Melzer Calculation Not Affected by Shared CustodyDecember 31, 2007 – Articles PA Family Lawyer
BULGARELLI v. BULGARELLI
--- A.2d ---- (Pa. Super. 2007)
The Superior Court (Lally-Green, Klein and Bender, JJ.) held that shared physical custody does not affect a Melzer calculation. A support order issued by the Delaware County trial court (Coll, J.) was affirmed and the case was remanded for consideration of charitable contributions made by father.
The parties shared physical custody of their three minor children. According to the parties’ 2001 Property Settlement Agreement, father was paying child support of $3,055 per month. At that time, father’s income was $213,800 per year and mother had no income. Later, the child support was increased to $3,499 per month.
On October 2, 2006, the trial court held a hearing on both parties’ petitions for modification and mother’s petition for contempt. The parties’ respective incomes were not disputed, with Mother earning $2,823.77 per month and Father earning $21,307 per month. The parties’ expenses, however, were in dispute. A Melzer calculation was utilized because the parties’ combined net income was in excess of $20,000 per month. Melzer v. Witsberger, 480 A.2d 991 (Pa. 1984).
Mother submitted a thorough expense statement for her and the children. She testified that her monthly expenses were $9,700.15, with $2,312.79 attributed to mother and $7,387.38 attributed to the children. Mother was not re-married and shared her home only with the parties’ three children.
The trial court scrutinized mother’s expenses, including her housing costs. Mother was renting a home from her father. Although she claimed a monthly rental expense of $2,600, she did not actually pay rent to her father. Instead the monthly rent accrued as a debt to mother. The trial court found mother’s rental expense to be legitimate and concluded that she provides a suitable suburban home for the children, allowing them to remain in their school district. However, the trial court reduced mother’s overall expenses by more than 20%, resulting in expenses to $7,744.05 per month. Mother’s expenses for real estate taxes, homeowners insurance and legal fees were disallowed in their entirety.
Father claimed expenses of $13,512.36 per moth, with $3,378.09 attributed to him and $10,134.27 attributed to the children. Father was re-married and shared his home with his new wife, her two children and the parties’ three children. Expenses attributed to father’s new wife and her children were not included in father’s reported expenses.
Although father’s expenses were not as well defined as mother’s, the trial court reduced them by only 10.36% to $12,112.70 per month. Father was not imputed with income of $700 per month for a car allowance. And, his spouse’s income of $90,000 per year was not considered.
After calculating each party’s expenses, the trial court next considered income available for support and subtracted the amount of expenses attributable to each party from their respective net incomes. Father’s income available for support was $18,738.44 ($21,307 – $3,568.16); and mother’s income available for support $603.50 ($2,823.77 - $2,220.27). The total available income for support was $18,341.94, with mother’s percentage at 3.12% and father’s percentage at 96.88%.
Father’s support obligation was calculated as follows:
|Mother’s expenses for the children||$5,523.78|
|Father’s percentage||x 96.88%|
|Less mother’s share of father’s expenses|
|For children ($8,544.54 x 3.12%)||$(266.59)|
|Support payable by father||$5,084.85|
The trial court entered an order on December 29, 2006 for father to pay: $5,084.45 per month for support of the three minor children; for maintenance of the children’s medical coverage; 50% of the children’s unreimbursed medical expenses after the first $250 per year; and, 50% of daycare costs.
Father appealed the trial court’s order and raised four issues. First, whether the trial court’s order was “exorbitant” given that the support amount was nearly double the presumptive minimum of $3,018 per month. Second, whether the trial court erred by adopting mother’s expenses for rent, home maintenance and school activities. Third, whether the trial court erred in calculating father’s income by not considering a decrease in his 2006 year to date income. And, fourth, whether the trial court should have considered father’s charitable contributions.
The Superior Court applied an abuse of discretion standard relying upon Arbet v. Arbet, 863 A.2d 34 (Pa. Super. 2004) and Laws v. Laws, 758 A.2d 1126 (Pa. Super. 2000). An abuse of discretion is found “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 …” at 39.
High income cases are decided in accordance with Melzer and under Pa.R.C.P. 1910.16-2(e)(2), which provides, in pertinent part, as follows:
(2) High Income Child Support Cases. When the parties' combined net income exceeds $20,000 per month, child support shall be calculated pursuant to Melzer v. Witsberger, 505 Pa. 462, 480 A.2d 991 (1984). The presumptive minimum amount of child support shall be the obligor's percentage share of the highest amount of support which can be derived from the schedule for the appropriate number of children and using the parties' actual combined income to determine the obligor's percentage share of this amount. The court may award an additional amount of child support based on the parties' combined income and the factors set forth in Melzer. The Melzer analysis in high income child support cases shall be applied to all of the parties' income, not just to the amount of income exceeding $20,000 per month. In a Melzer analysis case, the presumptive minimum remains applicable.
Father relied upon prior cases that set forth a flexible application of the Melzer formula taking into account that child rearing expenses in shared physical custody arrangements vary from those in a primary physical custody setting. Funk v. Funk, 545 A.2d 326 (Pa. Super. 1988); Fee v. Fee, 496 A.2d 793 (Pa. Super. 1985).
According to father, based upon the presumptive minimum for three children ($3,018) and his percentage of the parties’ combined net income (88.29%), his support obligation should have been $2,664.59. Father further contended that his share of support should be reduced based upon Part II of the formula set forth in Pa.R.C.P. 1910.16-4, which adjusts the support for substantial or shared physical custody. Father calculated his adjusted support obligation to be $2,060.99 per month.
The Superior Court disagreed with father’s interpretation of the existing case law related to the application of a Melzer formula in a shared custody arrangement. Looking directly at the leading case for guidance, the Court noted that “the amount of time a parent spends with his or her children has no bearing on that parent’s obligation of support.” Melzer, 480 A.2d at 996.
Father’s argument was further flawed in that he challenged the trial court’s acceptance of mother’s expenses, which he submitted should have been cut in half based upon their shared custody. However, father failed to consider that, under such a theory, his expenses should be cut in half as well. The Court noted that “a parent incurs certain fixed costs that remain the same whether the children are in that parent’s custody or not.” Colonna v. Colonna, 855 A.2d 648 (Pa. 2004).
The Court next disposed of father’s second issue concerning mother’s expenses. Father contended that mother’s expenses were not supported by the evidence presented at trial, in particular: her rent, which she did not pay; her home maintenance expense, which was not based on ongoing repairs; and, the school/activity fees because the children attended public school. The Court held that the trial court properly performed its duty of weighing the evidence and assessing credibility. This conclusion support a courts ability to consider and include certain expenses that are not actually being paid at the time of hearing and are more anticipatory in nature.
Next, at the time of trial father submitted evidence from his employer that his income would be reduced in 2006 based upon lower bonuses. The Court found father’s argument to be speculative and noted that he is able to seek modification if, in fact, his income was reduced.
Lastly, father submitted that the trial court should have considered his charitable contributions, which were about $10,000 per year, as such consideration was given to mother. The Court agreed and remanded the case for the trial court to determine what effect father’s charitable contributions would have upon his support obligation.
CASE NOTE AUTHOR’S EDITORIAL COMMENTS:
Melzer cases are expense driven. Although the case law instructs courts to be flexible in considering other factors in addition to expenses, under the facts presented in Bulgarelli, the parties’ shared physical custody arrangement did not qualify for a deviation from the standard Melzer calculation. The parties’ and children’s expenses are the paramount focus of any Melzer analysis. As such, great care must be given to preparing, documenting and presenting expenses as the courts will scrutinize each one and potentially discount any that are believed to be inflated or inappropriate.
This case also provides a useful and easy to follow guide of how Melzer is applied, including how expenses are scrutinized, how income available for support is determined and the manner in which the support amount is calculated.
Julia Swain is an associate at Fox Rothschild LLP, resident in the Philadelphia office. She is a member of the Philadelphia Bar Association Family Law Section Executive Committee, Co-Chair of the Programs Committee and was recently elected to serve as Secretary commencing January 2008.