J-A26034-14


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

J.E.E.                                              IN THE SUPERIOR COURT OF
                                                          PENNSYLVANIA
                          Appellee

                     v.

M.P.E.

                          Appellant                      No. 2051 MDA 2013


                Appeal from the Order Entered October 11, 2013
                 In the Court of Common Pleas of York County
                 Domestic Relations at No(s): 00386-SA-2013

-------------------------------------------------------------------------------------

J.E.E.                                              IN THE SUPERIOR COURT OF
                                                          PENNSYLVANIA
                          Appellee

                     v.

M.P.E.

                          Appellant                       No. 137 MDA 2014


               Appeal from the Order Entered December 20, 2013
                 In the Court of Common Pleas of York County
                 Domestic Relations at No(s): 00386-SA-2013

BEFORE: BOWES, J., MUNDY, J., and JENKINS, J.

MEMORANDUM BY JENKINS, J.:                                 FILED JUNE 16, 2015

         In these consolidated appeals, M.P.E. (“Husband”) challenges the

amount of child support that the trial court ordered him to pay J.E.E.

(“Wife”). The most intricate issue is whether income that Husband earned in

2011, his highest earnings year, is available for support calculations.
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Husband argues that his business was unusually profitable in 2011, and that

he cannot achieve this level of earnings consistently. He also insists that his

2011 earnings were offset by construction costs for a new building to house

his business.     The trial court rejected Husband’s claims and included his

2011 earnings within its support calculations.   Based on our review of the

record and relevant decisions, we conclude that the trial court appropriately

exercised its discretion. For this reason and other reasons provided below,

we affirm.

       Husband and Wife married in 1992 and have two children aged 12 and

8.   In 2011, Husband and Wife separated, and in 2012, Wife filed for

divorce. In early 2013, Wife filed a complaint for support and a petition for

alimony pendente lite against Husband. On September 19, 2013, the trial

court held a special hearing on both of Wife’s actions. 1 In a memorandum
____________________________________________


1
  The certified record does not include the transcript from the one-day
hearing on September 19, 2013. As the appellant, Husband has the duty to
ensure that the record includes all transcripts necessary for appellate review.
Pa.R.A.P. 1911. If the appellant fails to carry out this duty, this Court “may
take such action as it deems appropriate, which may include dismissal of the
appeal.” Pa.R.A.P. 1911(d).

We conclude that dismissal of this appeal is not appropriate. Husband
included the transcript in his reproduced record, and the transcript appears
complete. Wife does not object to the transcript’s absence from the certified
record or complain that the transcript in the reproduced record is
incomplete. Therefore, we will augment the certified record on our own
initiative to include the transcript of the September 19, 2013 hearing.
Pa.R.A.P. 1926(b)(1) (appellate court may, on its own initiative, correct an
omission from the record at any time).




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and order docketed on October 11, 2013, the trial court directed the hearing

officer to calculate a new support obligation based on analysis of the parties’

2010, 2011 and 2012 individual tax and Husband’s S Corporation tax

returns.   On November 12, 2013, Husband filed a notice of appeal of the

October 11, 2013 order.          This Court docketed Husband’s appeal at 2051

MDA 2013.2

       In an order docketed on December 20, 2013, the trial court

determined that Husband’s monthly net income was $9,008.67 and Wife’s

monthly net income was $3,001.78, resulting in a combined monthly net

income of $12,010.45.         The trial court directed Husband to make monthly

payments of $2,073.90 in child support, $1,179.90 in alimony pendente lite

and $296.20 in arrears.3, 4

____________________________________________


2
 On November 18, 2013, the trial court directed Husband to file a Pa.R.A.P.
1925(b) statement of matters complained of on appeal. On December 9,
2013, Husband filed a timely Pa.R.A.P. 1925(b) statement. On January 17,
2014, the trial court issued a Pa.R.A.P. 1925(a) opinion.
3
  None of the issues on appeal involve the amount of alimony pendente lite
or arrears.
4
  The trial court stated that Husband’s 2011 income (his best earnings year)
must be included in the calculation of Husband’s monthly net income and his
monthly child support payment. Other than its decision about Husband’s
2011 income, the trial court did not describe its methodology in determining
Husband’s and Wife’s monthly net income or Husband’s monthly child
support payment. We do not consider this lack of further explanation to be
significant, because Husband’s 2011 income is the only methodology-related
issue that Husband preserved for appeal.




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        In a second order docketed on December 20, 2013, the trial court set

Husband’s arrears at “$17,710.84 as of today.”          On January 21, 2014,

Husband filed a notice of appeal from “the December 20, 2013 order.” 5 This

Court docketed Husband’s second appeal at 137 MDA 2014.             On February

19, 2014, this Court consolidated Husband’s two appeals sua sponte.6

        Our standard of review over support orders is for abuse of discretion:

              [T]his 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.

W.A.M. v. S.P.C., 95 A.3d 349, 352 (Pa.Super.2014). “[T]he assessment of

the credibility of witnesses is within the sole province of the trial court.”

Calabrese v. Calabrese, 682 A.2d 393, 395 (Pa.Super.1996), rejected on
____________________________________________


5
   Husband’s notice of appeal does not specify which order docketed on
December 20, 2013 is the subject of his appeal. This ambiguity does not
affect our jurisdiction over this appeal, because “a timely notice of appeal
triggers the jurisdiction of the appellate court, notwithstanding whether the
notice of appeal is otherwise defective.” Commonwealth v. Williams, 106
A.3d 583, 587 (Pa.Super.2014). Moreover, review of Husband’s Pa.R.A.P.
1925 statement indicates that his appeal pertains to the child support
component of the first order docketed on December 20, 2013.
6
    The trial court did not issue a second Pa.R.A.P. 1925(a) opinion.



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other grounds by Mascaro v. Mascaro, 803 A.2d 1186, 1194 (Pa.2002).

In addition, the fact-finder is entitled to weigh the evidence presented and

assess its credibility. Calabrese, supra.

      Guided by these standards, we turn to the evidence adduced during

the evidentiary hearing on Wife’s child support petition. Husband is the sole

owner of Eden Tool Company (“Eden Tool”) and the sole shareholder in Eden

Properties, LLC (“Eden Properties”). N.T., 9/19/13, p. 4. Wife is a guarantor

on loans and lines of credit of Eden Tool, and the marital residence is

collateral for these loans and credit lines. Id., p. 15.

      Prior    to   the   parties’   separation,   Eden   Properties   had   begun

construction of a new building for Eden Tool and had obtained financing from

the bank for construction purposes.        Id., pp. 13-14.    Husband wanted to

construct a new building due to Eden Tool’s increase in business. Id., pp. 6,

12, 67.       Both parties guaranteed the loan underlying the construction

mortgage, and the marital residence served as collateral for the loan. Id.,

pp. 15-16.      Wife’s enthusiasm for Husband’s business dimmed when she

discovered that Husband was having an extramarital affair. Id., p. 70.

      The parties disputed whether Husband’s 2011 business income should

be considered in the calculation of support. Eden Tools’ 2011 income was

greater than any other surrounding years. Husband claims that the higher

2011 income was somewhat of an anomaly: he convinced his 5 employees

to put in a lot of overtime in 2011 to make the business grow, but they could


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not do that amount of work every year.        Id., pp. 92-93.   Husband also

claimed that the size of his 2011 income was due in part to accounting; his

accountant maximized the figures so that he could convince the bank to

provide financing for the new building. Id., p. 91. He also claimed that he

cannot make 2011-level income again because Eden Tools lost a major

customer. Id., pp. 6, 93-94. Husband also claimed it would be unfair to

include 2011 income in the support calculations, because any increase in his

income was offset by construction expenses for the new facility, which

remains unfinished. Id., p. 6.

     Husband insisted that Wife verbally agreed to accept rental income

from Eden Tool in lieu of support.      Wife claims she never made such an

agreement but only agreed to discuss this arrangement with her attorney.

Id., pp. 27-28.   Wife testified that she declined Husband’s proposal after

discussing it with counsel.      Id.   There was no written agreement to

substitute rental income for support. Id.

     The trial court ruled that Wife never accepted Husband’s proposal to

substitute rental income for support.     The court credited Wife’s assertion

that she discussed this concept with counsel and then turned down the

proposal. Trial Court Opinion, 10/11/13, p. 3.

     The trial court also ruled that Husband’s 2011 income should be

considered for support purposes.       Citing Lehman v. Lehman, 636 A.2d

1172 (Pa.Super.1994), the court held that Husband’s decision to invest


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funds in a new facility for Eden Tools did not render these funds unavailable

for support purposes.    Trial Court Opinion, 10/11/13, pp. 3-4.    Applying

Lehman, the court determined the income was available for support

regardless of whether Husband made the investment decision prior to or

after separation or whether both parties were signatories to a loan or

promissory note.

      Husband raises three issues on appeal:

            THE TRIAL COURT ABUSED ITS DISCRETION WHEN
            IT FAILED TO CONSIDER AND APPLY THE DOCTRINE
            OF PROMISSORY ESTOPPEL TO THE FACTS AS
            ADDUCED BY THE PARTIES’ TESTIMONY.

            THE TRIAL COURT ABUSED ITS DISCRETION WHEN
            DETERMINING HUSBAND'S INCOME FOR SUPPORT
            BY   FAILING    TO  CALCULATE    HUSBAND'S
            DISPOSABLE INCOME ON A NET CASH FLOW BASIS,
            AND BY NOT REDUCING FROM HUSBAND'S INCOME
            FROM    HIS   CORPORATION,   ALL   AMOUNTS
            BORROWED, OR PAID FROM ONGOING OPERATIONS
            FOR   CAPITAL  EXPENDITURES   WHICH   WERE
            NECESSARY FOR THE CONTINUED OPERATIONS AND
            SMOOTH RUNNING OF THE BUSINESS.

            THE TRIAL COURT ABUSED ITS DISCRETION IN
            ATTRIBUTING ANY RENTAL REAL ESTATE INCOME
            TO HUSBAND AS INCOME AVAILABLE FOR SUPPORT,
            WHEN THE UNREFUTED TESTIMONY OF RECORD
            WAS THAT FOR THE ONE RENTAL PROPERTY THAT
            PRODUCED A POSITIVE CASH FLOW, ALL RENT
            AFTER SEPARATION WAS PAID NOT TO HUSBAND,
            BUT RATHER TO WIFE.

Brief For Appellant, pp. 13, 16, 18.

      Husband first argues that Wife is not entitled to support under the

doctrine of promissory estoppel, because she agreed to accept rental income

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J-A26034-14


instead of child support, and Husband relied on this promise to his

detriment. To prove promissory estoppel, Husband must demonstrate: (1)

the promisor (Wife) made a promise that she should have reasonably

expected would induce action or forbearance on the part of the promisee

(Husband); (2) the promisee actually took action or refrained from taking

action in reliance on the promise; and (3) injustice can be avoided only by

enforcing the promise. Crouse v. Cyclops Industries, 745 A.2d 606, 611

(Pa.2000). Husband’s argument runs aground because the trial court found

as fact that Wife did not agree to accept rental income in lieu of support.

While she considered Husband’s proposal to substitute rental income for

support, she ultimately turned it down. Because we defer to the trial court’s

findings of fact that are supported by the record, Calabrese, supra, 682

A.2d at 395, Husband cannot prove element (1) of promissory estoppel, a

promise by the promisor.    Thus, Husband cannot obtain relief under the

doctrine of promissory estoppel.

     Husband’s second argument is that the trial court erred by including

Husband’s 2011 income in its support calculations, because Husband cannot

repeat 2011’s unusually large profits, and 2011 earnings were substantially

reduced by construction expenses on a new building for Husband’s company.

     A short sketch of the rules governing child support is helpful.

“Generally, the amount of support to be awarded is based upon the parties'

monthly net income.”    Pa.R.Civ.P. 1910.16-2.   The court determines each


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J-A26034-14


spouse’s “monthly net income” by subtracting permissible items from each

spouse’s “monthly gross income”.               Pa.R.Civ.P. 1910.16-2(c)-(d).    Then,

when the parties’ combined monthly net income is less than $30,000, as it is

here, the court should:

       (1)    calculate the amounts spent on children in intact families using

              the schedule in Pa.R.Civ.P. 1910.16-3;

       (2)    calculate the obligor’s (Husband’s) share of the basic support

              obligation using the formula in Part I of Pa.R.Civ.P. 1910.16-4;

       (3)    allocate    additional    expenses     between    the   parties   under

              Pa.R.Civ.P. 1910.16-6;7 and

       (4)    in the court’s discretion, make deviations from the amount of

              support based on factors outlined in Pa.R.Civ.P. 1910.16-5,

              including but not limited to “unusual needs and unusual fixed

              obligations” and “other relevant and appropriate factors.”

       Husband argues that the trial court performed the calculations in steps

(1) and (2) incorrectly by including Husband’s 2011 income in its

calculations.    Husband contends, in so many words, that Husband’s 2011

income is not capable of repetition and does not reflect his true earning

capacity. Based on our careful analysis of Labar v. Labar, 731 A.2d 1252

____________________________________________


7
  None of these additional expenses have any relevance to the present
appeal.




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(Pa.1999), and several decisions from this Court,8 we conclude that the trial

court’s decision was an appropriate exercise of its discretion.

       In Labar, the husband owned a bowling alley and had to make

significant capital expenditures to convert an antiquated manual scoring

system into a modern, computerized scoring system, including pinsetters.

The husband argued that the court should deduct these expenses from his

income in its calculation of support, because these expenses were

"necessary for the continued operation and smooth running of the business."

Id., 731 A.2d at 1257.

       The Supreme Court agreed with the husband.              The Court instructed

that when the trial court determines the financial responsibilities of parties to

a dissolving marriage, the trial court must look to the actual disposable

income of the parties.         Id. at 1255.        Such “income must reflect actual

available financial resources and not the oft-time fictional financial picture”

created by the application of federal tax laws. Id. The owner of a closely

held corporation cannot avoid his support obligation by sheltering income

that should be available for support by manipulating salary, perquisites,

corporate expenditures and/or corporate distribution amounts.              Id.   In

situations where the individual with the support obligation is able to control

the retention or disbursement of funds by the corporation, he still will bear
____________________________________________


8
 See Kraisinger v. Kraisinger, 928 A.3d 333 (Pa.Super.2007); McAuliffe
v. McAuliffe, 613 A.2d 20, 23 (Pa.Super.1993); Lehman, supra.



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the burden of proving that such actions were “necessary to maintain or

preserve” the business.         Id.    On the other hand, if the individual can

demonstrate that an expense is "necessary for the continued operation and

smooth running of the business," the court should deduct this expense from

gross income to arrive at net income for support purposes.                      Id.   The

husband’s installation of a computerized scoring system in the bowling alley

was deductible from gross income, since it was necessary to the continued

operation of the bowling alley.          Without this improvement, the business

could not have remained competitive with other bowling alleys. Id. at 1258.

      Kraisinger provides another example of a necessary business

expense that is deductible from gross income for purposes of support

calculations.   The      wife   in     Kraisinger     argued     that    the     husband

underestimated his income for support purposes by wrongfully claiming real

estate   depreciation.      The       husband     responded    that   his     depreciation

deductions “were properly not considered income as they were capital

expenditures used in the expansion of his [dental] business.” Id., 928 A.2d

at 344. Relying on Labar, the hearing officer concluded that it was proper

to deduct depreciation expenses from the husband’s income. The trial court

agreed with the hearing officer and concluded that “the depreciation

deductions were for actual cash outlays and the replacement of worn

equipment[,] … not for the depreciation of real estate.”                Id.    This Court

affirmed, reasoning as follows:


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J-A26034-14


              We have reviewed wife's arguments and first note
              that wife did not establish that the depreciation was
              for real estate as opposed to equipment. She did not
              cite to the record on this issue and we will not do her
              work for her. Rather, as the hearing officer noted
              and wife fails to establish otherwise, husband's
              uncontradicted testimony established that the
              depreciation was on equipment. … In addition, we
              note that the hearing officer's decision was largely
              based upon a credibility determination that the
              purchases of the items were necessary business-
              related expenses and were not taken to avoid
              distributions to husband. Wife disputes this, but we
              must remain cognizant that a hearing officer's
              credibility determination must be accorded great
              weight. … For these reasons, we find wife has failed
              to establish her entitlement to relief on this issue.

Id. at 344-45.

     While Labar and Kraisinger permit deduction of expenses from the

calculation of income that are essential to keep the business competitive,

non-essential expenses that merely help the business grow are not

deductible.    For example, in McAuliffe, this Court rejected the husband’s

argument that his increased expenditures for business equipment (from

$66,000 in 1989 to $201,000 in 1990) were deductible. We reasoned that

he made these expenditures for "new reserves" and to expand the business

rather than to continue its smooth operation and running. McAuliffe, 613

A.2d at 22.       We suggested that the sudden increase in expenditures

represented the husband’s attempt to dodge his support obligations.     Id.

(“to allow husband to shield substantial income of his business from

consideration in determining his support obligation without more evidence as



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J-A26034-14


to a legitimate need to do so would allow spouses with support obligations to

evade their obligations by unilaterally reducing their income. This is

obviously impermissible under Pennsylvania law”).

       In the present case, Husband’s decision to spend capital on a new

building was discretionary (McAuliffe) instead of mandatory (Labar and

Kraisinger), because the purpose of the new building was to expand

Husband’s business instead of preventing its demise. Proof that the decision

to make these expenditures was discretionary instead of necessary arises

from the fact that the building was never completed, yet the company

remains in good shape today.9            Husband did not have to build the new

building in order for his business to survive.

       Husband argues that he decided to construct a new building before

separating from Wife; that Wife initially supported this decision and

guaranteed the loan for construction expenses; and that once he and Wife

separated, it was too late for him to back out, because the bank had already

advanced the loan, and it had to be repaid. None of this overrides the fact




____________________________________________


9
  Gross revenues for the business were $1,302,136.00 in 2011, $828,375.00
for 2012, and $500,000 for the first six months of 2013. N.T., 9/19/13, pp.
6, 61.




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that construction of the new building was discretionary, rather than an act

that was necessary to keep Husband’s business from foundering.10

       Lehman,       supra,      further    confirms   that   Wife’s   pre-separation

acceptance of the construction project does not entitle Husband to deduct

construction expenses from his support obligations.            In Lehman, several

years before separation, the husband decided to buy two businesses, and

both spouses signed promissory notes for loans to fund the purchase. Even

though the wife agreed to the purchase, this Court held that the husband

could not deduct loan payments from his support obligations.              Just as the

husband in Lehman could not deduct pre-separation obligations, neither can

Husband do so here. Lehman is consistent with the principle that Labar,

Kraisinger and McAuliffe illustrate in greater detail: a discretionary

decision to expand one’s business is not a valid excuse for reducing support

obligations.11


____________________________________________


10
   Husband’s counsel stated during oral argument that it was necessary to
construct a new building because Husband had been operating the business
in a garage attached to Wife’s house, a violation of local zoning codes. We
do not see any evidence of this point in the record (and even if there was
such evidence, the trial court was free to disregard it in its role as finder of
fact).
11
   Husband also tried to explain away 2011’s large earnings as the product
of an unusually large amount of overtime work by his employees that they
cannot replicate every year. The trial court properly rejected this argument.
As the sole proprietor of his business, Husband has the authority to demand
the same amount of overtime each year or to find additional employees for
(Footnote Continued Next Page)


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        In his final argument, Husband complains that the trial court attributed

rental real estate income to Husband in its support calculations even though

Husband previously paid rental income directly to Wife.            Husband waived

this issue by failing to raise it in his Pa.R.A.P. 1925(b) statement. Madrid v.

Alpine Mountain Corp., 24 A.3d 380, 382 (Pa.Super.2011) (appellant’s

failure to include issue in Rule 1925(b) statement waives that issue for

purposes of appeal).

        Even if Husband preserved this issue, the trial court’s decision to

attribute rental real estate income was appropriate.             Husband requests

exclusion of rental income from the calculation of monthly gross income

under     Pa.R.Civ.P.     1910.16-2.       Pa.R.Civ.P.   1910.16-2(a)(2)   provides,

however, that gross income includes “net income from business or dealings

in property”.    Under this rule, rental income clearly is part of Husband’s

gross income.      No other rule provides any ground for excluding rental

income from support calculations.

        Notably, Husband only paid rental income to Wife before she filed for

support but not afterward.           Because he has continued to receive rental

income after Wife filed for support but no longer pays it directly to Wife, this

income constitutes gross income under Rule 1910.16-2(a)(2).

        For these reasons, we affirm the trial court’s order.
                       _______________________
(Footnote Continued)

overtime work, but he simply finds it inconvenient to demand a 2011 level of
effort from himself or his employees.



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     Order affirmed. Record modified to include transcript from evidentiary

hearing on September 19, 2013.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 6/16/2015




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