J-A27029-18


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CHRISTINA CALLAHAN                             IN THE SUPERIOR COURT
                                                  OF PENNSYLVANIA
                        Appellant

                   v.

JAMES CALLAHAN

                        Appellee                  No. 1394 EDA 2018


               Appeal from the Order Entered April 17, 2018
          In the Court of Common Pleas of Northampton County
        Domestic Relations at No: DR-0005814 PACSES 758114428


BEFORE: BOWES, STABILE, and McLAUGHLIN, JJ.

MEMORANDUM BY STABILE, J.:                    FILED FEBRUARY 21, 2019

     Appellant, Christina Callahan (“Mother”), appeals from the April 17,

2018 support order. We affirm.

     Mother commenced this action on January 14, 2014, seeking support

from Appellee, James Callahan (“Father”), for the parties’ child born in

September of 2006. On February 21, 2014, she filed an amended complaint

in which she also sought spousal support. The parties eventually reached an

agreement as to spousal support and alimony, child support, child support

arrears, health insurance and uncovered medical expenses. The trial court

adopted the parties’ agreement by order of October 29, 2014.

     On September 27, 2016, Father filed a petition for modification seeking

a decrease in support due to a decrease in income. The proceedings on that

petition culminated in a February 14, 2018 argument before the trial court.
J-A27029-18


On April 17, 2018, based on the record and the parties’ argument and briefs,

the trial court entered the order on appeal.    In this timely appeal, Mother

raises a single issue:

            Did the trial court commit an error of law and/or abuse its
      discretion in calculating Father’s disposable income based upon
      federally taxed income calculated in his 2016 federal income tax
      return rather than actual cash flow?

Mother’s Brief at 6. Specifically, Father’s tax 2016 returns—one personal and

one corporate for Callahan Agency, Inc., an insurance agency Father owns—

reflect that he pays $1,886.86 per month toward the repayment of a business

loan. Mother argues that the trial court erred in deducting that amount from

Father’s monthly income for purposes of calculating his support obligation.

      We conduct our review as follows:

            In reviewing orders granting, denying or modifying support,
      this Court is limited to considering whether, based on clear and
      convincing evidence, the trial court abused its discretion. An
      abuse of discretion requires proof of more than a mere error in
      judgment, but rather evidence that the law was misapplied or
      overridden, or that the judgment was manifestly unreasonable or
      based on bias, ill will, prejudice, or partiality.

            Since abuse of discretion allegations call for a review of the
      record, it is important to remember that this Court is not free to
      usurp the trial court's duty as the finder of fact. As this Court
      stated on prior occasions, [a]ppellate courts are becoming more
      reluctant to substitute themselves as super-support courts when
      they have not had the opportunity to see and hear the witnesses
      and so determine credibility.

Simmons v. Simmons, 723 A.2d 221, 222–23 (Pa. Super. 1998) (internal

citations and quotation marks omitted).




                                     -2-
J-A27029-18


      Mother cites Labar v. Labar, 731 A.2d 1252, 1257 (Pa. 1999) for the

proposition that cash flow, not federally taxed income, determines disposable

income for purposes of calculating a support obligation. In Labar, the wife

argued that one-half of a depreciation deduction the husband’s company took

in determining the amount of taxable income passed on to its shareholders.

Id. at 1255. Our Supreme Court rejected the wife’s argument, explaining that

depreciation is not the equivalent of cash flow, and it does not result in

income. Id.

      Husband and the trial court cite Cunningham v. Cunningham, 548

A.2d 611, 612 (Pa. Super. 1988), in which this Court wrote that deductions

permitted under federal income are not automatically deducted from gross

income for purposes of a support obligation. Instead, the courts will look to

actual disposable income instead of the “oft-time fictional picture” that arises

from tax deductions. Id. at 612-13. Instantly, the trial court found that each

of the deductions listed on Father’s 2016 tax return reflected an actual

reduction in his personal income. Thus, the support order is, in fact, based

on Father’s actual cash flow, in accordance with applicable law. The trial court

explained its findings in detail in its opinion of June 26, 2008. The record

supports that conclusion.

      Having reviewed the parties’ briefs, the applicable law, and the record,

we affirm the order based on the trial court’s June 26, 2008 opinion. We direct

that a copy of that opinion be filed along with this memorandum.


                                     -3-
J-A27029-18


     Order affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 2/21/19




                          -4-
                                                                                          Circulated 01/31/2019 10:41 AM
                                                         )                          )



                   IN THE COURT OF COMMON PLEAS OF NORTHAMPTON COUNTY
                              COMMONWEALTH OF PENNSYLVANIA
                                DOMESTIC RELAT�ONS SECTION

                  CHRISTINA CALLAHAN,                         )       No: DR-5814
                                            Plaintiff         )       PASCES No.: 758114428
                        v.                                    )       1394 EDA 2018
                                                              )
                  JAMES CALLAHAN,                             )
                                            Defendant         )

                     PENNSYLVANIA RULE OF APPELLATE PROCEDURE 192S(a)
                                        STATEMENT

                                     o1 +"'day of June, 2018, the Court issues the
                        AND NOW, this�

                  following statement pursuant to Pa.R.A.P. No. 1925(a):

                  Factual and Procedural History

                        This matter is before the Superior Court on Plaintiff's appeal of

                  our Order of Court dated April 10, 2018.

                        On January 14, 2014, Plaintiff filed a Complaint for the support

                  of one child, Savannah Callahan, born on September 1, 2006. See

                  Complaint in Support, Callahan v. Callahan, DR-5815 (C.P.

                  Northampton Co. Jan 14, 2014). On February 13, 2014, the parties

                  appeared for a conference on the child support Complaint. See

                  Conference Notes, Callahan, supra. (C.P. Northampton Co. Feb. 13,

                  2014 ). Defendant reported being the owner of his own business, the

                  "Callahan Agency". Id. Defendant provided his 2012 personal and

                  corporate tax returns, however, the Conference Officer noted several




ORIGINAL TO DOCKETING 6/26/18
    SUPERIOR COURT OF PA
                                                                                   JUN 2 6 2018
    HONORABLE JENNIFER R. SLETVOVLD                               1
    DONALD F. SPRY, 11., ESQ.
                                                                                DOMESTIC RELATIONS
    STANLEY J. MARGLE, ESQ.                                                          SECTION
    LISA YANY VEISZLEMLEIN(DRS DIRECTOR)
   I\AI\ I/"")\         ••   A   ..   _   .. __   -·--·--·-
 part-time by St. Stephen's School, earning $379. 53 bi-weekly, while

 also homeschooling the child for whom support was being sought. Id.

 Prior to homeschooling, Plaintiff had been employed full-time as a

teacher in the East Penn School District from 2000-2005. Id.

      The Conference Officer determined that Defendant's income

should be sent to the Domestic Relations Section ("DRS") accountants

to configure his monthly net income. Id. Addressing Plaintiff's

income, the Conference Officer recommended assessing Plaintiff as an

entry-level elementary school teacher, with an assessed income of

$38,880.00. Id. This resulted in an assessed monthly gross income

for Plaintiff of $3,240.00. Id. At the conclusion of the conference, the

case was listed as "pending" based on Defendant's income being

calculated by the DRS accountants and the parties being required to

submit documentation of several expenses. Id.

      On February 21, 2014, Plaintiff flied an Amended Complaint for

support requesting child support for one (1) child as well as spousal

support. Subsequently, the DRS accountants configured a net monthly

income for Defendant of $3,074.37. See, Conference Officer Follow Up

Notes, Callahan, supra. (C.P. Northampton Mar. 3, 2014). The

Conference Officer determined that Plaintiff should not be given

consideration for an extracurricular activities expense, as Defendant

did not agree to them. Id.   The Conference Officer also determined



                                   2
that Defendant should not be given consideration for the claimed

health insurance payments, as he failed to submit verification of the

cost thereof. Id. The Conference Officer recommended that

Defendant's support obligation for the one child be set at $552.00 per

month plus 20% on arrears. Id. Spousal support was not addressed

at the time of this conference, as Defendant had not received the

Amended Complaint and did not consent to address spousal support at

that time. Id.

      On March 3, 2014, the Honorable Paula A. Roscioli entered an

Order of Court directing Defendant to pay child support, for the

support of one child, in the amount of $662.00 per month. See Order

of Court, Callahan, supra. (C.P. Northampton Mar. 3, 2014).

Defendant's support obligation was allocated $552.00 for current

support and $110.00 for arrears. Id. The support obligation was

based upon Plaintiff's assessed monthly net income of $2,582.56 and

Defendant's net income, as determined by the DRS accountants, of

$3,074.37. Id. Arrears were set, as of March 3, 2014, at $1,454.16.

Id. On March 11, 2014, Plaintiff filed a demand for a de nova hearing

of the March 3, 2014 Order. See Demand for De Novo Hearing,

Callahan, supra. (C.P. Northampton Mar. 11, 2014).

      On April 24, 2014, a conference was held on Plaintiff's claim for

spousal support. See Conference Notes, Callahan, supra. (C.P.



                                   3
                    )                                  )


Northampton Apr. 24, 2014). Defendant did not contest spousal

support, however, based on the incomes previously established for the

child support calculations, the Conference Officer determined that

there was not a monetary basis for spousal" support. Id. On April 24,

2014, Judge Roscioli entered an Order dismissing Plaintiff's Complaint

for spousal support as the record indicated, in accordance with the

Uniform Support Guidelines, that there was no monetary basis for

spousal support. Id. The parties were directed to comply with the

Order of Court dated March 3, 2014. Id,

      On May 7, 2014, Plaintiff filed a demand for a de nova hearing of

the April 24, 2014 Order. The parties were advised that the objections

to the April 24, 2014 Order would be heard on August 25, 2014, when

the de nova hearing on the prior order was scheduled to be heard.

See Correspondence, Callahan, supra. (C.P. Northampton May 14,

2014).

      On August 25, 2014, the parties appeared before the Honorable

Michael J. Koury, Jr. for the hearings on the parties' respective

demands for de nova hearing. At that time, the parties entered into

an agreement pursuant to which, beginning October 1, 2014,

Defendant would pay 3 years and 3 months of spousal

support/alimony in the amount of $1,050.00, which would be non-

modifiable. See Notes of Transcript ("N.T."), de nova hearing, 8/25/14



                                    4
                       )                                        )


at 3:22-4: 1. Defendant was required to pay for health insurance for

Plaintiff through March 31, 2015. Id. at 4:2-3. Pursuant to the

parties' agreement, child support arrears were reset to $2,500.00 as

of August 25, 2014, and Defendant was to pay $1,200.00 per month in

child support for one child and provide health insurance for the child

through March 2015. Id. at 4:3-8. Arrears were to be paid off at the

rate of $60.00 per month. Id. at 4: 16-19. Uncovered medical

expenses were to be paid 70% by Defendant, 30% by Plaintiff. Id. at

6:3. On August 25, 2014, Judge Koury entered an Order adopting the

parties' agreement as an Order of Court. See Order, Callahan, supra.

(C.P. Northampton Aug. 25, 2014).1

       On October 29, 2014, Judge Koury entered an Order directing

that the "Order of Court dated 8/25/14 is hereby amended for child

and spousal support, the Domestic Relations Section having no

jurisdiction to enforce other provisions of agreement." See Order of

Court, Callahan, supra. (C.P. Northampton Nov. 4, 2014). The Order

also indicated that all other stipulations in the prior Order of Court,

dated March 3, 2014, remained in full force and effect. Id. On

November 6, 2014, the October 6, 2014 docket entry was amended to

read as follows:



1
  The docket entries in this matter reflect that the Order adopting the agreement of
the parties was received by DRS on September 9, 2014, and docketed on October 6,
2014.


                                          s
            And now, this 25th day of August, 2014, the
            Court hereby adopts the agreement of the
            parties as an Order of Court. Recv'd 9/9/14.
            Beginning 10/1/14 Husband will pay 3 years
            and 3 months of spousal support, which would
            convert to post divorce alimony upon the entry
            of a divorce decree in the amount of
            $1,050/month, non-modifiable. Child support
            arrears reset at $2,500 as of 10/1/14.
            Defendant to pay $1,200/month for child
            support defendant will continue to pay child
            and wife's healthcare through March 2015.
            Parties further agree as part o. the divorce
            matter husband will retain his business and will
            retain the marital home in exchange for any
            other claims other than the spousal support
            and alimony. Arrears to be paid at $60/month.
            Defendant is liable for 70% �f unreimbursed
            medical expenses.

See Order, Callahan, supra. (C.P. Northampton Nov. 6, 2014).

      On September 27, 2016, Defendant filed a Petition for

Modification seeking to decrease the support order due to having a

current decrease in income, along with an allegedly pending further

decrease in income in January 2017. See Petition for Modification,

Callahan, supra. (C.P. Northampton Sept. 27, 2016). On November 9,

2016, the parties appeared for a conference on the Petition for

Modification. See Summary of Trier of Fact, Callahan, supra. (C.P.

Northampton Nov. 9, 2016). At the time of the conference, Defendant

submitted his 2013 and 2014 personal and corporate federal income

tax returns, but failed to submit his returns for 2015. Id. The



                                   ti
                    )                                   )


Conference Officer noted that since Defendant filed the Petition for

Modification, but had failed to document his current income,

Defendant's Petition would be denied without prejudice. Id. On

November 9, 2016, Judge Roscioli entered an Order dismissing

Defendant's Petition for Modification without prejudice as a result of

Defendant's failure to adequately document his current income. See

Order of Court, Callahan, supra. (C.P. Northampton Nov. 9, 2016).

Defendant was permitted to apply fur a modification upon the filing of

his 2015 personal and corporate Federal tax returns. Id. The October

29, 2014 Order remained in full force and effect. Id.

      On November 15, 2016, Defendant filed a demand for a de nova

hearing of the November 9, 2016 Order. See Demand for De Novo

Hearing, Callahan, supra. (C.P. Northampton Nov. 15, 2016). The

parties appeared for a de nova hearing on December 7, 2016. On that

date, Judge Roscioli entered an Orc:ier remanding the case to DRS for a

conference. See Order, Callahan, supra. (C.P. Northampton Jan. 18,

2017). The Order noted that if Defendant failed to provide his 2015

tax returns, his petition would be dismissed with prejudice. Id.

      On February 2, 2017, the parties appeared for the ordered

conference. See Summary of Trier of Fact. Callahan, supra. (C.P.

Northampton Feb. 2, 2017). The Conference Officer recommended,

with the agreement of the parties, that Plaintiff continue to be



                                    7
assessed as an entry-level teacher earning $38,800 .00 per year,

resulting in an assessed monthly net income for Plaintiff of $2,363.00.

Id. Defendant submitted his 2015 personal and corporate income

taxes, and the Conference Officer determined that Defendant had a

monthly disposable income of $1,972.00. Id. The parties reported

already being divorced, and the Conference Officer requested a copy of

the parties' divorce decree as DRS had not been notified of the divorce

being finalized. Id. Thereafter, the Conference Officer received a copy

of the divorce decree, dated July 1, 2015, and the parties' Property

Settlement Agreement. See Conference Follow Up Notes, Callahan,

supra. (C.P. Northampton Feb. 21, 2017). The Conference Officer

noted that the spousal support was to be converted to alimony and

that alimony was set to terminate on January 1, 2018 as per the

parties' prior agreement. Id. The Conference Officer determined that,

considering the $1,050.00 alimony as income to Plaintiff and an

expense for Defendant, Plaintiff's assessed monthly net income was

$3,529.00 while Defendant had a monthly net income of $922.00. Id.

Utilizing those incomes, the conference office determined that there

was no basis for child support. Id.

      On March 21, 2017, Judge Roscioli entered an Order of Court

directing Defendant to pay alimony in the sum of $1,050.00 per month

in accordance with the parties' Property Settlement Agreement. See



                                      8
Order of Court, Callahan, supra. (C.P. Northampton Mar. 21, 2017).

The Order for alimony was noted to be not modifiable by Domestic

Relations, and was only modifiable by written agreement or Order of

Court in the parties' Northampton County divorce matter. Id.

Effective July 1, 2015, spousal support was converted to alimony

based on the parties' agreement . Id, Alimony was set to terminate on

January 1, 2018.   Id. The Order stated that in accordance with the

Uniform Support Guidelines, there was no monetary basis for child

support, effective September 27, 2016, when Defendant filed his

Petition for Modification. Id. An overpayment by Defendant in the

amount of $6,157.79 was remitted without prejudice. Id.

      On March 29, 2017, Plaintiff filed a demand for a de nova

hearing, and the parties were ordered to appear at a modification

hearing on April 26, 2017. The hearing was rescheduled several

times, and on May 23, 2017, the parties appeared before Judge

Roscioli for the de novo hearing on the March 21, 2017 Order.

Following a hearing on that date, the matter was continued until July

24, 2017 for depositions of the parties to be completed. See Order of

Court, Callahan, supra. (C.P. Northampton Jun. 5, 2017).

      The parties appeared before the underslgned on July 24, 2017.

On that date, we entered an Order: 1) directing Defendant to file his

2016 tax returns with DRS by August 31, 2017; 2) directing that



                                   9
depositions of the parties be completed within 60 days; and 3)

scheduling argument for the October 2017 de novo hearing list. See

Order of Court, Callahan, supra. (C.P. Northampton Jul. 24, 2017).

The argument, scheduled for October l 6, 2017, was continued at

Plaintiff's request and was rescheduled to December 18, 2017. On

December 18, 2017, the parties appeared before the undersigned, and

we entered an Order of Court continuing the case to February 14,

2018. See Order of Court, Callahan, supra. (C.P. Northampton Dec.

18, 2017). Defendant's counsel was granted 30 days to submit a

brief, and Plaintiff's counsel was given 10 days thereafter to file a

responsive brief. Id.

      The parties timely filed their briefs and submitted the transcripts

of their respective depositions, and counsel for the parties appeared

before the undersigned on February 14, 2018 for argument. On April

10, 2018, we entered the Order of Court currently on appeal, which

provides as follows:

            For the time period on [sic] September 27,
            2016 through December 31, 2017, Order is
            entered at $349.00 per month for the support
            of one (1) child, namely, Savannah Callahan,
            born September 1, 2006.

            Order takes into consideration Alimony award
            of $1,050.00 per month payable to Christina
            Callahan.

            Effective January 1, 2018, Allrnonv is hereby
            terminated.


                                    10
       )                                    )



Defendant's liability for uncovered medical
expenses is 34%.

Order is hereby modified to $592.00 per month
allocated $538.00 for the support of one (1)
child plus $54.00 to apply toward arrears
effective January 1, 2018.

Order is entered based on all parties agreed
earning capacity for Plaintiff of $38,330.00
annually as a teacher. This is an assessed
monthly gross of $3,233.00 and an assessed
monthly net of $2,663.00.

Order is entered based on Defendant's 2016
Federal Income Tax Return. Defendant has a
disposable monthly net of $2,907 .00.

In accordance with Order of Court dated March
21, 2017 overpayment to Plaintiff in the sum of
$6,157.79 is reinstated.

Defendant's request for a deviation due to
Plaintiff receiving monetary gifts from Plaintiff's
parents is denied.

Income attachment modified.

In the event health insurance coverage for
dependents on Order terminates, both parties
are responsible to provide insurance if
available at a reasonable cost.

Defendant's liability for uncovered medical
expenses is 52%.

Excess amount has been included in the Order
in the event arrears should accrue in the
future. No arrears being owed at present,
wages are attached for the basic amount of the
Order only. Upon arrears accruing, the wage
attachment will be modified without further
notice to the parties.


                        11
                   )                                    )



             Calculations appended.

Order of Court, Callahan, supra. (C.P. Northampton Apr. 10, 2018).

      On May 8, 2018, Plaintiff filed her Notice of Appeal of the April

10, 2018 Order. See Notice of Appeal,· Callahan, supra. (C.P.

Northampton May 8, 2018). On May 9, 2018, we entered an Order of

Court directing Plaintiff to file a "Statement of Errors Complained Of"

pursuant to Pa.R.A.P. No. 1925(b) within 21 days and to comply with

Pa.R.A.P. No. 1911 and Pa.R.J.A. 5000.1 through 5000.11 forthwith.

See Order of Court, Callahan, supra. (C.P. Northampton May 9, 2018).

On May 29, 2018, Plaintiff filed her "Concise Statement of Matters

Complained of on Appeal Pursuant to Pa.R..A.P. 1925(b)" (hereinafter

"Concise Statement"). Plaintiff raises one (1) issue on appeal,

averring that "[t]he Trial Court committed an error of law and/or

abused its discretion in calculating Defendant's disposable income

based upon Federally taxed income calculated in his 2016 Federal

income tax return rather than actual cash flow." See Concise

Statement, Callahan, supra. (C.P. Northampton May 29, 2018).

Discussion

      It is respectfully submitted that Plaintiff's appeal is without merit

and should be dismissed. Contrary to Plaintiff's assertion, it was not

an error of law or an abuse of discretion to calculate Defendant's

disposable income based upon Federally taxed income as calculated in


                                    12
                    )                                   )


his 2016 Federal income tax return for purposes of determining his

support obligation. It is respectfully suggested that Defendant's 2016

corporate and personal Federal taxes accurately reflect Defendant's

income for the calculation of his child support obligation.

      Scope and standard of review

      It is well established that "[i]n reviewing an order entered in a

support proceeding, an appellate court has a limited scope of review."

Kotzbauer v. Kotzbauer, 937 A.2d 487, 489 (Pa. Super. 2007)

(quoting Commonwealth ex rel. Cann v. Cann, 418 A.2d 403, 404-405

(Pa. Super. 1980)). "The trial court possesses wide discretion as to

the proper amount of child support: and a reviewing court will not

interfere with the determination of the court below unless there has

been a clear abuse of dlscretion." Id. In revlewinq a child support

order, "[t]he function of the appellate court is to determine whether

there is sufficient evidence to sustain the order of the hearing judge."

Id.

"On appeal, a trial court's child support order will not be disturbed

unless there is insufficient evidence to sustain it or the court abused its

discretion in fashioning the award." Haley v. Haley, 549 A. 2d 1316,

1317 (Pa. Super. 1988) (quoting Fee v. Fee, 496 A.2d 793, 794 (Pa.

Super. 1985)). A finding of abuse will be made only upon a showing

of clear and convincing evidence. Id. (citing Koller v. Koller, 481 A.2d



                                    13
                    )                                     )


1218 (Pa. Super. 1984)). A finding of abuse of discretion should not

be made lightly. Id., 549 A.2d at 1317 (citing Hartley v. Hartley, 528

A.2d 233 (Pa. Super. 1987)); see also, Shindel v. Leedom, 504 A.2d

353 (Pa. Super. 1986). "An abuse of discretion is not merely an error

of judgment; rather, it occurs when the law is overridden or

misapplied, or the judgment exercised is manifestly unreasonable or

the result of partiality, bias, or ill will." Kotzbauer, supra. (citing In the

Interest of M.S.K., 936 A.2d 103 (Pa. Supr!r. 2007)).

      Plaintiff's appeal is without merit.

      As set forth above, Plaintiff has raised a single issue as to our

April 10, 2018 Order, specifically alleging that we committed an error

of law and/or abused our discretion in calculating Defendant's

disposable income based upon Federally taxed income calculated in his

2016 Federal income tax return rather than "actual cash flow." It is

respectfully submitted that it was not an error of law or an abuse of

discretion to use the amounts set forth in Defendant's 2016 personal

and business tax returns to calculate his Income for child support

purposes as the tax returns accurately reflect Defendant's disposable

income.

      Plaintiff argues that Defendant's personal and business tax

returns do not accurately reflect Defendant's cash flow for support

purposes. See Plaintiff's Reply Brief, Callahan, supra. (C.P.



                                      J /l.
                         )                                           )


Northampton Jan. 29, 2018); Plaintiff's Brief at p. 4-5, Callahan,

supra. (C.P. Northampton Dec. 18, 2017). Plaintiff asserts that

"[w]hen determining a support obligor's disposable income Federally

taxed income is not the measure, rather cash flow, Labar v. Labar, 731

A.2d 1252 (Pa. 1999)." Plaintiff's Brief at p. 4, Callahan, supra. (C.P.

Northampton Dec. 18, 2017). Plaintiff further notes that "[d]eductions

allowed under Federal tax law which do not represent actual reductions

in personal income for a support obligor will not be allowed in the

disposable income calculation." Id. (citing Labar, supra). Plaintiff also

avers that "[i]t is actual available financial resources of the payor that

must be considered not the often fictional financial picture that

emerges after taking into account tax considerations." Id. (citing

Calabrese v. Calabrese, 682 A.2d 393 (Pa. Super. 1996)). Plaintiff's

arguments are not persuasive based upon the record in this matter.

       As noted above, the transcripts of the parties' depositions were

timely filed, along with their respective briefs. 2 Defendant was

deposed on October 2, 2017. See Notes of Transcript ("N.T."),

Depositions of James Callahan & Barbara O'Dowd, Oct. 2, 2017,

Callahan, supra. (C.P. Northampton Dec. 13, 2017).3 In the course of


2
 Plaintiff filed her initial brief, along with the transcripts of the parties' depositions
on December 18, 2017. Defendant filed his Brief Upon De Novo Review on January
17, 2018. Plaintiff filed her reply brief on January 29, 2018.
3Plaintiff was also deposed on October 2, 2017, and the transcript of her deposition
was filed as well. Plaintiff's testimony at her deposition did not address the issue


                                             15
his deposition, Defendant testified that he is the owner/operator of

Callahan Agency, Inc., located in Stockertown, Pa. and that he has

owned and operated the agency since January 1, 2008. See N.T.,

Depositions of James Callahan & Barbara O'Dowd, Oct. 2, 2017 at

4: 19-5:3. Defendant identified a 2016 Federal tax return for Callahan

Agency, Inc. that was marked as Plaintiff's Exhibit 3 and a 2016

Federal tax return for James Callahan that was marked as Plaintiff's

Exhibit 4. Id. at 5: 13-18. Following the identification of various

exhibits, counsel for Plaintiff temporarily concluded Defendant's

deposition to depose his paralegal reqardinq the copying and

segregation of various documents produced by Defendant. Id. at 6:6-

8: 19. Defendant's paralegal identified Plaintiff's Exhibits 14 and 15 as

the documents produced by Defendant to Plaintiff's counsel, along with

a series of checks written by Defendant that were also produced in

discovery. Id.

       Upon the resumption of Defendant's deposition, Defendant

identified several "attachments" to Exhibit 14 that represented his

total income for 2016. Id. at 10:8-11:11. Defendant then made it

clear that all of the income identified in Exhlblt 14 was included in his

2016 personal and corporate Federal tax returns. Id. at 11: 12-16.




raised on appeal, and no reference to her testimony at the deposition is necessary to
address the single alleged error in this matter.


                                         16
Defendant identified disbursements to several sales producers at the

agency and the agency's secretary/services team, totaling $23,027.00.

Id. at 11: 17-12: 20. Defendant identified expenses for the agency,

including the following: interest totaling $3,460 .00 (Id. at 12: 21-25),

a copier lease in the amount of $1,272.00 (Id. at 13:23-14:9), rent in

the amount of $9,600.00 (Id. at 14:10-19), maintenance costs totaling

$424.00 (Id. at 14: 20-15: 15: 9), insurance totaling $1,200.00 (Id. at

15:10-16), utility payments totaling $1,93}.19 (Id. at 15:17-18:1), a

car lease in the amount of $6,054.00 (Id. at 18:2-7), costs for a

business phone and data totaling $662.00 (Id. at 18:8-20: 11), an

AT&T bill in the amount of $1,960.14 (Id. at 20: 12-23: 16), postage

costs of $634.47 (Id. at 23: 7-18), office supplies costing $591.00 (Id.

at 23: 19-23), and miscellaneous expenses totaling $6 78.12 (Id. at

23:24-29:4).

      Regarding the interest reflected on Attachment H to Exhibit 14,

Defendant testified that above and beyond the amounts set forth in

Attachment H, there was also   a loan payment to Nationwide Insurance
not reflected on the documents. Id. at 12:24-13:1. Defendant

testified that the loan payment totaled $943.83 twice per month. Id.

at 13: 2-8. Defendant indicated that he had been paying that amount

since he purchased the business approximately nine (9) years ago.

Id. at 13:9-12.



                                    st
      Upon review of Defendant's personal and corporate Federal tax

returns for 2016, each of the above expenses is reflected in the

appropriate entry on the tax return form. Id. at Plaintiff's Exhibit 3

and 4. As noted in Defendant's Brief Upon De Novo Review, the loan

repayment to Nationwide insurance of $1,887 .66 per month, is set

forth in the tax return, along with the "costs of goods sold" totaling

$123,310.00 which includes the commissions and premiums paid to

Nationwide insurance and other costs of sale. Id.; Defendant's Brief

Upon De Novo Review at p. 3-4, Callahan, supra. (C.P. Northampton

Jan. 17, 2018). Defendant's corporate tax return reflects Defendant's

gross receipts of sales totaling $210, 174 and the costs of goods

totaling $123,310.00, for a total income of $86,864.00. See N.T.,

Depositions of James Callahan & Barbara O'Dowd, Oct. 2, 2017 at

Plaintiff's Exhibit 3. Deductions included in the corporate return

include repairs and maintenance ($2,302.00), rents ($9,450.00), taxes

and licenses ($1,312.00), interest ($3,460.00), advertising

($1,154.00) and "other deductior.s" totalinq $69,014.00. Id. The

"other deductions" are reflected on Statern12nt 1, attached to the

corporate return. Id. These "other deductions" include auto expenses,

equipment rentals, insurance expenses, office supplies, postage,

professional fees, professional publications, seminars, supplies,

telephone expenses, travel and utilities. See id. at Plaintiff's Exhibit 3.



                                     18
      As was noted in Plaintiff's Brief, "[d]eductions allowed under

Federal tax law which do not repres�nt act!Jal reductions in personal

income of a support obliqor will not be allowed in the disposable

income calculation. Labar [v. Labar, 731 A.2d 1252 (Pa. 1999)."

Plaintiff's Brief at p. 4, Callahan, supra. (C.P. Northampton Dec. 18,

2017) (emphasis added). In Cunningham v. Cunningham, 548 A.2d

611 (Pa. Super. 1988), the Superior Court stated as follows:

            It is well established that depreciation and
            depletion expenses, permitted under federal
            income tax law without proof of actual loss, will
            not automatically be deducted from gross
            income for purposes of determining awards of
            alimony and equitable distribution. In
            determining the financial responsibilities of the
            parties to a dissolving marriage, the court
            looks to the actual disposable income of the
            parties ... Depreciation and depletion
            expenses should be deducted from gross
            income only where they reflect an actual
            reduction in the personal income of the party_
            claiming the deductions, such as where, e.g.,
            he or she actually expends funds to replace
            worn equipment or purchase new reserves.

Cunningham v. Cunningham, 548 A.2d 611, 612-13 (Pa. Super. 1988)

(emphasis added).

      Contrary to Plaintiff's assertions, each of the deductions claimed

by Defendant in his corporate and personal tax returns for 2016 did, in

fact, reflect an actual reduction in Defendant's personal income.

Therefore, each of the deductions discussed herein were appropriately

considered in determining Defendant's disposable income for child


                                    19
support calculation purposes, and it was not an error of law or abuse

of discretion to utilize the tax returns. See Cunningham, supra.

      After review of Defendant's 2016 corporate and personal Federal

tax returns, it was determined that Defendant has a disposable

monthly net income of $2,907 .00. That amount was then properly

utilized in calculating Defendant's support obligation in accordance

with the guidelines and formula set forth in Pa.R.C.P. No. 1910.16-1

through 1910 .16-4. In accordance with that calculation, Defendant

was ordered to pay $592.00 per month, allocated $538.00 for the

support of one child plus $54.00 towards arrears. See Order of Court,

Callahan, supra. (C.P. Northampton Apr. 10, 2018).

Conclusion

      Upon a full review of the record in the instant matter, it is clear

that Plaintiff's appeal is without merit. Defendant's 2016 Federal tax

returns included deductions that reflected actual reductions in

Defendant's income. It was not an error of law or an abuse of

discretion to calculate Defendant's disposable income based upon the

figures contained in his 2016 Federal tax returns, as those tax returns

accurately reflected Defendant's actual cash flow. Based upon the

above, it is respectfully suggested that Plaintiff's appeal is without

merit and should be denied.




                                     20
�s1 � wJ
 BY THF. COURT



��i         SLETVOLD, J.




21
