid a support
     obligation by sheltering income that should be available for
     support by manipulating salary, perquisites, corporate
     expenditures, and/or corporate distributions amounts.” [Fennell
     v. Fennell, 753 A.2d 866, 868 (Pa. Super. 2000).] “By the same
     token, however, we cannot attribute as income funds not
     actually available to or received by the party.” Id. (emphasis
     added).

     Because the father [in Fennell] did not actually receive corporate
     distributions, nor did the father have the ability to control whether
     the company would issue distributions or retain its earnings, we
     concluded that the trial court erred when it considered that
     income. Id. at 869. We clarified, however, that our holding did
     “not create a presumption that corporate retained earnings per se
     are to be excluded from available income for purposes of support
     calculations.” Id. (footnote omitted). Rather, “in situations where
     the individual with the support obligation is able to control the
     retention or disbursement of funds by the corporation, he or she

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      still will bear the burden of proving that such actions were
      ‘necessary to maintain or preserve’ the business.”

Sichelstiel, supra, at 536 (emphasis in original). In Sichelstiel, the obligor

held ownership shares in nine businesses and used virtually all of the cash

flow he received from those businesses to pay taxes on the total flow-through

income. Id. at 533. At the support hearing, there was no testimony as to his

ability to control the companies’ distributions or the entities’ general practice

regarding retained earnings.    Id. at 537.    Based on the obligor’s minority

ownership in the businesses, we concluded that the obligor did not have the

burden of establishing whether retention of the flow-through income was

“‘necessary to maintain or preserve’ the business.”        Id. at 538 (quoting

Fennell, supra, at 869).

      As Mother argues, this is not the case here. Father is the sole owner

and shareholder of Union. SHO Bennett initially considered the inclusion of

Father’s pass-through income in his December 10, 2019 report in support of

the interim order. Father testified that he drew a salary of approximately

$140,000 annually from Union and did not take additional distributions so that

his lifestyle would not change year to year.      N.T., 8/2/18, at 38-39.     He

explained that Union consistently claimed depreciation tax deductions

throughout its history and had distributed $100,000 pursuant to an equitable

distribution order.    He contended that there had been no change in

circumstances since the parties had litigated Father’s income in earlier support

proceedings. SHO Bennett credited Father’s testimony:

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      The Master finds for the Obligor on this issue, as while the court
      must look beyond a corporate veil to determine actual cash flow
      for support purposes and determination (Morris v. Bell, 639 A.2d
      846 (Pa. Super. 1993), Cunningham v. Cunningham, 548 A.2d
      611 (Pa Super. 1998), and King v. King, 568 A.2d 627 (Pa.
      Super. 1989)), and where the Obligor has substantial control over
      the finances and business in which he is a controlling partner such
      as is the case here, the Master does not find that given the totality
      of the circumstances this Obligor has manipulated the timing and
      amount of personal income from his business to evade his support
      obligation.

      The Court has found that depreciation deductions, certain types
      of expenses, and even automobile expenses may be excluded as
      real income for support purposes, where these deductions reflect
      actual cash outlays. Holland v. Holland, 663 A.2d 768 (Pa.
      Super. 1995); McAuliffe v. McAuliffe, 613 A.2d 20 (Pa. Super.
      1992).

      In the present case the Master does not find that the Obligor’s
      capital outlays and business deductions are an attempt to shelter
      income from the Court. The Master also finds that there has been
      no substantial changes in the Obligor’s circumstances since the
      previous Master, and the Master therefore found for the Obligor in
      regards to this issue.

Report of Master in Support, 12/10/19, at 3 (cleaned up). Thus, SHO Bennett

found Father credible and concluded he was not using Union’s retained

earnings to shelter income from his child support obligation.

      Following argument on Mother’s first set of exceptions, the trial court

remanded the matter for the SHO to determine whether Union’s total profit

was, in fact, cash flow income available to Father. On questioning by SHO

Pandolfi, Father testified that the reported $665,751 in profit was an

“accounting measure” and “was not in anyone’s bank account.”                  N.T.,

12/10/20, at 37.    He testified that he was required to pay taxes on that

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amount. He said that Union did not alter its accounting methods in 2017 or

make any changes to how the company handled its cash flow and liabilities.

Union had consistently used an accrual method of accounting.        He further

testified that Union was subject to loan covenants that “dictated what could

be withdrawn from the business at any time.” Id. at 75.

      Mother’s expert, McGovern, testified that he reviewed Union’s and

Father’s tax returns from 2017 and limited his analysis of the cash flow to the

compensation and distribution paid by Union. He discovered that Union had

reported $143,841 in compensation paid and $271,821 in distributions. After

reviewing Union’s bank account, inventories and accounts receivables and

payable, he concluded that Union had sufficient reserves to make additional

distributions. He could not quantify the total amount Union would have been

able to distribute and acknowledged that a corporation would need to retain

cash for upcoming expenses. He did not know whether Union had additional

covenants that would require it to retain money and did not interview Father

to learn more about Union’s distribution practices. Finally, he testified that

the $665,751 figure reflected on Father’s tax return was not cash flow income

to Father, but rather Union’s taxable income. He could not determine from

the tax returns the purpose of the cash distributions.

      After considering this testimony, SHO Pandolfi concluded that Union’s

2017 income was not cash flow income available to Father for support

purposes and recommended that SHO Bennett’s interim order be made final.

                                    - 20 -
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Upon review of the full record of the proceedings in front of both SHOs, the

trial court agreed. The record supports this determination. While Father was

the sole shareholder of Union and was able to control its distributions, he

testified that he took the same salary every year to maintain his lifestyle and

that Union’s accounting methods had not changed throughout its history.12

Union retained profits in its bank account at the end of 2017 in accordance

with these accounting methods and to comply with loan covenants requiring

it to maintain cash reserves.        Thus, there was no evidence presented that

Father had access to the over $600,000 in profits that Union generated in

2017 as actual cash flow income.               Based on the consistency of Union’s

accounting practices, which predate the support action, and Father’s

testimony regarding the business’s practices, the trial court did not abuse its

discretion in determining that Father was not using Union to shelter income

from his support obligations.

                                               E.

       We address Mother’s next three issues on appeal together, as they all

challenge the trial court’s denial of her request for an upward deviation from

the support guidelines.13         She contends that an upward deviation was

____________________________________________

12 Union was founded in 1999, well before C.M. was born and support
proceedings were initiated.

13Collateral estoppel does not bar consideration of this claim. See note 8,
supra.

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appropriate because Father owned Union, a multi-million-dollar business, and

a new home, while Mother was solely responsible for C.M.’s tuition.            She

argues that the trial court invented a new standard for assessing whether a

deviation was appropriate by finding that the support award was “relatively

generous” while failing to consider the required statutory factors.           N.T.,

12/8/21, at 66.

      “[T]he support guidelines set forth the amount of support which a

spouse or parent should pay on the basis of both parties’ net monthly incomes

... and the number of persons being supported.”         Pa.R.C.P.1910.16–1(a).

There is a rebuttable presumption that the guideline amount of child support

is the correct amount. Pa.R.C.P.1910.16–1(d).

      That said, “a court generally has reasonable discretion to deviate from

the guidelines if the record supports the deviation.” Silver v. Pinskey, 981

A.2d 284, 296 (Pa. Super. 2009). Rule 1910.16–5 addresses deviation from

the guidelines as follows:

      (a) Deviation.

      (1) The trier-of-fact may deviate from the basic child support,
      spousal support, or alimony pendente lite obligation.

      (2) If the trier-of-fact determines a deviation is appropriate based
      on the factors in subdivision (b), the trier-of-fact shall specify on
      the record or in writing:

           (i) the calculated basic child support, spousal support, or
      alimony pendente lite obligation;

            (ii) the reason for the deviation;

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J-A26035-22

            (iii) the findings of fact justifying the deviation;

            (iv) the deviation amount; and

            (v) in a spousal support or an alimony pendente lite action,
      the obligation’s duration.

      Note: The deviation applies to the amount of the support
      obligation and not to the amount of income.

      (b) Factors. In deciding whether to deviate from the amount of
      support determined by the guidelines, the trier of fact shall
      consider:

      (1) unusual needs and unusual fixed obligations;

      (2) other support obligations of the parties;

      (3) other income in the household;

      (4) ages of the children;

      (5) the relative assets and liabilities of the parties;

      (6) medical expenses not covered by insurance;

      (7) standard of living of the parties and their children;

      (8) in a spousal support or alimony pendente lite case, the
      duration of the marriage from the date of marriage to the date of
      final separation; and

      (9) other relevant and appropriate factors, including the best
      interests of the child or children.

Pa. R.C.P.1910.16–5.

      The sole reason Mother cited in the trial court in support of an upward

deviation from the support guidelines was her expert’s valuation of Union at

three million dollars. Presumably, she is referencing factor five, “the relative

assets and liabilities of the parties,” as the factor supporting an upward

                                      - 23 -
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deviation. Pa. R.C.P.1910.16–5(b)(5). After examining the testimony at the

remand hearing in front of SHO Pandolfi, the trial court concluded that Union’s

valuation did not compel an upward deviation.14 McGovern testified that he

was not retained to provide a formal valuation of Union and had only reviewed

Father’s personal 2017 tax return and Union’s 2017 tax return in rendering

his opinion. Thus, he could not base his opinion on any sale that occurred

after the 2017 tax year, and he did not interview Father when researching his

opinion.    McGovern was only able to “surmise” based on review of these

limited records that the business was worth three million dollars.         N.T.,

12/10/20, at 53. The trial court did not abuse its discretion in concluding that

this tenuous valuation did not support a deviation from the guidelines under

the totality of the circumstances, and the record belies Mother’s claim that the

trial court denied the exception based solely on the “relatively generous”

nature of the guideline award.

       Moreover, the trial court credited SHO Pandolfi’s reasoning for rejecting

the upward deviation and SHO Bennett’s earlier factual findings regarding the

parties’ income, needs, obligations and assets and liabilities.     Trial Court

Opinion, 6/30/22, at 14-15, 17-18. While Mother presented evidence that she

____________________________________________

14 The trial court declined to consider any evidence of the actual sale of Union
because the record at the remand hearing did not disclose the sale price and
the sale occurred after the modification petition was filed. The trial court
repeatedly informed Mother that she could file a new modification petition
raising the issue of the sale once a final support order was entered.

                                          - 24 -
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paid $10,000 in tuition for C.M., the trial court noted that Mother had

unilaterally elected to enroll C.M. in a private school and that the parties’

custody order required her to pay all tuition expenses. Id. at 16-17. The

record reflects that the trial court reviewed all evidence presented and

considered all required factors before finding that an upward deviation was

not warranted under the facts of this case. As a result, no relief is due.

                                      F.

      Next, Mother contends that the trial court erred by remanding the case

to SHO Pandolfi for the hearing on Father’s income and Union’s valuation,

rather than ordering the hearing to take place in front of SHO Bennett. We

agree with the trial court that this issue is waived. When it remanded the

matter for an additional hearing, the trial court noted that SHO Bennett and

SHO Pandolfi had been involved in the case during its history and asked the

parties if they had any preference as to which SHO should preside over the

remand hearing.     Mother preferred SHO Bennett; Father preferred SHO

Pandolfi. The trial court stated that it would direct the matter to be listed in

front of one of those SHOs. Mother did not object to this decision at that time,

file a motion to have the matter transferred to SHO Bennett after the hearing

was scheduled, or object in front of SHO Pandolfi at the time of the remand

hearing. In absence of a timely, specific objection that would have allowed

the trial court to address this matter in the first instance, Mother’s claim is

                                     - 25 -
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waived.15    Summers v. Summers, 35 A.3d 786, 790 (Pa. Super. 2012)

(citing Hong v. Pelagatti, 765 A.2d 1117, 1123 (Pa. Super. 2000)); Pa.

R.A.P. 302(a).

                                               G.

       We address Mother’s next two issues on appeal together, as they both

challenge the trial court’s management of the case. Mother faults the trial

court for retaining the physical file in this matter in its chambers since the

inception of the case in 2012. She further contends that the trial court erred

by maintaining exclusive jurisdiction over the case rather than allowing other

jurists to preside over different proceedings and argues that the trial court’s

insistence on maintaining jurisdiction resulted in lengthy delays.

       Again, Mother’s claims are waived. The issue of the trial court’s handling

of the case and the numerous delays was addressed at the second exceptions

hearing. Mother asked the trial court why the hearing had been rescheduled

at the request of its chambers and why it had retained the case over the years.

See N.T., 12/8/21, at 57-61. The trial court gave a lengthy explanation for

the delays in scheduling the exceptions hearing and stated that it heard all

____________________________________________

15 In its opinion, the trial court explained that when the case was remanded,
the earliest available date for the hearing was in front of SHO Pandolfi. Given
the protracted nature of these proceedings, we discern no abuse of discretion
in ordering the case to proceed at the earliest possible date. Moreover, Mother
has not articulated any prejudice that she suffered by having the remand
hearing proceed in front of SHO Pandolfi, who was familiar with her case. See
Mother’s Brief at 44-47.

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petitions in the case due to a CCM order issued by the administrative judge.

Id. Mother stated that she had thought the trial court had requested to keep

the case and the trial court responded that it would preside over the case

unless one of the parties filed a motion to remove the CCM order. Mother

accepted this explanation without objection and did not file any motions to

recuse the trial court or remove the CCM order. As a result, her claims are

waived. Summers, supra; Pa. R.A.P. 302(a).

                                      H.

      Next, Mother claims that the trial court erred by failing to sanction

Father sua sponte for referring to her bankruptcy proceedings during the

second exceptions hearing.      At the hearing on Mother’s second set of

exceptions, Father contended that Mother had additional income available to

her in 2017 because approximately $37,000 in overpayment of child support

by Father was discharged as debt in her personal bankruptcy action. Mother

characterizes Father’s reference to these events as an improper attempt to

collect a debt that had been discharged in bankruptcy and faults the trial court

for failing to impose sanctions. See Mother’s Brief at 50 (citing D’Happart v.

First Commonwealth Bank, 282 A.3d 704, 730 (Pa. Super. 2022)).

      This claim is meritless. At the hearing, Father attempted to argue that

Mother was not entitled to a deviation from the support guidelines because

approximately $37,000 in overpayment of child support had been discharged

in her bankruptcy proceedings. This was not an attempt to collect a debt that

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had been discharged in bankruptcy, as Mother suggests. Mother immediately

objected to this argument, and the trial court reviewed the transcript of the

remand hearing and determined that SHO Pandolfi had found that the

bankruptcy was irrelevant to the matters on remand. No further argument

was made regarding the bankruptcy, the trial court stated that it could not

consider it, and Mother did not request sanctions. N.T., 12/8/21, at 68-71.

We agree with the trial court that Mother waived this issue.16     Trial Court

Opinion, 6/30/22, at 22-23; Summers, supra; Pa. R.A.P. 302(a).

                                               I.

       Next, Mother argues that many of the above-mentioned alleged trial

court errors created an appearance of partiality by the trial court.      See

Mother’s Brief at 53-55. However, as the trial court notes, Mother did not

seek recusal or otherwise raise an objection to the trial court’s continued

handling of the case in the lower court. Trial Court Opinion, 6/30/22, at 23.

____________________________________________

16 Additionally, the cases Mother cites in her argument on this point do not
support her position. The quote she supplies from Bisher v. Lehigh Valley
Health Network, Inc., 265 A.3d 383 (Pa. 2021), is from a case out of the
Massachusetts Supreme Court that our Supreme Court cited when reviewing
the law in other jurisdictions. See id. (quoting Rental Prop. Mgmt. Servs.
v. Hatcher, 97 N.E.3d 319, 333 (Mass. 2018)). Commonwealth v. Africa,
353 A.2d 855 (Pa. 1976), bears on a court’s power to find parties before it in
contempt for engaging in disruptive behavior. Neither case posits that it would
be reversible error for a trial court to decline to sanction a party sua sponte
for raising an argument that references another party’s bankruptcy
proceedings.

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Our review of the record confirms this conclusion. Accordingly, this issue is

waived. Summers, supra; Pa. R.A.P. 302(a).

                                      J.

      In her final claim, Mother argues that the trial court erred by requesting

that this Court quash her appeal as untimely filed. As explained in note 1,

supra, we have already concluded that her appeal was timely filed after a

delay in docketing the final order of support. The trial court has additionally

acknowledged its error in assessing the timeliness of the appeal. Trial Court

Opinion, 6/30/22, at 3-4, 23-24 (explaining that it was unaware that the

written order had not been docketed until it received notice from this Court).

Accordingly, any claim of error on this matter is moot.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 1/3/2023

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