J-S73016-16


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

GAIL F. ELLIOTT                                IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                            Appellant

                       v.

MICHAEL P. ELLIOTT

                            Appellee                 No. 69 WDA 2016


                   Appeal from the Order December 14, 2015
                In the Court of Common Pleas of Clarion County
                   Domestic Relations at No(s): 714 CD 2013


BEFORE: FORD ELLIOTT, P.J.E., LAZARUS, J., and JENKINS, J.

MEMORANDUM BY LAZARUS, J.:                      FILED NOVEMBER 1, 2016

       Gail F. Elliott (Wife) appeals from the support order entered in the

Court of Common Pleas of Clarion County. After careful review, we reverse

and remand.

       The parties were married on July 14, 1990, and separated on October

20, 2012. Two children were born of the marriage, both of whom are now

adults. On July 3, 2013, Wife filed a complaint for spousal support.1

       On August 12, 2013, the court entered a support order determining

Wife’s monthly net income at $1,260.82, Husband’s monthly net income at

$5,260.76, and requiring Husband to pay $1,610.00/month in spousal

____________________________________________


1
  Wife had initially filed a complaint for child and spousal support on
December 20, 2012. However, she withdrew that complaint in February
2013.
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support.      At that time, Husband owned and operated an electrical

contracting company, A&E Electric, Inc. (A&E).                Attached to the August

support order is a legal notice stating, in relevant part:

       Parties must within seven days inform the Domestic Relations
       Section (DRS) and the other parties, in writing, of any material
       change in circumstances relevant to the level of support . . .,
       including, but not limited to, loss or change of income[.] A party
       who willfully fails to report a material change in circumstances
       may be adjudged in contempt of court, and may be fined or
       imprisoned.2

Support    Order    (Important      Legal      Notice),   8/12/13,   at   4.   Husband

acknowledged that his attorney provided him with a copy of the support

order, which included this legal notice. N.T. Support Hearing, 5/14/15, at

35.

       On March 9, 2015, Wife filed a petition for modification of support

claiming that after a 2015 equitable distribution hearing in the parties’

____________________________________________


2
 The language in the parties’ support order is substantially similar to the
Duty to Report statute in the Domestic Relations Code:

       (a) Notice of changes affecting support. — An individual
       who is a party to a support proceeding shall notify the domestic
       relations section, the department and the other parties in writing
       or by personal appearance within seven days of any material
       change in circumstances relevant to the level of support or the
       administration of the support order, including, but not limited to:

       (1) change of employment; and

       (2) change of personal address or change of address of any
       child receiving support.

23 Pa.C.S. § 4353(a).



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pending divorce action, she discovered that Husband inaccurately self-

reported his 2013 monthly net income from A&E at $5,260.76. She asserted

that this amount was approximately $2,500.00 less than his actual monthly

net income for that year.     After a Master’s conference held on April 13,

2015, the court entered a support order determining that Husband’s monthly

net income was $7,022.93, and increasing his monthly support payment to

$2,332.00, effective as of the date of the modification petition.

      On April 14, 2015, Wife filed a request for a hearing de novo seeking

retroactive support arrears based on Husband’s unreported increase in

income. On the same day, Husband also filed a hearing request objecting to

the court’s calculation of his monthly net income and his legal responsibility

to provide health insurance for Wife.

      On May 14, 2015, a support modification hearing was held before a

Master. At the hearing, Husband produced his 2013 and 2014 tax returns

indicating his adjusted gross income from A&E was $117,067.00 in 2013 and

$97,544.00 in 2014.      N.T. Master’s Hearing, at 5/14/15, 20.       Husband

testified that the substantial increase in income for those years was a result

of “a lot of big contracts with big companies.” Id. at 21. Husband testified,

however, that by the end of 2014 “the [big companies didn’t] have much

work for small contractors [like A&E] and they raised their liability insurance

to 7 million a year which was going to cost [too much for him to pay].” Id.

at 23. As a result, Husband stopped bidding on jobs. Id.        Because of the

major loss of jobs for A&E, Husband had to let his employees go and look for

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other work to pay his bills. Id. In March 2015, Husband started working for

a new company, Comprehensive Fire Technology (Com-Tech), and also

began working odd jobs on weekends and evenings. Id. at 14, 23-24. On

June 26, 2015, the Master submitted his Report and Recommendation,

determining that spousal support should be established at $1,170.00, based

on a monthly net income for Husband of $4,142.57, without application of

retroactive arrears. On July 2, 2015, the court entered an interim support

order obligating Husband to pay $1,180.003/month based upon a monthly

net income of $4,142.57, but not applying retroactive arrears.

        On August 3, 2015, Wife filed her exceptions to the Master’s Report

and Recommendation. See Pa.R.C.P. 1920.55-2. On October 8, 2015, the

court filed its opinion and order dismissing Wife’s objections, wherein it

refused to order retroactive arrears.          On December 14, 2015, the court

entered its final decree in divorce and equitably distributed the parties’ net

marital assets as follows, 55% to Wife and the remaining 45% to Husband.

        Wife filed this timely appeal on January 11, 2016,4 in which she raises

the following question for our review:

____________________________________________


3
    This amount represents $1,170.00 in support and $10 for arrears.
4
  Because Wife filed her appeal of the support order from the final decree in
divorce in these companion actions, we find the appeal is properly before us
and, therefore, deny Husband’s motion to quash. See Leister v. Leister,
684 A.2d 192 (Pa. Super. 1996) (en banc) (spousal support order entered
during pendency of separately filed divorce action is not appealable until all
(Footnote Continued Next Page)


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      Whether a spousal support obligor may be excused of payment
      of proper spousal support in the form of retroactive arrears when
      the obligor failed to report significant increases in income as
      required by law, the oblige[e] promptly filed a petition to modify
      upon learning of the increase in income and there was no
      evidence that supported that the effect of retroactive arrears
      would have created a hardship for the obligor.

Appellant’s Brief, at IV.

      Our Court's scope of review of a spousal support order is limited; it will

reverse a trial court’s order only where it cannot be sustained on any valid

ground. Diament v. Diament, 816 A.2d 256, 264 (Pa. Super. 2003).5 This

Court will not interfere with the broad discretion afforded the trial court,

absent an abuse of discretion or insufficient evidence to sustain the support

order. Id. An abuse of discretion exists where the trial court has overridden

or misapplied the law. Id. Although the trial court should give great weight

to the conclusions of the master, the Superior Court is limited to a review of

the trial court’s decisions, not those of the master. Id.

                       _______________________
(Footnote Continued)

claims connected with divorce action resolved); see also Thomas v.
Thomas, 760 A.2d 397 (Pa. Super. 2000) (where record did not reveal
either filing of divorce action or that support order was entered during
pendency of companion divorce action, order is appealable); Asin v. Asin,
690 A.2d 1229 (Pa. Super. 1997) (divorce action filed in different venue is
not “companion” action and has no impact on appealability of support order
entered in different county).
5
  The 2005 amendments to Pa.R.C.P. 1910.16-4 “supersedes Diament[,
supra], to the extent that it held that the tax savings from payments for the
benefit of a spouse alone or from an unallocated order for the benefit of a
spouse and child must be considered in determining the obligor's available
net income for support purposes.”          See Note, Pa.R.C.P. 1910.16-4.
However, Rule 1910.16-4 (support formula) is not relevant to this appeal.



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        Wife claims that the trial court erred in not awarding her retroactive

support based on Husband’s misrepresentation of his 2013-2014 gross

income.     Wife claims that Husband continued to enjoy this unreported

income throughout 2013 and 2014 and that it was his statutory duty to

report the increase in income.

        Pursuant to Pa.R.C.P. 1910.19:

        (a) A petition for modification or termination of an existing
        support order shall specifically aver the material and substantial
        change in circumstances upon which the petition is based. A
        new guideline amount resulting from new or revised support
        guidelines may constitute a material and substantial change in
        circumstances.    The existence of additional income, income
        sources or assets identified through automated methods or
        otherwise may also constitute a material and substantial change
        in circumstances.

                                   *     *   *

        (c) Pursuant to a petition for modification, the trier of fact may
        modify or terminate the existing support order in any
        appropriate manner based upon the evidence presented without
        regard to which party filed the petition for modification. If the
        trier of fact finds that there has been a material and substantial
        change in circumstances, the order may be increased or
        decreased depending upon the respective incomes of the parties,
        consistent with the support guidelines and existing law[.]

Pa.R.C.P. 1910.19(a), (c).

        In Brickus v. Dent, 5 A.3d 1281 (Pa. Super. 2010), our Court noted

that:

        [M]odification of a support order is to be retroactive to the
        date when modification initially was sought unless the court
        sets forth reasons for failing to do so on the record. In fact,
        failure to make an award retroactive is reversible error unless
        specific and appropriate justification for such a ruling is shown.


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Id. at 1286-87 (emphasis added).               However, where arrears are at issue,

section 43526 of the Domestic Relations Code permits retroactive application

of support to a date earlier than the filing of the modification petition if “the

petitioner was precluded from filing a petition for modification by

reason of a significant physical or mental disability, misrepresentation of

another party or other compelling reason and if the petitioner, when

no longer precluded, promptly filed a petition.”7 23 Pa.C.S. § 4352(e)

(emphasis added).

____________________________________________


6
    The entirety of section 4352(e) reads:

        (e) Retroactive modification of arrears. — No court shall modify
        or remit any support obligation, on or after the date it is due,
        except with respect to any period during which there is pending
        a petition for modification. If a petition for modification was filed,
        modification may be applied to the period beginning on the date
        that notice of such petition was given, either directly or through
        the appropriate agent, to the obligee or, where the obligee was
        the petitioner, to the obligor. However, modification may be
        applied to an earlier period if the petitioner was precluded from
        filing a petition for modification by reason of a significant
        physical or mental disability, misrepresentation of another party
        or other compelling reason and if the petitioner, when no longer
        precluded, promptly filed a petition. In the case of an
        emancipated child, arrears shall not accrue from and after the
        date of the emancipation of the child for whose support the
        payment is made.

23 Pa.C.S. § 4352(e).

7
  Husband does not contest that Wife promptly filed her modification petition
the day after she became aware of Husband’s unreported increase in income
at the parties’ 2015 equitable distribution hearing in their divorce action.



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      Instantly, the trial court refused to retroactively modify support due to

the parties’ current financial situation and because Husband neither

intentionally misrepresented his increased income in an attempt to avoid an

increase in his support obligation, nor purposely ran his business into the

ground. Trial Court Opinion, 10/8/15, at 2-3. The court also found that if it

were to order retroactive arrears, Husband would suffer a significant

hardship due to the recent demise of his business and, consequently, the

decrease in his earning potential. Id. at 2.

      At the support hearing, Husband testified that he did not become

aware of his actual gross income in a given year until his accountant

provided him the relevant income tax return.          N.T. Support Hearing,

5/14/15, at 21-22, 34.    While the court concludes that an individual must

intentionally misrepresent his income in order to be subject to retroactive

arrears, we do not read such an intent requirement into the legal notice

attached to the parties’ support orders or the substantially similar language

of section 4353(a)’s duty to report.       Compare 23 Pa.C.S. § 4353(a)

(“individual who is a party to a support proceeding shall notify the domestic

relations section, the department and the other parties in writing . . . within

seven days of any material change in circumstances relevant to the level of

support[.]”) with 23 Pa.C.S. 4353(b) (“Willful failure to comply with this

section may be adjudged in contempt of court pursuant to section 4345

(relating to contempt for noncompliance with support order[.]”)).




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      The testimony from the support hearing shows that Husband’s gross

income substantially increased from 2012 to 2013, in the amount of roughly

$82,000.    Moreover, Husband’s gross income continued to be significantly

greater than his 2012 gross income for the majority of 2014.          Therefore,

Husband was required to report his material change in income to the

Domestic Relations Section. See 23 Pa.C.S. § 4352(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.”); 23 Pa.C.S. § 4353(a) (Duty to Report); Support Order

(Important Legal Notice), 8/12/13, at 4.

      In Krebs v. Krebs, 944 A.2d 768 (Pa. Super. 2008), our Court

determined that Husband “had an affirmative duty [under Section 4353(a)]

to notify [Wife] and [the] D[omestic] R[elations’] O[ffice] that his income

increased each year as reflected on his W-2 statements.” Id. at 776. The

court concluded that Husband had knowledge of his duty under section 4253

to report the increased income and that because he failed to inform Wife and

the DRO of the increase, “compelling reasons existed for the retroactive

modification” of support. Id. On appeal, our Court determined that the trial

court should make Husband’s support obligation retroactive to the date

when he first failed to report his significantly increased income.

      Likewise, we find that because Husband was on notice that he was

required to report any material change in circumstances to the DRS, and

failed to uphold this legal duty, the trial court had a compelling reason for

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the retroactive modification of support.           Krebs, supra.   Therefore, we

instruct the trial court, upon remand, to determine when Husband first failed

to report his significantly increased 2013-2014 income from A&E and make

his arrears payments retroactive to that date. Id.; 23 Pa.C.S. § 4352(e).

       Because the court misapplied the law regarding the imposition of

retroactive arrears, we must reverse and remand. Diament, supra.

       Order reversed. Case remanded. Jurisdiction relinquished.8

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 11/1/2016




____________________________________________


8
  Although the testimony from the support hearing shows that Husband’s
business, A&E, substantially declined at the end of 2014, that has no bearing
on the determination of whether Husband failed to report his 2013-2014
increased income and whether Wife is entitled to retroactive arrears.



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