J-A07038-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37


P.J.,                                         : IN THE SUPERIOR COURT OF
                                              :       PENNSYLVANIA
                  Appellee                    :
                                              :
                                              :
                     v.                       :
                                              :
E.J.,                                         :
                                              :
                 Appellant                    :
                                              : No. 1455 WDA 2016

               Appeal from the Order Entered August 31, 2016
                 in the Court of Common Pleas of Erie County,
        Domestic Relations at No(s): 201600486/ PACES No. 292115871

BEFORE: OLSON, STABILE, and STRASSBURGER,* JJ.

MEMORANDUM BY STRASSBURGER, J.:                       FILED JUNE 16, 2017

        E.J. (Father) appeals from the trial court’s August 31, 2016 order

establishing child support for his minor child J.J. Upon review, we affirm in

part, vacate in part, and remand for proceedings consistent with this

memorandum.

        The trial court summarized the pertinent background as follows:

              On April 12, 2016, [P.J. (Mother)] filed a complaint for
        support requesting child support and spousal support. Following
        a support conference, a May 11, 2016 interim order of court
        [was] issued setting Mother’s monthly net income at $2,103.42,
        Father’s monthly net income at $2,702.04 and establishing a
        monthly child support obligation of $670.11, plus arrears. As
        provided in the May 11, 2016 summary of trier of fact, “[Father]
        was held at an earning capability as a self-employed roofer at
        $44,810.00/year based on the U.S. Bureau of Labor [] Statistics
        May 2014 Wage Estimates for Erie.” The summary further
        provides: “[Mother] was held at [an earning] capability of



* Retired Senior Judge assigned to the Superior Court.
J-A07038-17


        $30,893.79/year based on the 2015 income.”           Father filed a
        demand for [a] court hearing.

              T[he trial court], following an August 31, 2016 de novo
        hearing, issued its August 31, 2016 order making the May 11,
        2016 interim order final.

Trial   Court    Opinion,   11/18/2016,   at   1-2   (unnecessary   capitalization

omitted).

        Father timely filed a notice of appeal from the August 31 st order, and

both Father and the trial court complied with Pa.R.A.P. 1925. He raises the

following issues on appeal, which we have reordered for ease of disposition.

        I.     Whether the [trial court] committed an error of law and/or
               abused its discretion in assessing [Mother] with an earning
               capacity based upon her 2015 income, where she worked
               less than the full year in 2015, she was terminated for
               cause in 2016, she testified as to the hourly rates she
               earned as a licensed nurse, and there was no competent
               evidence that [Mother] is unable to be employed in a full–
               time capacity.

        II.    Whether the [trial court] committed an error of law and/or
               abused its discretion in assessing an earning capacity to
               [Father], as there was insufficient evidence to support the
               assessment of an earning capacity under the factors of
               Pa.R.C.P. 1910.16-2(d)(4) as well as to support the
               earning capacity assessed where [Father] has operated a
               roofing business for over fifteen years and provided
               evidence of his income for the previous six years.

        III.   Whether the [trial court] committed an error of law and/or
               abused its discretion in failing to state the reasons for the
               assessment of an earning capacity to [Father] in writing or
               on the record in accordance with Pa.R.C.P. 1910.16-
               2(d)(4).

Father’s Brief at 2 (suggested answers omitted).




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      We set forth our well-settled standard of review and applicable

principles of law with respect to a support order.

      The amount of a support order is largely within the discretion of
      the trial court, whose judgment should not be disturbed on
      appeal absent a clear abuse of discretion. An abuse of discretion
      is not merely an error of judgment, but rather a misapplication
      of the law or an unreasonable exercise of judgment. A finding
      that the trial court abused its discretion must rest upon a
      showing by clear and convincing evidence, and the trial court will
      be upheld on any valid ground. For our purposes, an abuse of
      discretion requires proof of more than a mere error of 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.

Portugal v. Portugal, 798 A.2d 246, 249-50 (Pa. Super. 2002) (internal

quotation marks and citations omitted).

      [A] person’s support obligation is determined primarily by the
      parties’ actual financial resources and their earning capacit[ies].
      Although a person’s actual earnings usually reflect his earning
      capacity, where there is a divergence, the obligation is
      determined more by earning capacity than actual earnings.
      Earning capacity is defined as the amount that a person
      realistically could earn under the circumstances, considering his
      age, health, mental and physical condition, training, and
      earnings history.

Woskob v. Woskob, 843 A.2d 1247, 1251 (Pa. Super. 2004) (internal

citations omitted).

      We first address Father’s claim that the trial court erred in assessing

Mother’s earning capacity. Specifically, Father avers that

      [t]he [trial court] appears to assess Mother with less than full-
      time earnings based on prior medical leaves and resulting lower
      earnings over the past three years. ... Mother’s education,
      training, and work experience, that of a licensed, registered
      nurse for almost 20 years, along with the lack of evidence of any


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J-A07038-17


     current medical issue restricting Mother’s ability to work full
     time, support an income assessment of a full-time licensed,
     registered nurse.

Father’s Brief at 24.   The trial court offered the following explanation to

support its findings that Mother’s earning capacity was assessed accurately

using Mother’s 2015 income.

          At the time of the parties’ April 1, 2016 separation,
     Mother, who had worked as a licensed registered nurse for
     seventeen years, was unemployed. Mother was, on February
     26, 2016, terminated from her position with UPMC Lake Erie
     Endocrinology. At that point, Mother and Father agreed that
     Mother would stay home and that she would not apply for
     unemployment compensation.

            Prior to her termination, Mother had a series of medical
     issues which impeded her ability to work and resulted in multiple
     medical leaves. In 2013, Mother sustained a work-related back
     injury and broken ankle, which resulted in a leave from work.
     When Mother returned to work, she was only able to work in a
     light duty capacity. After approximately one year of light duty
     work, a functional capacity evaluation revealed that Mother could
     no longer perform her job. As a result, Mother was transferred
     to a different, lower paying position. In 2015, Mother was off of
     work again due to a broken knee and torn ACL. Thereafter, a
     November of 2015 incident of domestic violence with Father
     resulted in injuries which necessitated an additional medical
     leave. The impact of Mother’s continuing medical problems is
     reflected in her fluctuating income over the years.

          With regard to reduced or fluctuating income, the Support
     Guidelines provide:

           (1) Voluntary Reduction of Income. When either
           party voluntarily assumes a lower paying job, quits a
           job, leaves employment, changes occupations or
           changes employment status to pursue an education,
           or is fired for cause, there generally will be no effect
           on the support obligation.




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           (2) Involuntary Reduction of and Fluctuations in,
           Income. No adjustments in support payments will
           be made for normal fluctuations in earnings.
           However, appropriate adjustments will be made for
           substantial continuing involuntary decreases in
           income, including but not limited to the result of
           illness, lay-off, termination, job elimination or some
           other employment situation over which the party has
           no control unless the trier of fact finds that such a
           reduction in income was willfully undertaken in an
           attempt to avoid or reduce the support obligation.

           (4) Earning Capacity. Ordinarily, either party to a
           support action who willfully fails to obtain
           appropriate employment will be considered to have
           an income equal to the party’s earning capacity. Age,
           education, training, health, work experience,
           earnings history and child care responsibilities are
           factors which shall be considered in determining
           earning capacity.

     Pa.R.C.P. 1910.16-2(d).

           Mother was terminated from her employment a short time
     after her return from medical leave, but just over a month prior
     to the parties’ separation. While Mother disagrees that her
     termination was justified, there is documentation supporting that
     she was fired for cause. Meanwhile, parents have an obligation
     to support their unemancipated children. [See] 23 Pa.C.S.[]
     §4321. “Child support is a shared responsibility; both parents
     must contribute to the support of their child in accordance with
     their relative incomes and ability to pay.” [Depp v. Holland],
     636 A.2d 204, 206 (Pa. Super. 1994). The law is clear that,
     generally, there will be no effect on a parent’s support obligation
     when that parent is fired for cause. [See] Pa.R.C.P. 1910.16-
     2(d)(1). In that regard, Mother’s termination does not negate
     her support obligation to her child.

           Nevertheless, Pennsylvania Courts have long held that “[a]
     person’s earning capacity is defined not as an amount which the
     person could theoretically earn, but as that amount which the
     person could realistically earn under the circumstances,
     considering his or her age, health, mental and physical condition
     and training.” [Haselrag v. Haselrag, 840 A.2d 338, 340 (Pa.


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J-A07038-17


      Super. 2003) (quoting Strawn v Strawn, 664 A.2d 129, 132
      (Pa. Super. 1995))]. In determining Mother’s earning capacity,
      the [trial court] is unable to ignore an involuntary aspect of flux
      and decrease in her earnings. Specifically, since 2013, Mother’s
      medical issues have resulted in leave from work and fluctuations
      in her income. During that time, Mother also underwent a
      functional capacity evaluation which revealed that she could no
      longer perform her job and, accordingly, she was transferred to
      a different and lower paying position. In sum, Mother’s medical
      issues have precluded her from working a full year during any of
      the last three years. In that regard, Mother’s 2015 income,
      which is reduced due to medical leave, is realistic. In reality, the
      parties have not realized a full-time income from Mother in years
      and, had the family remained intact, no income would have been
      attributed to Mother due to the parties’ agreement that she
      remain at home.

Trial Court Opinion, 11/18/2016, at 5-7 (some citations omitted).

      After a thorough review of the record in this matter, we discern no

error in the trial court’s reasoning.      As cited supra, Pa.R.C.P. 1910.16-

2(d)(2) provides that “appropriate adjustments will be made for substantial

continuing involuntary decreases in income, including but not limited to the

result of illness[.]”   In this case, the trial court considered testimony from

both Father and Mother and determined, for the reasons it cited, that

Mother’s earning capacity had continually decreased due to medical issues

which barred Mother from performing her job. Because the record supports

the trial court’s conclusions, we decline to disturb its finding.

      Next, Father avers the trial court erred by relying on wage estimates

published by the United States Bureau of Labor Statistics. By way of further

background, after Mother filed a complaint in support, a conference was held

and   soon   thereafter,    an   interim   order   was   entered.   Said     order


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recommended that Father pay monthly support in the amount of $670.11,

plus arrears.    See Conference Summary and Order, 5/11/2016.            This

obligation was calculated by computing Mother’s earning capacity based on

her 2015 income, and Father’s earning capacity based on “the U.S. Bureau

of Labor Statistics May 2014 Wage Estimate for Erie.” Id. at 2.

      Father avers that

      [n]o copy of the U.S. Bureau of Labor Statistics May 2014 Wage
      Estimates for Erie was presented as evidence at the support
      conference. [] No evidence that Father had the opportunities to
      gross business income of $44,810.00 per year was offered at the
      conference. No explanation as to why Father was held at an
      earning capacity was offered in the conference Summary or May
      11, 2016 Interim Order.

Father’s Brief at 5. On May 23, 2016, Father filed a demand for a hearing,

and on August 31, 2016, a de novo hearing was held. At the August 31st

hearing, the Bureau of Labor Statistics document relied upon by the

Conference Officer was not entered into evidence by either party.        That

same day, the trial court entered an order affirming the May 11, 2016

interim order.

      Father contends that the Bureau of Labor Statistics document, which

was not entered into evidence by either party, should not have been used to

determine his earning capacity.    Father’s Brief at 15-16.   In making this

argument, Father cites Ney v. Ney, 917 A.2d 863 (Pa. Super. 2007).         In

Ney, the father sought a modification of his child support obligation due to a

reduction in his income. In concluding that the father was not entitled to a



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reduction, the trial court “sua sponte considered hearsay evidence not of

record in assessing [the father’s] credibility and determining his earning

capacity.” Id. at 866.    Specifically, the trial court conducted an internet

search of jobs in the area in determining the father’s earning capacity. This

Court held that this type of internet search, which led to reliance upon facts

outside the record, constituted reversible error.

      In its 1925(b) opinion, the trial court stated the following:

             Father, since 2000, has been the sole owner of his own
      construction business[.] By utilizing his Income Tax Returns,
      Father asserts that his income from his business is only around
      $15,000 to $16,000 per year. The [trial court] is not, however,
      constrained by Father’s self-reported earnings on tax
      documents. [See Labar v. Labar], 731 A2d 1252, 1255 (Pa.
      1999)(use of federally taxable income creates an “oft-time
      fictional financial picture” as the result of federal income tax
      laws); [See also Commonwealth ex rel. Banks v. Banks],
      478 A.2d 1387, 1390 (Pa. Super. 1984)(“[I]ncome tax returns
      are not infallible devices for measuring earning capacity,
      particularly where the income-earner is self-employed.”). When
      looking beyond the self-reported earnings, Father is not credible.

             Father is living well outside the means of his reported
      income, indicating that he has much greater cash flow than his
      Income Tax Returns reveal. For example, in 2016, Father took
      and paid for a trip to Romania. Father was out of the country for
      a month. Mother testified that she and Father used to go on
      vacation all of the time and that trips like Father’s to Romania
      averaged $10,000 to $15,000. Also this year, Father was able to
      make a $4,000 payment to Marquette in order to pay off the
      mortgage on the marital residence.        Moreover, Father sent
      approximately $36,000 through PNC Bank during just two
      months in 2016. It is further noteworthy that, during the
      marriage, Father acquired at least six parcels of real estate. The
      [trial court] fails to see how Father’s actions are feasible
      considering the meager earnings that he reports.1




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              1
                While Father’s demeanor was not the sole basis for
              the [trial court’s] credibility assessment, it is
              noteworthy that his demeanor changed and he was
              hesitant with his “no” response when questioned
              whether he performed work for people other than
              those for which he attached 1099s to his tax returns.

            In sum, the [trial court] believes that Father has much
      greater income than he reports. As a result, the [trial court] is
      faced with the arduous task of formulating a support award,
      without actual income information. Unable to get a clear picture
      of Father’s actual income, the [trial court] assessed Father with
      an earning capacity based upon the wage estimates for Erie of a
      self-employed roofer as published by the U.S. Bureau of Labor []
      Statistics Such an assessment is consistent with the occupation
      Father has held for the past sixteen years and, considering the
      standard of living maintained by Father, is more realistic than his
      reported earnings.

Trial Court Opinion, 11/18/2016, at 3-5 (some citations omitted).

      While we are cognizant that the trial court is well within its discretion

to determine that Father is disingenuous with reporting his yearly income,

based upon our decision in Ney, the trial court erred in adopting the

Conference Officer’s recommendations which were based upon facts outside

the record.       Furthermore, while the trial court is correct that it is not

constrained to determine Father’s earnings based solely on his tax returns,

the court’s determination must be made by utilizing record evidence

introduced by the parties. See Ney, 917 A.2d at 863 (“A trial court may not

consider evidence outside of the record in making its determination.        Nor

may this Court uphold a trial court’s order on the basis of off-the-record

facts.”) (citations and quotations omitted).




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      Although the earnings set for Father ultimately may be shown to be

appropriate, the trial court abused its discretion in accepting this finding

based upon evidence that was not introduced by either party.         Thus, we

vacate the order of the trial court to the extent it relied upon facts outside

the record when determining Father’s income, affirm the trial court’s order

as it pertains to Mother’s income, and remand for a new hearing to address

only, Father’s income and earning capacity.1 At that time both Mother and

Father will have the opportunity to present evidence of Father’s earning

capacity.

      Order vacated in part, affirmed in part, and case remanded for

proceedings consistent with this memorandum.2 Jurisdiction relinquished.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/16/2017




1
  In light of our disposition, we need not address Father’s remaining issue
concerning the trial court’s failure “to state the reasons for the assessment
of an earning capacity to [Father] in writing or on the record in accordance
with Pa.R.C.P. 1910.16-2(d)(4).” Father’s Brief at 2.
2
  In the interim, Father shall be held to the earning capacity confirmed by
the trial court in its August 31, 2016 order. To the extent that his earning
capacity differs in a future order, the trial court shall credit payments going
forward.

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